TIOL-DDT 1311 · 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 1311 </font><br>
04.03.2010 <br>
Thursday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax - Allotment of Document Identification Number - Further postponed </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SECTION</strong> 282B (Allotment of Document Identification Number) is a new section inserted by the Finance (No. 2) Act, 2009 in the Income-tax Act with effect from 1st October, 2010. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under this section, an income-tax authority is required to allot a computer generated Document Identification Number before issue of every notice, order, letter or any correspondence to any other income-tax authority or assessee or any other person and such number shall be quoted thereon. It also provides that every document, letter, correspondence received by an income-tax authority or on behalf of such authority, shall be accepted only after allotting and quoting of a computer generated Document Identification Number. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Commenting on the 2009 Budget in <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9319" target="_blank">DDT 1148 07.07.2009</a>, </strong>it was said, </font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What I liked best in the Budget is the proposed new Section 282B of the Income Tax Act. </strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">This is all about accountability of documents. Now every letter from the Income Tax Department will bear a computer generated identification number – so the existence of the letter cannot be denied or wished away and it should be easy to track it. Similarly the receipt of a letter by the Income Tax Officers will also be allotted a computer generated Document Identification Number. </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">The entire office administration will automatically improve if you have control over the inward and outward correspondence. And the government seems to be serious – that's why they have inserted these provisions in the Act – instead of issuing circulars which are anyway going to be flouted with impunity. </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">But why is it that no such provision is introduced in the Customs or Central Excise Acts? </font></strong></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Instead of making any such provision in Customs and Central Excise or Service Tax, the Finance Bill 2010, seeks to amend the provisions of Section 282B to stipulate that Document Identification Number will be required to be issued on or after 1st July, 2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Income tax Department needs to be totally computerised to make this provision workable and their hopes of making it possible by October 2010 has failed is clearly indicated in the amendment in the Act to make the provisions applicable from July 2011. Will they be ready by then? If not, the Act can be again amended! Why put such provisions in the Act, when you cannot implement them? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why was this provision introduced in the Statute? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Lofty ideals as can be seen from the explanatory memorandum to the 2009 Finance Bill. This is what they told parliament. </font></p>
<blockquote>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>“It is now well accepted that “tax administration is tax policy”. A tax administration designed to foster voluntarily compliance yields higher revenue than a sound tax policy administered by an inefficient tax administration. Therefore, it has always been the endeavour of the Income-tax Department to improve the standards of its service and transparency in its functioning. Therefore, it is proposed to introduce a computer based system of allotment and quoting of Document Identification Number (DIN) in each correspondence sent or received by it so as to enable tracking of documents and minimize taxpayers grievances.” </strong></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">People who write the policy unfortunately do not know the field realities. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why is CBEC not even thinking on these lines? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When this kind of amendment is made in the Income Tax Act, doesn't the Revenue Secretary or the Finance Minister ask why similar amendments are not made in Customs Act and Central Excise Act? </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Error in Notification 21/2010-Cus rectified </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> DDT 1309 dated 02.03.2010, we reported that Notification No. 21/2010-Cus dated 27.02.2010 issued to amend Notification No. 21/02-Cus erred in numbering the clauses of the opening paragraph. After the amendment, the clause number “(iag)” appears twice in Notification No. 21/02-Cus. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board reacted swiftly and issued a corrigendum to Notification 21/2010-Cus. Now in the said Notification “(iaf)” will have to be read as “(iag)” and “(iag)” will have to be read as “(iah)”. This quick response from the Board is commendable. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What about the error in Notification No. 07/2010-CE (NT)? The error may appear to be insignificant but it definitely requires a rectification. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/corrigendum_10_021.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CORRIGENDUM to Notification No. 21/2010 Dated: March 02, 2010 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Prohibition on Export of Non - basmati Rice - exemption </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BAN</strong> on export of Non-basmati rice shall not be applicable to </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. export of 20,000 MT of rice (Ponni Samba) to Sri Lanka through PEC. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. export of 25,000 MT of Non-basmati rice to Nepal through MMTC </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">subject to certain conditions like </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) The rice to be exported shall be with a minimum of 25% of brokens; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) Export will be undertaken directly, and only by the designated PSU/s. There will not be any associate exporter. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) Recipient country will be advised by MEA to enter into contracts for the exports only with the designated PSUs, in terms of GATT provisions and designation of a private contractor by the importing country, to supply rice will not be entertained. MEA will inform the concerned PSU(s) about the designated buying agency in the importing country; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) The PSU/s will procure rice through tender as per guidelines prescribed by the Department of Commerce vide O. M. No. 7/4/2009 –FT(ST) dated 18.2.2010; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(e) The PSU(s) will buy rice from the markets all over the country. The Supplier(s) will provide the necessary certificate to the PSU(s) confirming that rice has been procured to this effect. The supplier(s) will also provide a certificate to the effect that the rice is bought from those rice mills who have already met their levy rice requirements as stipulated in their respective States. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(f) The PSU /s will procure rice at a price as close to as possible to the derived MSP so as not to disturb the existing price situation in the domestic market; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(g) PSU(s) will supply rice to the designated country at a commercially negotiated price; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(h) The end point verification of the exports reaching the destination will be filed by the PSU(s) and for this purpose, the PSU(s) will obtain landing certificates from the port(s) of discharges. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) The above quantity shall be exported by PSUs during KMS 2009-10; </font></p>
</blockquote>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2009/dgft09not033.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Notification No. 33/2009-2014, Dated: March 3, 2010 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Did the FM err? </strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> alert Netizen sent us this mail. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What happens if the Budget Speech has a mistake? A cutting edge statement, but I am sure this would be unique in many ways – Please read on </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Straight to the point : Relevant extract from the Budget Speech </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“154. Harnessing
renewable energy sources to reduce dependence on fossil fuels is now
recognised as a credible strategy for combating global warming and
climate change. To build the corpus of the National Clean Energy Fund
announced earlier, I propose to levy a clean energy cess on coal produced
in India at a nominal rate of Rs.50 per tonne. This cess will also
apply to imported coal.” </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now let us look at the back up for this in the Budget Documents </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Chapter VII of the Finance Bill 2010 refers to Clean Energy Cess as proposed by the Finance Minister. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Sr No 82(3) thereof refers to the said cess as duty of excise and is proposed to be levied on goods specified in the Tenth Schedule. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The Tenth Schedule however refers to the rate of Rs 100 per tone (and not Rs 50 per tone as per the Budget Speech) on coal, lignite, peat and other goods detailed therein in Sr No 1, 2 and 3. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Well, no conclusions drawn. I leave it to Netizens to do that. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This issue was answered by JM Kishore in our budget analysis <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=10520">Clean Energy Cess on Coals – FM puts 'Polluter Pays' Principle into practice </a></strong>– He had explained, “ </font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>What is the rate of cess ? Is it Rs. 100 PMT or Rs 50 PMT ? </em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Clause 82(3) of the Finance Bill specifies that “t here shall be levied and collected in accordance with the provisions of this Chapter, a cess to be called the Clean Energy Cess, as duty of excise, on goods specified in the Tenth Schedule, being goods produced in India, <strong>at the rates set forth in the said Schedule </strong>….” The schedule specifies the rates as <strong>Rs.100 PMT </strong>for each of the category. However, interestingly, Hon'ble Finance Minister's speech indicated that the levy is <strong>only Rs.50 PMT </strong>. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Relevant date for levy of the Cess : </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The date from which the levy comes into effect, the rules and procedure of collection shall be notified after the enactment of the Finance Bill, 2010. Similarly, It is possible that the rate of the cess may be separately notified at a later date as <strong>Rs.50 PMT </strong>after the enactment of the Finance Bill 2010. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The JS TRU, in his DO letter had mentioned, </font></p>
<blockquote>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>6. Clean Energy Cess: </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6.1 A Clean Energy Cess is being imposed on coal, lignite and peat produced in India. This cess would be levied and collected as a duty of excise from coal mines. The <strong><font color="#FF6633">rate of the cess</font></strong>, the date from which it will be effective and the rules and procedure for its collection shall be notified after the enactment of the Finance Bill, 2010. </font></p>
</blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, after all it may be Rs. 50/-only! </font></p>
<p align="center"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600" size="2">Jurispruden</font><font color="#FF6633" size="2">tiol</font><font color="#006600" size="2"> – Friday'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">Income Tax </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>If the business of an assessee is indivisible in nature, then expenditure cannot be disallowed; assessee cannot be penalised for following RBI instructions: ITAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is bound to follow the RBI guidelines and secondly the same method of account was being followed by the assessee consistently which was always accepted by the revenue. Since the assessee is bound to follow and has only followed the RBI guidelines, the reversal of the entry cannot be faulted with. </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Clearance of Parts and accessories of Arms and ammunition without payment of Special Excise duty - Confusion in Budget Speech resulted in such non-payment – No ingredients for imposition of penalty u/s 11AC of CEA, 1944 : CESTAT </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN goods are not available or had not been cleared under bond, redemption fine cannot be imposed – Appeal allowed. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants were diligent in their duty to discharge duty liability and due to the confusion of the Budget speech made by the Finance Minister during the Budget they could not pay the duty in time. Moreover, they made it clear to the department through their monthly returns. The department did not ask them for the same. Moreover the appellants sought clarification from the office of the Finance Minister to this regard and they have discharged duty when they came to know of the same.</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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