CA Terminal: 01/07/15

Wednesday 7 January 2015

Gold chain worn by passenger won't covered under baggage declaration as body of passenger isn't a ba

Excise & Customs : Body of a passenger cannot be said to be baggage and since gold chain was worn by petitioner, therefore it was not necessary for petitioner to declare gold chain worn by him as a 'baggage declration'

Multi-purpose co-operative society, being primary agricultural credit society, was entitled to sec.

IT : A multi purpose Co-operative society which is a primary agricultural credit Co-operative society under Banking regulation Act is entitled to benefit of deduction under Section 80p(2)(a)(i)

Resale Price Method is suitable to compute ALP of goods purchased from an AE which are resold to unr

IT/ILT: RPM is best suited for determining ALP of an international transaction in nature of purchase of goods from an AE which are resold as such to unrelated parties and it pre-supposes no or insignificant value addition to goods purchased from foreign AE

Income on letting out of commercial complex was income from house property if it wasn’t a business a

IT : Where assessee was not engaged in any business activity, rental income earned from letting out commercial complex would be assessed as income from house property and not as business income

No fresh notice to levy penalty if AO didn't complete penalty proceedings in time after issuing orig

IT: Where Assessing Officer after issuance of notice did not complete penalty proceedings within prescribed period of limitation and further issued same notice afresh and levied penalty, said penalty order would be considered bad in law

Legal issues can be raised first time before ITAT if not raised before lower authorities due to bona

IT : Where reasons for not raising legal issues before lower authorities was found to be bona fide, same could be validly raised in objections for first time before Tribunal

HC directs TPO to decide whether investment made by NR in shares of India Co. was international tran

IT/ILT : Where assessee, a non-resident company, made investment in shares of an Indian Company, since it was a case where not only extent of shareholding was involved but also control exercisable in terms of material on record, matter was rightly referred to TPO under section 92CA

Govt. permits 100% FDI via automatic route in manufacturing of medical devices

FDI/FEMA/ILT : Consolidated FDI Policy Circular of 2014 – Review of the Policy on FDI in Pharmaceutical Sector – Carve out for Medical Devices

[Central Excise Circular] : Regarding mandatory pre-deposit of duty or penalty for filing appeal

F. No. 390/Budget/1/2012-JC

Government of India

Ministry of Finance

Department of Revenue

(Central Board of Excise & Customs)

Circular No. 993/17/2014-CX

New Delhi, dated the 5th January, 2015

To,

1. All Principal Chief Commissioners, Central Excise & Service Tax/Customs

2. All Chief Commissioners, Central Excise and Service Tax/ Customs.

3. Chief Commissioner (AR), CESTAT, New Delhi.

4. All Principal Commissioners of Central Excise & Service Tax/Customs.

5. All Commissioners of Central Excise, Service Tax and Customs

6. All Commissioners (AR), New Delhi, Mumbai, Chennai, Kolkata, Bangalore & Ahmadabad

7. Webmaster

Sub: Mandatory pre-deposit of duty or penalty for filing appeal– reg.

Attention is invited to Circular No 984/08/2014-CX dated 16th September, 2014 on the captioned subject. While para 6 of this Circular laid down the procedure and manner of refund, para 7.2 clearly directed that the Commissionerates should maintain a database of the record of deposits made so as to facilitate seamless verification of the deposits at the time of processing the refund claims made in case of favourable order from the Appellate Authority.

2. In order to maintain uniformity in the database being maintained, the following columns are suggested to be maintained in a separate register (e-register preferably) in the Review Cell of each Commissionerate. The following columns need to be filled in on receipt of each appeal memo as directed in Para 6.2 of the Circular mentioned above. The data should be maintained separately in respect of appeals before CESTAT and Commissioner (Appeals)-

(i) Sl. No.

