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    News
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    December 24, 2007
    Show AI Summary
    Cenvat credit: liberal nexus test allows input credit where processing, though not strict manufacture, relates to production.
    A liberal interpretive approach to input credit was applied: strict textual reliance on the statutory definition of manufacture is not determinative for denial of Cenvat credit. Processes that alter or prepare duty-paid goods, even if not amounting to manufacture as narrowly defined, may be regarded as operations in relation to manufacture and therefore qualify for Cenvat credit if a reviewing authority finds a sufficient nexus between input use and the production or export activity.
    December 18, 2007
    Show AI Summary
    Tariff value notification updates import valuations for edible oils and brass scrap, revising scrap valuation while preserving oil values.
    The Central Board of Excise and Customs issued a notification dated 17 December 2007 announcing per metric tonne tariff values for specified edible oils, retaining existing values for six palm group oils and crude soybean oil, revising the tariff value for brass scrap (all grades), and listing poppy seeds with an unchanged tariff value for use in customs import valuation and compliance.
    December 12, 2007
    Show AI Summary
    Indirect tax revenue growth reported for customs, excise and service tax with provisional monthly and year to date figures.
    Provisional Customs and Central Excise collections for November 2007 present month and cumulative receipts with year over year growth; Service Tax figures are reported up to October 2007; Customs, Excise and Service Tax are consolidated up to October 2007 to show percentage growth, and excise totals are exclusive of cess not administered by the Department of Revenue.
    December 5, 2007
    Show AI Summary
    Mandatory e-payment requirement for service tax to be enforced; penal action for non-compliance and contact support available.
    Mandatory electronic payment of service tax is required for assessees meeting the prescribed threshold under the Service Tax Rules, 1994; authorised banks already provide e-payment facilities. The Service Tax Commissionerate, New Delhi, has directed divisional officers to enforce the e-payment mandate and initiate penal action against assessees who fail to comply, while offering assistance through designated divisional officers listed on the Service Tax Delhi public grievances and redressal webpage.
    December 4, 2007
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    Foreign direct investment approvals and regulatory routing announced, with deferred, withdrawn, and one automatic route recommendation.
    Approval of 16 foreign direct investment proposals across multiple ministries is announced, covering equity inductions, joint ventures, wholly owned subsidiaries, downstream and holding company investments, and share transfers; aggregate reported inflow is Rs. 647.47 crore. Ten additional proposals are recommended for deferral, involving holding company formations, share swaps, removal of trading prohibitions, FDI into telecom-related holding structures, FCCB issuances, and conversions to operating cum holding companies. Two proposals were withdrawn concerning transfers from an erstwhile OCB to non residents, and one proposal was advised to proceed under the automatic route.
    December 4, 2007
    Show AI Summary
    Priority sector lending requirement for foreign banks shapes credit allocation and encourages rural and under banked branch outreach.
    Foreign banks are subject to a priority sector lending requirement measured against their Adjusted Net Bank Credit or the credit equivalent of off balance sheet exposures, including sub targets for small enterprises and export credit, with no specific targets for agricultural or scheduled caste/tribe lending; branch expansion into rural and under banked areas is encouraged under the Reserve Bank's Branch Authorisation Policy, which gives weight to the nature and scope of services provided to common persons when considering branch applications.
    November 30, 2007
    Show AI Summary
    Customs and service tax exemptions: duty reductions and refundable service tax for export-linked services extended to textile exporters.
    Reduction in basic customs duty under Notification No.115/2007 cuts rates on specified polyester and other man-made fibres, spun yarns, polyester chips, certain fibre intermediates and para-xylene while leaving duties on nylon and specified chemicals unchanged. Refund provisions under Notifications No.42/2007 and No.43/2007 extend service tax refunds to exporters by covering business exhibition service and additional export-attributable taxable services-including storage and warehousing and cleaning-alongside existing refundable services such as port services, transport from ICD to port, insurance, testing, and inspection.
    November 29, 2007
    Show AI Summary
    Rectification of tribunal's mistake: tribunals may correct manifest record-based errors that cause prejudice without conducting a review.
    The tribunal may correct a manifest, record-based error that caused prejudice to a party by rectifying its order without conducting a review; where an omission (failure to note a coordinate-bench decision) produced such prejudice, the tribunal was justified in rectifying its earlier judgment disallowing an exchange-fluctuation-based adjustment to asset value and related depreciation claim.
    November 29, 2007
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    Classification of laptops as distinct computing devices affects applicability of additional customs duty on imported computer sets.
    Classification of laptop computers for import duty hinges on their distinction from desktop computers: laptops have limited upgradeability, proprietary form factors and integrated peripherals on the motherboard, reducing component interchangeability; these features bear directly on whether a laptop constitutes a "CPU with monitor, mouse and keyboard imported together as a set" for additional customs duty purposes.
    November 29, 2007
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    Raw material definition excludes consumables; imported consumables do not defeat domestic raw-material requirement for exemptions in tax benefit claims
