TIOL-DDT 1169 · 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 1169 </font><font color="#663399"><br>
</font>05.08.2009 <br>
Wednesday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EDI
infrastructure under the 'Handling of Cargo in Customs Areas Regulations,
2009' - CBEC instructions </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per para 5.2 of the CBEC Circular No. 13/2009-Customs dated 23.3.2009, </font></p>
<blockquote>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">the infrastructure required to be provided by the custodian shall include the Civil and electrical infrastructure including properly air-conditioned office space, cabins with proper furniture, power backup facilities, hardware, networking and secure connectivity to customs data centres for customs officers and service centres specified by Customs. Facilities required for secure exchange of electronic information between the custodian and Customs shall also be provided. The technical requirements shall be as per the specifications prescribed by the Directorate General of Systems & Data Management. In addition to the above, the requirements as specified vide Board's Circular No.94 /2003-Customs dated 31.10.2003 to bring uniformity in automation and to expedite automation process at ICDs / CFSs , shall continue to apply. </font></strong></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now Board clarifies that in addition to the infrastructure required to be provided as mentioned in para 5.2 of the circular No.13 /2009-Customs, the custodian shall provide networking, communication equipments, Uninterrupted Power Supply System, computers, PCs, dump terminals, servers, printers and other computer peripherals as may be specified by the Directorate General of Systems. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants any difficulties in implementation of these Regulations to be brought to the notice of the Board immediately. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8765" target="_blank">DDT-1073 dated-March-18, 2009</a> and <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8793" target="_blank">DDT-1077 dated-March-24, 2009 </a></strong></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_021.htm" target="_blank">CBEC Circular No. 21/2009-Customs Dated 4 th August, 2009.</a> </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>We imported savings – did not export them – RBI Governor Subba Rao </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">India did not contribute to global imbalances. Indeed we ran current account deficits for the last two decades except for a brief period during 2001-04. In other words, we imported savings, did not export them. However, India's integration with the rest of the world over the last decade has been remarkably rapid. First, let us look at trade integration. The two way trade (merchandize exports plus imports) as a proportion of GDP doubled from 20 per cent in 1998/99, just after the Asian crisis, to 41 per cent in 2008/09. Our financial integration was even deeper as measured by the proportion of total external transactions (gross current flows plus gross capital flows) to GDP. This ratio much more than doubled from 44 per cent in 1998/99 to 112 per cent in 2008/09. While the crisis transmitted to India through both the trade and finance channels, the latter was by far more significant in terms of the intensity of impact. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>How do we manage global imbalances </strong>? It is argued that if the US Fed had refused to supply the incipient demand for liquidity in the late 1990s and early 2000s , higher interest rates could have prevented the borrowing boom and the follow on widespread deterioration of financial standards and the subsequent melt down. But this also would have meant lower growth in the US and the rest of the world. The short point is that even as macroeconomic imbalances should not be allowed to proliferate, it is necessary to balance the need for global economic growth against the disruptions which follow the unwinding of such imbalances. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Inflation targeting: I </strong>n the years leading to the crisis, central bankers had nearly declared victory. They had found the holy grail of stable growth, low inflation and low unemployment through a rule based monetary policy that targeted inflation rather than monetary aggregates. The much celebrated Great Moderation had delivered. The crisis at once hurt the central bankers' pride and shattered their confidence as the Great Moderation unravelled. Monetary policy was found wanting in delivering financial stability. The undoing was the reluctance or failure of central banks to acknowledge increasing asset prices. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">From RBI Governor Subba Rao's JRD Tata Memorial lecture at ASSOCHAM . </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Chairman Sridhar to address our Seminar at Hyderabad </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. V. Sridhar, the new Chairman of CBEC is to address our Seminar at Hyderabad on 7 th August 2009. Last year in April, he addressed our Seminar a few days after taking over as Member CBEC and we are proud that he is again at our Seminar within a few days after taking over as Chairman of the CBEC. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the last year's seminar he mentioned, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Seminars of this kind I have always believed, are very useful; number one, some of the feelings you can get off your chest as you say that would give you a feel good factor, particularly if you are upset with the tax proposals. That is on the lighter side. We always value the suggestions from the trade. We do commit mistakes as I have said… I have done five budgets, and we handled so many things in a compressed time frame of one and half to two months, there are issues of time and secrecy, you can't consult too many people. We do err and I don't hesitate to admit, to err is human and we have committed mistakes. And when the mistakes are pointed out by the forum of Taxindiaonline or from you, we are only grateful to you for bringing the mistakes to our notice so that remedial steps can be taken and the heartening feature is that quite often we do get feed back from trade or excise law times or taxindiaonline , even pointed out anomalies which should be set right to increase our revenue. It is not always a plea for more concession, or more reduction of duties, but we have failed to take care of some thing or failed to address an issue they were brought to our notice and we have taken quick remedial action. So in that sense suggestions are always welcome and we are grateful to you for whatever suggestions you have. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I hope we don't have that kind of impossible trinity of the trade, Taxindiaonline and department. <strong>We make a possible trinity </strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are grateful that he has agreed to be with us this year too and in his elevated role as Chairman of the CBEC. Be with us in Hyderabad on Friday. </font></p>
<p align="center"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600" size="2">Jurispruden</font><font color="#FF6633" size="3">tiol</font><font color="#006600" size="2">– Thursday's cases</font></strong></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#660099" 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 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></strong></font></strong></font><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BAS - commission paid to sales agents – input service – entitled for credit – demand and penalty set aside - CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Any input service used by the manufacturer, whether directly or indirectly in or in relation to the manufacture of final product and clearance of final product from the place of removal, stands eligible for availing as credit. </font></p>
<p align="justify"><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A provision for deduction, exemption or relief should be construed reasonably and in favour of the assessee. VRS payment, subject to limit of Rs.5 Lac, is exempted from tax, even if the payment is made in installments to be paid in subsequent years – High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">salary or benefit in lieu of salary payable to an employee opting for voluntary retirement is chargeable to tax under Section 15 (a) as soon as it became due, though not paid. The amount so received is exempted from being charged to tax to the extent of Rs.5 ,00,000 /- by the reason of Section 10 ( 10C ) of the Act. Even if the payment is stretched over a period of years, the same would not become chargeable to tax in any subsequent assessment year. </font></p>
<p align="justify"><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Supplementary invoices – interest – Demand of interest set aside based on a Five Member order [that was never delivered]: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The dispute was, whether the assessee is liable to pay interest under Section 11 AB of the Central Excise Act by treating the differential duty paid on the supplementary invoices as duty short paid. The matter was referred to Larger Bench in <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2008/2008-TIOL-575-CESTAT-MAD.htm" target="_blank"><font size="1">2008-TIOL-575-CESTAT-MAD</font></a> . </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Larger Bench referred the matter to a still Larger Bench of Five Members in the <em>Lucas </em>case - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2008/2008-TIOL-1843-CESTAT-MAD-LB.htm" target="_blank"><font size="1">2008-TIOL-1843-CESTAT-MAD-LB</font></a>. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems this Five Member Bench has not delivered its order and may not deliver it at all as more than four months have elapsed after hearing. But the Mumbai Bench of the Tribunal has passed an order relying on this non-existent order of the Five Member Bench. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more DDT </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p>
<p align="justify"><font color="#FF6633" 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" target="_blank"> vijaywrite@taxindiaonline.com </a> </font></p>
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