(ii) Name of the Appellant/ Party

(iii) Details of duty paying document viz Challan etc

(iv) Amount of pre-deposit paid

(v) Order No and date of the order of Commissioner(A)/Tribunal

3. Rule 17 of the CESTAT (procedure) Rules, 1982 stipulates that a copy of the appeal memo is to be sent to the Departmental Representative as well as to the Executive Commissionerate. This is required to be done by the Tribunal registry where

the appeal memo is received. It has been brought to the notice of the Board that appeals filed before the Tribunal on or after 6th August are not being sent to the Commissionerate. Therefore, it is emphasized that Rule 17 ibid has to be followed and the Tribunal Registry must send a copy of the appeal memo to the Commissionerate immediately after receipt. Similarly, a copy of the appeal memorandum filed before the Commissioner (Appeal) must be sent to the Commissionerate concerned by the office of the Commissioner (Appeals). This would help in processing the refund claims quickly.

4. Para 1.2 of the Circular ibid stated that amended provisions would apply to appeals filed after 6th of August, 2014. An Act of Parliament comes in to effect on the date it received the assent of the President of India. Hence, the amended provisions regarding filing of appeal along with stipulated percentage of pre-deposit shall apply to all appeals filed on or after 6th August, 2014. Para 1.2 of the earlier Circular stands suitably modified.

5. Several representations have been received by the Board stating that some Commissioners (Appeals) have been insisting on pre-deposit in cases of demand of erroneous drawback granted. It has been represented that drawback is not a duty and hence the amended provisions would not apply to such cases.

6. The issue has been examined. Drawback, like rebate in Central Excise, is refund of duty suffered on the export goods. Section 129E stipulates that appellant filing appeal before the Commissioner (Appeals) shall pay 7.5% of the duty demanded where duty and penalty are in dispute. Accordingly, it is clarified that mandatory pre-deposit would be payable in cases of demand of drawback as the new section 129E would apply to such cases.

7. The ambit of the Section 129E of the Customs Act, 1962 in the legislation does not extend to appeals under section 129DD before Joint Secretary (Revision Application). Therefore, while mandatory pre-deposit would be required to be paid in cases of drawback, rebate and baggage at the first stage appeal before Commissioner(Appeals), no pre-deposit would be payable in such cases while filing appeal before the JS(RA).

(Archana P Tiwari)

Joint Secretary (Judicial/Review)

SSI exemption applies only to domestic clearances and not to exports made under rebate claim

Excise & Customs : SSI-exemption applies to domestic clearances made by assessee; it does not apply to exports made on payment of duty under claim for rebate

Commission paid to foreign agent for securing sales order won't fall within the ambit of 'FTS'; not

IT/ILT: Where commission payments were made to foreign agents for securing sales orders payments will not fall in category of 'Fee for Technical Services' requiring withholding of tax

Insurer rightly rejected claim for damages as complainant didn’t intimate to it transfer of interest

MRTP Act : Where complaintant in terms of insurance policy failed to intimate insurer about transfer of interest of insured property in favour of bank, insurer was not guilty of unfair trade practice in rejecting complainant's claim for damages as a result of fire

Govt. notifies Jan 1, 2015 as date of enforcement of Labour laws amendment Act

CORPORATE LAW/INDIAN ACTS & RULES : Section 1 of The Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Amendment Act, 2014 - Act Enforcement of - Notified Date for Enforcement of Said Act

Resident subsidiaries of MNCs can hedge their forex exposure on basis of guarantee of their NR group

FEMA/ILT : Non-Resident Guarantee for Non-Fund Based Facilities Entered between Two Resident Entities

Vegetable Prices Have Gone Down

Faced with criticism against rising vegetable prices in the city, Delhi government on Tuesday said that there had been a significant decline in prices of several vegetables including onion, potato, tomato and cabbage in December 2014, as compared to the prices in December 2013.

On Tuesday, TOI had reported that there was a sudden rise in price of vegetables, especially tomatoes, since production had been affected due to the weather and that export to Pakistan were continuing despite the shortage.

"As per price information collected from various markets of Delhi, there has been 31% decline in the price of cabbage, 20% decline in price of tomato and 10% decline in the price of onion in December 2014 as compared to the average retail price in December 2013.

Price of tomato has shown a declining trend. And prices of many vegetables also registered a declining trend in the last three months. As compared to the average retail price in October 2014, there is a decline of 40% in the price of potato, 14% in the price of cabbage and 6% in the price of onion was registered in December 2014, said SS Yadav, commissioner, food supply and consumer affairs.

Yadav said a close watch was being maintained on the arrival of vegetables and their wholesale and retail prices.