    The Court considered whether process-consumed items qualify as raw material for a notification requiring manufacture from domestic raw materials. It adopted a functional test: an ingredient is raw material if it is essential and indispensable to the manufacturing process so that the end product depends on its use, regardless of its absence in the finished article. The Court distinguished consumables from raw material, treating consumables as a separate category for assessing entitlement to the exemption.
    November 24, 2007
    Show AI Summary
    Tariff value set for poppy seeds to curb undervaluation and reduce valuation disputes in imports.
    The Central Board of Excise and Customs issued a notification prescribing a tariff value for imported poppy seeds to address undervaluation and valuation-related disputes, establishing an administratively notified import valuation benchmark per metric tonne for customs assessment and to standardise duty determination and valuation scrutiny for consignments described as poppy seeds.
    November 24, 2007
    Show AI Summary
    Foreign direct investment approvals across multiple sectors; several proposals deferred and some rejected, involving joint ventures.
    The Foreign Investment Promotion Board recommended approval of 22 FDI proposals totaling Rs. 511.4616 crore across multiple ministries, authorising new wholly owned subsidiaries, joint ventures, induction of foreign equity, share issues for business transfers and corporate reorganisation including conversions to operating cum holding companies; some proposals invoke Press Note 1 (2005 series) compliance. The Board also recommended deferral of 13 proposals-notably conversions to holding structures, single brand retail ventures, telecom and SEZ related WOS proposals-and recommended rejection of three proposals that sought to expand duty free or test marketing permissions into cash and carry wholesale activities.
    November 23, 2007
    Show AI Summary
    Self-sealing requirement: exporters must self-seal containers for duty-free shipments; examinations limited to intelligence-based cases.
    Mandate requires exporters to self seal containers for shipments under free shipping bills, using tamper proof one time bottle seals; central excise officers will not attend stuffing or sealing for such exports. Opening or examination at port is not to occur except where specific intelligence of concealment or mis declaration exists.
    November 16, 2007
    Show AI Summary
    Tariff valuation update: edible oils unchanged while brass scrap tariff value reduced, affecting import valuation and customs assessment.
    Notification sets tariff values for specified palm oils, palmoleins and crude soyabean oil, leaving those values unchanged, and separately reduces the tariff value for brass scrap (all grades), constituting an administrative import valuation update for customs assessment and compliance.
    November 14, 2007
    Show AI Summary
    Tax Revenue Growth: provisional customs, excise and service tax collections show year on year increases across categories.
    Provisional figures show year on year increases in Customs, Central Excise and Service Tax receipts for the reported months, with month and year to date comparisons and percentage growth rates provided; excise totals exclude cess not administered by the Department of Revenue.
    November 12, 2007
    Show AI Summary
    Central Excise duty evasion exposes clandestine manufacture and mis-declaration leading to arrest and ongoing investigation.
    Large-scale Central Excise duty evasion was detected at a Gutkha manufacturing unit where clandestine production from unaccounted raw material enabled clearance of excisable goods without payment of duty; the operator mis-declared pouch-packing machine shifts and speeds contrary to a regulatory directive, leading to arrest of the company director, remand to judicial custody, and ongoing criminal and revenue investigations.
    November 6, 2007
    Show AI Summary
    Precursor chemical importation detected in a concealed parcel, prompting criminal investigation and enforcement action.
    Australian Customs detected pseudoephedrine tablets concealed as herbal products in an international parcel; field tests indicated the controlled precursor commonly used to manufacture methamphetamine. The concealment in professional packaging prompted investigative measures including search and seizure warrants and inquiries of persons connected to the consignment, reflecting enforcement priorities against clandestine importation of precursor chemicals and exposure to significant criminal penalties for importing commercial quantities.
    October 23, 2007
    Show AI Summary
    Special Economic Zone approvals expand formal and in-principle permissions enabling new IT, biotech, FTWZ and multi product projects.
    The Board of Approval recommended grant of 10 formal and 3 in-principle SEZ approvals, noting 395 formal approvals to date, 156 notified SEZs, substantial investment and direct employment figures. Approved projects span IT/ITES, biotechnology, electronic hardware and software, and a Free Trade Warehousing Zone, with developers, locations and site areas specified. The in-principle approvals cover multi-product and electronics & electrical products SEZs with large proposed land areas, recording the administrative authorisations and project scope for each proposal.
    October 23, 2007
    Show AI Summary
    Excise duty evasion detected: undisclosed continuous production revealed, prompting intensified anti-evasion enforcement and machinery verification nationwide.
    Detection disclosed excise duty evasion by a Gutkha manufacturer who declared only one shift while operating round the clock; searches recovered duplicate challans and unaccounted clearances kept at the manager's residence, evidencing undisclosed production. Authorities directed verification of machinery, sealing of non-working machines, and intensified anti-evasion inspections in the sector.
    October 19, 2007
    Show AI Summary
    Foreign direct investment approvals cleared across multiple sectors; several proposals deferred and one advised to seek central bank clearance.
    Approval of 14 Foreign Direct Investment proposals across multiple sectors was granted, covering induction of foreign equity, formation of wholly owned subsidiaries, conversions to operating cum holding companies for downstream investments, and share swaps; major investments were in new & renewable energy, telecommunications and economic affairs, with aggregate inflows set out. Six proposals were recommended for deferment and one applicant was advised to first seek Reserve Bank of India clearance for post facto conversion to an operating cum holding company.

