TIOL-DDT 1004 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"
"http://www.w3.org/TR/html4/loose.dtd">
<html>
<head>
<title>Untitled Document</title>
<meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1">
</head>
<body bgcolor="#FFFFFF">
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1004</font><br>
03.12.2008<br>
Wednesday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Guidelines for compounding of offences under Customs</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Recently by Notification No. No. <a href="http://taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=NzM3OQ==" target="_blank"><strong>118/2008-Customs (N.T)</strong></a> dated 12.11.2008, certain amendments have been carried out in the Customs (Compounding of Offences) Rules, 2005. [please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8174" target="_blank">TIOL-DDT 995 20.11.2008</a></strong>]</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Board has issued guidelines and explanations to the amendments.</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The compounding amount has been revised downwards.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. If a person has, in respect of same goods, committed offences falling under more than one category, and where amount of duty evasion or amount of drawback or exemption from duty, or amount of market value of the goods is same for all such offences, then the compounding amount, in such cases, shall be the amount determined for the offence for which a higher compounding amount has been prescribed.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. An applicant should pay duty, penalty, and interest before submission of application for compounding.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Correspondingly, the Application Form has also been amended by inserting Sl.No.12A so as to ensure that the compounding of offences shall not be allowed unless the aforesaid duty, penalty and interest thereon are paid by the applicant.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Normally the application for compounding of offences may be disposed of within a period of 3 months from the date of receipt of such application.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. In order to ensure such time bound disposal, it is reiterated that the existing instructions regarding time limit for launching prosecution should be followed.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. In straight cases, where the importer/exporter is caught red handed, prosecution may be launched immediately after seizure of the goods. In other cases, the process of deciding about launching of prosecution or otherwise shall be completed within a month of adjudication of the case.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. Cases of prosecution shall be pursued seriously with the respective Government Counsels and the Courts.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. The Compounding Authority shall invariably obtain a factual report from the Reporting Authority within one month of receipt of the application for compounding, except in deserving cases, where request for extension of the period have been sought for justifiable reasons.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. Where an opportunity of personal hearing requires to be given to the applicant before passing of an order, the same shall be offered within one month's time of date of receipt of report from the Reporting Authority.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. In any case, even if there are certain difficulties in timely submission of report or conducting timely personal hearings, the Compounding Authority shall dispose of the application within an overall time limit of 6 months.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, it was decided by the Board that compounding of offences should not be allowed where there are <strong><font color="#FF6633">demonstrable contradictions</font></strong><font color="#FF6633">, <strong>inconsistencies </strong>or <strong>incompleteness</strong></font><strong> </strong> in the case.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now what do these words mean? Who will demonstrate the contradictions and who will decide as to what the <strong>inconsistencies </strong>or <strong>incompleteness </strong>are.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants adequate publicity to be given about reduction of compounding amount, in order to make the scheme more popular as to reduce the cases pending in the Court. All persons against whom prosecution is initiated or contemplated, should be informed separately in writing, the offer of compounding.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Also see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=3105" target="_blank">TIOL-DDT 274 - 02.01.2006</a> </strong>and <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5962" target="_blank">TIOL-DDT 684- 23.08.2007</a> </strong>for more details on the Scheme.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2008/cuscir08_20.htm" target="_blank">CBEC Circular NO. 20/2008-Customs Dated: 2nd December, 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Guwahati Commissionerate - Jurisdiction Notified</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has notified the jurisdiction of Guwahati Central Excise Commissionerate and consequently Notification No. <a href="http://taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=NzAwOA==" target="_blank"><strong>14/2002 Central Excise (N.T.)</strong></a> dated the 8th March, 2002 has been amended. Similar amendments in the Customs Notification are yet to be made and that will certainly be done in a few days - and most probably with a back date.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2008/exnt08_47.htm" target="_blank">Notification NO. 47/2008 - CX ( N.T. ) Dated: December 01, 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>India is Angry</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These are some of the messages doing the rounds on the dastardly terror attack.</font></p>
<ul>
<li>
<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">Least paid, but bravest, they make biggest sacrifice, our jawans and officers. Selfless saviours. If only we could para-drop our politicians on Nariman House.</font></div>
</li>
</ul>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify"> Let us hope Chidambaram will be successful in bringing down terrorism the way he brought down share prices.</font></li>
</ul>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">He may introduce service tax on terrorism and fringe benefit tax on NSG.</font></li>
</ul>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">Don't worry about those who came thru boats - our forces can defeat them; WORRY about those who come thru votes - those are our REAL ENEMIES.</font></li>
</ul>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify"> Forgiving the Terrorists is God's responsibility. But fixing their appointment with God is entirely OUR responsibility.</font></li>
</ul>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600">- Tommorow's cases</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"></b></strong></strong></strong></strong></strong></strong></strong></font><font color="#663399">Central Excise</font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Provisional assessment - Rule 7(4) of the CER, 2002 - Interest is required to be paid even when the differential amount is paid before the finalization of the assessment- CESTAT LB</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> reference was, accordingly, answered thus -</font></p>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">In the case of provisional assessment under the Central Excise Rules, 2002, interest is required to be paid from the first day of the month succeeding the month for which such amount is determined.</font></li>
</ul>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">Interest is required to be paid even if the differential amount is paid before the order, under the rule 7(3) of the said Rules, is issued finalizing the assessment</font></li>
</ul>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The same issue was also recently decided by the Larger Bench of the Tribunal, Chennai, in the case of <em>Bimetal Bearings Ltd. vs. CCE, Chennai </em><strong>[<a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2008/2008-TIOL-1821-CESTAT-MAD-LB.htm" target="_blank"><font size="1">2008-TIOL-1821-CESTAT-Mad-LB</font></a>] </strong> and where a similar conclusion was arrived.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Interest proceeds received from the bank had to be treated as income from other sources as it had no direct or immediate nexus with the export business; Netting cannot be allowed as this was paid as interest on over draft facility, which was, utilized in the export business- High Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>assessee/respondent, who is a 100 EOU of readymade garments had surplus funds which were put in a fixed deposit with the bank. The said fixed deposits, in the assessment year in issue, earned interest in the sum of Rs 23,14,800/-. The assessee who was required to furnish a bank guarantee to the AEPC for procurement of export quota, prevailed upon the bank, to furnish a bank guarantee, which was, secured by the fixed deposit held with the bank. The bank guarantee furnished on behalf of the respondent/assessee by the bank was a pre-condition for allotment of an export quota by the AEPC.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Refunds - claiming refund without challenging assessment - when there is no provision for assessment, there is no question of challenging it - the very basis given by the Tribunal, simply has no legs to stand. High Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> may be observed, that under the scheme of things, starting from Section 73 onwards it is clear, that the assessee himself is to deposit service tax in form ST-3, (sic) there is no provision for assessment. Passing of assessment order is contemplated only in cases where the notice is issued under Section 73, and it is found, that service tax is not levied or paid, or has been short levied or short paid etc.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns tomorrow for the judgements</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Day.</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p>
</body>
</html>