TIOL-DDT 1245 · 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><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1245 </font><br> 26.11.2009 <br> Thursday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>‘Nil' BG to all Status Holders </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> has received representations to clarify whether the status holders other than ‘Star Export House' are entitled for ‘nil' BG in terms of sl.No.(c) of the Table appended to para 2.1 of <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2009/cuscir09_017.htm" target="_blank"><em>Circular No.17/2009-Cus. dated 25.05.2009</em></a></strong><em>. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board explains, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The circular no 17/09-Cus. had amended circular No.58/2004-Cus which was issued in the light of the provisions of the 2004-05 edition of the Foreign Trade Policy (FTP).The FTP-2004 recognized five categories of Status Holders viz. One star /two star / three star /four star and five star Export Houses. The circular No. 58/2004-Cus extended the benefit of ‘nil' BG to all the five categories through a common phrase ‘Star Export House' under sl.No. (c) of the Table. The intention of the circular no 58/2004-Cus was therefore to extend the benefit of ‘nil' BGto all the status holders.The sl no. (c) of the table remained unchanged in circular No. 17/09-Cus. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And clarifies </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As the above categories are now known as Export House, Star Export House, Trading House, Star Trading House and Premier Trading House respectively in terms of para 3.10.2 of the current FTP, the benefit of ‘nil' BG should also be extended to all categories of status holders.The words ‘Star Export House' appearing under sl. No. (c) of the Table may therefore be read to mean ‘Status Holders recognized under the provisions of the Foreign Trade Policy' </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2009/cuscir09_032.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Circular No. 32/2009 - Cus Dated: November 25, 2009 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Bank Street should be kept dull in order to keep Main Street safe<br> An insight into Boring Banking </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ONE</strong> of the more influential ideas, one that has generated a vigorous debate, has been the thesis put forward by the noted economist and Nobel Laureate Paul Krugman that the way to reform banking is to once again make it boring. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Taking a long term historical view, Krugman argues that there is a negative correlation between the ‘business model' of banking and economic stability. Whenever banking got exciting and interesting, paid well and attracted intellectual talent, it got way out of hand and jeopardized the stability of the real sector. Conversely, periods when banking was dull and boring were also periods of economic progress. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To support his thesis, Krugman divides American banking over the past century into three phases. The first phase is the period before 1930, before the Great Depression, when banking was an exciting and expanding industry. Bankers were paid better than in other sectors and therefore banking attracted talent, nurtured ingenuity and promoted innovation. The second phase was the period following the Great Depression when banking was tightly regulated, far less adventurous and decidedly less lucrative - in other words banking became boring. Curiously, this period of boring banking coincided with a period of spectacular progress. The third phase, beginning the 1980s, saw the loosening of regulation yielding space for innovation and expansion. Banking became, once again, exciting and high paying. Much of the seeming success during this period, according to Krugman, was an illusion; and the business model of banking of this period had actually threatened the stability of the real sector. Krugman's surmise accordingly is that the bank street should be kept dull in order to keep the main street safe. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Is ‘Boring' Banking a Necessary and Sufficient Solution?</font> </strong>RBI Governor Subba Rao does not think so. Addressing the International Finance and Banking Conference organized by the Indian Merchants' Chamber yesterday he said, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ills of the banking system listed above raise two follow-on questions. Is making banking boring in the sense that Krugman indicated a necessary and sufficient solution to curing those ills and preventing their recurrence? And what will be the cost of making boring? Both questions cause much confusion, the first because it has too many answers and the second because it has too few. Abstracting from these answers, I will argue that it is neither possible nor desirable to make banking boring. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">3-6-3 banking:</font> </strong>The narrow banking of the 1950s and 1960s was presumably safe and boring. But that was in a far simpler world when economies were largely national, competition was sparse, pressure for innovation was low, and reward for it even lower. Bankers of the time, it is said, worked on a 3 - 6 - 3 formula: pay depositors 3 per cent interest, lend money at 6 per cent and head off to the golf course at 3 pm. From the 24/7/365 perspective of today, that may appear romantic but is hardly practical. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In fact, I will go further and argue that boring banking is an oxymoron in the Indian case. Here my intent is to argue not so much from the perspective of a banking model - narrow or full service - but from the perspective of the challenges that Indian banks will have to meet. Meeting these challenges is going to demand lateral thinking, entrepreneurship and management calibre - all a far cry from anything like boring. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is a challenge that will test ingenuity, perseverance, ability to learn and adapt and management skills. And this is going to be <strong><font color="#663399">anything but boring.</font> </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Revenue Presents Rs. 10 lakhs to widow of slain Central Excise Assistant Commissioner </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9556" target="_blank">TIOL-DDT 1181-24.08.2009</a> </strong>had reported the incident of Assistant Commissioner of Central Excise, Nripateshwar Singh having been shot dead in Varanasi. In a rare gesture of expressing solidarity with the bereaved family, the Revenue Department granted an amount of Rs. 10 lakhs from the Customs Welfare Fund. The Minister of State (R) and Chairman, CBEC flew down to Varanasi yesterday to hand over the cheque. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ten lakhs rupees may not be much money these days, but the gesture, especially of the Minister and the Chairman personally going to the family to hand over the cheque is a laudable one indeed. </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> <p><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, 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color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FERA </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FERA or FEMA? For cases already initiated prior to 31.5.2002, provisions of FERA applicable – Dismissal of appeal by Tribunal on limitation upheld – High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under Section 52 of the FERA, it is clear that the outer limit for filing an appeal is 90 days; beyond the period of 90 days the Court has no power to condone the delay. The Appellate Tribunal on 26.3.2005, had rightly dismissed the appeal on this ground by invoking Section 52 (2) of the FERA holding that the delay of 118 days could not be condoned; the outer limit being 90 days. The said order calls for no interference. </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>Disallowance u/s. 40A(3) is applicable for each payment and not for the aggregate of various payments made to same party during one day; Sec. 69C cannot be applied on mere presumption or suspicion. – ITAT Third Member </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Assessee's plea against the disallowance u/s. 40A(3) was that each payment was below, Rs.20,000/-, and, therefore, Sec. 40A(3) is not applicable. However, as per the A.O., since the payment of one day exceeded Rs. 20,000/-, therefore, Sec. 40A(3) was applicable. The C.I.T.(A) also sustained the disallowance upholding the views of the A.O. Unfortunately, both the Members either while confirming the disallowance or while deleting the disallowance have not considered the aspect on which disallowance was made by the A.O. </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>Extra Duty Deposit cannot be demanded when provisional assessment could not be completed in four months. The reasons for failure by proper officer in finalising assessment is immaterial; Board Circulars binding on Customs officers – High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Admittedly, in the instant case, the provisional assessment has not been finalised. The contention of the respondent is that investigations are still going on. The further contention is that investigations could not be completed for reasons beyond their control and therefore, it was open to the proper officer to demand the extra duty deposit as demanded. The reasons for failure by the proper officer in finalising the assessment is immaterial, as that is no ground to discontinue the extra duty deposit. </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> </body> </html>