TIOL-DDT 1153 · the untouched capture
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<p><strong><font color="#6633CC" size="2" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 1153 </font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
<strong>14.07.2009 <br>
Tuesday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Who will audit THE AUDIT? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>CAG Audit has the consistent habit of not accepting the judicial verdicts
and raising objections against the settled case laws. In respect of Rule
6 of the CENVAT Credit Rules, 2004 there are umpteen numbers of orders wherein
it was held that once the credit attributable to the inputs used in exempted
goods is reversed, there is no case for demand of 10% amount on the exempted
goods. In some cases, the demand had reached such a ridiculous stage where
the 10% amount would run into Crores while the credit taken was only a few
thousand rupees. However, the Audit continued to raise such objections and
provided much needed source of revenue for the consultants at the cost of
material / manpower resources of the Government in handling such cases. A
recap of these objections raised in earlier reports of CAG . </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2006: </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10.5.1 Six assessees in Bhopal, Kolkata III, IV, VII, Pune I and Raigad Commissionerates, availed Cenvat credit on inputs and used them in dutiable as well as exempted finished goods. No separate inventory was kept in respect of exempted category of goods. Assessees were therefore liable to pay sum of Rs. 10.94 Crore representing eight per cent of value of exempted goods cleared between April 2000 and June 2005. Three assessees had, however paid a sum of Rs.42 lakh , Rs.3 lakh and Rs.10 lakh representing reversal of actual credit availed on such inputs. This did not absolve assessee from responsibility of making payment of duty of Rs.10.94 crore . Differential amount of Rs.10.39 crore was required to be recovered. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2007: </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>10.1.1 </strong>M/s. Rashtriya Ispat Nigam Limited, M/s. Sponge Iron India Limited in Visakhapatnam I and Hyderabad III Commissionerates respectively and M/s. Tata Sponge Iron Limited, M/s. Orissa Sponge Iron Limited both in Bhubaneswar II Commissionerate, engaged in manufacture of iron and steel products, produced electricity in their captive power generation units and utilized it partly in the manufacture of their final products and partly sold it to Transmission Corporation of Andhra Pradesh Limited, residential colony, NESCO etc. The assessees availed cenvat credit on inputs such as water treatment chemicals, greases, lubricants, caustic soda, max treat, maxquat , alum etc., but did not maintain separate accounts. Assessees were liable to pay amount equivalent to eight per cent/ten per cent on the value of electricity sold. Instead assessees reversed proportionate credit on inputs. This led to short payment of Rs 12.27 crore during the period between April 2000 and March 2006. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2008: </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>3.1.6 </strong>M/s Ahlcon Paranteral (India) Ltd., in Jaipur I Commissionerate, availed of cenvat credit of excise duty of Rs. 22.52 lakh on furnace oil which was used in the production of dutiable as well as exempted products. Separate accounts were not maintained. Therefore, the assessee was required to pay Rs. 60.90 lakh being an amount equal to ten per cent of the assessable value of Rs. 6.09 crore of exempted goods cleared between July 2005 and March 2006. The assessee, however, reversed the cenvat credit of Rs. 7.80 lakh on a proportionate basis. Reversal of cenvat credit on proportionate basis was not correct as there was no provision in the Cenvat Credit Rules allowing reversal on this basis. This resulted in short payment of duty Rs. 53.10 lakh . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The report for 2009 also contained such objections at Para 3.4.1, 3.4.2 and 3.4.3. The report also contained non-payment of 10% amount on electricity cleared for having availed credit on inputs like lubricants and paints. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps in a move to put an end to such demands, Rule 6 has been amended in 2008 to provide for allowing proportionate reversal of credit which was not accepted by the CAG . </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">STRANGELY, in 2009 CAG report, the audit claims as if this amendment in 2008 was an achievement by the audit, though all along they were against such proportionate reversal! </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, we all remember how the Audit was the reason for scores of show cause notices denying the 75% exemption for persons liable to pay service tax on Goods Transport Agency Service, which ultimately did not yield a single rupee to the exchequer. Further to curtail further menace, the Government issued a 37 B order, making the intentions clear and not to deny the exemption INSPITE OF THE CAG objections. Finally the exemption has been made unconditional. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, in 2009 report for Service Tax, the Audit claims the amendment as the “IMPACT OF AUDIT” as if it is their achievement. In fact it should have been other way round “NEGATIVE IMPACT OF AUDIT”! </font></p>
<p><strong><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif">Source – CAG's Audit Report No. 20 of 2009-10 - Union Government (Indirect Taxes) </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG has no respect for Supreme Court </font></strong></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Here is a sample from the CAG's 2009 Report to Parliament: </font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>3.2 </strong>Rule 4(2)(a) and (b) of the Cenvat Credit Rules, 2004 enunciates that cenvat credit in respect of capital goods received in the premises of the provider of output service at any time in a financial year shall be taken only for an amount not exceeding fifty per cent of the duty paid on such capital goods in the same financial year and the balance 50 per cent credit may be taken in any subsequent financial year. Rule 14 of the said rules provide that where the cenvat credit has been taken or utilised wrongly, the same alongwith interest shall be recovered. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>3.2.1</strong> M/s Bharti Airtel Ltd., in Hyderabad II Commissionerate, engaged in providing cellular phone services procured capital goods during the period from October 2006 to March 2007 and took full credit of Rs. 40.50 crore during 2006-07 on such capital goods even though they were eligible for taking credit only to the extent of Rs. 20.25 crore being 50 per cent of the duty paid. The excess credit of Rs. 20.25 crore taken by the assessee was recoverable along with interest of Rs. 58.32 lakh . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On
