ITAT directs AO to examine revised TDS return for deciding issue of sec. 40(a)(ia) disallowance

IT : Where revised TDS return was filed by assessee during appellate proceedings, matter was restored to Assessing Officer to examine same

Matter remanded by Tribunal without any observation on merits couldn't be challenged before HC

Excise & Customs : Where Tribunal has : (a) neither opined on quality of material, (b) nor held that it should necessarily be admitted and examined etc., but, has merely thought it proper that it should be examined by adjudicating authority rather than by Tribunal, said remand order could not challenged in appeal before High Court

Penalty upheld as source of deposits wasn’t explained and income wasn’t disclosed in pursuance of se

IT : Where assessee did not explain cash deposits and did not disclose income in response to notice issued under section 153C and did not give details as to how he would fall within explanation 1 to section 271(1)(c), penalty would be levied

Prior to 1-4-2005, no denial of sec. 80-IB relief even if space for commercial establishment exceede

IT : Where approval to housing project was given prior to 1-4-2005, deduction of section 80-IB could not be denied on ground that commercial establishments exceeded 2000 sq. feet

ITAT set-aside TP addition as some of the comparables chosen by TPO were functionally different

IT/ILT : Where TPO made addition to assessee's ALP in respect of rendering research and development support services to its AE, in view of fact that some of comparables selected were inappropriate on account of functional difference, regarding, impugned addition was to be set aside and matter was to be remanded back for disposal afresh

Interest on refund to be calculated from date of filing of first application and not from date of re

Excise & Customs : Where assessee had applied for refund on 4/11-2-2003, but, had re-submitted same in June 2004 after having won on merits before Commissioner (Appeals), interest on refund would be granted with reference to 4/11-2-2003

MMTC couldn't be said to be in dominant position as other players in market were also trading in gol

Competition Act: Where not only OPs, i.e., government nominated agencies for import and allocation of gold, but also other dealers, Jewellery, manufacturers and retailers were engaged in trading of gold, it could not be said that OPs were in a dominant position

Casual vacancy in appellate committees can be filled up by assigning review powers to other Commissi

EXCISE & CUSTOMS LAWS : Section 35B of the Central Excise Act, 1944 – Appeals to the Appellate Tribunal – Constitution of Review Committee of Commissioners of Central Excise – Assignment Of Charge of a Commissionerate where Committee is left with only one member

Uranium May Head To India In 2015

The uranium industry is hoping to make trial shipments to India next year.Prime Minister Tony Abbott and Indian leader Narendra Modi have discussed the supply of Australian uranium for India's nuclear power plants.It follows their signing of a safeguards agreement in New Delhi in September, overturning a long-standing ban on uranium exports to the subcontinent.

In his address to federal parliament on Tuesday, Prime Minister Modi said he saw Australia as a major partner in his country's quest to boost electricity production and address climate change.Advertisement "(We seek) energy that does not cause our glaciers to melt," he said. "Clean coal and gas, renewable energy and fuel for nuclear power."

The pair discussed energy security and what Mr Abbott called Australia's "readiness and willingness" to supply uranium to India for peaceful purposes.

"If all goes to plan, Australia will export uranium to India - under suitable safeguards of course - because cleaner energy is one of the most important contributions that Australia can make to the wider world," Mr Abbott said.

The agreement is now being examined by the parliamentary treaties committee, which will close submissions on November 28. There are also talks between officials on administrative arrangements. Both the treaties process and the administrative arrangements must be finalised before Australian uranium producers can start exports to India.

Minerals Council uranium spokesman Daniel Zavattiero told AAP the industry expected to start shipments next year. "The industry position is things are moving okay," he said. "We expect some point next year it will come into force and become operational, then we can start on shipments and sales."

Initial sales are expected to start on a small scale, but the outlook is strong. The International Energy Agency estimates that while nuclear provides three per cent of India's power today, it will grow to 12 per cent by 2030 and 25 per cent in 2050.

India plans to invest $96 billion in nuclear plants to 2040, with 21 operating now, six under construction and 57 planned or proposed. "It's very positive for us," Mr Zavattiero said.

