Modvat credit for countervailing duty on imported black and white picture tubes permitted when supported by a PSU certificate.
Modvat credit of countervailing duty is permitted on imported black and white picture tubes routed through M/s. Electronics Trade and Technology Development Corporation Ltd., where the undertaking furnishes a certificate evidencing payment of the countervailing duty; the same evidential facility previously applied to colour picture tubes is to be extended to black and white picture tubes.

Surcharge on advance tax instalments: late payments accepted within an authorised extended period without levy of penalties.
Surcharge on instalments of advance tax due 15 June and 15 September 1987 was to be paid by 30 September 1987; the Board authorised that payments made by 30 October 1987 will not attract penalties and instructed officers to notify subordinate staff of this administrative concession.

Tax-deduction Account Number requirement: deductors must apply for and quote TAN in TDS documentation consistently.
Persons responsible for tax deduction at source must apply for and quote a Tax-deduction Account Number (TAN) using the prescribed application; metropolitan TDS work is centralised to a single circle for uniform allotment. TAN structure comprises an employer letter and serial number, a check digit derived by remainder on division by seven (mapped to letters A-G), a letter indicating the nature of payment (specified codes for salary, interest, dividends, contractor payments, insurance commission, lottery winnings and other sums), and a station abbreviation.

Salary classification of incentive bonus prevents separate expense deduction; only the standard deduction applies to such payments.
Incentive payments to Development Officers of the Life Insurance Corporation constitute salary inclusion because of the employer employee relationship; such payments do not qualify for the fixed percentage expense deduction applicable to insurance agents, and only the statutory standard deduction for salaried income is allowable against these incentive payments.

Sales tax deferral treated as discharged under section 43B when state law deems deferred payments as paid, preserving incentives.
Sales tax deferral schemes permit collection and retention of sales tax for a prescribed period, but tax deduction timing under section 43B allows deduction only when tax is actually paid; a State-law deeming provision treating deferred tax as paid will satisfy section 43B and cause the statutory liability to be treated as discharged for income-tax purposes.

Jurisdictional allocation of high-value assessments: metropolitan IAC(Assessment) to handle large business/professional cases with reassignment and reporting deadlines.
Jurisdiction for assessment work in four metropolitan cities is revised to assign significant business and professional cases to the metropolitan IAC (Assessment) when returns or aggregate receipts exceed prescribed high-value thresholds for pending assessment years; Commissioners should reassign additional important scrutiny cases to metropolitan IACs if workload requires. Other scrutiny assessments remain with Income-tax Officers under Range IACs, with an objective of thorough investigation to detect concealment, and transfers and compliance reporting are to be completed within specified timelines.

Exemption scope for pump parts clarified as outside retrospective exemption, limited to parts for water-handling pumps addressing Modvat.
S. No. 16 of Notification No. 64/86-CE limits exemption to parts classifiable under heading 84.13 used in manufacture of power driven pumps primarily for handling water; identical parts used for other pumps are dutiable. The provision was inserted to resolve Modvat difficulties and is not a restoration of prior duty rates; therefore S. No. 16 is not covered by the Central Duties of Excise (Retrospective Exemption) Act, 1986.

Duty-free import by post: goods for export-oriented units are generally ineligible but may be considered for ad-hoc exemption.
The Ministry of Law has advised that goods imported by post do not qualify for exemption under Notification No. 13/81-Customs for export-oriented units; however, individual instances may be considered for discretionary ad-hoc exemption, and authorities are requested to recommend specific cases with full details and to report any pending applications.

Deemed dividend rules expanded to tax loans and advances to smaller shareholders and concerns, preventing distribution avoidance.
The Finance Act, 1987 enacts wide ranging direct tax amendments: it sets tax and TDS rates, expands the definition of dividend to treat loans/advances to smaller shareholders and to concerns as deemed dividends, broadens the meaning of transfer to capture substantive transfers (including power of attorney and membership rights), reforms capital gains computation and carry forward rules, mandates timely employer crediting of employee fund contributions for deduction, introduces a minimum tax on company book profits, and strengthens TDS administration through tax deduction account numbers and revised TDS thresholds and timing.