this being pointed out (January 2008), the department accepted the audit
observation and reported (May 2008) that the assessee had paid Rs. 20.25
crore . The department further stated (May 2008) that the assessee had
not utilised the excess availed credit, charging of interest on the credit
lying unutilised was not warranted in view of judicial decisions of Punjab
and Haryana High Court {2007 (214) ELT 173} = [</font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2006/2006-TIOL-308-HC-P-H-CX.htm" target="_blank">2006-TIOL-308-HC-
P&H-CX</a></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">]
which was upheld by the Supreme Court also {2007 (214) ELT – A 50}. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The reply of the department was contrary to the provisions of rule 14 of the Cenvat Credit Rules, which stipulated charging of interest where cenvat credit had been taken wrongly. Further, the anomalous situation which had cropped up due to above judicial pronouncements needs to be remedied by making the relevant provisions more explicit and unambiguous, as otherwise the provisions of the said rule with regard to recovery of interest were not enforceable in any case even though the assessees commit breach of the provisions by taking 100 per cent instead of 50 per cent credit on capital goods in the year of their procurement. </font></p>
</blockquote>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is the CAG suggesting yet another retrospective legislation? </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG has a lot of respect for CESTAT (especially if the decision is favourable) </font></strong></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Here is another sample from the CAG's 2009 Report to Parliament: </font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>3.6 Dual benefit by taking credit on inputs and collecting duty on exempted final products;</strong> Rule 6 of the Cenvat Credit Rules, 2004, envisages that where an assessee manufactures final products, part of which are chargeable to duty and part of which are exempt but avails of credit of duty on inputs meant for use in both the categories of final products and does not maintain separate accounts, he shall pay an amount equivalent to eight per cent (ten per cent from 10 September 2004) of the price charged for the exempted goods. The amount so payable is in lieu of cenvat credit availed of on inputs used in the manufacture of exempted goods and hence the liability is to be borne by the manufacturer itself. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Ministry also clarified on 9 September 2002 that where a manufacturer debits an amount equal to eight per cent in terms of rule 6 of the Cenvat Credit Rules, 2002, and collects it from the buyers, then the amount so collected should be deposited to the credit of the Government. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, the CESTAT in the case of M/s Vimal Moulders (India) Ltd . {2004 (164) ELT 302} <strong>= <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2003/2003-TIOL-244-CESTAT-DEL.htm" target="_blank"><font size="1">2003-TIOL-244-CESTAT-DEL</font></a></strong> had held that the amount of eight per cent paid by the manufacturer but collected from the customer was to be deposited with the Government as per the provisions of section 11 D of the Central Excise Act. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Here the CAG wants the amount of 8% (or 10%) collected from the buyer to be deposited with the Government, based on a CESTAT Order. If it suits them, Audit is prepared to accept a CESTAT order and if it doesn't, they will not accept even a Supreme Court Order. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, the CESTAT order, relied on by CAG is no more valid. The Larger Bench of the Tribunal, in the case of Unison Metals Ltd - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2006/2006-TIOL-1337-CESTAT-DEL-LB.htm" target="_blank"><font size="1">2006-TIOL-1337-CESTAT-DEL-LB</font></a></strong> - had clearly held that the 8% collected was already paid to the Government and there was no requirement of a second payment. Government seems to have accepted this view and this should have been closed at least after the Larger Bench Decision. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even the Board reacted though a little late with a Circular No. 870/08/2008- CX ., Dated: May 16, 2008, wherein it after referring to the Larger Bench decision in the Unison case clarified that, </font></p>
<blockquote>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">as long as the amount of 8% or 10% is paid to the Government in terms of erstwhile rule 57CC of the Central Excise Rules, 1944 or rule 6 of the CENVAT Credit Rules, the provisions of section 11D shall not apply even if the amount is recovered from the buyers. </font></strong></p>
</blockquote>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT had covered this issue extensively in <font size="1"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=2046" target="_blank">DDT 124 on 30 05 2005</a></font> and DDT <font size="1"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7330" target="_blank">869 21.05.2008</a></font> </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So there is a Larger Bench Decision in 2006 and there is a Board Circular in 2008 and CAG in 2009 says, “Eureka” blissfully ignorant about either of them! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the CAG's Report is submitted to Parliament! And the CAG is a very honourable man – so are they all; all his auditors! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is time we do an audit of THE AUDIT to find out the amount of time and money wasted due to frivolous and ignorant Audit objections! </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">What was the First Schedule to the Central Excise Act? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday <strong>DDT</strong> asked you what the First Schedule to the Central Excise Act was. This was the Central Excise Tariff and this was omitted with effect from 28.02.1986, when the new Central Excise Tariff Act came into existence. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even this was not without its share of humour. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Way back in 1986, when the Board brought in the new Tariff Act and deleted the old Tariff and the First Schedule to the Central Excise Act, it was a hilarious situation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Section 4 of the Central Excise Tariff Act, 1985 reads as follows: </font></p>