The agreement stipulates India must only use the uranium for peaceful purposes that adhere to recognised international safety standards. It is controversial because India has refused to sign the Nuclear Non-Proliferation Treaty despite possessing an arsenal of atomic weapons.

Australia has the largest share of uranium resources in the world but currently exports only 8400 tonnes a year, valued at over $820 million. Sydney will host a meeting on Wednesday involving ministers from 12 countries to discuss nuclear non-proliferation.

The Forum for Nuclear Cooperation in Asia is a regional network to promote the peaceful uses of nuclear technology in the Asia-Pacific. Industry Minister Ian Macfarlane, who will host the event, said Australia was committed to the safe and efficient application of nuclear science and technology.

Source: news.theage.com.au

[Indian Customs Circular] : Regarding All Industry Rates (AIR) of Duty Drawback w.e.f. 22.11.2014

Circular No. 13/ 2014-Customs

F. No. 609/118/2014-DBK

Government of India

Ministry of Finance, Department of Revenue

Central Board of Excise & Customs

New Delhi, dated 18 th November, 2014

To

All Chief Commissioners of Customs / Customs (Prev.)

All Chief Commissioners of Central Excise/Customs & Central Excise

All Director Generals under CBEC

All Commissioners of Customs / Customs (Prev.)

All Commissioners of Central Excise/Customs & Central Excise/Service Tax

Subject: All Industry Rates of Duty Drawback effective 22.11.2014 - Reg.

Ma’am/Sir,

The Ministry has notified revised All Industry Rates (AIR) of Duty Drawback vide Notification No. 110/2014- Customs (N.T.), dated 17.11.2014. This notification comes into force on 22.11.2014.

2. Some of the broad aspects, from amongst the changes notified with respect to AIR of duty drawback and entries in the Schedule, are the following –

(a) As before, the drawback rates have been determined on the basis of certain broad average parameters including, inter alia, prevailing prices of inputs, input output norms, share of imports in input consumption, the applied rates of central excise and customs duties, the factoring of incidence of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods, factoring incidence of duty on HSD/furnace oil, value of export goods, etc.

(b) Many items already covered under the Drawback Schedule prior to incorporation of erstwhile DEPB items, shall see a change in the AIR. In continuation of a transitory arrangement, for the items incorporated in the drawback schedule from the erstwhile DEPB Scheme there is a reduction in the AIR.

(c) Drawback caps continue on most tariff items with AIRs above 2%. The caps have been revised. At rates below 2% there is cap with respect to guar gum and frozen marine products.

(d) Further, in the case of project exports, where export product is accompanied with ARE-1 and for which no drawback cap has been prescribed in the Schedule, the Note/Condition (6) in the AIR notification now specifies a cap. It has been provided that such cases shall be declared by the exporter and the maximum amount of drawback that can be availed under the Schedule shall not exceed the amount calculated by applying the ad valorem rate of drawback to one and half times the ARE-1 value. In such cases, before Let Export Order is made, the relevant ARE-1 value (s) are to be recorded in the "Departmental Comments" field which is to be also taken into account at the subsequent stage of drawback processing.

2

(e) Several entries have been rationalized by merging them at respective four digit level or under the respective residuary sub-heading ‘others’. Tariff item numbers have seen a change in many cases.

(f) The hitherto residuary rate of 1% (composite) and 0.3% (Customs) is changed to 1% (composite) and 0.15% (Customs). Further existing residuary rates of 1.3% and 1.7%, have been increased to 1.4% and 1.9%, respectively, with some exceptions.

(g) In chapter 57, the six digit tariff item (TI) under 5705 have been changed to refer to the composition of fibre as is under other four digit tariff items. Further, all caps have been made on the basis of per sq.mtr instead of earlier per kg (for some items) in the chapter.

(h) Several entries have been modified /amended to address issues brought to Ministry’s notice. Laptop bags and shopping bags have been specifically mentioned at six digit level below TI 4202. ‘Cami’ has been included with women’s/girl’s tops in TI 611402 and 621102; ‘three fourth pants’ along with ‘capris’ included in TI 610302, 610402, 620302, and 620402; and ‘leggings" included in TI 610402. An entry for ‘other jackets’ below TI 6114 and 6211 has been made. Mountain terrain bicycles have been specified against TI 871203. Cricket bats made from English willow (TI 9506) have been distinguished from other cricket bats.

