No reassessment on basis of survey report if it didn't indicate that any income escaped assessment

IT : Where neither survey report nor any other material indicated that any income chargeable to tax for relevant assessment year had escaped assessment, issue of reassessment notice on basis of survey report was invalid

Tata Motors Banks On Defence Sector Business, Exports

Tata Motors, India's largest commercial vehicle maker, is banking on growth in its defence sector business and exports to drive 30-40 per cent of its revenues in the next three to four years as it seeks to derisk the domestic commercial vehicle business from its inherent cyclicality.

The company expects the defence business to account for 15 per cent of its total revenues, a fivefold jump from 3 per cent at present, and exports volumes to increase to 150,000 units from about 50,000 in 2014-15.

"The potential is very large...10 per cent is not a good number, our defence business can be much bigger than 15 per cent in the future," said Ravindra Pisharody, executive director and head of commercial vehicle business at Tata Motors. Pisharody was referring to Rs 900 crore order that Tata Motors secured from the Indian Army for supplying 1,200 trucks for material handling cranes for loading, unloading and transportation of ammunition pallets, spares and other operational equipment.

The company will start delivering the vehicles by December. Tata Motors is making a gradual transition from just providing logistic support to supplying combat vehicles including front line combat vehicles. Simultaneously, the company is planning to open up new overseas markets through the hub-and-spoke model in Eastern Europe, Africa, Asean and Latin America.

Tata Motors collaborated with SUPACAT a UK-based high mobility vehicle specialist, for technical assistance for its Light Armoured Multi-role Vehicle (LAMV) project, a combat vehicle based on a defence ministry programme. The company also has a partnership with Malaysian-based DRB-HICOM for import, distribution and assembly of Tata
Motors' commercial vehicles and defence range in Malaysia, a step towards expanding into the international market.

The company has developed the WHAP (Wheeled Armoured Amphibious Platform) besides the LAMV and its upgrade programmes include missiles carriers, mine protected vehicles, main battle tanks and infantry combat vehicles.

"The first order is always difficult, with various vehicles under trial. We definitely do expect significant business from defence going ahead, as long as orders keep flowing from the government," said Pisharody .The recent order is a major shot in the arm for the company, which has an order book of Rs 1,500 crore in its defence business. It expects to post a 20 per cent growth in the segment this year, owing to increased buying by government agencies.

Apart from India, Tata Motors has supplied defence vehicles in markets including the ASEAN, SAARC and Africa. The company recently received an order from Myanmar for about 500 units and it completed deliveries for 520 defence vehicles to the United Nations Multidimensional Integrated Stabilisation Mission in Mali.

The company's defence division will be bidding for government contracts to supply light specialist vehicles and light armoured multi-role vehicle. The technical evaluation for both types of vehicles has been completed and the prototypes will now be tested, the company said. It is eyeing this additional Rs 3,000 crore business opportunity.

Source:economictimes.indiatimes.com

 

Presence of big players like HP, IBM, Lenovo in relevant market of 'x86 server' in India ruled out d

Competition Act : Where big players such as HP, IBM, Lenovo were operating in relevant market of x86 server in India, Dell was not dominant in relevant market and, therefore, question of abusing dominant position did not arise

Three Indian Diamond Labs Receive Duty Exemptions

The Indian Central Board of Excise and Customs (CBEC) has exempted three diamond laboratories operating in India from customs duty, reported The Hindu.
 
Cut and polished goods imported for grading or certification and then re-exported from the country by the GIA (Mumbai), the Indian Diamond Institute (Surat) and the International Institute of Diamond Grading and Research India (Surat) are exempt from customs duties. The move comes in the face of falling diamond exports.

Diamonds imported into India for the purpose of certification must be re-exported within three months to be eligible for the exemption, said a notification from the CBEC. 

The Hindu said that strict checks will be enforced to verify that the diamonds being re-exported are the same as those that were imported.

Source:idexonline.com

 

Sharp Drop In Gold & Oil Prices Brings Cheer For Modi Govt; Public Investments May Rise Too

Thanks to god, gold and oil, India's businesses and consumers may be in for somewhat better times than has been the case in recent months.

Rain gods have been kind, gloomy monsoon forecasts have proved off the mark so far, with rains just 5% short of normal. Oil and gold - two of India's biggest imports - have seen sharp price falls. Crude oil prices are down 15% in the past month and trading at half the price that prevailed in June last year.

Gold has plunged to a multi-year low. Most analysts expect these trends to continue. The implications of god, gold and oil being kind to India now and in the near future means the festive season - India's annual high point of consumerism - will likely see consumers feeling they can spend some serious money.

Businesses will both have healthy demand and be free of fear of interest rate hikes. And the government may find it easier to pump prime the economy, thanks to better
current account and fiscal situation.

Think basics: gold is cheap, cooking oil prices are down and likely good harvests means higher rural demand for cars, motorcycles, tractors, jewellery and FMCG products. Plus, the rare combination of near-normal rain and much lower import bill for oil and gold means the government and RBI need not lose sleep over fears of inflation. So, little pressure on raising rates.

