TIOL-DDT 1276 · 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 align="justify"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1276 </font></strong><font size="2"><strong><br> 12.01.2010 <br> Tuesday </strong></font></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DRI releases Draft Preventive Manual – Invites Comments from Departmental Officers </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ONCE </strong>upon a time the CBEC used to have well written manuals for Customs, excise, audit, preventive, adjudication and a host of commodity manuals and an Office Procedure manual called OPM. Over a period of time, the officers became a law unto themselves and the manuals slowly withered away with nobody to renew, revise or update them. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These manuals helped the Departmental Officers in functioning effectively as per the law and instructions and within a uniform procedure all over the country. Over the years, the officers lost the patience and ability to read and they developed giant sized ego and a contempt for the Board as well as the assessees. When they refuse to follow Supreme Court decisions, what respect they have for the Board or stupid manuals? You may be surprised (I am not) that Show Cause Notices are still being issued for demanding Service Tax for import of services for the period from 1.1.2005! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems the railway manual has an answer to every problem that an employee may face in discharging his duties. Unfortunately there is no such manual for the Customs, Excise and Service Tax officers – even if there is one, nobody is going to read it and implement it, because disobeying the Board is a regular habit in the field and nobody was ever punished for blatant disobedience of the Board or its instructions. There are still many adjudicating authorities who believe that they are independent judges and not bound by the silly instructions of the Board or higher judicial authorities. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the DRI has released a new Draft Preventive Manual. The previous manual was released in 1987 and a Draft Customs Preventive Manual was prepared in 2000. Now the DRI has released the Draft Customs Preventive Manual 2009 and has asked the Departmental Officers for their comments and suggestions. The DRI wants the comments to reach them by 31.01.2010, so that the final manual (already approved by the Board) may be released in this Financial Year. But why call it Draft Preventive Manual 2009, when it is released only in 2010? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The First lady DG of DRI, Vijai Lakshmi Sharma will have a proud place in history if she can get the final manual released this year – after 23 years of the previous manual. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Draft Manual proudly declares, <font color="#FF6633">No goods can be imported or exported, except in accordance with provisions of the law. Section 11 empowers the central Government to prohibit, through issue of notification, either absolutely or subject to pre/post clearance conditionality, import or export of any goods if it is satisfied that it is necessary so to do for any of the twenty two purposes listed in the sub clause (2) of Section 11. </font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Compare this with what the Commerce Ministry says in the Foreign Trade Policy, <font color="#FF6633">“Exports and Imports shall be free, except where regulated by FTP or any other law in force” </font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DPM states, “CBEC, according to its Citizen's Charter, “is the apex body for administering the levy and collection of indirect taxes of the Union of India viz. Central Excise duty, Customs duty and Service Tax, and for facilitating cross border movement of goods & services” – <font color="#FF6633">but for the Citizen's charter, the DPM is not prepared to accept the supremacy of the Board? </font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Manual has given the detailed description and functions of the various DGs, but when it comes to <strong><font color="#FF6633">Directorate General of Export Promotion</font> - </strong>, there is a blank. The Manual obviously does not know what this DG is supposed to do!! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Manual states that the appointment of Customs ports under Section 7 is to be done by the Central Government, but this is a power vested with the Board!! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Manual stipulates that <em>Recruitment to the Group 'D' cadre is either directly through Employment Exchange and Sports quota etc. or by promotion from the <strong><font color="#FF6633">menial staff</font> </strong> of Loaders and Hamals etc., as per the existing recruitment policy. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Do we still call employees <strong><em><font color="#FF6633">menial</font> </em></strong>? </font></p> <h1><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/dri_letter.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGDRI letter DRI.F.NO. XII A/10-Pol/08 Dated: 23 .12.2009 and the manual </font></a></h1> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>International Customs Day in India on 27 th January 2010 </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INTERNATIONAL</strong> Customs Day is celebrated all over the world on 26 th January, but in India, it being a holiday is celebrated either on the previous day or the next working day. This year, the Revenue Department has decided to celebrate it on 27 th January with the main function to be held at the New Custom House, New Delhi. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The WCO theme for this year's Customs Day is “Customs and Business: Improving Performance through Partnerships” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Field formations have been requested/directed to celebrate International Customs Day on 27 th January 2010 in a suitable manner. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CESTAT Acknowledgement </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CESTAT</strong> Registrar informs that a new link has been developed in the software of CESTAT by which acknowledgment of appeal/application can be issued to the appellant/respondent. It is therefore directed that acknowledgment of appeal, showing the appeals nos. may be issued to the litigant instantly across the appeal receiving counter by the<font color="#FF6633"> <strong>concerned</strong></font><font color="#FF6633"> </font> dealing clerk receiving the appeal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The litigants may also insist for acknowledgement while filing the appeal, if the appeal is in order. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/cestat_circular.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CESTAT Circular dated 07.01.2010 </strong></font></a></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font></strong> <font color="#FF6633" size="5"><strong>tiol </strong></font></font><font color="#006600">– <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> Wednesday's cases </strong></font></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"><font color="#663399">Central Excise</font> </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Registration of Motor Vehicle as Taxi – Refund of duty - Benefit of notification not to be denied if the assessee has fulfilled the substantive conditions and failed to follow the procedural conditions - Beneficiary provision should be interpreted liberally – CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SUPREME</strong> Court has held that the distinction is to be made between a procedural condition of a technical nature and a substantive condition. Non-observance of the former is condonable, while that of the latter is not condonable as it is likely to facilitate commission of fraud and introduce administrative inconveniences. The Supreme Court has observed that the benefit of exemption notification should not be denied if the assessee has fulfilled the substantive conditions and failed to follow the procedural conditions and that it is not appropriate to attach equal importance to the non-observance of all the conditions. </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 195 - export of cars - assessee enters into pact with French company for impact testing - remittance - AO holds it as fees for technical services - Scope of expression 'fees for technical services' under Indo-French DTAA - payment is liable to TDS: ITAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INDIA</strong> has signed 78 DTAAs but all of them are not the same in text and intent. Depending on the bargaining powers of a contract state, the wording and phrases are scripted for the Protocol and the Articles of the DTAA. 'Fees for Technical Services' is one of the payments which can be found in all the DTAAs but the definition for the same is not the same. In the instant case the assessee, an automobile giant, hires the services of a French company to do 'Impact Testing' of various models of its cars as per the requirements of the French Govt before the cars are exported in large number. Revenue takes the stand that the assessee is liable to TDS u/s 195(2) on remittances payable to the French company. Assessee takes the stand that there is no transfer of any knowledge and technical knowhow which may qualify the payment as fees for technical services either under Sec 9(1)(vii) or Article 13(4) of the India-France DTAA. </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>Original Importer does not clear the goods – Another importer stakes claim – tribunal ought not have passed the order without impleading the original importer – matter remanded – High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN</strong> the question as to the ownership of the goods imported is substantially in issue, as such, the decision on that issue will have far reaching consequences for the determination of the release of the goods, the levy of duty, the levy of redemption fine in lieu of confiscation and for the levy of penalty for improper import. The Tribunal ought to have examined the question as to the rights of the original importer, namely, M/s Sandip Exports Limited and the present claim of the first respondent who seeks to virtually subrogate itself to that of the original importer based on certain documents stated to have been obtained from the overseas supplier. </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="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more DDT </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p> <p align="justify"><font color="#FF6633" 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>