TIOL-DDT 1172 · 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 face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1172 </font><font size="3"></font><font size="2"><br> 10.08.2009 <br> Monday </font></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Brain Storming Seminar in Hyderabad and Vizag </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Seminars conducted by Tax Law Research Group in association with TIOL on Service tax, Customs, Central Excise and Income Tax at Hyderabad on August 7, 2009 was graced by Mr. V. Sridhar, Chairman, Central Board of Excise and Customs who was the chief guest, Mr. SS Khan, Member, Central Board of Direct Taxes. Mr. Gautam Battacharya, JS (TRU) later addressed service tax related queries. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Earlier, while delivering the Keynote address, the Chairman stated that the economic downturn had a significant impact on tax collections and in spite of this Government announced stimulus packages for the industry by way of reduction in duty rates. He urged the trade to be more tax compliant and pay their taxes. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. R Kalla from Nagpur mailed to us, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Hyderabad seminar will certainly go into golden page of the history of Taxation in India. ‘Such great luminaries' sharing the same dais is not less than a magic. Everybody must have received the satisfaction during interaction. I can understand the efforts which must have gone behind this seminar. </em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. S. Thirumalai, Consultant and a former President of FAPCCI , wrote in, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The seminar at Hyderabad on Aug 7 was well positioned. It was good to hear the Chairman, CBEC on the road map for GST which is really the next big change in indirect taxes that we are all looking forward to. Unlike the previous VAT exercise this would involve all most all the revenue collectors at the State and Central levels in ushering in this second stage reform. Lot of unlearning, relearning and re relearning is called for at all levels in the Government, the Departmental representatives and equally indeed with the assesses and their representatives. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>While so much is being mentioned about the objective to reduce the "docket explosion" and consequent pendency in Courts from the present average of 11 years to 3 years some steps are also called for at the Adjudication and CESTAT levels. Recently I understand that the Hon'ble APHC tax bench will hear only regular matters for two exclusive days in the week. The current President of CESTAT has introduced this in New Delhi as I understand on a test basis. This should be extended across the country to find out how the local bar and assessees respond to this. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>More importantly there has to be some room for innovation and management in avoiding waste of time in Adjudication/CESTAT. I am sure if there is a forum at each Commissionerate level and in the CESTAT to mainly focus on delays of various sorts and sizes as of now useful suggestions taking into account local conditions will emerge and there will be scope for improvement. </em></font></p> </blockquote> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9496" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See Excerpts of Chairman’s Speech in TIOL TOP</strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Amendment of ITC (HS) Classification of Export & Import Items </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Government amended the Schedule-I of the ITC (HS) Classification of Export and Import Items, 2004-09 as follows: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Import of refined or white sugar (Code No.17019100 or 17019990) allowed to be imported at ‘Nil' rate of customs duty, vide Notification No.84/2009-Cus dated 31.7.2009, shall be permitted only through EDI ports/locations”. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While the Customs Notification was issued on July 31, 2009, the DGFT amendment introducing this condition is issued only on August 6, 2009. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It may be noted that hitherto when Notification 36/2009-Cus dated April 17, 2009 was issued for providing exemption to import of refined or white sugar by designated agencies, there was no such condition for import. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, through Notification 84/2009-Cus refined or white sugar was allowed to be imported by any person subject to registration of the import contract with APEDA and it appears that to keep track of the quantum of imports (which is subject to a ceiling of 10 lakh metric tonnes) this condition is introduced. </font></p> <p align="justify"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2008/dgft08not120.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT NOTIFICATION No. 120 (RE-2008) / 2004-2009, Dated: August 6, 2009</font></a></strong></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Foreign Trade Policy restrictions on State Trading Enterprises shall not apply to Special Economic Zone manufacturing Units – Special Economic Zone Rules, 2006 Amended to incorporate these provisions and much more </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Special Economic Zones Rules, 2006 have been amended as follows: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Chapter II in Rule 11, after sub-rule (11), the following sub-rule is inserted: </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“(12) The Central Government may lay down guidelines for development, operation and maintenance of Special Economic Zones”. </em></font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Does it mean that all along the guidelines issued by the Government in matters related to SEZ under these Rules in the last three years are without any sanction of such a rule as is introduced now? