TIOL-DDT 1272 · the untouched capture
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<p align="justify"><font size="3"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 1272 </font></strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong></strong></font></font><font size="2"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><br>
06.01.2010 <br>
Wednesday </strong></font></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs and Central Excise – Headless Commissionerates – at crucial last quarter? </strong></font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RECENTLY</font></strong> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">17 Commissioners of Customs and Central Excise were promoted as Chief Commissioners – that means 17 important posts of Commissioners are lying vacant. Actually about 50 posts of commissioners are vacant, but these 17 who were recently promoted must have been holding very important Commissionerates being the senior most commissioners in the country. Already the indirect taxes revenue is showing a disturbing negative growth and the last three months of the fiscal are very important when the officers use all the tricks in the trade to get that extra rupee of revenue. If important Commissionerates are left headless in this crucial time, who will take care of the important task of Revenue collection? When these 17 officers were promoted, the Board should have affected a mini transfer of Commissioners also by an adjustment order, where some efficient commissioners working in unimportant Commissionerates could have been transferred to important Commissionerates. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But
it seems the Board is waiting for the promotion of 24 Additional Commissioners
who have cleared DPC for promotion. But that promotion is sure to get stuck
in DOPT (this would be the second <em>adhoc </em> promotion for them – adhocism
is the rule rather than exception) and then the mighty Revenue department
and the Finance Ministry. It is understood that lobbying for posting has
already started and there are officers who can rope in a couple of Cabinet
ministers to help them get their choice posting. In this entire circus, it
will be almost impossible to get the promotion and posting orders of the
24 Additional Commissioners for quite some time. In such a situation, it
will be very difficult to fill the posts vacated by the promoted Commissioners.
Board should perhaps consider filling these posts without waiting for the
promotion of the Additional Commissioners. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is another side to the coin. There is a general belief among the assessees and the staff that “that Commissionerate is the best which does not have a regular Commissioner”. It will be better, if the in-charge Commissioner is at least a thousand kms away with no proper flight facilities. Many remote area Commissionerates without regular commissioners are doing exceedingly well! </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Advocates appearing for Revenue expected to know recent judgments of Court as well as that of Apex Court – Bombay High Court frowns on want of knowledge of Revenue Counsel</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a recent decision, the Bombay High Court observed, “advocates appearing on behalf of the Revenue are expected to know the recent judgments of this Court as well as that of the Apex Court. In all fairness they are expected to bring it to the notice of the Court while making their legal submissions.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the Counsel for the Income Tax, the High Court observed, “We have noticed number of times in number of cases wherever she appears, either she is not ready with the matter or she is not able to articulate her submissions may be for want of legal knowledge. This Court had an occasion to bring this fact to the notice of the Higher Officers of the Department at Mumbai. On few occasions, we were compelled to summon the Officers of the Department to argue the matter. In most of the cases, for want of assistance, we found it difficult to do justice in the matter. <strong><font color="#663399">Administration of justice needs assistance</font> </strong>. We expect the Department and the Chairman of the CBDT to take corrective steps in the matter so as to enable this Court to do better justice between the parties.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though the Bombay High Court has come out openly and commented on this aspect, the fact is that similar situation prevails in almost all the courts. The Government Counsels are not always the best lawyers available. Often the judges come to the rescue of the Revenue when their counsels fail. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe the reform should start with Departmental Officers who have the best knowledge on the taxing subject, start passing reasonable orders and not blindly confirm all demands. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(See </strong></font><strong><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2009/2009-TIOL-731-HC-MUM-IT.htm">2009-TIOL-731-HC-MUM-IT</a></font></strong><font size="2"><strong><font face="Verdana, Arial, Helvetica, sans-serif">)</font></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Waive Service Tax, MAT For Industries For Creating Employment: ASSOCHAM </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSOCHAM</strong> wants complete waiver of Service Tax as also Minimum Alternate Tax (MAT) for industries set up solely with a view to creating employment opportunities both in public and private sectors having minimum marginal profits. It also wants imports of capital goods, required to set up such industries be exempt from import tariffs, initially for a period of 10 years. