TIOL-DDT 1216 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1216</font> <br>
15.10.2009 <br>
Thursday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Supply of Duty free gold by Nominated Agencies </strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>DGEP has issued guidelines for supply of precious metal for exports </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the Nominated Agencies shall be allowed import of precious metal for warehousing in their own bonded vaults. The vaults shall be licensed by the jurisdictional Dy / Asstt . Commissioners of Customs or Central Excise under Section 58 of the Customs Act, 1962; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the Nominated Agencies shall furnish a bond to the satisfaction of the said officer undertaking to properly account for the warehoused precious metal and also to discharge the duty liability at the prescribed effective rate of duty in the event of the exporter not fulfilling his export obligation within the prescribed period; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) the Nominated Agencies may be permitted to give a general bond for an estimated amount of duty worked out at the effective rate involved in their monthly import or may give a revolving bond starting with a bond equal to the duty estimated at the effective rate on quantity of precious metal likely to be imported in a month; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) the Nominated Agencies (other than designated banks nominated by RBI and public sector undertakings) shall also furnish a bank guarantee equal to 25% of the estimated amount of duty involved on import of precious metals in a month or the bonds executed by them. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) the Commissioner of Customs may allow more than one Nominated Agency to keep their imported goods in the same vault provided the quantities are kept segregated and separate accounts are maintained; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vi) the Nominated Agencies will be required to keep the imported duty free goods for supply to the exporters segregated from the quantities imported for domestic consumption on payment of duty; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vii) the Nominated Agencies shall be exempt from following the double lock system. Physical presence of the Bond Officer will not be required for bonding or ex-bonding the goods. No cost recovery charges would be payable by the Nominated Agencies; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(viii) the Nominated Agencies can be visited by Custom officers for surprise audit or checks. The Commissioner should devise a system of random audit at least once in 6 months initially and once in a year subsequently; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(xi) the exporters intending to receive precious metal from the Nominated Agencies will register themselves with their jurisdictional Asstt . Commissioners who will issue them a one-time Certificate specifying therein the details of their units such as name and address of the unit and the head/owner of the organization. This certificate has to be produced to the Nominated Agencies while taking gold. The units shall submit an undertaking to the Asstt . Commissioner without bank guarantee to follow the conditions of notification under which they are receiving duty free precious metal and export the jewellery made therefrom within the period stipulated in the Foreign Trade Policy. The EOU units may submit a self-declaration to the Nominated Agencies stating therein the details of their unit; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(x) the Nominated Agencies would allow clearance of the goods for export production under the relevant exemption notification under their own internal documents and would submit a consolidated monthly account in format enclosed of the goods released exporter-wise and the duty involved which will be worked on the basis of effective rate of duty; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(xi) the Nominated Agencies shall maintain an account of the goods released to the exporters (exporter-wise) on day-to-day basis. This account shall be liable for inspection by any Customs Authorities as the account of a bonded warehouse; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(xii) the exporter shall furnish the EP copy of the shipping bill and Bank certificate of realization in Appendix 22A to the nominated agencies as a proof of having exported the jewellery made from the duty free goods released to them within the period prescribed in the Foreign Trade Policy; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(xiii) wherever such proof of export is not produced within the period prescribed in the Foreign Trade Policy, the Nominated Agencies shall (without waiting for its recovery from the exporter) deposit the amount of duty calculated at the effective rate leviable on the quantity of precious metal not exported, within 7 days of expiry of the period within which the jewellery manufactured out of the said precious metal was supposed to be exported. The duty so paid by the Nominated Agency shall be reflected in the monthly statement prescribed in para (x) above. The Nominated Agencies will settle their claim with the exporter at their own level; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(xiv) the Nominated Agencies shall report the cases of failure, to export the jewellery made out of precious metal released to the exporter, to the Commissioner of Customs in whose jurisdiction the licensed vault of the Nominated Agencies is installed; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(xv) the exporters operating under replenishment scheme may be permitted to receive precious metal from the Nominated Agencies on submission of EP copy of the shipping bill. Nominated agencies shall also monitor the export proceeds realization of such shipments against which they have replenished precious metal, on the basis of Bank certificate of realization in Appendix 22A to be submitted by exporters to the nominated agencies, as a proof of having exported the jewellery. </font></p>
</blockquote>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2009/cuscir09_028.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGEP Circular No. 28/2009- Cus ., Dated: October 14, 2009 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Complicated Selection procedure for Members of CBDT – BOARD out of CAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All these days nobody really knew how Members to the two premier Revenue Boards were appointed. This came to light only recently when a Chief Commissioner grade officer who missed the bus to the Board challenged the application of the selection process as approved by no less an Authority than the Prime Minister of India. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
basis of selection is the last ten available annual confidential reports
of the officer. 10 points are awarded for 'Outstanding', 8 points for "Very
Good', 5 points for 'Good' and zero points for other gradings below 'Good'
in the ACRs . When an officer gets different gradings from the Reporting,
Reviewing and Accepting Authorities, an average is taken so that adequate
weightage is given to the difference in gradings given by these authorities.