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Chapter III, in Rule 17, after sub-rule (2), the following sub-rule is inserted: </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><strong>“(2A) The Approval Committee shall meet once in every fortnight on a fixed pre-determined day”. </strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Chapter IV, in Rule 26, after the second proviso, the following provisos are inserted: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#FF6633"><strong>“Provided also that the Foreign Trade Policy restrictions on State Trading Enterprises shall not apply to Special Economic Zone manufacturing Units.” </strong></font></em></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Provided also that export of iron-ore shall be subject to the conditions as imposed by the Central Government.” </em></font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Chapter IV, in Rule 27, in sub-rule (9), after the first proviso, the following proviso is inserted: </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><strong>“Provided further that the goods which are sent outside the Special Economic Zone for repairs are returned to the Special Economic Zone, within 180 days from the date of removal from the Special Economic Zone, under intimation to the specified officer. In case goods are sent out for replacement then on replaced goods, no Duty Entitlement Passbook Scheme, duty drawback or other export incentives shall be claimed for this purpose” </strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Chapter IV, in Rule 39 for sub-rule (4) the following sub-rule is substituted: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#FF6633"><strong>“Where any goods procured from Domestic Tariff Area under claim of drawback or Duty Entitlement Passbook Scheme credit or under any export promotion scheme are destroyed due to natural calamities, the zone unit shall be required to pay drawback or Duty Entitlement Passbook Scheme credit or any other export incentive claimed on such goods: </strong></font></em></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Provided that in case where the Unit has procured the goods from Domestic Tariff Area against payment of foreign exchange, the Unit shall not be liable to pay back drawback or Duty Entitlement Passbook Scheme credit or any export incentive claimed on such goods.” </em></font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Earlier this sub-rule (4) read as follows: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#FF6633"><strong>4) Where any goods procured from Domestic Tariff Area under claim of drawback or Duty Entitlement Passbook Scheme Credit or any other export incentive or under any export promotion scheme are destroyed due to natural calamities, the zone unit shall be required to pay drawback or Duty Entitlement Passbook Scheme Credit or any other export incentive claimed on such goods: </strong></font></em></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Provided that in case where the Unit has procured the goods from Domestic Tariff Area against payment of foreign exchange, the Unit shall not be liable to pay back drawback or Duty Entitlement Passbook Scheme credit or any export incentive claimed on such goods. </em></font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While the words ‘or any other export incentive' are deleted in the introductory part of the sub-rule, this phrase continues to exist in the rest of the sub-rule including the proviso. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Chapter IV, for Rule 40, the following rule is substituted: </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“The movement of goods to and from non-processing area to a processing area and from one processing area of Special Economic Zone to a different processing area of the same Special Economic Zone shall be under serially numbered challans pre-authenticated by the owner or Managing Director or working partner or the company secretary or by any person duly authorised in this behalf by the unit or developer, as the case may be, and the challans shall contain complete description of goods.” </em></font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Earlier Rule 40 of the said Rules, read as follows: </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“The movement of goods to and from non-processing area to a processing area and from one processing area of Special Economic Zone to a different processing area of the same Special Economic Zone shall be under serially numbered challans pre- authenticated by the owner or Managing Director or working partner or the company secretary or by any person duly authorized in this behalf by the company or firm, as the case may be, and the challans shall contain complete description of goods.” </em></font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Chapter IV, in Rule 46, in sub-rule (8), for the proviso the following proviso is substituted: </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“Provided that the items not sold abroad may be re-imported within a period of three hundred and sixty five days from the date of their export.” </em></font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Earlier this proviso read as follows: </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“Provided that the items not sold abroad may be re-imported within a period of three hundred and sixty five days from the date of their export inclusive of the period of forty-five days.” </em></font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Chapter VIII, in Rule 70, in sub-rule (2), after the proviso, the following proviso shall be inserted, namely:- </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#FF6633"><strong>“The identity card shall be valid upto a period of five years and shall be issued, in the format given in Form K, to the entrepreneurs and regular employees of the Units: </strong></font></em></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Provided that when any employee who has been issued an identity card ceases to be in employment of the Unit or Developer, the said identity card shall be surrendered forthwith and shall be deemed to be invalid from such date: </em></font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Provided further that when the Unit ceases to hold a valid Letter of Approval, all identity cards issued to the Entrepreneurs and employees of such Unit shall be deemed to be invalid and shall be surrendered forthwith.” </em></font></strong></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=259&filename=sez/sez_notification/amendment_2009_III.