<blockquote>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"4. Consequential amendments of, and construction of references to the First Schedule to Act 1 of 1944. - In the Central Excise Act, 1944,- </font></strong></p>
<p align="justify"><strong><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif">(a ) for the words "First Schedule", wherever they occur, the words and figures "Schedule to the Central Excise Tariff Act, 1985" shall be substituted; </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(b)</strong> xxxx </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c)</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong><font color="#660099">the First Schedule shall be omitted. </font></strong></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, “<strong><font color="#FF6633">the First Schedule shall be omitted </font></strong>. “ means the "<strong><font color="#FF6633">Schedule to the Central Excise Tariff Act, 1985</font></strong>" is omitted, which means there is no tariff now! And this is a 23 year old aberration. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
Babus to Fly only Air India </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Air India is in deep trouble and being the National Carrier, it deserves all help from the Government. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Government has decided that </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In all cases of air travel, both domestic and international, where the Government or India bears the cost of air passage, the officials concerned may travel only by Air India. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ For travel to stations not connected by Air India, the officials may travel by Air India to the hub/point closest to their eventual destination, beyond which they may utilise the services of another airline which should also preferable be an alliance partner of Air India. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In all cases of deviation from these orders because of operational or other reasons or on account of non-availability, individual cases may be referred to the Ministry of Civil Aviation for relaxation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ These orders will also apply to officials in autonomous bodies funded by Government of India. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All Ministries/Department of the Government of India are requested to strictly adhere to these instructions, as per an OM issued by the Department of Expenditure. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/oms/office_memorandum_1.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ministry of Finance (Department of Expenditure) OFFICE MEMORANDUM Dated July 13, 2009 </font></strong></a></p>
<p align="center"><strong><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">–</font></strong></font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Wednesday's cases</strong></font></strong></p>
<p><strong><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 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 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 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 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 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 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 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 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></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax – Air Travel Agent – Tax collected on Basic Fare, but not paid to Government – Separate penalty under Section 76 and Section 78 imposable – Tax paid before Adjudication – penalty should be 25%: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of Kerala High Court's judgment in case of Asstt . Commissioner, Central Excise vs. Krishna Poduval reported in <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2006/2006-TIOL-77-HC-KERALA-ST.htm" target="_blank"><font size="1">2006-TIOL-77-HC-KERALA-ST</font></a></strong> wherein i t was held in that case that incidents of imposition of penalty under Section 76 and 78 are distinct and separate under two provisions and even if the offences are committed in the course of the same transaction or arise out of the same act, penalty would be imposable both under Section 76 as well as Section 78. </font></p>
<p align="justify"><strong><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Appointment of ITAT Member, who had not practised as an advocate for even a day, as High Court Judge upheld: Supreme Court. </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Eligibility” is a matter of fact whereas “suitability” is a matter of opinion. In cases involving lack of “eligibility” writ of quo warranto would certainly lie. One reason being that “eligibility” is not a matter of subjectivity. However, “suitability” or “fitness” of a person to be appointed a High Court Judge: his character, his integrity, his competence and the like are matters of opinion. At the end of the day “trust” in the decision-making process is an important element in the process of appointment of Judges to the Supreme Court and the High Court, which is the function of an integrated participatory consultative process. </font></p>
<p align="justify"><strong><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Goods imported under 'Actual User' condition, diverted – penalty justified: Bombay HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government of India formulated and announced the export and import policy for the period from April, 1992 to March, 1997. Clause 25 of the Export and Import Policy provides that all second hand capital goods, having a minimum residual life of 5 years, may be imported by the Actual Users, without a license, subject to “Actual User” condition. The Actual User was also required to furnish to the Customs at the time of clearance of the goods, self-declaration to the effect that the second hand capital goods being imported had minimum residual life of 5 years. In view of these provisions, it is clear that such second-hand capital goods could not be imported unless they were to be imported for actual user by the importer. That itself was a prohibition against import. However, the import would be exempted from the prohibition subject to “Actual User Condition”. If that condition is violated, provisions of S.111 ( o) of the Customs Act would be attracted. </font></p>
<p><strong><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more DDT </font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p>
<p><font color="#FF6666" 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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