Surcharge on income-tax increases liability where taxable income exceeds threshold; surcharge on advance-tax instalments must be paid by the due date.
The Ordinance requires a surcharge to be added at a fixed percentage to income-tax computed for purposes such as deduction at source on salaries and advance-tax payments when taxable income exceeds the threshold, and it mandates that surcharge attributable to earlier advance-tax instalments be paid by a specified due date, with non-payment attracting defaulter consequences under the Income-tax law.

Net fabric classification: construction determines whether mosquito netting cotton fabrics fall under net rather than woven or knitted headings.
Classification of round mesh mosquito netting cotton fabrics turns on their method of manufacture and actual construction; fabrics produced on roller locking machines and not knitted are net fabrics rather than loom-woven fabrics. When goods are specifically described as net fabrics, they are excluded from the woven-fabrics grouping, and each case must be decided on its merits by ascertaining the fabric's construction.

Classification of colour master batches: percentage alone should not determine status; intended use must guide classification.
The Ministry, in consultation with the Chief Chemist, advises that prescribing a single minimum percentage of colourant is inadvisable as the sole criterion to identify a product as a master batch. When the colourant proportion substantially exceeds the indicative level it will ordinarily be a master batch, but when it is slightly below that level the manner of use must be taken as the confirmatory factor to decide whether the product is a colour concentrate.

Exemption from excise duty on cigarettes supplied as naval ship stores subject to bond procedure, marking, and consumption certificate.
Exemption from excise duty for cigarettes supplied as stores to Indian Navy ships is allowed subject to Collector prescribed bond movement procedure (similar to form A.R.-3A), marking packages "I.N. Ships only", and the Commanding Officer issuing a consumption certificate to the customs bonded warehouse officer within six months confirming onboard consumption; Collectors must prevent diversion and submit monthly brand wise, manufacturer wise supply reports and revenue foregone.

Rebate of excise duty: audit objections on assessable value calculation withdrawn; pending assessments may be finalised.
Rebate measures to encourage use of specified oils were distinguished from ordinary effective-rate exemptions because the rebate's purpose and the impracticability of computing precise rebate quantum at clearance precluded deducting the rebate when deriving assessable value; the Comptroller and Auditor General has elected not to pursue earlier objections, allowing finalisation of pending assessments, and the issue has been overtaken by subsequent budgetary notifications removing the cum-duty valuation problem.

Classification of Ayurvedic products must be determined on individual merits, with doubtful cases referred for technical review.
Ayurvedic, Unani and Siddha products must be classified by individual examination on their merits to determine whether they fall under the medicaments provision attracting nil duty; Collectors should refer doubtful cases to the Board, which will consult the Drugs Controller of India.

Disallowance of Modvat credit requires a demand letter giving a short period to reverse before issuing a show cause notice.
When Modvat credit is wrongly availed, the officer should issue a reasoned demand letter requiring the assessee to pay or debit the wrongly taken credit within seven days; a show cause notice is to be issued only if the assessee fails to reverse the credit within that period or is unwilling to comply.

Neutral packing permitted for cotton yarn exports; name and address may be omitted with separate storage and monthly account checks.
Exporters of cotton yarn may elect to use neutral packing and omit the manufacturer/owner name and address on export packages, representing a limited relaxation of rule 185 packaging identification requirements; such packages must be stored separately and recorded in subsidiary accounts, which local Central Excise Officers may check monthly to ensure compliance.

Job work exemption requires an undertaking to the Assistant Collector, allowing clearance without prior permission.
Job work exemption under Notification No. 214/86 permits removal of goods for manufacture of final products upon furnishing an undertaking to the Assistant Collector of Central Excise; the notification contains no provision requiring prior permission before clearance, so goods may be cleared once the requisite undertaking is given.

Modvat credit ineligibility: specified electrodes, thinners, paper and processing chemicals do not qualify for input credit under the scheme.
Modvat benefit is denied for titanium coated mild steel electrodes used as cathodes and anodes because they are fixed plant items, not consumables; thinners used as diluents in spray painting and craft paper used as interleaving are likewise ineligible; flushing chemicals, cutting oils and compressed nitrogen used as indicated are also not admissible for Modvat credit.

Excise liability on products under 'other' sub-heading: manufacture from duty paid like goods remains chargeable to duty.
A product falling under a sub heading "other" and manufactured from a duty paid product falling under the same sub heading "other" is chargeable to excise duty; chargeability is determined by classification of the finished article rather than by prior duty payment of the input.