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      Customs, DGFT & SEZ

      22 FDI Proposals Cleared

      November 24, 2007

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      Finance Minister, Shri P. Chidambaram has approved 22 Foreign Direct Investment proposals recommended by Foreign Investment Promotion Board (FIPB) in its meeting held on 16th November, 2007. The approval amounts to Rs. 511.4616 crore.  The proposals are related to Ministries/Departments,  namely,  Commerce, Food Processing Industries, Heavy Industry, Industrial Policy & Promotion, Information & Broadcasting, Shipping, Railways  and Economic Affairs.  The major investment proposals pertain to the Ministries/Departments of Heavy Industry, Shipping, Railways and Economic Affairs.

      The details of the proposals approved are as follows:

      l. No.

      Name of the applicant

      Particulars of the proposal

      FDI/NRI inflows (Rs. In crore)

      COMMERCE

      1   

      M/s. Georgia Pacific Kemrock International Pvt. Ltd. Vadodara

      Capitalization of pre-incorporation/preliminary expenses made by the foreign investor, by way of issue of shares

      No fresh inflow

      2

      M/s. Metal One Corporation, Japan

      To set up a new WOS to undertake the activities of import, maintain stock, inventories and sale of the products within India and overseas.  Proposal attracts Press Note 1 (2005 series)

      2.90

      3

      M/s. Palfinger Asia Pacific Pte. Ltd. Singapore

      To set up a trading company with a foreign equity of upto 74% undertake Import and sale to the end users/customers  of Palfinger truck mounted kuckle-booms cranes, hook leaders, etc, and their after sale service. Proposal also involves sourcing of items from SS Sector.

