TIOL-DDT 1443 · 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 1443</font><br> 13.09.2010<br> Monday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Powers of Adjudication in service tax – Superintendents included</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> appears though the CBEC is administering both Central Excise and Service tax, there is no proper coordination between both wings. When we reported the Superintendents of Central Excise being vested with power of adjudication in Central Excise cases, <strong><em>(<a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=10878" target="_blank">DDT 1363 dated 20.05.2010</a>)</em></strong> we asked:</font></p> <p align="justify"><strong><em><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Why are they given powers to adjudicate only Central Excise cases? What about Service Tax and Customs? Maybe that will be given soon. </font></em></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now they have notified similar powers of adjudication in respect of service tax to the Superintendents in cases of <em>CENVAT credit</em> or service tax not exceeding Rs. one lakh (excluding the cases relating to taxability of services or valuation of services and cases involving extended period of limitation.) by amending <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2005/stnot05_30.htm" target="_blank">Notification No. 30/2005 – Service Tax, dated 10th August 2005</a></strong></em>. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_048.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NOTIFICATION NO 48/2010-ST, Dated: September 8, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax on Goods Transport from 16.11.1997 to 1.6.2008 – Unending Saga - Larger Bench Rules that Show Cause Notice issued in 2004 is valid</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> story began in 1997 and with many twists and turns, continues even in 2010. It has travelled to Supreme Court three times, resulting in landmark judgements in case of <em>Laghu Udyog Bharati</em> <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=42&filename=legal/sc/2002/2002-TIOL-162-SC-ST.htm" target="_blank"><font size="1">2002-TIOL-162-SC-ST</font></a></strong>, <em>L.H. Sugar Factories</em> <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=42&filename=legal/sc/2005/2005-TIOL-105-SC-ST.htm" target="_blank"><font size="1">2005-TIOL-105-SC-ST</font></a></strong> and <em>Gujarat Ambuja Cements Ltd</em> <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=42&filename=legal/sc/2005/2005-TIOL-53-SC-ST.htm" target="_blank"><font size="1">2005-TIOL-53-SC-ST</font></a></strong>. Somehow the Government is not prepared to lose revenue for this short period of six months and trying all means to collect service tax on Goods Transport during this period. In yet another dispute of whether the Show Cause Notice issued in 2004 demanding service tax for the above period is valid or not, the Larger Bench of the Tribunal has answered the reference in favour of revenue by holding that the taxpayers cannot argue 'Heads I win and Tails you lose'. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Probably this issue has to go the Supreme Court again! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please also see: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=1369"><strong>Service tax on goods transport stranded on the highway? </strong></a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=1374"><strong>SC upholds another retrospective legislation; Service tax on GTA is valid</strong> </a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7740" target="_blank">TIOL-DDT 932 - 19.08.2008</a> </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=2430" target="_blank">TIOL-DDT 183 - 19 08 2005 </a></strong></font></p> </blockquote> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">We will bring you this landmark case tomorrow. </font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Draft Scheme of 'On Site Audit' on lines of EA 2000 Audit for Imports </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> a trade facilitation measure, CBEC is considering introduction of scheme of ‘On Site Post Clearance Audit (PCA)' for imports in Customs and Draft Scheme has been put up to elicit public response. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Scheme aims at reducing the transaction costs and dwell time for imports and at the same time balancing the conflicting interests of faster clearance and customs checks. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per prevailing international practices, the Indian Customs also would like to facilitate trade further by allowing release of goods on the basis of declaration of the importer without physical examination of the goods. But as it is the concern of any Government that goods imported are as per the declaration, that proper duty has been paid and that when concessional rates have been availed of subject to end use, the conditions have been fulfilled, that no national laws have been violated, such facility has to be accompanied by an onsite audit after the clearance of imported goods. It might increase the compliance costs as audits would be done at importer's premises. But this will be more than compensated by faster clearance of imports with considerable savings on warehousing, insurance, demurrage, faster sale etc. And such a scheme will be in consonance with the Kyoto Convention also. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The importers are broadly divided in four categories - manufacturers, service provider, trader, individual consumer. So far as manufacturers and service providers are concerned, most of them are likely to be registered with the Commissionerates and the on site audit will be combined with EA 2000 audits. That leaves the importers who are basically traders and units which are exempted/not registered and the jurisdiction for customs on site will be decided based on their IEC Code. In case of multi locational manufacturers/ service providers, the audit will be conducted at the business premises as well as the factory premises. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The views, comments and suggestions to the draft Scheme can be sent to <a href="mailto:dircus@nic.in"><strong>dircus@nic.in</strong> </a>latest by 15th October, 2010. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/draft_scheme.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">F.No.450/1/2010-Dir. (Cus); Dated; September 10, 2010</font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Courier imports and exports: Delhi and Mumbai airports notified</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has declared the Customs airports at Delhi and Sahar, Mumbai (Bombay) to be the ‘Customs airports' for the purpose of sub-regulation (1) of regulation 2 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_080.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NOTIFICATION NO 80/2010-CUSTOMS (N.T.), Dated : September 9, 2010</font></strong></a></p> <div align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Addl Commissioner of Customs (Ahmedabad) given jurisdiction of Sahar and Customs house for adjudication of a specific case</font> </strong></div> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has appointed the Additional Commissioner of Customs (Imports), Air Cargo Complex, Ahmedabad to exercise the powers and discharge the duties conferred or imposed on </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the Additional Commissioner of Customs, (Imports), Air Cargo Complex, Sahar, Mumbai ; and </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the Additional Commissioner of Customs (Import), New Customs House, Mumbai, </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">for the purpose of adjudicating the matters relating to a specific Show Cause Notice. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_081.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION NO 81/2010-CUSTOMS (N.T.), Dated : September 9, 2010</strong> </font></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Vigilance officers vested powers of Customs officers</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has amended the <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_036.htm" target="_blank">Notification No. 36/2009- Customs (N.T.), dated the 17th March</a></strong></em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_036.htm">, <em><strong>2009</strong></em></a>, relating powers of Vigilance Officers as Customs Officers, to include Superintendent (vigilance), Appraiser (vigilance),Preventive Officer (Vigilance) and Inspector (Vigilance). </font></p> <p align="left"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_082.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NOTIFICATION NO 82/2010-CUSTOMS (N.T.), Dated : September 9, 2010</font></strong></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> Principal Chief Commissioner? </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ONCE</strong> upon a time Collectors of Customs and Central Excise were very senior officers reporting directly to the Board. Then the senior-most Collectors in Delhi, Calcutta, Bombay and Madras were designated as Principal Collectors – they were also Collectors. Later they became Chief Commissioners – they were supposed to be mini Boards, but they actually became post offices between the Board and Commissioners. But why should a senior officer simply act like a post office? So they started usurping the powers of the Commissioners including the mighty power to transfer subordinates – slowly they became little princes with all the powers and absolutely no responsibility. Now there is a proposal to create a new post of Principal Chief Commissioner who will perhaps be a new bridge between the Chief Commissioners and the Board. For more details please see our <strong>TIOL</strong> <strong>TOP</strong> today. </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"> – Tuesday's cases</font></strong></font></strong></font></p> <p align="justify"><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"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Finished products were removed by manufacturer after broker had pointed out buyers – since assessee had availed services of broker before clearance of goods from factory, service tax paid on brokerage is entitled for Cenvat credit: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is the submission of the Revenue that the services of the brokers had been availed by the respondents subsequent to manufacturing of their final product and hence they are not entitled for any input service credit. Reliance is also placed on the apex Court decision in <em>Maruti Suzuki ltd. vs. Commissioner of Central Excise, Delhi </em><strong>(<font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2009/2009-TIOL-94-SC-CX.htm" target="_blank">2009-TIOL-94-SC-CX</a></font>)</strong>. </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"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - Sec 10A - Part outsourcing of import order not to disentitle assessee from claiming Sec 10A benefits: ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> Company filed its return of income for the impugned year after claiming deduction of section 10A. During the course of assessment proceedings the AO discarded the details filed by the assessee and denied the exemption of section 10A on the ground that the assessee is not a manufacture rather is an agent of the concerns who entrusted work to the assessee. CIT (A) affirmed the order of the AO observing some incorrect factual things. </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><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"><strong>vijaywrite@taxindiaonline.com</strong> </a></font></p> </body> </html>