TIOL-DDT 1132 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1132</font><br>
15.06.2009<br>
Monday</strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Export of Edible Oil in branded packs of upto 5 Kg – Allowed till 30th September 2009</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> informs CBEC that Customs are not allowing consignments of edible oil in branded consumer packs of upto 5 Kgs citing reason that there is no information whether quota of 10,000 MTs set by the DGFT has been exhausted or not.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT had vide Notification No.60 dated 20.11.2008, allowed export of edible oils in branded consumer packs of upto 5 Kgs, subject to a limit of 10,000 MTs upto October 31, 2009.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Initially, the DGFT had informed that Customs may allow export of consignments of edible oil in branded consumer packs of upto 5 Kgs till 31.5.2009 – see our <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8553" target="_blank">DDT-1047- 06.02.2009</a></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has been monitoring export of edible oil in consumer packs of upto 5 Kgs and it is stated by them that as reported by the DGCI&S, till 14.5.2009, 5036 MTs only have been exported.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Now, it has been decided by DGFT that presently Customs may allow export of consignments of edible oil in branded consumer packs of upto 5 Kgs till 30th September, 2009.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In our <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9151" target="_blank">DDT-1129-10.06.2009</a> </strong>we reported on the authenticity of the foreign trade (exim) statistics compiled by DGCI &S and now DGFT relies on such statistical data to fix the sunset clause for export of edible oil in branded consumer packs.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, it is not clear from this latest communication from DGFT if the Customs have to allow the said exports till 30th September, 2009 or restrict it to 10,000 MTs being the outer limit of export quota (as stipulated by DGFT Notification No. 60 dated 20.11.2008) which may be reached even before the cut off date.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let's hope a copy of the latest communication from CBEC and DGFT reaches all Customs Stations.</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/instruction09_005.htm" target="_blank">CBEC's Letter in F.No.528/5/2007-Cus.(TU) Dated: June 11, 2009</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Reimbursement of duty in lieu of drawback for supply of goods to SEZ Developers against Indian Rupees</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In pursuance of Commerce Ministry's Instruction No. 9 dated February 18, 2009 issued regarding reimbursement of duty in lieu of drawback for supply of goods to SEZ developers against Indian Rupees, the Ministry clarifies that sanction for the claims against reimbursement of duty in lieu of drawback for supply of goods to SEZ Developers shall be made by the Zonal Development Commissioner from the budget allocated to his office for DBK, CST claims.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The jurisdiction of the Zonal Development Commissioners is given below in Annexure-I. The Zonal Development Commissioners may inform the additional fund requirements, if any, in this connection to Under Secretary (EOU Division), Department of Commerce.</font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Annexure-I</strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>List of Zonal DCs and the States under their jurisdiction</strong></font></p>
<div align="justify">
<table width="450" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td colspan="2" valign="top"> <p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Name of DC </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">States </font></strong></p></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1 </font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DC, KSEZ </font></p></td>
<td valign="top" width="342"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Gujarat</font></p></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2 </font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DC, MEPSEZ </font></p></td>
<td valign="top" width="342"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tamilnadu</font></p></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3 </font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DC, SEEPZ SEZ </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maharashtra, Goa , Dadra & Nagar Haveli</font></p></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DC, NSEZ</font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Uttar Pradesh, Madhya Pradesh, Rajasthan, Delhi, Punjab, Haryana, Chandigarh, Chattisgarh, Uttarkhand</font></p></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5 </font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DC, CSEZ</font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Kerala, Karnataka</font></p></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6 </font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DC, FALTA SEZ </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">West Bengal, Orissa, Assam, Jharkhand, Pondicherry, Nagalan</font></p></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7 </font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DC, VSEZ </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Andhra Pradesh</font></p></td>
</tr>
