TIOL-DDT 1286 · 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 1286 </font><br>
27.01.2010 <br>
Wednesday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>There is no alternative other than co-operation between all those involved in international trade - WCO Secy Genl Kunio Mikuriya </strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><img src="http://www.taxindiaonline.com/RC2/image/stories/WCO.gif" alt="Legal Corner Icon" width="120" height="119" hspace="5" border="0" align="left"></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a message on the occasion of the International Customs Day (which is being celebrated in India today), the WCO Chief Kunio Mikuriya said, <em>"In these early years of the 21st Century, there is no alternative other than co-operation between all those involved in international trade, which is the key to development and the engine which drives the global economy forward, and we must stand together as we look to the future.”</em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He added,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The international Customs community is unanimous: it is time to sweep away the non-essentials and the artificial synergies and engage in dialogue, innovating together and acting in concert to work out a course of action with optimism and determination in the face of the challenges to be confronted. The futures of all those involved in the supply chain are closely related, and depend on their ability to work together. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs cannot continue to act independently, without taking into account the interests of its partners; it must decompartmentalize its relations with international trade operators, develop consultation, dialogue, the exchange of expertise and know-how, promote information exchange and co-operation, and reduce the barriers that impede the smooth flow of trade by remedying shortcomings, doing away with duplications and organizing interactions. Customs must review its fundamentals, as must its partners who need to gain a better understanding of Customs, its missions and its challenges. In order for this partnership approach to be a balanced one, the private sector must take on board the two facets of the Customs role, which entails both collecting revenue and protecting society, whilst facilitating legitimate trade by means of the benefits granted to operators who commit to a process of transparency built on trust. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is essential to make the point that in its day-to-day operations Customs must work closely with business in a shared endeavour to enhance performance. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us make the decision to take action and pool our talents, remembering that every journey must begin with a single step. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Decline in Exports - Relief to Exporters</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per para 5.11.2 of the Handbook Of Procedures, “To provide relief to exporters of those sectors where total exports in that sector/product group has declined by more than 5% as compared to the previous year, average export obligation for the year may be reduced proportionate to reduction in exports of that particular sector/product group during the relevant year as against the preceding year.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the DGFT has amended the para to include the provision that, “However, in case export decline is continuous over consecutive years, the base year for calculation of eligibility and calculation of reduction in Average Export Obligation will be taken as the year after which the exports have shown continuous decline.” </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2009/dgft09pn036.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Public Notice No. 36/2009-2014, Dated: January 21, 2010 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Punjab wants Himachal and Uttarakhand Model exemptions</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Punjab Chief Minister wants excise exemptions similar to those given for neighbouring Himachal Pradesh and Uttarakhand. He is concerned with industries in Punjab shifting base to these states disturbing the level playing field. He feels that the concession to the other states is a deterrent to economic growth of Punjab. Now if this concession is given to Punjab, can it be denied to Haryana? Maybe politicians in Telangana are not aware of this concession or maybe they are waiting for the State to be formed. Regional imbalances of the economic kind are sure to haunt the FM in the days to come! </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>The
Republic - pages from History: 1857 Revolution – A Customs Babu's Report</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ON</strong> the First War of Independence, an unnamed Customs babu had given a Statement. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I am a native of Bengal and was attached to the writers' establishment of the Jhansie Customs Collector's office. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the 5th of June last at about 3 p.m., while we were in attendance at the office, we were alarmed by the report of musketry fired in the direction of the magazine; instantly two peons and a duffadar of the Customs establishment, who had been sent by Mr. Carshore to pay in 1,500 rupees of the Customs collections in the Deputy Commissioner's treasury, returned to our office panic stricken, and stated that they had been informed by certain sepoys that the revenue treasury was in imminent danger of being plundered by a gang of robbers. Our office was ordered to be closed directly, and the peons on the establishment were called in to hold themselves in readiness within the office compound for any contingency which might occur. Mr. Wilton was next seen dashing in from the military lines, and urging Mr. Carshore to fly from the place with his family, intimating