This grading in a year is then weighted to the number of months covered in
the report ... The points weighted by the number of months in each year
are added up for ten years and the grand total is divided by the total number
of months for which the ACRs pertain and thus, the weighted average point
for an officer is arrived at. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The above procedure has been worked out having regard to various imponderables in the recording of ACRs . The weighted average principle eliminates the scope for any deviation or discretion by assigning different weightages when an ACR relates to a fraction of a year as compared to another for the whole year. This is the only way to compare/differentiate one officer who has say, very good grading for 12 months from another officer who has a very good grading for 9 months and an outstanding for the remaining 3 months in a year. If the weighted average is not taken, an officer who has say, an outstanding for just 3 months in a year (with no report for the remaining 9 months) will get an undue advantage. Similarly, an officer who has only a good grading for just 3 months of a year (with no report for the remaining months) will be severely disadvantaged. The only way such instances can be taken care of is by weighing the grading to the number of months to which it relates. This is what is being done. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Petitioner before CAT, Narinder Singh who would have been Chairman of CBDT, if these calculations were done correctly has won a major battle with the CAT directing that these calculations be redone and Mr. Singh be appointed as Member and Chairman if he is eligible. Mr. Singh has become a Member subsequently. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The remarkable feature in this case is the remarkable research done by the petitioner to fight his case. He has not only produced details about his postings and leaves but those of 16 other officers. Even the Tribunal observed that Respondent was caught off-guard by the <strong>meticulous research done by the Applicant. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the CAT has asked for a fresh selection by the Committee of Secretaries and if Mr. Singh is eligible to consider him for the post of Member, CBDT and consequently or the post of Chairman, CBDT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government is in a fix. Will it revert the present Chairman and appoint Singh as Chairman? Or will it appeal to the High Court? But then, what is the question of law? This was a question of simple Arithmetic. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Interesting
days ahead. See a detailed analysis in our <strong>CobWeb. </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Greek and Latin </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>debitum
in praesenti, solvendum in future</em>: </strong>A debt due at present,
to be paid in future. There is a difference between debt payable now
and one payable at a future time. On the former an action may be brought,
on the latter no action lies until it becomes due. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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"> – Friday's cases</font></strong></font></strong></font></p>
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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" 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color="#663399" 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>Section 11AC - There is no discretion vested in assessing authority, appellate authority or Tribunal to reduce penal amount, even if duty is paid before issue of notice – but penalty can be imposed only if ingredients of 11AC are satisfied – High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is obvious that there is no rule of law applicable in blanket manner to the effect that if the amount of duty due has been paid before the issuance of show cause notice then the provision concerning interest or penalty would not be applicable. In the light of the absence of findings of clandestine removal of goods or any fraud, mis -representation, suppression of facts with the intention to evade duty, Section 11 AC of the Act read with Rule 25 of the Rules would not get attracted as has been held by the Hon'ble Supreme Court in the case of <em>Rajasthan Spinning and Weaving Mills's </em> case. </font></p>
<p align="justify"><font color="#663399" 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>Advance given by One PSU to another – No notional interest when there is no enforceable right to receive interest – ITAT by majority</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There
must be as is otherwise expressed <em>debitum in prasenti</em>, <em>solvendum
in future (</em>see Greek and Latin above for meaning<em>)</em>. Unless and
until there is created in favour of the assessee a debt due by somebody,
it cannot be said that he has acquired a right to receive the income or that
income has accrued to him. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Testing
laboratory cannot be held liable to penalty on charge of aiding and abetting
in absence of any conscious knowledge in matter of mis -declaration or
overvaluation of the goods by exporter: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant is a testing laboratory and their job is only to analyse the samples and accordingly to prepare a test report and the appellant has nowhere any role in mis -declaration or under valuation of the impugned goods. </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="#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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