TIOL-DDT 1173 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#660099" size="3">TIOL-DDT 1173 </font><br>
11.08.2009 <br>
Tuesday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Custom House Agents – Board issues Draft Circular – KYC for CHA </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> proposes to issue guidelines regarding certain issues pertaining to Customs House Agents (CHA) Licence. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6666">(i) Minimum number of CHAs required in a Customs station:</font> </strong>The Board has decided against fixing a numeric criterion governing the number of CHA licences being issued. However, the Board is examining the suggestion for enhancement of the quality of services provided by CHAs in consultation with all concerned. Till a final view is taken the present provisions for inviting application for grant of CHA licences shall continue and the examination under Regulation 8 shall be conducted on an annual basis instead of twice a year, by suitably amending the sub-regulation (1) to Regulation 8. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6666">(ii) Employment of person by a CHA:</font> </strong>It is reiterated that it is only those persons who have qualified themselves in the examination conducted under regulation 19(3) and who have been authorized by CHA in terms of regulation 19(5) alone are allowed to sign the declarations filed before Customs for transacting the work at any Custom station. Those persons who have not qualified in the examination but who are still in employment with CHA are being given ‘H' card for identifying the persons who may assist the CHA in his work. However, the Commissioner of Customs in a Custom House / Station shall undertake an annual review of the number of such ‘H' Cardholders with each CHA to ensure that discredited individuals are not being allowed to work as ‘H' Cardholders. The examination under Regulation 19(3) shall also be conducted by Commissionerate of Customs on annual basis. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6666">(iii) Suspension or revocation against CHAs operating on ‘C' form intimation basis: </font></strong>It is clarified that the suspension action against CHA's operations may be taken by the Commissioner of Customs at the station who issued the CHA license and such action would either be limited to a particular customs station where a violation has been noticed or action against the CHA in general, applicable at all customs stations where the CHA operates, depending upon the gravity and seriousness of the violation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6666">(iv) Know Your Customs ( KYC ) norms for identification of clients by CHAs :</font> </strong> It has been decided by the Board to put in place the “Know Your Customer ( KYC )” guidelines for CHAs so that they are not used intentionally or unintentionally by importers / exporters who indulge in fraudulent activities. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6666">(v) Time limit for completion of suspension proceedings against CHA licensee under regulation 22 </font></strong>: The investigating authority shall furnish its report to the Commissioner of Customs who had issued the CHA license (Licensing authority), within thirty days of the detection of an offence. The Licensing authority shall take necessary immediate suspension action within fifteen days of the receipt of the report of the investigating authority. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6666">(vi) CHA licenses in respect of individuals who had passed the examination under CHALR , 1984: </font></strong>Board had decided that there was no generalized case for grant of CHA licences to those who have not qualified the requisite examination prescribed under the CHALR , 2004, and the concerned persons for the aforesaid reasons will have to pass the Examination under CHALR , 2004. </font></p>
</blockquote>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2009/cuscir09_021.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Draft Circular Dated 10th August, 2009 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IRS
Officer trying for a transfer through MOS(R) - Charge-sheet without approval
of Disciplinary Authority not valid – High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
allegations levelled against the officer are that while working as Additional
Commissioner of Income Tax in the year 2003, he has failed to maintain integrity
and exhibited conduct becoming of a government servant, as he approached
one practicing Chartered Accountant in Chennai pertaining to his transfer
from Chennai to Mumbai and in turn an approach and contact was made to 1st
P.A. to Shri G.N. Ramachandran, the then Minister of State for Finance (Revenue),
Govt. of India and on a demand of certain money, he agreed to pay the bribe
for ensuring his transfer. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The officer was duly charge-sheeted. He approached the CAT on the ground that the charge sheet was not approved by the Disciplinary Authority who happened to be the Minister of Finance. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal held, “As no specific approval has been accorded by the disciplinary authority to the charge sheet, it is right from inception without jurisdiction and is not sustainable in law.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The charge sheet was quashed; however the government was accorded liberty to take appropriate action against the officer. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government took the matter to the High Court with the question, “whether the charge sheet issued to the IRS officer in connection with a disciplinary inquiry was required to be approved by the disciplinary authority or not”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
High Court agreed with the Tribunal that “the charge sheet ought to have
been approved by the disciplinary authority before it is issued. Since there
was no such approval obtained, the charge-sheet was issued without jurisdiction.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Moral of the Story: </strong>When you approach somebody for a transfer, be sure that he is capable of getting you a transfer; if not you will be charge-sheeted. See the inequity of the situation. If your source is strong, you get the transfer and no questions asked, but if your source is weak, you don't get the transfer and on top of that you are stuck with a charge-sheet. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some twenty five years ago, an MOS, Revenue sent a letter to a Collector of Central Excise recommending a transfer of an Inspector. The Collector did not oblige and in a few months the Minister got defeated in the Elections and the Collector promptly issued a memo to the Inspector for bringing political pressure for transfer. </font></p>
