TIOL-DDT 1232 · 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 1232 </font><br>
09.11.2009 <br>
Monday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Withdrawal of facilities – Board may delegate Member's power to Chief Commissioner: Supdts of Central Excise may get Adjudication Powers </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Rule 12CC of the Central Excise Rules, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">where the Central Government, having regard to the extent of evasion of duty, nature and type of offences or such other factors as may be relevant, is of the opinion that in order to prevent evasion of, and default in payment of, excise duty, it is necessary in the public interest to provide for certain measures including restrictions on a manufacturer, first stage and second stage dealer or an exporter, may by a notification in the Official Gazette, specify nature of restrictions including suspension of registration in case of a dealer, types of facilities to be withdrawn and procedure for issue of such order by an officer authorized by the Board. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Member, CBEC is the officer competent to issue such orders like withdrawal of monthly payment of duty, freezing of CENVAT Credit etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This power vested with the Board Member may be soon delegated to the Chief Commissioner. We only hope the Board will do no such thing. This power was vested in the Board to ensure that the decision to deny the assessee eligible facilities was taken at the highest level and not routinely as is done often. In fact it may be a good idea to delete this draconian Rule 12CC from the statute. This proposes punishment before Show Cause Notice and adjudication which is against all principles of justice. Already the Bombay High Court has admitted a petition challenging the Rule - </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2009/2009-TIOL-83-HC-MUM-CX.htm" target="_blank">2009-TIOL-83-HC-MUM-CX</a></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>. </strong>The
High Court not only stayed the order of the CBEC Member but held that <font color="#FF6633">the impugned decision prima facie suffers from arbitrariness. </font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We understand that this was one of the issues discussed in the conference of Chief Commissioners of Central Excise held in Shilling on 30 th and 31 st of October 2009, attended by nearly 30 Chief Commissioners. It seems a large number of Chief Commissioners were in favour of delegating this power to them. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9894" target="_blank">DDT 1230 05.11.2009</a>, </strong>it was commented, <font color="#FF6633">And
strangely while a decision to appeal to the Tribunal has to be taken by
a Committee of Commissioners or Chief Commissioners, the decision to approach
the High Court can be taken by a single Commissioner! </font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT </strong> understands that this was also an issue discussed by the Chief Commissioners in the conference. Maybe the order to appeal against the order of the Tribunal should be taken at the Board level. Anyway earlier the Board used to review the orders of the Commissioners – now they can do so for the Tribunal orders. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The conference also discussed issues on CENVAT Credit, Rebate Claim on exports by EOUs, Area based Exemptions, registered dealers of Iron and Steel products. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Others issues discussed include Review of Audit performance, implementation of ACES, pendency in key areas like adjudication etc, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The conference also discussed the possibility of conferring adjudication powers on senior Superintendents of Central Excise in certain areas like refund. There was a proposal sometime back to make Superintendents adjudicating authorities for Service Tax cases where a large number of cases are to be adjudicated. The Department has a large number of Superintendents in the scale of Deputy Commissioners, whose services can be used to dispose of a large number of adjudications. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Can there be a conference now without a discussion on GST? This was an Open House where the CBEC Member, Excise addressed not only the Chief Commissioners, but also the local officers of Shillong from Tax Assistant to Commissioner. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Contrary to popular belief that work in Central Excise offices will come down, the Member, Mr. Dutt Mazumder told the staff that there will be actually increase in work as the assessee base will go up 4 to 5 times and may be around 40 lakhs to 60 lakhs and maybe even 80 Lakhs depending on the threshold limit which is yet to be decided. Of course the work will be slightly different from what it is now – The future will be more Audit and Anti Evasion oriented. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Licence to manufacture cigarettes by Central Excise Department </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9894" target="_blank">DDT 1230 - 05.11.2009</a>, </strong>we
reported, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board Circular states, “The legal position regarding requirement of obtaining industrial licence by cigarette manufacturing units under IDRA has been clarified vide letter no. 9(3)2009-IP dated 8th September, 2009. A copy of the same is enclosed for your kind information. Trade and Field formations may be informed suitably.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board Circular does not enclose the Department of Industrial Policy and Promotion letter. Now what is this licence by the Central Excise Department? There is absolutely no requirement of any licence by the Central Excise Department and God knows what the requirements are under the IRDA. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But why can't the Board be a little more clear? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We carried this in <strong>DDT </strong> on 5 th November and on 6 th November, a concerned Netizen asked us for a copy of the letter. Now the Board has released the letter from Department of Industrial Policy and Promotion. </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=31&filename=notification/excise/2009/excircular905.htm" target="_blank">CBEC Circular No. 905/25/2009-CX., Dated: November 4, 2009 </a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Safeguard Duty on Soda Ash </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Government after considering the findings of the Director General (Safeguards), has imposed a safeguard duty at the rate of 20% ad valorem on Soda Ash, falling under tariff item 2836 20 of the First Schedule to the said Act, when imported into India from the People's Republic of China. </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=23&filename=notification/custom/2009/ctariff09_122.htm" target="_blank">NOTIFICATION NO. 122/2009-Cus., Dated: November 5, 2009</a> </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise – Section 11C Notification for Ceramic Products, furniture </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government has granted Section 11C exemption to Ceramic products falling under Chapter 69 and furniture falling under heading numbers 94.01, 94.02 and 94.03 of Schedule to the Central Excise Tariff Act for the period commencing on the 1 st day of September, 1987 and ending with 28 th day of February, 1989. </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=30&filename=notification/excise/2009/exnt09_25.htm" target="_blank">NOTIFICATION NO. 25/2009- CX.,(N.T.), Dated: November 6, 2009</a> </strong></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"> – Tuesday's cases</font></strong></font></strong></font></p>
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color="#663399" 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>Activity of teaching math through abacus training program a recreational program to increase children's interest in math – Eligible for exemption under Notification No. 9/2003-ST: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE appellant conducts mental arithmetic programs for children between 5 to 12 years by using the ancient tool ‘abacus'. Department proceeded against them by issuing a show cause notice demanding service tax under the taxable service category of ‘Commercial Training & Coaching Service' and also denied benefit of exemption notification 9/03-ST on the ground that the activities undertaken by them would not come under the category of ‘recreational training'. Their contentions were rejected by the lower authorities resulting in an appeal before the CESTAT. </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>Assessee sells gifted asset - computation of long term capital gains - cost of acquisition to be worked out by applying cost inflation index in relation to year when previous owner first held the asset and not the year when asset was gifted to assessee - Revenue's appeal dismissed: ITAT Special Bench </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">IT is not uncommon to see in our society that a daughter gifts a flat to her father. This is what happens in the instant case. But a dispute arises when the father decides to sell off the flat and computes the capital gains tax by taking into account the indexed cost of acquisition in relation to the year in which his daughter first held the asset. But the AO disagrees and insists on computing the same from the year in which the father gets control of the asset. Since there were conflicting decisions on this issue, the matter is referred to the Special Bench. </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>Equipment imported for supply to BSNL – contract with BSNL cancelled – goods detained by DRI – allowed to be re-exported: High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Action in the matter is possible only after the conclusion of the proceedings in the said show-cause. Therefore, at this stage, only relief that can be granted is to allow the petitioner to re-export the goods, subject to furnishing of the Bond (as that condition is not challenged) and leaving the petitioner to seek the appropriate remedy after the orders pursuant to the said show-cause notice are passed by the respondents. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Tomorrow for the judgements </strong></font></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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