      2.90

      4

      M/s. Eric Kozlowski, USA

      To set up a WOS to undertake trading of items sourced from small scale sector

      0.25

      5

      M/s. Crocs Inc.

      To set up a new Joint Venture with a foreign equity of 51% to undertake the business of single brand retail trading of footwear and apparels under the single brand CROCS

      2.04

      FOOD PROCESSING INDUSTRIES

      6

      M/s. Rejoire Natural Creations Private Limited, Mysore

      Induction of foreign equity upto 100% in a company engaged in the manufacture of items reserved for SSI sector viz., manufacture of  natural perfumes and essential oil, handmade products like bags and house hold furniture and natural soft drinks

      0.03

      HEAVY INDUSTRY

      7

      M/s. Yachiyo Industry Co. Ltd. Japan

      To set up a new WOS to undertake manufacture of plastic fuel tanks for automobiles.  Proposal attracts press Note 1 (2005 series)

      30.00

      INDUSTRIAL POLICY & PROMOTION

      8

      M/s. UPM KYMMENE OYZ., Finland

      To set up a new JV  with a foreign equity of 50% to undertake the activities of trading in recycled paper

      14.50

      SHIPPING

      9

      M/s. CWT International Pte. Ltd. Singapore

      To set up a new WOS/Joint Venture company to undertake warehousing, storage and container freight station business and other ancillary/auxiliary activities connected thereto.  Proposal attracts Press Note 1 (2005 series)

      24.00

      ECONOMIC AFFAIRS

      10

      M/s. Bluechip Corporate Investment Centre Limited, Mumbai

      Induction of FDI in an Investment company which has existing downstream companies. Conversion of operating company into an operating-cum-holding company

      20.50

      11

      M/s. Croupier Prive Private Equity Fund L.P. Delaware

       Investment of upto 5% equity in Central Depository Services Limited

      16.00

      12

      M/s. Maples ESM Technologies  Pvt. Ltd. Chennai

      Issue of shares in lieu of acquiring the business of an US company, in IT sector

      No fresh inflow

      13

      M/s. SCICOM Technologies Pvt. Ltd. New Delhi

      Issue of shares in lieu of transfer of branch office business of the same foreign investor

      No fresh inflow

      14

      M/s. PTC India Financial Services Limited, New Delhi

      Conversion of status of operating company engaged in leasing and finance into operating-cum-holding company, and induction of foreign equity by Goldman Sachs and Macqarie, up to 40%, to make downstream investments in Indian companies engaged in the energy and related infrastructure space sectors

      155.74

      15

      M/a. Angel Infin Pvt. Ltd. Mumbai

      Induction of foreign investment by IFC of upto 18% of the equity of the holding company having downstream investments in the companies engaged in the activities of share brokerage, rendering corporate and financial advisory services , portfolio brokerage, commodities broking, distribution of mutual funds and insurance products and software solution services

      152.00

      16

      M/s. Accentia Technologies Limited

      Transfer of shares by way of share swap for acquiring 3 US based companies engaged in Health BPO Services

      No fresh inflow

      INDUSTRIAL POLICY & PROMOTION

      17

      M/s. Anest Iwata Motherson Ltd.

      Conversion of operating company into operating cum holding company to make downstream investment in companies engaged in trading, marketing and servicing of air compressors and associated spare parts & accessories etc.

      No fresh inflow

      ECONOMIC AFFAIRS

      18

      M/s. HP Financial Services (I) Pvt. Ltd.

      To undertake additional activities of financing and leasing

      No fresh inflow

      19

      M/s. Smartronics Solutions India Pvt. Ltd.