Jyotinder Kaur, Principal Economist, HDFC Bank, said India was lucky that global prices of commodities, particularly energy, had softened. "This has provided a buffer to us and will help keep headline inflation below the nearterm target of 6% set by the RBI.

This will, needless to say, provide comfort to Governor Raghuram Rajan in his deliberations about the future course of monetary policy," she said.

Analysts also say the government can raise public investment to offset private sector capital spending blues and raise more money from disinvestment as blue-chip oil firms now command a better value.

The oil price fall will reduce the borrowings of refiners and cut ONGC's subsidy burden. "This, along with the policy reforms augurs well for the sector, and will help the government get good valuations if it goes ahead with divestment in these companies," said K Ravichandran, Senior Vice-President and Co-Head, Corporate Ratings, ICRA.

Source:economictimes.indiatimes.com

Steel Firms Cut Prices As Imports Pour In

Local steel makers are cutting prices to avert loss in market share as cheaper imports from China, Korea and Japan flood the market.

Hot-rolled steel prices dropped by Rs.3,000-4,000 a tonne in the April-June quarter, said Vikram Amin, executive director, strategy and business development, Essar Steel India.

As on 1 July, the average price of hot-rolled steel was Rs.36,100 per tonne in Delhi, according to data available with the Joint Plant Committee (JPC) of the steel ministry.

This, industry experts and traders say, has led to a gap between the landed cost of imported steel and domestic steel prices narrowing down in the last few months, a clear indication of steel companies focusing on volumes and giving up on margins.

During the March-April period, the landed cost of imported steel in the hot-rolled category in India was lower by about Rs.2,000-3,000 per tonne, said Ajay Srinivasan, director, Crisil Ratings. This gap, Srinivasan said, has narrowed to Rs.1,000 per tonne now.

Vivek Gupta, vice-president, Indian Chamber of Steel, and a leading steel dealer in Mumbai said for a broader category of steel products, the difference between imported and domestic steel prices has narrowed from a range of 15-20% in April to 5-15% now, depending on the product category.

Amin from Essar added that the domestic steel price correction is a result of cheap imports and the depreciation in the currencies of various steel exporting countries.

According to JPC data, total finished steel imports by India rose 53.1% in the April-June period on a year-on-year basis. The average spot price of hot-rolled steel sheets in China, a major exporter for steel to India, corrected 12% from April to June-end.

“There is a surge in volumes in imports due to dumping, resulting in squeezing the margins of domestic companies,” said Jayant Acharya, director (commercial and marketing), JSW Steel Ltd. He did not share details on the steel price movement as the company is in its silent period ahead of its earnings report next week.
JSW Steel produced the highest ever quarterly crude steel volume of 3.4 million tonnes for the June quarter, it said in a statement on 13 July. The company is yet to disclose the sales figure for the same period.

Tata Steel Ltd said its sales volumes for the June quarter rose 2% to 2.14 million tonnes in a statement sent to BSE on 9 July. “Being an industry with high capital investments and hence high fixed cost, focus is generally on increasing capacity utilization to recover maximum fixed cost and improve margins in spite of reduction in prices,” said a SAIL spokesperson.

“Falling international steel prices have affected domestic prices of steel. The average price realisation for SAIL has dropped by 17.4% in the June quarter with respect to the corresponding period last year,” the SAIL spokesperson said.

Srinivasan of Crisil Ratings explained, “Notwithstanding the weak rupee and rise in import duty, domestic steel makers are under tremendous pressure with steel prices falling globally. Domestic steel makers have been forced to bring down prices, focusing on volumes than margins.”

Jimesh Sanghvi, an analyst at IL&FS Broking Services, in a 9 July note said the drop in steel prices will adversely impact integrated steel players such as Tata Steel and SAIL.Some expect pressures on margins to continue in the September quarter.

Srinivasan expects global steel prices to fall below $370-390 per tonne. “This (global price correction) will force domestic steel companies to follow suit,” Gupta said. In addition, July-September is a weak quarter for steel companies.

“The demand and prices start to pick up after October. We expect the same trend to continue even this year,” said Amin.

Source:livemint.com

Rupee Falls Against Dollar In Early Trade

 The rupee depreciated by 4 paise to 64.08 against the dollar in early trade due to month-end dollar demand from importers.

Besides, a weak opening in the domestic equity market weighed on the rupee, dealers said. A weakness in the US dollar against major world currencies in global market however limited rupee fall.

The rupee had lost 27 paise to close at more than 5—week low of 64.04 per dollar in the precious session on Friday following persistent demand for the US currency from banks and importers.

Meanwhile, the benchmark BSE Sensex fell below the 28,000—mark to trade at 27,875.31, down by 237 points, or 0.84 per cent over previous close.

Source:thehindubusinessline.com

Prior to 7-9-2007, 'reversal of credit' can't be made a condition precedent for remission of duty

Cenvat Credit : For period prior to 7-9-2007, in absence of any condition of reversal of credit in case of grant of remission, department cannot order 'reversal of credit' as a condition for grant of remission of duty

Denial of part of sec. 80-IC relief doesn't lead to imposition of concealment penalty

IT : Penalty need not be imposed when part of deduction under section 80-IC to assessee was denied on basis of some estimated addition