(i) Separate entries have been created distinguishing certain export products such as cotton yarn of less than 50 counts or 50 or more counts (Chapter 52); core spun cotton yarn containing 3% or more of lycra /spandex/ elastane (TI 5205); flame retardant fabric treated with organic phosphorous compound (TI 5209); knotted/tufted woolen /fine animal hair carpets containing 15% or more by weight of silk (TI 5701, 5703); embroidery in the piece, in strips or in motifs, of flax/linen (TI 5810); cotton blankets (TI 6301); leather safety footwear with protective toe caps of composite/synthetic material (TI 6403); glass artware/handicraft made out of two or more ply glass with or without metallic fusion (TI 7020); delivery tricycles/cycle rickshaws (TI 8712); specified electrical apparatus, of aluminium (TI 8536) and parts of aluminium for specified electrical apparatus (TI 8538).

(j) AIR has been provided to calcined kaolin packed in HDPE/ LDPE/ PP bags (TI 2507), umbrellas, etc. of Chapter 66 and artificial flowers, etc. (TI 6702). Composite rate of 7% has been provided for all agricultural machinery etc. of TI 8432.

(k) AIR has been fixed as Rs. 219.9/gm for gold jewellery /parts and Rs. 3112.5/kg for silver jewellery /articles. Guar Gum has been provided ad valorem rate (composite) of 0.75% with a cap of Rs. 1270 per MT.

(l) Note/Condition (20) in the AIR Notification specifies that "shirts" shall include "shirts with hoods". Similarly, Note (25) specifies that "vehicles" of Chapter 87 shall comprise completely built unit or completely knocked down (CKD) unit or semi knocked down (SKD) unit.

3. It has been made explicit that where the claim for duty drawback is filed with reference to the rate in the AIR Schedule, an application for fixation of Brand Rate under Rule 7 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 shall not be admissible. For this, para 2 of the Notification and amendment to the said Rule vide Notification No.109/2014-Customs (N.T.) dated 17.11.2014 may be referred. 3

4. In this context, it is also clarified that the exporters opting for claim of brand rate shall declare the figure "9801" as an identifier in the shipping bill under the Drawback Details on basis of which they may subsequently apply to Central Excise for determination of brand rate. The Commissioners of Central Excise shall facilitate such exporters in terms of paras 5A-5C of Instruction No. 603/01/2011-DBK dated 11.10.2013 with, interalia, the grant of provisional brand letters.

5. The Commissioners are expected to ensure that the due diligence is exercised to prevent any misuse. As before, it may be ensured that exporters do not avail of the refund of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods through any other mechanism while claiming AIR. Moreover, there is need for continued scrutiny for preventing any excess drawback arising from mismatch of declarations made in the Item Details and the Drawback Details in a shipping bill. Also, in case of claim of the composite (higher) rate of AIR, the processing at the time of export should specifically ensure availability of ‘ Non-availment of Cenvat certificate ’ etc at that stage itself.

6. It is requested to download the notifications from the Board’s website (www.cbec.gov.in) and carefully peruse them and thereby take note of all the specific changes notified.

7. With trade facilitation in view, tenure of the Drawback Committee constituted by Central Government has been temporarily extended. Therefore, if any inconsistency or error is noticed or difficulty faced, the Board may be apprised so that the appropriate action can be initiated.

8. Suitable public notice and standing order may also be issued for guidance of the trade and officers.

(Rajiv Talwar)

Joint Secretary to the Government of India

CBEC nominates link officers to grant leave to officers in various zones of services tax

EXCISE & CUSTOMS LAWS : Approval of Chain of Nomination (Link Officer) – Partial Modification of Order No. 220/2012, Dated 23-11-2012

Mrls Have Larger Impact On Tea Trade, Feels Fao

At a time when the residue level in Indian teas is being debated, the FAO (Food and Agriculture Organization of the United Nations) Inter-governmental Group on tea has found that, in general, food safety standards might have a deterring effect on trade if exporters fail to comply with regulations.