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NOTIFICATION No. NIL Dated: August 3, 2009</font></a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Board Appoints Officers for Adjudication of DRI cases </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Board of Excise and Customs in exercise of its powers in terms of Sections 4(1) and 5(1) of the Customs Act, 1962 has appointed specific authorities to adjudicate show cause notices issued by DRI. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_105.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CUSTOMS NOTIFICATION Nos. 105/2009-CUS (NT)</font></strong></a><strong>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_106.htm">106</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_107.htm">107</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_108.htm">108</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_109.htm">109</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_110.htm">110</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_111.htm">111</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_112.htm">112</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_113.htm">113</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_114.htm">114</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_115.htm">115</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_116.htm">116</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_117.htm">117</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_118.htm">118</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_119.htm">119</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_120.htm">120</a>, and </strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/cnt.htm" target="_blank"><strong> 121/2009-CUS(NT) </strong></a><strong>all Dated: August 06, 2009</strong></font></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Lesotho and Mali added to the list of LDCs </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Government has amended the list of least developed countries to include Lesotho and Republic of Mali for extending the benefit of concessional rate of duty for import of specified goods from these countries as well. The principal notification extending the exemption benefit is Notification 96/2008-Cus dated August 13, 2008. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_086.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CUSTOMS NOTIFICATION No. 86/2009-CUS Dated: August 6, 2009</font></strong></a></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><font color="#006600">Jurispruden</font><font color="#FF6633">tiol</font><font color="#006600">– Tuesday's cases</font></strong></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#660099"><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><font color="#FF6633"><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></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></font><font color="#663399">Service Tax </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Cenvat Credit of service tax - Even if the appellate authority while waiving penalty cited section 80 of the Finance Act, 1994 which does not apply to the facts of the case, in the absence of <em>mens rea </em>, penalty cannot be imposed u/s 11AC of the CEA , 1944 - CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Although the appellate authority has referred the wrong provision of law while dropping the penalty which is not applicable in this case but the penalty cannot be imposed without <em>mens rea </em> under section 11AC of the Central Excise Act, 1944. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Central Excise </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Post Budget letter by JS ( TRU ) cannot add more words to the Notification and make it applicable retrospectively – Such communication issued is not tenable at law – Gujarat High Court. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ALONG </strong>with every budget, we find a letter issued by the JS( TRU ) explaining the changes proposed in the Finance Bill and the Notifications. It is also common practice to make amendments in the style of “for removal of doubts” and leave a doubt whether the proposed amendment is prospective or retrospective, which has only to be resolved by the Courts. This case is about one such amendment which the JS( TRU ) felt as only clarificatory in nature but the High Court thought otherwise. </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 color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Settlement Commission – abating of cases filed before June 2007 for no fault of applicant – not legal </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> choice of 31st March 2008 as the cut-off date is not supported by any rationale reasons. From the statistics of the Income-tax Department itself it is indisputable that the cut-off date of 31st March 2008 for disposal of all applications filed prior to 1st June 2007 were known to be illusory, whimsical, capricious and so wide off the reasonable mark as to make it palpably arbitrary. The arbitrariness of the choice of 31st March 2008 as the cut-off date is even more apparent when it is noticed that the Settlement Commission is not being wound up, but on the contrary even after the amendments made by the 2007 Act came into effect on 1st June 2007, the Act permits the filing of fresh applications before the Settlement Commission. </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="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more DDT </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day </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>