Source:timesofindia.indiatimes.com

Payment by foreign HO to foreign service provider for its business couldn't be taxed in hands of Ind

Service Tax : Payment made by foreign Head Office to foreign Service providers for services availed by Head Office for benefit of Head Office's business, cannot be taxed in hands of Indian Branch under reverse charge

HC denied stay as assessee failed to deposit the requisite amount of duty

CST & VAT : Kerala VAT - Where assessee had neither satisfied condition to deposit 30 per cent of disputed amount nor had produced proof thereof as required under rule 72A, benefit of stay would not be available to it

Club subscription paid by Co. on behalf of its managing director was personal exp; disallowable unde

IT : Expenditure incurred by assessee for creating manufacturing facility of elevator in India being in nature of capital expenditure, assessee's claim for deduction in respect of same under section 37 (1) could not be allowed

India's Coal Imports Jump 19 Pct In 2014 - Mjunction

Coal shipments to India, the world's third-largest importer, rose 19 percent to 210.6 million tonnes last year driven by an even bigger jump in purchases of the variety used in power generation, online trader mjunction said.

Imports have risen over the past four years as India adds capacity to supply round-the-clock power to its 1.2 billion people, a third of whom live without electricity. Lower-than-expected output from state giant Coal India (COAL.NS) is also boosting imports.

At 163 million tonnes, imports of thermal coal used by power companies jumped 22 percent in 2014. Coking coal, a steelmaking raw material, saw a 4 percent rise to 37 million tonnes, according to the provisional data from mjunction. Anthracite coal, met coke and pet coke made up the rest of the shipments.

Imports fell slightly in December to 15.30 million tonnes as good weather helped Coal India ramp up supply.

Coal India may not maintain the pace in January: workers at the world's top coal producer began a five-day strike on Tuesday in protest at Prime Minister Narendra Modi's move to allow private companies to mine and sell the fuel for the first time in 42 years.

The government does not regularly release coal import figures. Mjunction's data is based on port figures, monitoring of vessel positions and data from shipping firms.

Source:reuters.com

ITAT had to determine applicability of sec. 68 when AO had made additions under sec. 68

IT : Where Assessing Officer had invoked section 68 to make addition, Tribunal had to determine whether said section could be invoked

Issue as to determine an activity as 'service' or its classification would lie before Apex Court and

Service Tax : Issue whether a particular activity is 'service' or not; or whether, particular activity is classifiable under a particular heading of service or not, is question relating to 'rate of service tax or value of service' and cannot be raised before High Court; appeal would directly lie from order of Tribunal to Supreme Court

Issue whether service amounts to export is appealable to SC; Delhi HC applies new provision inserted

Service Tax : Issue 'whether assessee was engaged in export of services and whether service tax was payable' relates to levy of service tax and therefore, in view of section 35L(2) of Central Excise Act, 1944, same is appealable before Supreme Court, not High Court; issue of export rebate/refund is consequential

Kolkata Port Trust, West Bengal Govt To Sign Jv For New Port

Kolkata Port Trust, West Bengal govt to sign JV for new port Union government-owned Kolkata Port Trust will sign an agreement with the West Bengal government on Wednesday to set up a new port at Sagar Island in South 24 Parganas district through a joint venture (JV) between the two.

The Sagar Island port is estimated to cost Rs.11,900 crore and will be the first port to be built by the Union government in 14 years. The last major port— those owned by the Union government—to be constructed was the Kamarajar port at Ennore in Tamil Nadu in 2001 when the National Democratic Alliance government led by Atal Bihari Vajpayee was in power.

The new port will be developed through a special purpose vehicle (SPV) set up under the Companies Act, with 74% equity participation by the Kolkata Port Trust and 26% by the West Bengal government, a spokesperson for the shipping ministry said.

“Kolkata Port and West Bengal government will sign a joint venture agreement to set up the SPV, which will award concessions to private firms for setting up cargo handling facilities at the new port,” the spokesperson added.

This will enable Sagar Island to operate as a landlord port, a port development model where the land and waterfront infrastructure is owned by the government-controlled firm, which are given on lease to private firms who put up and maintain their own superstructure and install their own equipment to handle cargo.