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Area based exemption – Himachal CM announces extension! </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> area based exemption from excise duty for Himachal Pradesh (and a couple of other states) is supposed to end on 31.03.2010. The Himachal CM, Prem Kumar Dhumal, has stated in Delhi that the Commerce minister has cleared the extension till 2013. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Remember Kamal Nath used to announce several Service Tax exemptions and Chidambaram used to laugh at/away them! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The chief minister clarified that “there was no flight of industries from any of the neighbouring states like Haryana and Punjab, which were opposing Himachal Pradesh's demand for the last three years. In fact, several leading industrial houses from Karnataka, Gujarat, Maharashtra and Andhra Pradesh are in the process of setting up new units in Himachal Pradesh to derive benefits from the tax holiday here. The package has had a positive impact on the industrial growth of the state and withdrawal of these benefits will jeopardize economic development.” </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"> – Thursday's cases</font></strong></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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"></strong></font><font 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>Asstt. Director (Cost) is an employee of the department and is not a Cost Accountant entitled to carry on the profession in terms of Sec.2(1)(b) read with Sec.2(2) of the Cost and Works Accountants Act, 1959 read with Explanation 1 to Sec.14A of the Central Excise Act - He should not have been appointed under Sec. 14A of the Act to estimate the cost of production, let alone the assessable value of the goods – 90 lakhs demand and equivalent penalty set aside on ROM application - CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> independent Cost Accountant practising his profession in accordance with the provisions of the Cost and Works Accountants Act alone should have been engaged for the purpose under Sec.14A of the Act. This legal position was made abundantly clear by this Tribunal in the case of Bausch & Lomb (India) Ltd (vide supra.) It is apparent from the records that the decision pertaining to the second part of the period of dispute was not taken with due regard to the legal provisions supported by the case law. </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>Sec 271D - purchase of flat - Assessee receives cash payment from a company - pleads cash payment was towards 40% share of company in flat - AO treats same as unexplained cash in hand of assessee and also loan from company - Contradiction in AO's order negates satisfaction for levy of penalty: ITAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is common knowledge that most property transactions involve cash payments. And any cash payment above Rs 20,000 is prohibited under Sec 269SS. If one violates it, the assessee attracts penal provisions u/s 271D. But how the AO goofed up a good case can be seen in the instant case. The assessee is an HUF. It earns its income from house property and other sources. It buys a flat in Bandra area. Revenue conducts a search u/s 132 and finds that a cash payment of Rs 46 lakh was also made on various dates. The cash payment had come from a registered company. Assessee takes the plea that the cash payment was made by the company towards its 40% share in the flat and the sum was to be utilised for the interior work. </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>Fraudulent Import – misdeclaration - petitioner cannot be allowed to take advantage of the wrong committed by it by filing writ in the High Court – Exercise of power of seizure of any goods in the absence of a quick decision, without any responsibility is prima facie not permissible - Directions to Customs in 2006 to take steps for quick clearance of goods – Court satisfied with Report from Customs – High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHETHER</strong> an importer, who is alleged to be guilty of misdeclaration of description of goods and under-valuing the invoices, can invoke extraordinary jurisdiction of the High Court by filing a writ petition with a prayer that the authorities be directed to reimburse the cost of detention and demurrage charges during the pendency of proceedings before the appropriate authority, which has issued a show-cause-notice for imposing duty, penalty and confiscation of goods, especially when goods have been provisionally released, is a question which has been raised in the present writ petition. </font></p>
<p align="justify"><font 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>Production of goods containing alcohol and discharging State Excise duty – CESTAT while granting Stay ordering for pre-deposit – later, in another case of same appellant setting aside order of lower authority by holding activity not liable to Service Tax under head BAS – Appellant files Modification applications – CESTAT dismisses the same as infructuous and also sets aside demand. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> was decided that if the CBU undertakes complete process of manufacture of alcoholic beverage under the ‘contract bottling arrangement' then such activity would not fall under the taxable service, namely the BAS. However, in case the activity undertaken by the CBU falls short of the definition of manufacture (such as activity of ‘packing' or ‘labelling' alone) then such activity would fall within its ambit and would be charged to service tax. </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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