<p><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=51&filename=legal/hc/2009/2009-TIOL-403-HC-DEL-SERVICE.htm">UNION OF INDIA Vs B V GOPINATH</a> </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NACEN Launches Website </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Chairman, Mr. V. Sridhar inaugurated the new website of the National Academy of Customs, Excise & Narcotics ( NACEN ) - <a href="http://www.nacen.gov.in/">www.nacen.gov.in </a> . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NACEN informs that:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The website has all standard features of the websites of other top Academies of India like the information about the facilities of NACEN, Probationer's Gallery, Information about the Faculty, Picture Galleries etc . However, the website has many unique features, which are available usually on the websites of academic institutions like IITs and IIMs . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The unique feature of the website includes News and Updates, Announcements (allows the download of the notifications/correspondences by NACEN), Online Registration of Departmental Officers and Guest Faculty, Online availability of the Training Schedules at NACEN with the facility to give willingness for the training program online, provision for uploading of Articles and provision for the download of important study materials. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The visitors can submit their feedback to NACEN online using the Feedback feature of this website. Their feedback shall be used to make NACEN a true center of excellence for imparting the knowledge of indirect taxation to the world. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We wish the site all the best. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though we do not wish to criticize something which has just been launched, certain deficiencies cannot be ignored. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The site will not open in Firefox but opens in Internet Explorer. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The ‘Galleries' contain just one irrelevant picture. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ There is no content in the “Centre of Excellence”! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ And there is no content in the “ RTI Act” </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Strangely the <strong><font color="#FF6633">Syllabus</font> </strong> offers some good jokes. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Excise ( No.2 ) Rules, 2002</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> is part of the syllabus. It is really a mystery as to how the distinguished faculty of the premier centre of excellence can teach a non–existing law. And the Central Excise Rules, 2002 is not a part of the syllabus. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC Excise Manual of Supplementary Instructions for New Excise Procedures as on 01.09.2001 is another subject in the syllabus. But NACEN seems to be ignorant of the fact this latest manual is as <font color="#FF0000">on 01.03.2005</font> – even after four and a half years of the revised manual, NACEN is about eight years behind. And they produce the future leaders of this department! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Launching a website is rather easy – the problem is maintaining and updating it. Almost all Commissionerates and directorates of CBEC have their websites but they are now graveyards proclaiming their glorious past existence. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even NACEN had a website a few years ago. God knows what happened to that. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NACEN is a premier world class academy and it is essential that its website is accurate and up to date. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We hope the authorities keep this in mind and ensure that the website is properly maintained and updated – otherwise it will be a matter of shame for us in the international circles. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Log on to <a href="http://www.nacen.gov.in/">www.nacen.gov.in </a> and send your feedback and watch for the response. [In Internet Explorer only] </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income
Tax Chief Commissioners' Conference Today </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The 25th Annual Conference of Chief Commissioners & Directors General of Income Tax will be held at the Convention Hall, The Ashok, Chanakyapuri , New Delhi on 11th & 12th August, 2009. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Finance Minster will inaugurate and deliver the keynote address today while the Minister of State for Finance (Revenue) will deliver the valedictory address on 12th August 2009. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Senior officials from the Ministry of Finance, Central Board of Direct Taxes and its offices, and Chief Commissioners and Directors General of Income Tax from all over the country will attend and participate in the function. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Conference will deliberate upon ways and means to maximise direct tax collections; further improve taxpayer services; and optimise response to taxpayer grievances; besides discussing other issues relating to working of the Income Tax department. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Direct taxes have grown at an average annual rate of 26.5 percent per annum in the last five years and more than trebled from Rs.1,05,088 crore in financial year 2003-04 to Rs.3,38,212 crore in financial year 2008-09. The cost of collecting taxes, on the other hand, has declined from 1 percent to 0.58 percent, among the lowest in the world.</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">– Wednesday's
cases</font></strong></font></strong></font></p>
<p><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>COFEPOSA </strong></font></p>
<p align="justify"><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="#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></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="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Grounds of detention and relevant relied upon documents not provided to detenu violates Article 22 (5) of Constitution and Section 3(3) of COFEPOSA – Detention order quashed with directive to release detenu forthwith: Supreme Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Constitution of India provides adequate safeguards under clauses (5) and (6) of Article 22 to the detenu who is detained in pursuance of the order made under any law providing for preventive detention. </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>India-USA DTAA - Applicant enters into agreement with Indian Co for cost allocation of services availed - withholding tax - TDS not applicable as services are rendered from outside India; even if some services availed are technical in nature, since no technical knowhow is 'made available' as per Article 12.4 of DTAA , no income is taxable in India - No TDS: Advance Ruling </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">IN the latest decision the Authority for Advance Ruling has held that the provisions of withholding tax u/s 195 will not be applicable if the services are provided by the applicant from outside India to its India-based Group Company. The Authority further notes that although most of the services listed out in the Cost Allocation Agreement signed by the applicant and the Indian Group Co are beyond the ambit of technical or consultancy services as they are managerial in nature, not covered under Article 12 of the DTAA or Sec 9(1) of the I-T Act, but even if some of them are technical in nature, what takes them outside the ambit of Indian I-T Act is the non-satisfaction of the requirement of technical knowledge or experience being 'made available' to the service recipient as per the Clause (b) of Article 12.4 of the DTAA . </font></p>
<p><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Exim </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Revalidation of licences after endorsement of transfer on duty free advance licences – Para 125 of Policy does not differentiate between transferable licence and a non-transferable licence – All import licences whether endorsed as transferable or non-transferable to be treated alike: Delhi HC </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>petitioner, M/s Ajay Industrial Corporation, exported hand pumps to UNICEF and based on these exports duty free advance licenses along with DEEC was issued. The petitioner requested the DGFT for transfer of four licenses which was allowed after due examination of the requests. Subsequently, the petitioner applied for revalidation of the licenses for an extended period. This revalidation request was rejected by the DGFT on the ground that there is no provision in EXIM Policy 1992-97 for revalidation of advance licenses which were already transferred. </font></p>
<p align="justify"><strong><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></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>
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