</table>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=260&filename=sez/sez_instructions/2006/sez09ins015.htm" target="_blank">Ministry of Commerce, Instruction No. 15 (F.No.H.7/1/2007-SEZ) Dated: June 11, 2009</a></strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Validity of Formal Approval for SEZs</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Commerce Ministry had received references from developers of SEZs regarding validity of formal approval after operationalization of the Zone and the time limit mentioned in the Letter of Approval for implementation of the project.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this regard, the Ministry clarifies that a SEZ will be operational once exports start from the SEZ. Further, the Letter of Approval issued to the developer of SEZ shall remain valid beyond the date prescribed in the Letter of Approval for implementation of the project, once the Special Economic Zone becomes operational, till it is suspended/revoked.</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=260&filename=sez/sez_instructions/2006/sez09ins016.htm" target="_blank">Ministry of Commerce, Instruction No. 16 (F.No.C.3/16/2009-SEZ) Dated: June 11, 2009</a></strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">CBI books Customs Official – Exposes deep rooted corruption in Customs & Excise</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Superintendent of Customs (Special Valuation Cell, Mumbai) was booked by the CBI under the Prevention of Corruption Act for allegedly amassing wealth and property amounting to Rs. 5 Crores which is disproportionate to his known sources of income.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Initial investigation revealed that the officer allegedly owned three shops in Oberoi Mall at Andheri, one shop in Hiranandani Galleria Park at Powai, three flats at Khar and another flat worth over Rs. 1 Crore at Chembur. An amount of Rs. 3.5 lakhs in cash was recovered from his residence. CBI also found 20 bank accounts being operated in Pandey's name. A search operation was conducted in his ancestral house in UP.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A <strong>Concerned </strong> Netizen wrote to us,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“It is alleged that the officer created a HUF to show that the property possessed by him was inherited or earned through sources other than his salary. An ingenious modus operandi indeed.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If this is the kind of wealth found in possession of a Customs Superintendent at Mumbai then one can only imagine the amount of ill-gotten wealth possessed by senior officers in Mumbai, Delhi and other Customs stations across the country and the losses incurred by the exchequer by the nefarious acts of such corrupt officials.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This could be one of the prime reasons why the Central Government does not give into the demands of the officers of Customs & Excise while structuring their pay scales by the Pay Commissions. Probably the Government know that these officials can survive without even getting their salaries. A clear example encouraging institutionalized corruption. Unfortunately, because of the presence of a large number of corrupt officials in the department, a few honest officers working in the department live in abject penury. No wonder why there is exodus of honest and efficient officers from the department to private sector in recent years.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If the Government is serious enough in fighting corruption and improving tax collections, then the officers working in revenue departments have to be paid handsomely and their basic needs like housing, medical and family welfare taken care of. An Inspector working in the US Customs & Border Protection is paid on an average USD 62,000 per annum with other perks and allowances (translates to Rs. 30 lakhs per annum). Compare this with the average salary of an Inspector in Customs & Excise in India and you know why you get monkeys if you pay peanuts.”</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">–Tuesday'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 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></strong></font><font color="#663399">Central Excise </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">Central Excise – No bar in assessee with LTU to pre-deposit at any of their factories – When Commissioner (Appeals) at Bangalore LTU has power to take up an appeal of Kolkata unit of assessee, pre-deposit made by its Vadodara unit cannot be held as invalid – Matter remanded for consideration of appeal without insisting on further pre-deposit – CESTAT</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Tribunal after considering the submissions from both sides observed that when the assessee was recognized as LTU by the Department, the amount pre-deposited by one their manufacturing units should be considered in as much as Commissioner (Appeals) at LTU Bangalore has taken up disposal of appeal against the assessees West Bengal unit.</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">Income tax - If an expenditure is incurred for enhancing efficiency and no asset is created, it is to be treated as revenue expenditure - legal and professional charges are revenue expenditure; 'Router' is integral part of computer system and is entitled to depreciation at rate of 60% - ITAT</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> battle over whether an expenditure is revenue or capital in nature is legion. Revenue misses no opportunity to brand an expenditure as capital in nature even if it may take an additional pound of foolhardiness! In the latest case decided by the Delhi Bench of ITAT the AO treated legal and professional charges as capital expenditure and disallowed deduction. And one mantra which we may help in distinguishing an expenditure, the Tribunal notes, is that if an expenditure is incurred to enhance the efficiency of business and no asset is created, such an expenditure is to be treated as revenue expenditure. Merely following the enduring benefit theory may not help in doing justice. And thus the Tribunal has allowed the assessee's appeal.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">FERA/FEMA</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">FERA - Appeal filed by Director is appeal by Central Government; Possession of foreign exchange not illegal; going to Burma Bazar with foreign exchange does not mean, respondents were going there to sell it: Madras HC</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Supreme Court had held that the expression 'Government of India' includes all the officers functioning under the three wings and that the Deputy Director, Enforcement Directorate is an officer of the Government of India coming under the Department of Revenue, Ministry of Finance and is not independent of the Government of India; he is an Officer of the Union and his acts and duties are only official and he is acting for the Government of India. The High Court observed that when the appeal is filed by the Union of India represented by the Director, then the appeal is filed by the Central Government and the Central Government is the aggrieved party. The Central Government will have to be represented by an officer and the officer in this case is the proper officer.</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>
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