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Exchange Rate for imported goods is Rs 74.03 Per Pound Sterling and Rs 51.22 Per Yen-Exchange Rate for export is Rs 72.45 Per Pound Sterling and Rs 49.94 Per Yen-Customs Non-Tariff Notification No.128 Sensex slips further and closes at 8773 100 per cent EOUs allowed to export non-basmati rice-DGFT Notification No.59 Customs duty of 5 per cent imposed on import of Pig Iron, spiegeleisen, semi-finished products, flat products & long products Import of Crude Soyabean Oil subjected to 20 per cent customs duty- no change in import duty on refined soyabean oil-Customs Tariff Notification No.122 Time-limit for filing refund of service tax extended to 6 months-Service Tax Notification No.32 Rahul Bajaj asks Industry to prepare for the worst Tariff Value for import of Brass Scrap is 3525 and for poppy seeds 5206-Customs Non-Tariff Notification No. 127 CBEC clarifies the entire amount of duty paid by the manufacturer, as shown in the invoice would be available as credit irrespective of the fact that subsequent to clearance of the goods, the price is reduced by way of discount or otherwise-Central Excise Circular No.877 Mandavariya (Kishangarh), District Ajmer notified for Unloading of imported goods and loading of export goods-Customs Non-Tariff Notification No.117 SC Ruling-the entitlement of benefit in terms of Section 32AB, Section 80HH and Section 80I of the Income Tax Act- conversion of Jumbo rolls of photographic films into small flats and rolls in the desired sizes amounted to manufacture/production-AIT-2008-413-SC SC Ruling-Whether any "gift" arose in terms of Section 2(xii) of the Gift-tax Act, 1958 on the allotment of rights issue by the appellant company to its shareholders vide Board's Resolution- Whether there was any element of "gift" as defined under Section 2(xii) in the appellant issuing Bonus shares in the ratio of 1:23-AIT-2008-412-SC DEPB benefit allowed on export of cement and steel-DGFT PN 108 exports of cement in all types and forms and primary steel products eligible for export incentives under Focus Market Scheme-DGFT Notification No.58 Import of Marble Tiles-DGFT Notification No.57 Clarification on setting up Duty Free Shops approved by FIPB-Customs Circular No.19 HC Ruling-Income Tax-"reserves" arising out of the acquisition of the business of Tata Cellular Limited could never have the character of "income" in the hands of the petitioners-pre-requisite condition contained in proviso to section 147 to enable the re-assessment to be opened after period of 4 years have elapsed have not been met-AIT-2008-410-HC HC Ruling-Central Excise- valuation of the goods for the purpose of excise duty and whether excise duty was chargeable under Section 4 or Section 4A of the Central Excise Act 1944-while construing rule 3, who are excluded are only the institutional or industrial consumers as explained in Rule 2A and the industrial or institutional consumers in terms of the proviso to rule 2(p) for the purpose of chapter-II are the same-If the person who purchase the prepacked commodity not directly from the manufacturer or packers, they are consumers and the declaration will be of no effect-AIT-2008-408-HC Government considering imposition of import duty on steel Bad News for Consulting Engineers- whether turnkey contract can be vivisected?- The conclusion in Daelim case on the point, prima facie, being not in accordance with law, matter goes to Larger Bench-AIT-2008-405-CESTAT Larger Bench of CESTAT rules Credit is admissible on an input service relating to the business-AIT-2008-407-CESTAT credit of the service tax paid on the outdoor catering (canteen) service is admissible as input service under Rule 2(l) of the Cenvat Credit Rules, 2004-AIT-2008-406-CESTAT The payment for use of "services for MTNL/other companies via the interconnect/port/access/toll by the assessee would not fall within the purview of payments as provided for under section 194J of the Act, so as to be eligible for tax deduction at source-The interconnect charges/port access charges cannot be regarded as fees for technical services-AIT-2008-404-HC Computation of Value under Section 14 for Levy of Export Duty - Customs Circular No. 18 Advance Ruling- Whether the service fee paid by the applicant to Intertek Testing Management Limited UK under Global Management Service Agreement is taxable as "Royalties & Fee for Technical Services" as per the provisions of Article 13 of DTAA between India & UK? Whether the applicant is required to deduct tax at source on the service fee paid to Intertek Testing Management Limited, UK, at the rate of 10% plus applicable surcharge and cess as per the provisions of section 115A(1)(b)(BB) of the Income-tax Act-AIT-2008-401-AAR Larger Bench of SC Ruling-whether the revenue can be precluded from filing an appeal even though in respect of some other years involving identical dispute no appeal is filed -AIT-2008-403-SC SC Ruling-whether transfer of Banking Undertaking gave rise to taxable capital gains under Section 45 of the 1961 Act-it was not possible to compute capital gains and, therefore, the said amount of Rs. 10.20 cr. was not taxable under Section 45 of Income Tax Act-AIT-2008-400-SC Export duty of 8 per cent notified in place of earlier rate of Rs. 200 per tonne on export of iron ore fines-Customs Tariff Notification No.121 Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Second Amendment Rules, 2008-Central Excise Non-Tariff Notification No.45 SC rules Ethylene and propylene manufactured by the assessee and used in its factory in the further manufacture of the same goods would be entitled to the benefit of exemption contained in notification no.217/86-AIT-2008-398-SC New DEPB Rates on export of all products notified–DGFT PN 102 service tax paid under Section 66A is available as 'input credit' under Cenvat Credit Rules, 2004 provided the said services are used as input services by the manufacturer or producer of final products or a provider of output taxable service-Service Tax Trade Notice No.43/2008 Anti-dumping duty imposed on import of cable ties from China & Taiwan-Customs Tariff Notification No.118 Definitive Anti-dumping duty imposed on import of Phenol from Singapore, South Africa & European Union-Customs Tariff Notification No.114 High-tech products entitled to benefits under High-Tech Products Export Promotion Scheme –DGFT PN 101

