TIOL-DDT 1056 · the untouched capture
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<!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 1056</font><br> 19.02.2009<br> Thursday</strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Appoint President of CESTAT – Bar Association writ in Supreme Court</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Excise, Customs & Gold Control Bar Association, through its President D. N. Mehta, has filed a writ petition in the Supreme Court seeking a direction to the Government to fill the post of the President of CESTAT. The writ petition was mentioned before the Court No. 1 of the Chief Justice, yesterday. Upon hearing counsel the Court made the following ORDER</font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“List on 2.3.2009.'</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The petitioner submitted that:-</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. On an earlier occasion, the Court had intervened in 1991-92 when the post was lying vacant for a couple of months.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. After the last President Justice SN Jha had resigned on 3 rd November 2008, the CESTAT is without a President in spite of the fact that a name has been recommended by the Chief Justice of India and is pending before the Cabinet Secretary.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. On 31st of October 2008, the Ministry of Finance requested the Chief Justice of India to recommend the name of a sitting/retired Chief Justice/senior judge of the High Court for appointment as President of the CESTAT and the Chief Justice is learnt to have recommended some name for the said appointment to the Ministry of Finance.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. CESTAT is without any President for the last three months with the result that there is a complete breakdown of the administration and chaos all around and even the judicial working of CESTAT is adversely affected and disposal of appeals has considerably declined for many Benches.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. There are in total 18 posts of Members of CESTAT out of which four posts are vacant as on date. Besides, two Members have opted for VRS and thus 2 more vacancies are likely to arise.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. In the absence of the President, no Vice-President or Member can be selected/appointed.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. The tenure of the President is three years or till he attains the age of 65. Therefore a retired Chief Justice/judge of the High Court can have a maximum tenure of 3 years, and if Government, takes months in making appointment after the recommendation by the Hon'ble CJI, this tenure of three years get reduced and the person recommended may become <em>disinterested </em> in the said appointment because of the shortening of his tenure.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. It is not graceful to make a retired Chief Justice wait indefinitely for the appointment and by the time the order comes, he may lose interest and withdraw consent.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. Apart from vacancy of the post of President, out of total strength of 18 posts of Members of CESTAT, 4 posts of Members are also vacant, besides these 4 vacancies, 2 Members have recently opted for VRS.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. In the absence of President, no appeal relating to anti-dumping duty could be decided by the Tribunal because as per section 9C of the Customs Tariff Act, 1962, all Anti dumping appeals are to be heard by a Bench to be headed by the President. These appeals are pending with no bench to hear these appeals. <strong>It has serious implications for the Indian economy.</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. Because of the non-appointment of the President, non-filling of four posts of the Members and four posts of the Deputy Registrars, the functioning & disposal of cases at CESTAT has adversely been affected and nearly 40000 appeals have now been accumulated.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The writ petition seeks appropriate directions on the appointment of</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. President</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Four Members of the Tribunal</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Four Deputy Registrars.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Hopefully, we will have a President very soon.</font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Advance Authorisation – Import of Sugar – No AU condition</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has amended the Foreign Trade Policy to stipulate that</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Advance authorization for import of raw sugar, can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer(s). Exports can also be made by procurement of white sugar from any other factory(ies).This provision shall be applicable for exports from 17.2.2009</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The actual user condition shall not be applicable in case of raw sugar to be imported from 17.2.2009, till 30.09.2009 under advance authorization Scheme.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2008/dgft08not086.htm" target="_blank">Notification No. 86 (RE-2008)/2004-2009, Dated: February 17, 2009</a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import of Sugar – extension in export obligation period extended till Year End</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For the advance authorization (erstwhile licences), where raw sugar has been imported between 21.09.04 and 15.4.08, but the export obligation is yet to fulfilled, the export obligation period stands automatically extended upto 31.12.2009 without payment of composition fee. Against these advance Authorisations/licences, no further E.O. extension shall be allowed beyond 31.12.2009.