      Issue of shares against advance paid for purchase of second hand machinery

      No fresh inflow

      INDUSTRIAL POLICY & PROMOTION

      20

      M/s. Rajasthan Leather Industries Ltd, Jaipur

      Issue of shares against amount received in the account of a third company due to the account of the investee company being frozen

      No fresh inflow

      RAILWAYS

      21

      M/s. Sical Infra Assets Ltd, Chennai

      Induction of foreign equity upto 26% in  investing companies in infrastructure sector

      106.6

      INFORMATION & BROADCASTING

      22

      M/s. Wai Wire and Cable Services Private Limited, USA

      To undertake additional activities of publishing specialty journal under the title "Wire Bulletin"

      No fresh inflow

      Total 511.4616 Cr

      3. The following 13 (thirteen) proposals have been recommended to be deferred:           

      Sl.No

      Name of the applicant

      Particulars of the proposal

      1.

      M/s. AVA Seeds Pvt. Ltd. Bangalore

      change in the status of the operating company into an operating cum holding company for making further downstream investments.  Proposal also  attracts Press Note 1 of 2005

      2

      M/s. Dolce & Gabbana

      To set up a Joint venture company with 51% foreign equity  to undertake the business of single brand retail trading of all kinds of fashion and lifestyle products under the brand name "Doice & Gabbana" and "DG Dolce & Gabbana"

      3

      M/s. Global Assets Holding Corporation Private Limited, Mumbai

      FDI in a holding company having subsidiaries in the Telecom Sector  

      4

      M/s. Sistema Joint Stock Financial Corp. Russia

      Increase of FDI from 10% upto 74% in a company engaged in telecom sector

      5

      M/s. Universal Success Enterprises Ltd, Tortola

      To set up a WOS to hold downstream investments in various Indian companies engaged in development of SEZs

      6

      M/.s. Universal Success Enterprises Ltd., Tortola

      To set up a WOS to hold downstream investments in various Indian companies engaged  development of infrastructure development projects, tourism, convention centre, Industrial Parks (including IT parks)  etc. in development of SEZs

      7

      M/s. Universal Success Enterprises Ltd, Tortola

      To set up a WOS to hold downstream investments in various Indian companies engaged in development of Office parks (including industrial Parks and IT Parks)

      8

      M/s. JSW Energy Ltd, Mumbai

      Induction of foreign equity in an Indian company which has existing downstream ventures. Conversion of operating company into operating cum holding company.

      9

      M/s. Bycell Telecommunications India Pvt. Ltd.

      To undertake activities of offering GSM based cellular telephone services under UAS License agreement all over India, and increase in paid up capital of the company

      10

      M/s. Grupo Omnilife S.A. de C.V. Mexico

      To establish a WOS to undertake test marketing  and manufacture, sell and distribute its proprietary nutritional food supplements and cosmetic products through its WOS in India

      11

      M/s. KNOX Holding Pte. Ltd. Singapore

      Transfer of shares held by an OCB by way of sale by a foreign investor. The promoters of the Indian Company and the new foreign investors are same.

      12

      M/s. Redington (India) Limited, Chennai

      Conversion of operating company into an operating cum holding company to make downstream investments into NBFC activities

      13

      M/s. Dumeric Holdings Private Limited, Mumbai

      Conversion of status of operating company into operating cum holding company

      The following 3 (three) proposals have been recommended to be rejected:

      Sl. No

      Name of the applicant

      Particulars of the proposal

      1

      M/s. Flemingo Duty Free shop Pvt. Ltd.

      To undertake additional activities of cash and carry whole sale trading in addition to operating duty free shops

      2

      M/s. Flemingo (DFS) Pvt. Ltd.

      To undertake additional activities of selling duty free goods to hotels against duty credit in addition to operating duty free shops

      3

      M/s. Elken International  India Pvt. Ltd.

      To undertake cash and carry wholesale trading of the items earlier permitted for test marketing

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