TIOL-DDT 1293 · 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 1293 </font><br> 05.02.2010 <br> Friday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Procedure to re-credit 4% Special Additional Duty (SAD) of Customs in DEPB, VKGUY, FPS, FMS, MLFPS scrips - DGFT clarifies</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REFER</strong> <em>Customs Notification No. 102/2007-Customs dated 14th September, 2007</em> (as amended) read with Customs instructions communicated vide <em>F.No.354/129/2007-TRU dated 14.9.2007, Customs circular No..6 /2008-Customs</em> <em>dated 28th April, 2008</em> and <em>6 /2009-Customs dated 9th February, 2009</em> on the provision to re-credit the 4% SAD to applicants who qualify for the re-credit subject to compliance of the conditions stated therein. This re-credit facility is available in case of debit of the 4% SAD from the duty credit scrips such as DEPB, VKGUY, FPS and FMS Scrips subject to fulfillment of the conditions. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Various importers, exporters, trade and industry associations have sought clarification regarding the procedure for re-credit of 4% Additional Duty of Customs (SAD) leviable under sub-section (5) of Section 3 of the Customs Tariff Act, 1975 in pursuance of <em>Notification No.102/2007-Customs dated 14.9.2007</em> and the Customs circulars stated above. Department of Revenue have also referred the matter for a corresponding procedure for re-credit for uniform action by the field formations of DGFT and the Customs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accordingly the following guidelines are being laid down for the re-credit of the 4% SAD: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The duty credit scrip holder including the transferee (Applicant) shall submit the original copy of the relevant Duty credit scrip, scheme wise consolidated certificate (credit note) issued by the customs authority at the port of registration along with the forwarding letter to the Regional Authority (RA) who had issued the scrip. The RA concerned shall make an endorsement in the scrip. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In case, the original duty credit scrip, after partial utilization, has been transferred to another importer and the earlier importer wants to get the re-credit facility for the 4% SAD component, proportionate to imports effected by him, the applicant would be required to produce the attested copy of the duty credit scrip, the proof of having transferred the original duty credit scrip, the consolidated certificate (credit note) issued by the customs authority along with an Indemnity Bond indemnifying to pay the loss (the re-credit amount along with the interest) caused to the exchequer in case of unjustified re-credit detected subsequently. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ RA shall endorse the Bills of Entry Nos and dates and the credit amount on the scrip along with the name and address of the consolidated certificate (credit note) issuing authority, as per the consolidated certificate (credit note) issued by the customs authority. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ All such applications shall be filed by the applicant within 3 months of issuance of the consolidated certificate (credit note) by the Customs authority. These applications shall be filed scheme-wise and port-wise to the RA concerned who had issued the original duty credit scrip. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Finalization of such applications shall be subject to fulfillment of the prescribed conditions and careful scrutiny of all documents submitted in support of the claim so that no fraudulent applications are approved. </font></p> </blockquote> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2009/dgft09cir022.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Policy Circular No. 22/2009-2014 Dated: February 3, 2010. </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FTP - Amendment of HBP Vol. 1 for revalidation of freely transferable Authorization/Duty credit scrips and re-credit of 4% SAD </strong></font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> DGFT has amended the <strong><font color="#663399">Handbook of Procedures (Vol. I): </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Para. 2.13.1</font> </strong>amended to read as “However, revalidation of freely transferable Authorisation / Duty credit scrips and stock and sale Authorisation shall not be permitted unless validity has expired while in custody of Customs authority / RA.”. This earlier read as, “However, revalidation of freely transferable Authorisation and stock and sale Authorisation shall not be permitted unless validity has expired while in custody of Customs authority / RA.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">A new para 2.13.2A added</font></strong><font color="#663399">:</font> For the purpose of re-credit of 4% Special Additional Duty (SAD) of customs in the freely transferable Duty credit scrips (including DEPB), revalidation for a maximum period of 6 months from the date of endorsement, shall be allowed in case the balance period of validity is less than 6 months on the date of re-credit. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2009/dgft09pn038.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Public Notice No. 38/2009-14, Dated: February 3, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Compliance with FDI norms-Half yearly certificate from Statutory Auditors of NBFCs </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI</strong> has informed all Non-Banking Financial Companies that </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. NBFCs having FDI whether under automatic route or under approval route have to comply with the stipulated minimum capitalisation norms and other relevant terms and conditions, as amended from time to time under which FDI is permitted. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. As such these NBFCs are required to submit a certificate from their Statutory Auditors on half yearly basis (half year ending September and March) certifying compliance with the existing terms and conditions of FDI. Such certificate may be submitted not later than one month from the close of the half year to which the certificate pertains, to the Regional Office in whose jurisdiction the head office of the company is registered. </font></p> </blockquote> <p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/rbi_notification.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI/2009-10/304 DNBS (PD).CC. No 167 /03.10.01 /2009-10 Dated: February 04, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Draft service Tax Audit manual Released </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> DG, Audit, Customs, Central Excise and Service Tax has released a new Draft Service Tax Audit Manual. Of course this is not for public consumption. It is meant only for Departmental Officers. It seems the Board wanted the DG to place the Draft Manual on the website with restricted access to officers only. So the DG has placed the Draft Manual on the website but it can be accessible only with a password given to Departmental Officers. The DG has requested the Departmental Officers for suggestions / comments / views. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In these days of transparency and right to information, it beats logic that the government does not want to share information. Having locked it up with a username and password, how many officers are going to open it? This is certainly not secret information and anybody can get a copy under the RTI Act. Then what is the whole purpose behind keeping it a secret? Maybe it is so sacred that only Departmental officers are entitled to see it. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why do you want to know what I tell my officers, asks a senior officer – simply because I have a right to know and that right does not require me to tell you, why I want that information. Citizens have a right to know what the government servants are doing – you can't conceal information from your master – the citizen. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Strangely the Draft Preventive Manual from the DRI, the premier investigation agency, which also has an exemption from the RTI, is available in the public domain, while the Draft Audit Manual is a closely guarded secret. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally the letter addressed by the DG, Audit informing about the Audit manual is available in the website open to the public. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DG Audit F. No. 381/24/2009 Dated: February 04, 2010 </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"> – Monday's cases</font></strong></font></strong></font></p> <p><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>25% penalty under Section 11AC is not applicable for proceedings before Settlement Commission: High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> order of settlement is obviously distinct from an adjudication order of a Central Excise Officer, who has no power to accord immunity from prosecution while determining duty liability under the Excise Act. The order of settlement is in the form of a package and takes into consideration all the aspects of the case in a holistic manner before determining the issues of penalty and interest as well as the extent of immunity therefrom. Therefore, once the Petitioner has adopted the course of settlement he has to be governed by the provisions of the said Chapter. Resultantly, the benefit under the proviso to Section 11AC of the said act which could have been availed when the matter of determination of duty was before a Central Excise Officer is not attracted to the cases of a settlement undertaken under the provisions of Chapter-V of the Excise Act. </font></p> <p><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax - ITAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Hyper technical objections – Members of Bench differ even on points of difference - Even oral plea can also be made for raising an additional ground – </font>THE</strong> two Members of the ITAT Bench did not agree on an issue. As there was a difference of opinion, it had to be referred to a third Member. The two members also did not agree on what the difference of opinion was. It is well known that there is no prescribed proforma to raise an additional ground. There is no specific procedure to be followed to raise an additional ground. What all is required is that the appellant needs to take leave of the Tribunal before raising additional ground and the Tribunal needs to give an opportunity of being heard to the affected party. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ORDER by one Member of the Bench cannot be given effect to: </strong>the J.M. did not adjudicate on the merits of the issue as he did not admit the additional ground. On the other hand, since the ld. A.M. admitted the additional ground, he adjudicated on the merits as well. There is nothing wrong in what the ld. A.M. has done. However, so far as granting of relief is concerned, it cannot be granted in the absence of a decision by the Bench. </font></p> <p align="justify"><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>Benefit of sub-section (2B) to section 11A of CEA, 1944 is not available where duty became payable before 11.05.2001 – declarations u/r 173C were being filed and exercise revenue neutral, hence penalty u/s 11AC set aside: CESTAT. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong> assessee was clearing excisable goods to their sister concern by valuing them on cost construction method. This method of valuation was pointed out as incorrect by the department and the assessee willingly paid the differential duty of over Rs.15 lakhs. This payment was made in September 2000. Later a demand notice was issued seeking appropriation of the amount paid and imposition of penalty and interest under section 11AC and 11AB respectively. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Weekend. </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>