The implications of MRLs (maximum residue levels) on tea trade were discussed by the Inter-governmental Group at its recent meeting in Indonesia. It is a forum for inter-governmental consultation and exchange on trends in production, consumption, trade and price of tea.

The FAO felt that the MRL standards had a much larger effect on trade than import tariffs, and any cost-related disruption in supply could increase prices, leading to price volatility.

As one of the food safety standards, MRLs set the maximum level of pesticide residue that can be traced in food and food products to ensure food safety.

MRL regulations vary across countries, and there is no international agreement on harmonisation of regulations. The European Union has increased the number of pesticides regulated for tea. The number is now 45.

The FAO study found that China’s export to major European partners decreased significantly after 2000, most likely due to the regulations. The FAO also noted that if the importing country was large enough, prices would rise in that particular import market following the supply-disruption It might also have a negative impact for employment and gender, especially in developing countries.

India recently came under attack from Greenpeace which alleged that Indian teas were laced with banned pesticides.

The Tea Board of India maintains that Indian tea is subject to some of the most stringent standards globally, and 37 Plant Protection Codes (PCC) (chemicals) have been identified as permissible for use in Indian tea growth. MRLs are also in place.

The PPC is a comprehensive document, which lays down the manner in which chemicals are going to be used safely in tea cultivation.

Source: thehindu.com

Mere grant of sec. 12A registration won’t be sufficient to allow registration under sec. 80G as well

IT : Section 80G and section 12A are exclusive and, therefore, in order to get recognition under section 80G, mere registration under section 12A is not sufficient

PVC and HDPE tubes or pipes used in effluent treatment plant are eligible for capital goods Cenvat C

Cenvat Credit : Expression "tubes and pipes" in rule 2(a)(A)(vi) of CENVAT Credit Rules, 2004 covers all pipes and tubes whether of iron and steel or of PVC or HDPE; hence, PVC/HDPE/MS pipes or tubes used in effluent treatment plant are eligible for capital goods credit

Trust promoting India-Japan relationship and not extending its benefits to Japan, eligible for regis

IT: Where assessee-society had been formed to promote relationship between India and Japan without any element of profit and fees collected was utilized only for promotion of its aims and objects, it was entitled to registration under section 12AA

Merchandise Exports Fall As Trade Deficit Widens To $13.3 Bn In October

India’s merchandise exports contracted in October—the first time this fiscal year—exerting pressure on the country’s trade deficit even as gold imports surged, forcing the government and the Reserve Bank of India (RBI) to consider further curbs on imports of the precious metal.

The government and the central bank are in talks to increase curbs on gold imports that almost quadrupled in October, Reuters reported on Monday, quoting RBI deputy governor S.S. Mundra.

“With the surge in gold imports which has been witnessed, it warranted a relook,” Mundra said. Last year, the government increased import duty on gold to 10% and made it mandatory for 20% of all gold imports to be held for exports of jewellery as part of its efforts to reduce the import of the yellow metal and consequently narrow the current account deficit that was spiralling. Some of these curbs were relaxed in May.

Although import growth was subdued, trade deficit widened to $13.3 billion in October from $10.6 billion a year ago, according to data released by the commerce ministry on Monday.

During the month, merchandise exports contracted 5% to $26 billion, mainly on account of sectors such as engineering goods, pharmaceuticals and cotton yarn exports. Imports grew 3.6% to $39 billion, with the growth moderation mainly on account of lower oil imports even as gold imports surged.

Gold imports rose 280% to $4.17 billion from $1.09 billion in the year-ago period. Gold imports have surged in the last two months, mainly on account of the festive season as well as the low prices globally.

Oil imports, however, came in 19% lower at $12 billion, compared with $15.2 billion a year ago as international oil prices fell.

The international crude oil price of the Indian basket has fallen to less than $80 per barrel, giving the government some respite in containing the trade deficit.

Non-oil, non-gold imports were up by 6% to $22.9 billion, mainly on account of iron and steel, electronic goods and vegetable oils.