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FinMin spoils Rebate Party of J&K and North-East on AIT Report

AIT News Network

NEW DELHI. Acting on the Report of Allindiantaxes ; Finance Ministry has finally spoiled the Rebate Party of Jammu & Kashmir,North-East,Kutch and Sikkim Units by issuing directions to the concerned Officials that the Units working in Excise Free Zones are not entitled to Rebate on export as they are not paying any Central Excise duty but are availing exemption from duty. The officials have also been directed to issue notices to all those Units to whom Rebate claims have been irregularly sanctioned by the Department.

The Government had also taken the Opinion of Law Ministry who opined that the term ‘duty paid’ used in rule 18 of Central Excise Rules does not include that portion of duty, which is subsequently refunded to the manufacturer. It was also opined that the amount so refunded to the manufacturer is to be treated as an exemption and rebate of the said amount cannot be paid.

The Story reported by Allindiantaxes is as under:

FinMin in Santa Mode: Doles out Rebate when no duty paid: Double Your Money Scam all set to shake North Block

AIT News Network

JAMMU. What may perhaps be another Rs.100 Crore scam going to shock even the mandarins of the Finance Ministry; is grant of Rebate by Maritime Commissioners on goods manufactured in Tax Heaven of Jammu & Kashmir on which no duty is legally paid but the rebate is being illegally claimed on export of these goods.

Though on one hand Hon’ble Finance Minister is leaving no stone unturned for plugging the Revenue leakage, Double Your Money in no time is the new buzzword for manufacturers and exporters.

The modus operandi is simple:

Step 1. Set up a Unit in Jammu & Kashmir and avail the benefit of Central Excise Notification No. 56/2002.

Step2: Pay Rs.10 lakh on goods manufactured and cleared as prescribed under Notification No.56/2002

Step 3: Get Refund of Rs.10 lakh paid as provided under Notification No.56/2002

Step 4: Export the same goods. Get Rebate of another Rs.10 Lakh.

Thus on an investment of Rs.10 Lakh ; the Government is in fact giving a return of Rs.20 Lakh.

According to sources this incentives without legal backing are being given to some of the manufactures allegedly on the basis of unreported clarification given to the field formations by the Central Board of Excise & Customs.

R.S.Sharma, Well Known Indirect Tax Expert told allindiantaxes.com that granting of Rebate of duty under Rule 18 of the Central Excise Rules, 2002 on the goods directly exported from Jammu Units through Merchant Exporters, in addition to the refund granted under the said Notification No.56/2002-CE is illegal as the Notification No. 56/2002-CE is an exemption notification issued under Section 5A of the Central Excise Act, 1944 granting exemption to the goods manufactured in the specified areas of Jammu region. A suitable mechanism has been incorporated in exemption Notification to operationalize the exemption wherein the the manufacturer is first required to pay the excise duty and thereafter, whatever is paid in cash is to be refunded. In terms of Rule 12 of the CENVAT Credit Rules, 2004, there is a special dispensation to the manufacturers to take CENVAT credit of duty paid on the goods bought from the units of Jammu region and used in the manufacture of subsequent final products. However, there is no such special dispensation for admissibility of rebate under Rule 18.

Under Notification No. 56/2002-CE, effectively no duty is being paid on the goods cleared and in addition, they are getting rebate of duty @ rate of 16% of value of goods which is never paid.

It has been reportedly learnt that the alleged clarification given by the Board has given indication that payment of duty under the said Notification is also payment of duty for the purpose of granting rebate under Rule 18. It seems to be incorrect in as much as since Notification No. 56/2002-CE is an exemption Notification under Section 5A i.e. no duty is being paid effectively, grant of rebate under Rule 18 in the absence of special dispensation as in the case of CENVAT Credit Rules, 2004, is a double benefit resulting into revenue loss in crores of rupees, which needs to be addressed immediately.

In view of above Allindiantaxes.com suggests:

FinMin should give equal opportunities( as guaranteed under Constitution of India) to all manufacturers exporters to double their money by claiming first Refund and thereafter Rabate of the same amount by issue of a Circular that the Rebate is also admissible in addition to Refund under the said Notification and Rebate Party is open for all manufacturers exporters as granting of rebate in addition to refund in the above manner has resulted in loss of business opportunity to those manufactures who are not claiming such rebate vis-à-vis manufacturers who have claimed rebates and have offered lower prices of the products to their buyers.

Immediate directions should be issued to stop Rebate Party and to recover the rebate granted erroneously. Possibility of the same fate for North East units or units in Kutch region cannot be ruled out. But whether Intelligence Agencies will be able to trace merchant exporters who have availed the Rebate or not; is a big question as their addresses are neither verified at the time of issue of IEC Code nor at the time of grant of Rebate.