Currently, 12 of the 13 major ports function as trusts under a law framed about four decades ago called the Major Port Trusts Act, 1963. Ennore port is the only exception. It was formed as a company under the Companies Act, 1956, when it was opened in 2001. The 13 ports together account for some 57% of India’s external trade shipped by sea.

Ports functioning as companies are free to set their own rates. In comparison, ports operating as trusts are subjected to rate regulation by the Tariff Authority for Major Ports.

The first phase of the new port, expected to start operations by 2019, will have the capacity to handle 54 million tonnes (mt) of cargo from nine berths. In the second phase, the capacity will be increased to 127.8 mt by adding 11 more berths to handle coal, iron ore, iron and steel products, fertilizer, container, petroleum, oil and lubricants.

India plans to almost triple cargo handling capacity at its ports to 3.13 billion tonnes by 2020 from the existing 1.16 billion tonnes to meet demand, according to a 10-year plan unveiled by the shipping ministry in 2011.

The Union government has decided to approach the Japan International Cooperation Agency for a soft loan of Rs.4,715 crore for the Sagar Island port—Rs.1,223 crore for dredging the approach channel and Rs.3,492 crore for building a 27km long rail road connectivity, including a bridge over the river Muriganga for evacuation of cargo, minister of state for shipping P. Radhakrishnan told Parliament on 11 December.

When operational, the new port with deep draft (depth) is expected to diminish the role of Kolkata port, India’s only riverine port, which has been hit by depth restrictions and higher logistics costs for exporters and importers.

As a result, Kolkata has been losing cargo to other neighbouring ports. From a peak of 57.329 mt in 2007-08, the port’s cargo volumes slumped to 41.386 mt in the year to March 2014.

Experts say there isn’t much cargo left for Kolkata to lose. “Whatever had to be lost, had been lost over the past five years. There is nothing more to lose,” said an executive at Steel Authority of India Ltd (SAIL)— Kolkata port’s biggest customer by volume.

SAIL, which ships about 5 mt of coking coal a year through the port’s Haldia dock, said it could consider shipping some of its coking coal imports through the Sagar Island port to save on logistics costs as bigger ships can be accommodated there, unlike in Haldia. The shipping ministry is also expected to seek viability gap funding from the Union government for the new port.

Viability gap funding refers to a one-time grant given by the central/state government for supporting public-private-partnership projects in infrastructure that are economically justified but fall short of financial viability. A project can secure as much as 20% of its capital costs in viability gap grants from the central government to boost its viability.

Source:livemint.com

CBDT asks officials to seek exchange of info. by 15-2-2015 in assessment cases getting time-barred o

IT/ILT : Section 143 of the Income-Tax Act, 1961 - Assessment - General - Request for Exchange of Information from Field Offices of Time Barring Assessment Cases

Slow Recovery Seen For Indian Steel Demand

Steel demand growth in India is unlikely to show rapid improvement in the short term, with any growth being gradual, India-focused ratings agency Icra said.

Steel consumption grew at 0.5pc on-year in the April-October period, Icra said, in line with the growth of 0.6pc in the 2013-14 fiscal year that ended 31 March.

Demand recovery in the capital goods and construction sector remains fragile, although automobile production is likely to make a smart recovery during 2014-15. Growth in steel output has also slowed to 2.2pc on-year in April-October, compared with a 4pc output growth in 2013-14, the agency said. India is likely to end 2014-15 as a net importer of steel because of the inflow of cheaper Chinese steel products.

But the top seven Indian steelmakers continue to have a healthy operating profit margin of 21.04pc, Icra said, largely because of cheaper prices of imported coking coal. India imports most of its coking coal needs, with the agency forecasting the average imported coking coal cost to Indian steelmakers to fall 15pc on-year in 2014-15.

But iron ore prices in India continue to remain firm, despite a nearly 50pc fall in global prices in 2014, as mining disruptions and restrictions in almost every major producing state has limited supply availability. While larger steel mills are meeting some of the shortfall through imports, smaller companies are unable to afford imports and are operating at lower capacities, Icra said.

Lower coking coal prices and a gradual demand recovery will offset firm iron ore prices and help Indian steelmakers stay profitable in 2014-15, it added.

Source:argusmedia.com

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