In the April-October period, trade deficit was at $83.7 billion, as against $87.3 billion in the year-earlier period. A slowing global economy could remain a key risk factor for export growth, analysts say.

“Exports growth in the remainder of 2014-15 is likely to be muted, given sluggish growth in key export markets such as Europe and Japan as well as lower prices of commodity intensive exports,” said Aditi Nayar, senior economist at rating agency ICRA.

“As gold imports normalize post the festive season, we expect the trade deficit to ease materially from the levels seen in September-October 2014, benefiting from lower commodity prices,” Nayar said. “However, low growth of exports remains a key risk.”

Source: livemint.com

India Iron Ore Imports Surge To Record Levels In April-October

India iron ore imports have witnessed a record surge during April-October touching 5 million tonnes as steel makers bought raw material from overseas markets due to domestic supply crunch.

According to industry consultancy SteelMint, India imported 5.06 million tonnes of iron ore in the first seven months of the fiscal year ending in October.

Mining restrictions due to court action against illegal mining have reduced iron ore supply in India. That, along with falling global prices, has prompted rising imports, which topped 2 million tonnes in October alone, said SteelMint, predicting the total for the full year to March could reach up to 11 million tonnes.

India holds vast reserves of iron ore and was once the world’s no. 3 supplier. Global iron ore prices have fallen below $76 a tonne, losing 44 percent of their value this year amid a deep supply glut.

Meanwhile, India’s steel consumption growth during April – October 2014. As per the latest data from the Joint Plant Committee under the Ministry of Steel, the consumption stood at 43.112 million tonnes signalling a slump of 0.5 per cent.

The usage of steel during the corresponding period last year stood at 42.9 million tonnes. In October India consumed 6.53 million tonnes of steel, a drop of 1.3 per cent over the same month last year.

Source: hellenicshippingnews.com

India Said To Take Imminent Steps To Curb Surging Gold Imports

India is likely to announce measures to curb gold imports as early as Tuesday, a senior finance ministry source said, as a surge in inbound shipments threatens to worsen the country’s trade deficit.

“We are working on it. The measures to slow gold imports are almost ready and may be announced today (Tuesday) or tomorrow (Wednesday),” said the source, who declined to be named because of the sensitivity of the matter.

Gold imports into India, the world’s second largest gold consumer behind China, surged nearly fourfold in October to $4.18 billion from a year ago, data showed on Monday.

Although India’s trade deficit has so far been kept in check by lower oil imports, analysts warn that is unlikely to last if inbound gold shipments continue to surge.

Struggling with high current account and trade deficits, India last year raised the import duty on gold to a record 10% and imposed other import restrictions, some of which it relaxed in May.

Imports of the precious metal have risen steadily since August, boosted by jewellery demand for the wedding season, raising concerns among policymakers.

Last Thursday, officials from the Reserve Bank of India (RBI) and the finance ministry met to review the country’s gold import policy, but no decision was taken. Reuters.

Source: livemint.com

Rupee Ends Marginally Lower Against Dollar

The local unit opened at 61.63 per dollar and touched a high and a low of 61.63 and 61.79, respectively. The currency ended at 61.74, down 0.03% from previous close of 61.72, while India’s equity benchmark Sensex closed at 28,177.88 points on BSE, up 0.17%.

“With the local markets performing well, all the cues for therupee were positive. But through the day we saw consistent dollar demand from importers. There might be slight import cover happening and even some commodity hedging,” said Harihar Krishnamoorthy, treasurer, FirstRand Bank.

India’s trade deficit in October narrowed to $13.4 billion as compared to $14.25 billion in September, government data showed on Monday. Merchandise imports up nearly 3.62% year-on-year to $39.50 billion mainly on account of lower oil imports even as gold imports surged. Exports, meanwhile, fell 5.04% on year to $26.1 billion.

Most of the Asian currencies ended higher. South Korean won was up 0.63%, Philippines peso 0.1%, Japanese yen rose 0.08%, Indonesian rupiah up 0.07%, China offshore 0.06%, Singapore dollar 0.05%.

Bond yields fell after both the CPI and WPI inflation fell which boosted the speculations that the Reserve Bank of India may cut the rates in its 2 December policy.