</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=47&filename=notification/dgft/2008/dgft08pn145.htm" target="_blank">Public Notice No. 145 (RE 2008)/2004-2009, Dated: February 17, 2009</a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No DEPB Credit for Prohibited items of exports</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has amended the Foreign Trade Policy to stipulate that Prohibited items of exports mentioned in ITC(HS) Book (as amended from time to time) shall not be entitled for DEPB credit except for the exports effected under transitional facility, wherever allowed, in terms of paragraph 1.5 of FTP.</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=45&filename=notification/dgft/2008/dgft08not087.htm" target="_blank">Notification No. 87 (RE-2008)/2004-2009, Dated: February 17, 2009</a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EOUs can re-import exported samples without duty</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Para 6.29.3 of the Handbook of Procedures (Vol.1),</font></p> <blockquote> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">An EOU may export free samples, without any limit, including samples made in wax moulds, silver mould and rubber moulds through all permissible mode of export including through courier agencies/post.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the following is added,</font></p> <blockquote> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">For statutory requirement of Stability & Retention sample with manufacturer, an EOU/EHTP/BTP/STP unit may re-import without payment of duty, those samples, which were exported by it, under intimation to Custom Authorities, and FOB value of such samples shall not be counted for NFE purpose and other export benefits, if any.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs, willing, of course.</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=47&filename=notification/dgft/2008/dgft08pn147.htm" target="_blank">Public Notice No. 147 (RE 2008)/2004-2009, Dated: February 17, 2009</a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Satyam Ramalinga Raju Denied Bail – Again</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An Additional Chief Metropolitan Magistrate in Hyderabad has again denied bail to Satyam Raju again. Raju had been in jail for over a month and surprisingly, he is not able to get bail and nobody seems to know as to what the offences were.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Magistrate permitted the Income Tax Department to interrogate Raju in jail on February 21.</font></p> <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">–Tomorrow'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></strong></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise</strong></font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Rule 5 of Valuation Rules, 2000 - Freight charges shown on invoice were an approximation vis-à-vis that actually collected from buyer - deduction of freight cannot be denied in its entirety by contending that only the actual, if shown on invoice, is allowable: Tribunal</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is no requirement that the actual cost incurred should be shown and once the amount shown is the actual recovered from customer, then the requirement of Rule 5 stands satisfied because ultimately the deduction has been claimed of the actual cost of transportation and not the average cost of transportation. It is also not the case of the Revenue that the price is inclusive of freight, once freight is shown separately. In such a case, the Board Circular also does not specifically debars the deduction of freight.</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="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Units are neither stocks, nor shares nor commodities as contemplated in section 43(5) - Even if they are considered to be 'speculative' in nature, losses have to be set off against profits as both are speculative in nature: ITAT</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> transactions in Units of the UTI do not fall within the purview of section 43(5) as units are neither stocks, nor shares nor commodities as contemplated in section 43(5) of the IT Act; proviso (b) to sec.43 (5) again uses the word 'stocks' and 'shares'. The word 'units' is not mentioned anywhere in the statute. Each category 'shares' 'stocks', 'commodities' are mutually exclusive and exhaustive - as it is presumed that Legislature does not use redundant/superfluous words. Thus the Income tax Act itself recognizes that 'securities' 'shares and bonds' and 'units' constitute separate and distinct categories of financial instruments. However, even if hypothetically or for the sake of argument, these transactions are considered to be 'speculative' in nature then in accordance with the provisions of sec 73(1) of the Income tax Act, the losses have to be set off against the profits as both are speculative in nature.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs</strong></font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Clearance from bonded warehouse – licence valid at the time of import but not at the time of clearance from warehouse – importer not entitled to exemption – High Court</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> importer's right to bring in the goods duty-free depends on the Advance licence, and when the Licence is not valid on the date when the duty is to be assessed, the right of exemption ceases. The incidence of duty depends on the time of clearance, and if the licence entitling the importer to bring in goods duty free had expired at the time when the goods were cleared, the department is right in objecting to his claim for exemption from duty on the ground that he had a valid Advance Licence under the DEEC Scheme at the time of the import.</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="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Day.</font></p> <p align="justify"><font color="#FF6600" 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>