at the same time that the regiments had mutinied and all was over. Accompanied by Mr. Wilton, Mr. Carshore drove with his family in a buggy to the dak bungalow where they arrived in safety. Myself and other amlahs then quitted the office compound, leaving the peons in charge of the office, and took our stand on an adjoining road to witness what was going on. Seeing nothing where we stood, we determined to cut into the town by striking across the parade ground, but we had not advanced many steps in our intended direction, before we were accosted by a sepoy from a distance to the effect that we should keep ourselves out of the way, as some men of the 12th Native Infantry had broken into open mutiny and taken possession of the magazine. We, however, pushed on regardless of consequences, till we came up to a spot where the officers of the 14th Irregular Cavalry with a party of sowars belonging to that regiment were haranguing the men of the 12th Native Infantry, who had not already mutinied, to continue true to their colours, and we then cut into the town. On our way, however, we observed a party of sepoys running towards the cutcherries of Messrs. Skene and Gordon intent upon mischief; but as those officers and all other Christian residents with the exception of officers attached to the regiments had been timely escorted by a party of the 14th Irregular Cavalry into the fort, the sepoys were in this instance foiled in their attempt to massacre the Christian population of Jhansie. When all the Christian residents, with the aforesaid exception, had taken shelter in the fort, the town gates were closed by order of Captain Scene who had directed that no one should be permitted to enter the town except with the privity of the head of the police. </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><font color="#663399" 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">Central Excise</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A show cause notice under section 11A(1) of CEA, 1944 should result from successful conclusion of investigations rather than from a mere report of an auditor – Arithmetically blunderous demand – CESTAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> lower authorities chose to repeat the mistake of the auditor in application of Rule 9(5) of the Cenvat Credit Rules, 2004 . Apparently, it was presumed that the burden of proof regarding the admissibility of CENVAT credit to the extent of Rs.3,22,525/- lay on the assessee. The indisputable fact is that, in this case, the assessee consistently denied having taken any such credit. The department, in the absence of CENVAT account, did not make out a fool-proof case of such credit having actually been taken by the assessee either. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax</font></strong></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Cooperative bank - deduction for interest on tax refund - Although interest income falls under head 'income from other sources' but for business of banking it falls under much wider term 'gains' in 'profits and gains of business' as legislature has used phrase 'attributable to' as against narrower term 'derived from' in Sec 80P - deduction allowable: ITAT Special Bench</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INTEREST</strong> on income tax refund is a common phenomenon. What is equally common and settled legal proposition is that such interest is an income, exigible to tax. But the larger question is whether such income would fall under the head 'income from other sources' or under the head, depending on the character of source of such income. For instance, if the source of fund deposited with the Revenue is 'capital gains', would the interest on income tax refund fall under the head 'capital gains'? If the fund deposited with the Revenue is 'Income from House Property', will the interest income by way of income tax refund fall under the same head? </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>Rent a cab service, outdoor catering service, air travel booking, telephone/mobile services and steamer agent qualify as "input service" – Refund of un-utilised Cenvat credit admissible – CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> present stand of the Revenue is unacceptable. It is well settled that the Revenue cannot blow hot and cold at the same time. The law does not permit blowing bugle at both ends. It is clear that the burden of service tax must be borne by the ultimate consumer and not by any intermediary i.e. manufacturer or service provider. In order to avoid the cascading effect, the benefit of cenvat credit on all input Stage goods and services must be allowed. Consequently, refund should be allowed in case of export of goods. </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>Prosecution – A person not concerned with exports cannot be prosecuted for export offence; No punishment for false declaration when no document was signed by petitioner- complaint also time barred – High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> the present case there is nothing to show that the petitioner made any false declaration or prepared false documents and, therefore, he is not liable to be prosecuted under Section 132 of the Customs Act. In this case, moreover the complaint is barred by limitation inasmuch as per the provision of Section 132 which existed at the relevant time the punishment which could have been imposed for violating Section 132 could have extended for a period of six months or with fine or with both and limitation in such a case as provided under Section 468 of the Cr.P.C. was only 1 year. In the present case, the complaint was filed by the respondent on 31.08.1998 whereas the incident in this case pertains to the year 1997 and, therefore, the complaint was admittedly barred by limitation. This has also been accepted by the learned counsel for the respondent during the course of arguments. </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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