TIOL-DDT 1448 · 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 1448</font> <br> 20.09.2010 <br> Monday</strong> </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Duty Drawback - New All India Rates from Today - No Drawback if Service Tax refund is availed</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has notified the new All India Rates of Duty Drawback effective today. Board has also issued a Circular explaining the salient features of the Drawback rates. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The drawback rates have been determined on the basis of certain broad parameters including, the prevailing prices of inputs, Standard Input Output Norms (SION), share of imports in the total consumption of inputs and the applied rates of duty. The incidence of duty on HSD/Furnace Oil has been factored in the drawback calculations. The incidence of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods has also been factored. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants the Commissioners to ensure that the exporters do not avail of the refund of this tax through any other mechanism while claiming the All Industry Rates of duty drawback. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Drawback Schedule includes some new entries such as Denim Fabric and cotton garments containing 1% or more by weight of Spandex / Lycra / Elastane, garments of blend containing wool & Man Made Fibre(MMF), woven carpets and floor coverings of jute, knotted carpets and floor coverings of MMF, brass parts of ball or roller bearings and silk embroidery. The Schedule may please be perused for details. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_035.htm" target="_blank">CBEC Circular No. 35/2010-Cus., Dated: September 17, 2010</a> and </font></strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_084.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NOTIFICATION NO. 84/2010-CUSTOMS (NT) Dated: September 17, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise – Valuation – 100 chocolates packed in a Plastic Bag – Wholesale or Retail pack? Sour Sweets - Revenue Loses in Supreme Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INDIVIDUAL</strong> chocolate weighing about 5 gms are wrapped in a printed plastic film. These wrapped chocolates are packed in a wholesale pack in a jar weighing about a kg or plastic bag weighing about 500 gms. The assessee's contention is that individual chocolates are not attracted by Section 4A of the CEA as they weigh less than 5gms. The wholesale package also does not get attracted because they are not for retail sale. The Department's contention is that the wholesale packets are indeed for retail sale and so should get assessed under Section 4A. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In fact before a Larger Bench, the ingenious SDR produced such packets and jars which she had bought in retail from a corner shop. She argued that anybody can buy these packs in retail and now a days nobody buys one toffee; they buy a packet containing about 100 toffees. While one Member wanted to know if she would get reimbursement for the toffees she bought and distributed in the Court, another Member objected to her introducing evidence at this late stage. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This issue had already entered the portals of four Zonal benches of the CESTAT and the Supreme Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <em>Swan Sweets Ltd vs Commissioner</em> – <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2006/2006-TIOL-229-CESTAT-MUM.htm" target="_blank"><font size="1">2006-TIOL-229-CESTAT-MUM</font></a></strong>, the Tribunal held that these goods are not covered under the MRP assessment. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In<em> Loknath Prasad Gupta vs Commissioner of Central Excise</em> – <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2006/2006-TIOL-1405-CESTAT-KOL.htm" target="_blank"><font size="1">2006-TIOL-1405-CESTAT-KOL</font></a></strong>, the Tribunal took a similar decision in the case of chewing tobacco pouches packed in a bag. The Tribunal also referred to the Swan Sweets case. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal Larger Bench in <em>Commissioner of Central Excise vs Urison Cosmetics Ltd</em> - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2006/2006-TIOL-354-CESTAT-MUM-LB.htm" target="_blank"><font size="1">2006-TIOL-354-CESTAT-MUM-LB</font></a></strong>, had taken a similar view and this was also mentioned in the Loknath case. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court agreed with the Larger Bench in <em>Commissioner of Central Excise vs Kraftech Products Inc</em> - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2008/2008-TIOL-54-SC-CX.htm" target="_blank"><font size="1">2008-TIOL-54-SC-CX</font></a></strong> </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal in <em>Central Arecanut & Cocoa Marketing & Processing Co-Op. Ltd. vs. C.C.E. Mangalore</em>, - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2008/2008-TIOL-703-CESTAT-MAD.htm" target="_blank"><font size="1">2008-TIOL-703-CESTAT-MAD</font></a></strong>, followed the Swan Sweets case and held that “individual toffees weighing 5.5 gms as well as packs of 100 such pieces do not attract assessment under Section 4A of the Act.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This case was appealed to the Supreme Court by the Revenue and the appeal was dismissed by the Supreme Court on 15.09.2008. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue had appealed in the other cases of Swan Sweets and Loknath Prasad Gupta and the Supreme Court by the present order dismissed all these appeals. The Swan Sweets case had other parties like Makson Confectionery and Cadbury India . </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court held that “In view of the order of this Court dated 15th September, 2008, dismissing C.A. No. 7559 of 2008 (D.19192/2008), preferred by the Revenue against the order of the Tribunal in the case of <em>Central Arecanut & Cocoa Marketing & Processing Co-Op. Ltd. vs. C.C.E. Mangalore</em>, <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2008/2008-TIOL-703-CESTAT-MAD.htm" target="_blank"><font size="1">2008-TIOL-703-CESTAT-MAD</font></a></strong>, the issue raised in the appeals is no more res integra . In view of the said decision, with which we are in respectful agreement, there is no merit in these appeals, which are dismissed accordingly.