TIOL-DDT 1128 · 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> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1128 </font><br> 09.06.2009 <br> Tuesday </strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">What is the difference between ICDs and CFSs –CBEC Clarifies</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>UNDER</strong> Section 7 of the Customs Act, 1962, Board may appoint the ports, airports or the Land Customs Stations (LCS) as ‘customs ports or customs airports or land customs stations', respectively, for the purpose of unloading of imported goods and loading of export goods or any class of such goods.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 8 of the Act provides that the Commissioner of Customs may approve the landing places for unloading and loading of goods [clause (a)] and specify the limits of the customs area [Clause (b)] within a notified customs port or customs airport or any other category of customs station.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Container Freight Stations [CFS] are specified as customs areas under Clause (b) of Section 8 wherein imported goods or export goods are ordinarily kept before clearance by customs. With the increase in volume of international trade and the bottlenecks/lack of sufficient infrastructure at the ports, a number of CFSs have been developed around the seaports over the years.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 4 of the Act empowers the Board to appoint such persons as it thinks fit to be officers of Customs. The Board has, vide several notifications issued under the Section, appointed Commissioners, Additional Commissioners, Joint Commissioners, Deputy Commissioners and Assistant Commissioners to be officers of customs within the area specified in the notification. Accordingly, a Commissioner of Customs can notify a Container Freight Station as a customs area only within his prescribed jurisdiction.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A port, an airport, a Land Custom Station or an Inland Container Depot is a customs station and each facility has to be treated at par with the other. ICD are thus self sufficient customs stations and for all practical purposes, a Custom House in the same way as any port or airport.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the other hand, a Container Freight Station is only a custom area located in the jurisdiction of a Commissioner of Customs exercising control over a specified custom port, airport, LCS/ICD.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Container Freight Station by itself cannot have an independent existence; it has to be linked to a customs station within the jurisdiction of the Commissioner of Customs. It is an extension of a customs station set up with the main objective of decongesting the ports. It is a place where only a part of the customs process mainly the examination of goods is normally carried out by Customs and goods are stuffed into containers and de-stuffed therefrom and aggregation / segregation also takes place at such places.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Given the status of CFSs being extension of port/airport/ICD/LCS, Custom's function relating to processing of manifest, import/export declarations that are filed by the carrier/Importer or exporter and assessment of bill of entry/shipping bill are performed in the Custom House/Custom Office that exercises jurisdiction over the parent port/airport/ICD/LCS to which the CFS is attached.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the case of Customs Stations where automated processing of documents has been introduced, terminals have been provided at such CFSs for recording the result of examination, etc. In some CFSs, extension of service centers have also been made available for filing documents, amendments etc. However, the assessment of the documents etc. is carried out centrally.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An ICD on the other hand would have an automated system of its own with a separate station code [such as INTKD 6, INSNF6 etc.] being allotted by the Dir ectorate General of Systems and with the inbuilt capacity not only to enter examination reports but also to enable assessment of documents, processing of manifest, amendments, etc.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Goods intended for transshipment from the customs station of first arrival shall be allowed to be unloaded/loaded in a customs area, approved by the jurisdictional Commissioner of Customs, within the same customs station. Movement of goods directly from a customs station to a CFS of another customs station shall not be permitted, since manifest is required to be filed only at a customs station. In exceptional cases, such as strike or disruption in the activity resulting in congestion at some ports, the direct movement of goods to a CFS of another customs station can be permitted only with approval of the Board, after due waiver of Sub-Manifest Trans-shipment Procedure (SMTP).</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A standalone customs clearance facility in an inland Commissionerate cannot be approved by the Commissioner as a CFS, if there is no ICD or seaport within its jurisdiction to which the CFS can be attached. Such a facility can, however, be notified as an ICD i.e., as an independent customs station with provision for filing and assessment of documents and examination of goods. A customs clearance facility could be established as a CFS at a port city for examination of imported/export goods, since the CFS would fall under the jurisdiction of Commissioner of Customs, having jurisdiction over the customs port with which the CFS would be attached.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, in a seaport city such as Chennai or Mumbai, it may be possible to develop an ICD also within the territorial jurisdiction of the <strong><em>concerned </em></strong> Customs Commissionerate in addition to existing CFSs. In case of such an ICD, it should be capable of providing full-fledged customs services, independent EDI system, and all procedures meant for transshipment of cargo have to be followed for movement of goods from the port of import to the ICD. Further, such an ICD would function as an independent Customs Station in all respects and would not be attached to any other port or airport.