TIOL-DDT 1161 · 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><font size="3"><strong><font color="#660099" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 1161</font></strong></font><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <br> 24.07.2009 <br> Friday</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Export of non-excisable goods under self-sealing and self-certification – CBEC Clarifies </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has received representations from exporters of non-excisable goods (agricultural products) requesting to extend the facility of self-sealing and self-certification to non-excisable agricultural products. They have requested that this facility would enable them to meet export requirements of the products which expire within a few weeks. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The benign Board has kindly granted the facility. The Board Circular patronisingly states, </font></p> <p align="justify"><strong><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>the facility of self-sealing/self-certification is hereby extended for export of non-excisable agricultural products, subject to the condition that these shall be examined at the port of export, as per the norms prescribed under circular no. 6/2002-Customs dated 23.1.2002 as amended. </em></font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What does it mean? Your goods are going to be ripped open at the port of export. What is the facility extended? Is there any requirement of examination and sealing by Excise officers in respect of non-excisable goods? </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2009/excircular892.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 892/11/09- CX., Dated: July 23, 2009 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Procedure for direct supply by intermediate supplier to the port for export by ultimate supplier – CBEC Clarifies </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per DGFT Public Notice No. 151 (RE-2008)/2004-09 dated 26th February, 2009, <strong><font color="#660099">intermediate supplier can also supply the product(s) directly to the port for export by the ultimate exporter (holder of Advance Authorisation or DFIA ). In such cases, shipping bill shall be in the name of the ultimate exporter with the name of intermediate supplier endorsed on it. </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But any DGFT benefit can be implemented only when CBEC decides to do so. And the CBEC has NOW decided to do it. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC Circular stipulates that </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>1. The intermediate manufacturer as prescribed in para 4.13 of the FTP, 2004-09 can also remove goods to the port of export without payment of duty under<strong> bond</strong>. <strong>[<font color="#FF6633">Are we still bonded?</font>]</strong> </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. In such cases, the goods should be verified and sealed in the presence of central excise officers, and ARE-1 prepared in this regard should be countersigned by central excise officers. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The ARE-1 shall also show the name and address of ultimate exporter, and the details of permission/ invalidation letter issued by licensing authority. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The description, quantity, value, technical specifications, etc., mentioned in the permission / invalidation letter shall be verified by the central excise officer with respect to the goods supplied by the said intermediate supplier. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. The Shipping Bill should be prepared in the name of the ultimate exporter with the name of intermediate supplier endorsed on it. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. However, the reference of ARE-1 of the intermediate manufacturer and permission/invalidation letter issued in favour of intermediate manufacturer should also be mentioned in such a Shipping Bill. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. The procedure relating to proof of export as given in Chapter 7 of CBEC's Central Excise Manual shall be followed for such exports. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But what has been happening between February and July? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC and the DGFT should appoint ambassadors in each other's office and ensure that both of them speak with one voice and at the same time. The DGFT should issue a Circular or notification only after taking concurrence from CBEC and making them also issue a parallel Circular or Notification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This way, two wings of the Government can avoid confusing the public! </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2009/excircular893.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 893/13/ 2009- CX ., Dated: July 23, 2009 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Karaunanidhi wants waiver of Service Tax on Health Insurance </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under the ‘ Kalaignar Insurance Scheme for Life Saving Treatments for One Crore Poor Families' launched by the Tamil Nadu Government yesterday, the State government had committed itself to pay the premiums on behalf of the poor to enable them to access private health institutions for life-saving treatments. The Rs. 517 Crores project of the State Government may have a Service Tax component of Rs. 48 Crores. And it is this 48 Crores that Karunanidhi wants to be waived. Seems to be fair – at least the welfare schemes of the State meant for the poor should be exempted from Service Tax. </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">–</font></strong></font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Monday's cases</strong></font></p> <p><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><font color="#660099">Central Excise </font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Valuation - expenses of loading of goods within the factory for clearance to a buyer are includable in the assessable value before and after 1.7.2000 – CESTAT LB </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue referred to the Larger Bench by the regular Bench is <strong>whether the expenses of loading of goods within the factory for clearance to a buyer are includable in the assessable value</strong> of the goods where such expenses are incurred by, or on behalf of, the buyer. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Larger Bench held that, </em></font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ pre-1.7.2000, the expenses of loading of excisable goods within the factory for clearance to a buyer are liable to be included in the assessable value of the goods as held by the Supreme Court in Indian Oxygen case and, </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ for the period from 1.7.2000 also, it is liable to be included in the assessable value of the goods unless it is proved by the assessee that the burden of such expenses was not borne by them. </font></em></p> </blockquote> <p align="justify"><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Principle of mutuality will apply to a cooperative Housing Society as long as there is no taint of commerciality, trade or business: Bombay High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tests: (1) Is there any commerciality involved? (2) From the moneys received are the services offered in the nature of profit sharing or privileges, advantages and conveniences? (3) Are the participants and contributors identifiable and belong to the same class in the case of cooperative housing society? (4) Do the members have the right to share in the surplus and do they have a right to deal with its surpluses? </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">Prosecution vs Departmental proceedings - once the department has no legs to stand with respect to the original cause of action, continuing criminal proceedings and prosecuting the accused in such like matters amounts to abuse of the process of Court: Delhi High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Once departmental adjudication exonerates the accused of the offences which are the basis of lodging a complaint against the accused/petitioners before a criminal Court under Section 135 Customs Act, the complaint cannot be permitted to be tried further because once the department has no legs to stand with respect to the original cause of action, continuing criminal proceedings and prosecuting the accused in such like matters tantamounts to abuse of the process of Court and therefore such proceedings must come to an end. </font></p> <p align="justify"><strong><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT </strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Weekend. </font></p> <p align="justify"><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> </body> </html>