TIOL-DDT 1337 · 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 1337 </font><br> 13.04.2010 <br> Tuesday</strong> </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Series of Notifications issued to delete/amend references to Mumbai–IV </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> yesterday's<font color="#FF6633"><strong> DDT</strong></font>, we had highlighted that the merger of Mumbai–IV Commissionerate with Mumbai–I Commissionerate through <strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/exnt10_13.htm" target="_blank">Notification 13/2010-CE (NT) dated March 19, 2010</a></em></strong> should have resulted in consequential amendments to several other notifications. Finally, the amending notifications tumbled out of Board's closet. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Chief Commissioner's Review Committee amended to delete reference to Mumbai-IV </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><strong>NOTIFICATION</strong> No. 24/2005-CE(NT)</em> which was issued to constitute Committee of Chief Commissioners across the country to supervise and exercise their powers in terms of Section 35E of Central Excise Act, was further amended to delete reference to Mumbai-IV Commissionerate at S. No. 16 of the said notification. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/exnt10_14.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 14/2010-CX.(N.T.), Dated: April 8, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Commissioner's Review Committees Reconstituted - Mumbai IV replaced by CST-I, Mumbai </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Notification No. 25/2005-CE(NT)</em> which was issued to constitute Committee of Commissioners to supervise and exercise their powers in terms of Section 35B(2) over jurisdictions of respective Commissioner (Appeals) across the country, was further amended to replace ‘Commissioner of Central Excise, Mumbai-IV' with ‘Commissioner of Service Tax I, Mumbai' at S. No. 45 of the said notification. Entry number (2) thereof is also omitted.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For all these days of delay in issuing this Notification, the appeals process would have got derailed or withheld which would probably result in delayed filing of appeals before the CESTAT. On the contrary, what if in the intervening period, the Commissioner of Central Excise, Mumbai-I acted as a Committee by himself. Would it be valid and legal?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <em>CCE, Belapur vs. Coramandel Fertilizers Ltd <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2008/2008-TIOL-366-CESTAT-MUM.htm" target="_blank"><font size="1">2008-TIOL-366-CESTAT-MUM</font></a></strong></em> it was held by the Mumbai Bench of CESTAT that a single Commissioner wearing two caps does not constitute a committee. A similar decision was taken earlier by the Kolkata Bench of CESTAT in <em>CCE , Bhubaneswhar & Ors vs. Indian Plastics Ltd & Ors - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2007/2007-TIOL-2216-CESTAT-KOL.htm" target="_blank"><font size="1">2007-TIOL-2216-CESTAT-KOL</font></a></strong></em>. So if any decision is taken by Mumbai-I Commissioner acting as a single member Committee in terms of Section 35B(2) would render such decisions illegal. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/exnt10_15.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 15/2010-CX.(N.T.), Dated: April 8, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC reconstitutes Committees of Commissioners for review of LTU cases </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><strong>NOTIFICATION</strong> No. 6/2007-CE(NT)</em> which was issued to constitute Committee of Chief Commissioners to review LTU cases, was further amended to replace references to Commissioner of Central Excise, Mumbai-IV, by substituting the table. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Who should be held responsible for delayed filing of appeals due to a delay in issuing these amendments? </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/exnt10_16.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 16/2010-CX.(N.T.), Dated: April 8, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Reference to Mumbai – IV deleted in Committee of Chief Commissioners </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><strong>NOTIFICATION</strong></em> <em>No. 39/2005-Cus(NT)</em> which was issued to constitute Committee of Chief Commissioners across the country to supervise and exercise their powers in terms of Section 129D of Customs Act, 1962, was further amended to delete reference to Commissioner of Central Excise, Mumbai-IV at S. No. 9 of the said notification. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_028.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 28/2010-Customs (N.T.), Dated: April 8, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Commissioners' committee for review cases – Mumbai-IV substituted by CST-I </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>NOTIFICATION</em></strong><em> No. 40/2005-Cus(NT)</em> which was issued to constitute Committee of Commissioners to supervise and exercise their powers in terms of Section 129A(1B) over jurisdictions of respective Commissioner (Appeals) across the country, was further amended to replace ‘Commissioner of Central Excise, Mumbai-IV' with ‘Commissioner of Service Tax I, Mumbai' at S. No. 45 of the said notification. Entry number (2) thereof is also omitted. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The same questions on breach of timelines for filing appeals and exercise of powers by a single member committee prop up. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_029.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 29/2010-Customs(N.T.), Dated: April 8, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">What about Committees Constituted under Section 86(1A) of Finance Act, 1994 </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> was good to see Board swinging into action to issue amendments to re-constitute Committees in terms of Section 35(1B) of Central Excise Act and Section 129A(1B) of Customs Act, though it was belated and could have some legal consequences. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But what about amending <em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2007/stnot07_019.htm" target="_blank"><strong>Notification No. 19/2007-ST dated May 12, 2007</strong></a></em>. S. No. 34 thereof refers to a Committee of Commissioners consisting of CST, Mumbai and CCE, Mumbai-IV to exercise their functions under the Act over the jurisdiction of CCE (Appeals), Mumbai Zone-I. Now there are two CSTs in Mumbai and Mumbai-IV has since merged with Mumbai-I. There are other references to CST, Mumbai in this Notification as well as <em>Notification 18/2007-ST</em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why is it that the Board fails every time to take up a comprehensive review of the affected notifications before issuing amendments? After all the Committees constituted under the respective legislations have a legal sanctity and any mix up or laxity could result in serious consequences for the Revenue. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All that it takes is a search of ‘Mumbai IV' in the notifications list – but then perhaps nobody in the Board has a comprehensive list of updated notifications – we have and we will be happy to share it with the Board. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Or they should follow the <strong>DGFT</strong> example and issue a fresh amended notification every time an amendment is made to a notification. Our CD XCuSE has all the relevant notifications updated. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Listing of Supporting Manufacturer for SHIS – DGFT Notifies Procedure </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PARA</strong> 3.16 of the FTP deals with Status Holder Incentive Scrip and Public Notice No. 54/2009-14 dated 8.4.2010 notified the procedure and the application form ANF3E for filing the claims under SHIS scheme. For operationalising the scheme, the following procedures are notified by DGFT to be implemented at the field level: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Till such time the EDI software is developed, tested and operationalised, RA shall accept the applications manually, process the claims and issue SHIS duty credit scrip manually. The Scrip shall have the same format as other duty credit scrips. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The following endorsement shall be made on the SHIS scrip by RA concerned at the time of issuance of SHIS duty credit scrip: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>i. Actual User Condition in terms of Para 3.16.3 of the FTP 2009-14. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii. Imports Allowed: This Duty Credit Scrip issued under SHIS may be utilized for payment of applicable Customs Duties for imports of capital goods (as defined in FTP) relating to the sectors specified in this scrip. However, for import of any ‘restricted item' under ITC HS Book, the utilization of this scrip is allowed only if the beneficiary/holder has a separate license/permission for import of the said ‘restricted item' in question. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. On the SHIS Scrip, the name of the sector in which export is ‘NIL' should not be endorsed. Only those export sectors in which the applicant has exports (out of the eligible sectors mentioned in Para 3.16.4 of FTP) should be endorsed on the SHIS Duty Credit Scrip. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. In cases where the applicant chooses to list the supporting manufacturer, a list of supporting manufacturer(s) may be provided to RA concerned at the time of filing the application as per the format given in Annexure I to this policy circular, based on exports made till the date of filing SHIS application along with the export documents to establish the same. RA shall endorse the Name(s) of the supporting manufacturer(s) as Co-Licensee on the SHIS Duty Credit Scrip. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/dgftcir.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Policy Circular No. 30/2009-14 Dated: April 12, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise Inspector awarded Ph.D. by Madras U - ‘Tax Crimes in India' </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MR</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">. T.M. Kothandaraman, Inspector of Central Excise, Chennai, has successfully completed his Ph.D. Degree course after being declared so in the public viva voce examination held at Department of Criminology, University of Madras. The topic of research was “Tax Crimes in India – A Study of Union Excise Duty Evasion”. To our knowledge, Dr. T.M. Kothandaraman is the third Inspector of Central Excise to successfully accomplish this distinguished academic achievement. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A highly talented, honest and sincere officer, Dr. T.M. Kothandaraman who is a post-graduate in Physics, worked as Assistant Commissioner in EPFO (Provident Fund) but resigned when he felt that he could not do justice to the job. He had a stint in Central Bureau of Investigation also. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As regards the doctoral work, it is one of the rarest studies ever undertaken in Indian indirect taxation. There have been isolated studies on direct tax compliance. But, committees and experts have been on record stating that quantifying evasion is difficult and government has also confined studies to evasion prone commodities. An in-depth and comprehensive study on non-compliance issues relating to excise duties using perspectives from economics, sociology, criminology, penology and psychology has not been attempted before and hence, this work is unique in every sense. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Congratulations Dr. Kothandaraman! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A friend who gave us this information said, “we have been highlighting all things undesirable and loathsome – from arrest of our corrupt officers to strictures, with sickening frequency. I thought, for a change, a credible academic work with immense practical application, by an ordinary officer, should be publicized so that it receives the acknowledgement it deserves. We hardly get good things to write about. Please consider writing a few words on the above good work in DDT.” </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TIOL</strong> and <strong>DDT</strong> are always eager to publicise any good work by any Revenue Officer. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tomorrow is a Holiday - Dr Ambedkar's Birthday</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TOMORROW</strong> is a closed holiday for all Central Government offices including industrial establishments throughout India. This holiday is also notified under Section 25 of the Negotiable Instruments Act, 1881. The Government has been notifying this day as a holiday every year since 1990. For the last twenty years, the government had been separately notifying this holiday. Why can't it be included in the general list of closed holidays published before the beginning of every year? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There was a strange case before the Central Information Commission on this issue. The applicant asked the Ministry of Personnel, Public Grievances and Pensions:- </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What is the criterion for declaring birthdays of departed leaders as gazetted holidays? Do leaders like Netaji Subhash Chandra Bose or Pandit Jawahar Lal Nehru do not fulfil the criterion to have their birthdays also as national holidays on lines of birthdays of Mahatma Gandhi and Dr. BR Ambedkar? Is it fair that birthdays of leaders like Mahatma Gandhi or Dr. BR Ambedkar are made holidays contrary to their noble ideas of hard work? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Ministry replied:- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. There is a policy decision that no holiday should be declared on the birthday of any national leader other than that of Mahatma Gandhi. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Holiday on Dr. B. R. Ambedkar's birthday: It is not one of the regular annual holidays. However, since 1990 this occasion has been declared as a closed holiday for all Central Government administrative offices. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The persistent applicant pleaded, </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“I appeal that details and rules may be clearly mentioned under which Dr. B. R. Ambedkar's birthday is being observed as a closed holiday since 1990” </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Ministry gave a somewhat curious response:- </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per RTI Act Section 8 (I) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen,-(a) information, disclosure of which would prejudicially affect the sovereignty and integrity of India, therefore, under the provisions of Act, no information can be provided to the first Para of your appeal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government feels that disclosure on the holiday would prejudicially affect the sovereignty and integrity of India!!! </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This certainly is not the way to celebrate the Great man's birthday. </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><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 color="#663399">Income Tax</font></strong> </font></p> <p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Appeal before Commissioner (Appeals) and ITAT - Provisions of one section cannot be imported into another - doctrine of incorporation cannot be invoked by implication: Supreme Court </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Courts have to be careful in reading into the Act such dis-enabling provisions as that would tantamount to judicial legislation which the Courts must eschew. It is for the Parliament to specifically say that no appeal shall be filed or admitted or maintainable without the assessee(s) paying the admitted tax due. That has been done only in the case of an appeal under Section 249(4)(a) of 1961 Act. We cannot read such a dis-enabling provision into Section 253(1)(b) of 1961 Act. If we do so, we are judicially legislating by reading something into the Act which is not there.</font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Excisability - Burden to show that product is marketed or capable of being bought or sold is entirely on Revenue: Supreme Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MARKETABILITY</strong> is essentially a question of fact to be decided on the facts of each case and there can be no generalization, and the fact that goods are not in fact marketed is of no relevance and the question whether they are capable of being marketed. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Contract for execution of lump-sum work of loading, unloading, bagging, stalking, destalking to be read and interpreted in its entirety – Services rendered cannot be classified as ‘manpower recruitment & supply agency' service either directly or indirectly, temporary or otherwise - Ratio of Apex Court judgment in Super Poly Fabriks Ltd </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=42&filename=legal/sc/2008/2008-TIOL-82-SC-ST.htm" target="_blank">2008-TIOL-82-SC-ST</a></em></font><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"> followed. </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants entered into a contract for rendering services like feeding bags, for filling bulk, stitching, shifting back cargo, stacking, destalking, loading back cargo to the trucks, destalking and loading on trucks for wagon loading and transportation of the goods within the premises of CWC. The Service tax authorities scrutinized the contracts and other relevant documents, investigated the matter in detail and issued show cause notices alleging that the appellants were liable to pay service tax under the taxable service category of ‘manpower recruitment & supply agency' service. The Adjudicating authority held that services provided by appellants were classifiable under the category of ‘manpower recruitment & supply agency' service and confirmed the service tax demand. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Thursday for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Day after 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> </body> </html>