The yield on India’s 10-year benchmark bond ended at 8.183%, compared with its Friday’s close of 8.217%. Bond yields and prices move in opposite directions.

Data released on Friday showed the wholesale price index (WPI)-based inflation for the month of October was at 1.77%, the slowest pace since September 2009. A Bloomberg poll of 37 analysts had estimated that WPI inflation at 2.1% for October.

Data on Wednesday showed India’s index of industrial production (IIP) expanded by 2.5% in September after anaemic growth in the preceding two months and retail inflation moderated to 5.52% in October, compared with 6.46% in September, mainly on account of easing vegetable and fuel prices. A Bloomberg poll estimated consumer price index (CPI) at 5.67%.

Since the beginning of this year, the rupee has gained 0.12%, while foreign institutional investors have bought $15.20 billion during the period from local equity markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 87.647, up 0.14% from the previous close of 87.525.

Source: livemint.com

Loss on assignment of debt wasn’t deductible as assessee was giving loan to affiliate when it was in

IT: Where assessee having assigned amount recoverable from sister concern to another company, claimed deduction of loss incurred on assignment of debt, in view of fact that assessee kept giving loan to sister concern even when it was continuously making loss, Tribunal rightly concluded that transaction of assignment of debt was not entered into normal course of business and, thus, assessee's claim was to be rejected

No ST refund on services used for export unless assessee correlates services with export/import code

Service Tax : In order to claim refund of service tax paid on services used for export goods, it is incumbent upon assessee to produce necessary documents before adjudicating authority alongwith invoices indicating IEC number so that activities of export could be correlated with documents and notifications

'CII' had to be taken of the year in which capital asset was converted into stock-in-trade to comput

IT : To determine capital gains cost inflation index as stood in year of conversion of asset into stock-in-trade has to be applied and not cost inflation index as stood in year of sale taxation

Sales incentives to employees establish LO promotional activities in India; treated as PE of foreign

IT/ILT: Foreign Company established a LO in India - Performance of employees of LO was determined by number of direct orders received by them - Employees were also entitled to sales incentives for these orders - Such incentive plans established that LO was not engaged merely in preparatory or auxiliary activities - Its activities extended to marketing activities as well - Therefore, it would be treated as PE of foreign company and the income attributable to LO activities would be taxable in Indi

AO couldn’t adopt DVO’s report making valuation at CPWD if it exceeds market rate

IT: Where DVO valued construction at CPWD rates which were 30 per cent higher than market rate, no addition could be made over valuation of approved valuer as adopted by assessee

Tribunal can't extend stay beyond 365 days yet HC can extend stay beyond that period by exercising w

Excise & Customs : After insertion of third proviso to section 35C(2A) by Finance Act, 2013, Tribunal may extend stay for period upto 365 days and not thereafter; however, High Court may, in exercise of its writ jurisdiction, pass a protective order provided delay in disposal of appeal is not attributable to conduct of assessee

Profits from sale of shares were business receipts as holding period of half of transactions were of

IT: Where there was huge frequency of share transactions and in most of cases holding period was only upto 7 days and assessee carried out repetitive transactions, income therefrom was business income

No addition due to non-inclusion of excise duty in closing stock as duty was payable on removal of g

IT : Excise duty being payable at time of removal of goods and not at time of manufacture, an addition to income of assessee-company on account of non-inclusion of excise duty in closing stock of finished products was not justified

Credit available on input tax even on generation of exempted by-product during manufacture of produc

CST & VAT : Where assessee was engaged in manufacture of refined sunflower oil from sunflower oil cake by employing solvent extraction process and in extraction process it also obtained de-oiled cake, which was exempted from tax, assessee was entitled to full deduction of input tax paid on purchases of sunflower oil cake

Chief Judicial Magistrate has no role to play in securing assets of secured creditors under SARFAESI

SARFAESI ACT: Secured creditors can approach Chief Metropolitan Magistrate in Metropolitan areas and District Magistrate in Non-Metropolitan areas for seeking assistance to secure their assets; Chief Judicial Magistrate has no jurisdiction in such cases