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Has the issue reached finality? No chance! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <em>Roys Industries Ltd vs Commissioner of Central Excise, Hyderabad IV</em> – <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2006/2006-TIOL-1581-CESTAT-BANG.htm" target="_blank"><font size="1">2006-TIOL-1581-CESTAT-BANG</font></a></strong>, the Bangalore Bench of the Tribunal did not agree with the Swan Sweets decision and referred the matter to the Larger Bench. It is understood that the Larger Bench has already decided the issue in favour of Revenue. And the Division Benches have to decide the cases based on the Larger Bench. But why did it go to a Larger Bench when there was already a decision of the Larger Bench approved by the Supreme Court? Apparently the referring Bench did not have the benefit of the Larger Bench or Supreme Court. But by the time the second Larger Bench delivered its decision, all these were available and any decision rendered by this second Larger Bench without considering the earlier Supreme Court decision upholding the judgment of the first Larger Bench would be per incuriam and a Larger Bench itself deciding this issue for a second time would be violating the principle of res judicata – well that is another story – the second larger bench order is not yet available and we have been trying to get a copy of it as soon as possible, but now with the Supreme Court decision, this has only academic interest. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now what does Roys Industries do? Go to the Supreme Court or file an ROM with the Tribunal as already there were two decisions, one of the Supreme Court and the other of the Larger Bench of the Tribunal (approved by the Supreme Court) against Revenue. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this important decision today. Please see </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2010/2010-TIOL-72-SC-CX.htm"><strong>2010-TIOL-72-SC-CX </strong></a></em></font> </p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Private e-mail ids used for official communication</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN</strong> we mentioned the fact that many Revenue officers were using private e-mails for official communication, we had to face the wrath of some officers for our stupid criticism. But we had a pleasant surprise the other day when we received a call from a senior Commissioner who appreciated us for raising the issue. He said that he insisted on all the officers in his Commissionerate to use the official e-mail id. He said that the DG, Systems had provided e-mail ids to all the officers and there was no reason why they should not use them. I told him, “maybe the official e-mail system was not very convenient and user friendly and that is why officers were not using it”. He said, “come on I have been using it for the last eight years without any problem; we have to persuade our officers to use it and that is why I liked your coverage of the issue.” He had absolutely no anger or complaint against the officers who refuse to use the official e-mail, he says they have to be convinced about its use and security and then they will use it. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We also have pointed out this only from the security angle and when the government has a capable and secure email server, what is the problem in using it? When you use a private email server, you have no control over data and many others may have control and access. The email service from NIC is called nicemail – It is certainly a nice mail – if you use it. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Technology is like fire – it is a good servant but a bad master. </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"><strong><font color="#663399" 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">Service Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Stock Brokers – If main broker has paid service tax – sub brokers need not pay: CESTAT LB</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is true that there is no provision under Finance Act, 1994 for double taxation. The scheme of service tax law suggest that it is a single point tax law without being a multiple taxation legislation. In absence of any statutory provision to the contrary, providing of service being event of levy, self same service provided shall not be doubly taxable. If service tax is paid by a sub-broker in respect of same taxable service provided by the stock-broker, the stock broker is entitled to the credit of the tax so paid on such service if entire chain of identity of sub-broker and stock broker is established and transactions are provided to be one and the same. </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">Sec 263 - CIT must have positive materials in possession to invoke revisionary powers: Delhi HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the High Court is - Whether before invoking powers u/s 263 the CIT must have positive materials in his possession, and merely forming a different opinion is not sufficient to revise an order passed u/s 143(3). </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">Export - Rebate - When factum of export is not doubted, rebate cannot be denied even if all conditions of the notification are not complied with: High Court</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN</strong> once the competent authority viz., the Assistant Commissioner was satisfied with the factum of export that the final products made by the appellant, his failure to exercise the discretionary power vested in him in the absence of any other valid reasons cannot be sustained. In the event of factum of export being satisfied with the goods having been exported even if all or any of the conditions laid down in the notifications were not complied with, the claim can be sanctioned. </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>