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board advises that at the time of initial examination of the proposals received for setting up of ICD/CFS from prospective operators, the jurisdictional Commissioners may take due care to see that whether the proposed facility is required to be approved as an ICD or CFS and whether such facility fulfills the laid down guidelines, infrastructure requirements specified in the Handling of Cargo in Customs Areas Regulations, 2009 while forwarding the comments to the Board for consideration during Inter-Ministerial Committee (IMC) meeting.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The <strong>concerned </strong> jurisdictional Commissioners of Customs who are competent authority for regulation of ICDs/CFSs are requested to verify the existing position in various ICDs/CFSs under their jurisdiction and inform the Board about the deviations, difficulties, if any, so that the matter may be taken up for appropriate action by the Board.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All Commissioners are <strong>concerned </strong> – concerned about their safety, not about your welfare.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Port Community System (PCS) of the Indian Ports Association (IPA) states as follows:</font></p> <blockquote> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">ICD (Inland Container Depot) is temporary storage for import/export laden and empty containers. According to the guidelines of Indian Government, functionally there is no difference between CFS and ICD . While CFS is an off dock facility located near the servicing port, ICD is generally located outside the port towns.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If ICD is a port where ships don't come what is CFS ? Do you think the CBEC is clear or the Indian Ports Association is clear? ICD or CFS – what difference does it really make?</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/2009/cuscir09_018.htm" target="_blank">CBEC Circular NO. 18/2009-Customs Dated: June 08, 2009</a></strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">CBEC appoints Common Adjudicating Authorities for DRI cases</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC has appointed certain Commissioners to act as Common Adjudicating Authorities in certain specified DRI cases.</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=24&filename=notification/custom/2009/cnt09_057.htm" target="_blank">Notification NO. 57</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_058.htm" target="_blank">58</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_059.htm" target="_blank">59</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_060.htm" target="_blank">60</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_061.htm" target="_blank">61</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_062.htm" target="_blank">62</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_063.htm" target="_blank">63 /2009 – Cus ( N.T. )</a> all Dated: June 08, 2009</strong></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">–Wednesday's cases</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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">Service Tax</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">Export of services – Rebate - Without questioning credit taken, eligibility to rebate cannot be questioned; Input services used in connection with procurement of other input services has to be treated necessarily as input services; Filing of declaration only procedural – substantial benefit cannot be denied: CESTAT</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> eligibility to the credit of the duty paid on inputs and the credit of tax paid on input services are not contingent on whether the services are exported or not. It is incidental that the respondent is exporting the entire services as of now. They could as well be rendering, or may render in future, the same services to domestic customers. They could be partly providing the said services to domestic customers and could be partly exporting services. In all the situations, the criteria for the eligibility of the credit will be the same. It is clear that there cannot be two different yardsticks, one for permitting credit and the other for eligibility for granting rebate. Whatever credit has been permitted to be taken, the same are permitted to be utilized and when the same is not possible there is provision for grant of refund or as rebate.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Income Tax</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">payment to non-resident without TDS - Order u/s 201(1) - TDS with interest deposited - Refund ordered - interest u/s 244A - if TDS is not deposited voluntarily, interest is payable on refund: ITAT</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INTEREST</strong> on refund under the Income Tax Act has always been a bone of acute contention. The question before the Tribunal was - is interest payable u/s 244A on TDS refund when the assessee was held as assessee in default under Sec 201(1) and u/s 201(1A) and TDS on remittances made to non-resident u/s 195 was deposited. And the Tribunal has observed that it is settled law that no interest is payable if TDS is deducted and deposited voluntarily. However, in this case, it has held that since the TDS was paid only after two orders were issued by the AO, treating the assessee as assessee in default and once refund was ordered by the CIT(A), interest u/s 244A is payable on the sum refunded.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Customs</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">Modular furniture or anti static carpet to be regarded as capital goods, entitled for benefit of exemption notification 52/2003- Cus under EOU scheme and allowed for inter unit transfer: CESTAT</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ONCE</strong> goods are imported in terms of exemption notification 52/2003- Cus, Customs cannot dispute the eligibility of the said notification – Board Circular 16/07 dated 18.04.07 clarifies that even items which are listed in Sl. Nos. other than Sl. No.1 of Annexure I to notification 52/2003- Cus may be allowed the facility of IUT, if these items qualify to be considered as capital goods – No justification in demand of duty and imposition of penalties when transfer is made after obtaining permission from Development Commissioner and Customs authorities.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">See our columns Tomorrow for the judgements</font></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>