TIOL-DDT 1385 · 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 1385 </font><br> </strong></font><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">22.06.2010 <br> </font></strong><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tuesday </font></strong></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ROM - Same Bench to Hear?</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RULE</strong> 31A of the CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL (PROCEDURE) RULES, 1982, stipulates;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>31A. Same Bench to hear applications for rectification of mistakes:</strong> An application for rectification of a mistake apparent from the record, under sub-section (2) of section 129B of the Customs Act, or sub-section (2) of section 35C of the Central Excise Act, 1944, or sub-section (2) of section 81A of the Gold (Control) Act, shall be heard by a Bench consisting of the Members who heard the appeal giving rise to the application, <font color="#FF6633"><strong>unless the President directs otherwise.</strong></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now an ROM is filed for rectification of a mistake apparent on record – no arguments, no debate – the mistake should be glaringly visible. Apparently such a mistake would be very costly. Suppose the order reads as, “appeal is dismissed” instead of, “appeal is allowed” - rectification is absolutely and urgently required. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is it possible for the Bench consisting of the same Members to hear the ROM? Maybe in the early days of the Tribunal, it was possible. Now Members frequently sit on different Benches in different cities for various reasons like, leave, vacancy etc,. A member posted in Ahmedabad may sit for a few days in Chennai along with a Member posted in Chennai. After a few days, he goes back to his Original Bench. What if one of those orders passed by him sitting along with a Member from Chennai, needs Rectification?.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">According to the above Rule, this Rectification Application can be heard only by the same members. Now when will the same two Members sit again in a Bench? Until they do so, the Rectification application cannot be heard – unless of course, the President directs otherwise. Now how can the President direct? How will the President know about it?. Will the Registry in all the Benches send such ROM applications to the President to constitute the same Bench again or constitute a new Bench to hear the ROM application? Till such time, will the Department keep quiet, if the earlier order was in its favour?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Of course, it is always advisable that the same Bench hears the ROM application as otherwise there may be chaos with different Benches holding the orders of other benches as containing apparent mistakes. But when it is difficult to constitute the same Bench again, another Bench should be allowed to hear the ROM. Or it can be made that the ROM can be heard by a Bench which includes the Member who wrote the Original order and only when he is not available, the President may allocate the case to another Bench. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Transfer of Units from one SEZ to another</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> issue had been considered by the Board of Approvals in its meeting held on 8 th June 2010. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">BOA noted that there have been requests for shifting of units from one SEZ to another SEZ and there are no specific provisions under the SEZ Rules for these shifts and also there are no rules prohibiting the shifts. With the consolidation of SEZs, shifting of units may become more frequent and to deal with such shifts laying down guidelines have become necessary. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There could be three kinds of situations where the shifts can take place (a) the unit has not commenced any activity (b) the unit has started imports / procurement of goods but not started exports or commenced production and (c) the unit has commenced production and starting exporting. In the first two cases, there may be no difficulties in permitting the shifts subject to all the monitoring, in respect of the third case, the relevant provisions of Income Tax Act for seeking exemptions in respect of migration of goods may come into play. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Based on this, the Department of Commerce has issued Instruction. No. 59. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government has been receiving requests for shifting of units from one SEZ to another SEZ due to various reasons. These requests were considered but could not be acted upon as there are no specific provisions under the SEZ Rules for these shifts and also there are no rules prohibiting the shifts, with the consolidation of SEZs, shifting of units may become more frequent and, accordingly, the entire issue was placed before Board of Approvals for its directions. After due deliberations, it has been decided by the Board that in principle there is no objection for such shifting. However, all proposals for shifting of units from one SEZ to another must be placed before the Board for its consideration. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=260&filename=sez/sez_instructions/2006/sez09ins059.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Department of Commerce Instruction No. 59 Dated: June 18, 2010 </font></strong></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RTI - 30 Rupees Commission for a 10 Rupees DD? </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> Concerned netizen sent us this mail -</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"I wanted to make an application seeking information under the RTI Act, 2005. I visited <strong>Rule 3 of the Right to Information (Regulation of Fee and Cost) Rules, 2005 which reads thus - </strong></font></p> <blockquote> <p align="justify"><strong><em><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">"3. A request for obtaining information under sub-section (1) of section 6 shall be accompanied by an application fee of rupees ten by way of cash against proper receipt or by demand draft or bankers cheque or Indian Postal Orders payable to the Accounts Officer of the public authority." </font></em></strong></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As I did not want to visit the office of the public authority and make the 'application fee' payment in cash, I went to the State Bank of India and applied for issuance of a Demand Draft of Rs.10/- favouring the Accounts officer of the public authority. To my surprise, the bank commission charges for issuance of a Rs.10/- DD was Rs.30/-. I also found that other banks charged anywhere between Rs.25/- to Rs.30/- as the minimum charges for issuance of a DD. Adding to it the 'Speed Post' charges of Rs.12/- to send the RTI Application, the total expense incurred by me to make the RTI application came to Rs.42/- . </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I have learnt a lesson. The next time I will approach the local post office for the IPO of Rs.10/- as they charge only Rs.1/- (rupees One only) as commission. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I feel that the Central Government should issue directives through the RBI to all banks to charge <font color="#FF6633"><strong>a token commission</strong></font> while issuing such DDs." </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBI yet to get nod to prosecute 129 Customs Officers </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBI</strong> had requested various Government Departments and Agencies for sanction to prosecute several officers. About 380 requests from CBI are pending with these Departments, of which 129 are from the Customs and Excise Department. Interestingly 4 requests from the CBI to prosecute its own officers are also pending! </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"> – Wednesday's cases</font></strong></font></strong></font></p> <p align="left"><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">Central Excise </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENVAT Credit – Inputs used for repair and maintenance of plant and machinery – Entitled: High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> substantial question of law raised by the Revenue before the High Court: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether the Hon'ble CESTAT is correct in allowing the benefit of input credit in respect of goods which were used for repair and maintenance of plant and machinery when the said issue was already decided by the Larger Bench of the Tribunal, New Delhi and the Hon'ble Supreme Court as inadmissible. </font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Can AO reject books of assessee on failure to reconcile entries of seized papers with books of account? - YES, says ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> company is engaged in the business of catering; surrenders certain sum during Survey by department but fails to include the surrender income at the time of filing return. After scrutinizing the books of the assessee AO found that receipt as present on Annexure A-1 (5) is not recorded by the assessee in its books. Thereafter observing other anomalies in the books, the AO rejected the books. AO further observes that getting the accounts audited u/s. 44AB or under the Companies Act, would not mean that the assessee has recorded all the receipts and the payments in his books of accounts as the auditor can only audit the entries, which were entered into the books of accounts, and are not supposed to know about the entries which are not recorded in the books. </font></p> <p><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">Penalty - Section 80 – Is bona fide belief consideration for setting aside penalty - Tribunal has not assigned any reason – matter remanded: High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN</strong> it came to the question of imposing of penalty the tribunal has merely stated that the appellants were under a bonafide belief that they would not be liable to pay service tax penalty under Section 80 of the Finance Act, 1994 and therefore, set aside the said penalty. We find that in arriving at such a conclusion, the tribunal has not assigned any reason and as to whether a bonafide belief on the part of the assessee in regard to the payment of tax would be consideration for setting aside the order imposing penalty. </font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns TOMORROW for the judgements</font></strong></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until TOMORROW with more <strong>DDT </strong></font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice DAY. </font></p> <p><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>