TIOL-DDT 1451 · 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 1451 </font><br> 23.09.2010 <br> Thursday</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Measures to streamline processing of departmental litigation before Courts and Tribunal - Board's renewed Instructions - Will filed please consider? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> has been the constant endeavor of the Board to streamline the procedures relating to processing of departmental litigation before the Supreme Court, High Courts and CESTAT. Several circulars/ instructions have been issued by the Board, <font color="#FF6633"><strong>but as usual, the field officers have been disobeying them with contempt and consistency</strong></font>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Board has again come out with an exhaustive Circular on this management of litigation. Sparks of wisdom from the Circular: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ One major cause of concern is delay in receipt of proposals in the Board's office. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Quality of proposals sent by Commissionerates is extremely important for preparation of Civil Appeal/SLP. However, it has been observed that proposal lack quality in so far as content is concerned. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Another significant aspect that has been found lacking in the proposals is documentation. Often complete sets of documents are either not enclosed or not found legible. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Grading of cases pending before the Courts is very important for effective monitoring by supervisory officers </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Henceforth, acceptance of CESTAT's orders or filing of appeals by the Commissioner before the High Courts shall be subject to obtaining the concurrence of the Chief Commissioner. [<strong><font color="#FF6633">Does the Board think that any Chief Commissioner will reject a proposal from a Commissioner to file an appeal? Remember the days when Chief Commissioners had to approve Show Cause Notices? Have you ever heard of a CC refusing to approve a Show Cause Notice?</font></strong>] </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ There are instances where the Commissioners filed appeals before the High Court after obtaining some legal advice even though the issue related to valuation or rate of duty. The High Courts rejected revenue appeals as non-maintainable and delayed appeals were filed before the Supreme Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Board expects the Chief Commissioners to be careful while deciding about the Court to approach. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Well conversant officer(s) should be sent by the Commissioners to brief the Departmental Representative / Special Counsels in important matters for effective presentation of the case before the Tribunal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ To ensure in-depth analysis and for preparation of comprehensive proposals the Commissioner shall ensure that legal journals such as ELT, RLT etc and software or online services such as Jurix, Manupatra, SCC Online, EXCUS, Lawcrux, Taxindiaonline etc. and reference books, law lexicons are available to the sections/officers dealing with SLP/CA. The Chief Commissioners should ensure availability of such books and online journals in the Commissionerates. <strong>[<font color="#FF6633">It is sad that many of the commissionerates do not have basic amenities for preparing for the legal battles – they spend huge amounts of money on cars, carpets, furniture and furnishings, crockery, gym, but they are miserly when it comes to books and subscriptions for technical software, sites. In fact we get calls from dedicated officers requesting us to give a particular case law, a notification etc,. Let us hope the Commissioners will follow the earnest directions of the Board. Incidentally RLT has stopped publishing its print journal.</font>] </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Every Commissioner will undertake an exercise to sort out important pro-revenue decisions in respect of his jurisdiction and if it is observed that such cases have not been published / uploaded in the ELT/ STR / RLT / <a href="http://taxindiaonline.com/RC2/index.php3" target="_blank"><strong>www.taxindiaonline.com</strong></a>; send clear, legible and authenticated copy to them for publication in their journals/ website. <strong>[<font color="#FF6633">We have been requesting Departmental Representatives in the Tribunals to send us copies of the judgements which they would like us to publish and some DRs have been sending us important decisions, which we have been carrying promptly. There were many occasions when cases could be decided in the Tribunal because of our prompt reporting. With a little more co-operation from the Department, we would be able to carry these orders faster. Perhaps Board could persuade the Tribunal to give us soft copies of the orders for faster reporting.</font>] </strong></font></p> </blockquote> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Board is serious about the business of litigation, but the field should equally be. Issuing a Circular by the Board, is no solution – Board has issued more than 20 circulars on the subject. What is important is <font color="#FF3300">COMPLIANCE</font> by the field. Nothing ever happens to anybody who has refused to follow the Board directions. If an appeal which is to be filed in the Supreme Court is filed in a High Court, can there be any excuse? If the Commissioner does not know where to file an appeal who will? Is it not dereliction of duty of the highest order? </strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board's assertion, of taking a serious view of violation of its instructions, is a standing joke in the field – they all know that the Board is never serious – at least that has been the experience in the last 50 years or so. </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Why should the Board send these paper missiles? For once let them try to ensure that their instructions are followed and if not followed, the disobedient officers should be taken to task immediately. Simply transfer them to Timbuktu and inform the rest of the world that this particular officer had been transferred because he blatantly disobeyed the Board's genuine legal instructions – and don't entertain any request from him for the next three years. If the Board can do this, it will suddenly find that its instructions are eagerly followed. </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">If the Board is really serious about effectively defending its cases, it should seriously ensure that field officers do obey its instructions – if not any number of such circulars will have no real effect and Board can continue to issue instructions threatening to take a serious view and the field will continue to smile at the joke. </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe this is a harsh commentary on the reality, but reality it is! </font></strong></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2010/excircular935.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC CIRCULAR NO. 935/25/2010-CX, Dated : September 21, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on STPP</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has imposed provisional anti dumping duty on Sodium Tripoly Phosphate (STPP) originating in, or exported from, People's Republic of China </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The anti-dumping duty imposed shall be effective up to and inclusive of the 20 th March, 2011 and shall be payable in Indian currency. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We hope the Board remembers this sunset date.</font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_096.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 96/2010-Customs, Dated : September 21, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise Superintendents - Adjudication Powers for Service Tax – Board clarifies</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RECENTLY</strong>, Board had given adjudication powers up to Rs one lakh to Superintendents. Now Board clarifies that </font></p> <blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">++ The Superintendents would be competent to decide cases that involve Service Tax and / or <em>CENVAT credit</em> upto Rs. one lakh in individual show cause notices. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">++ They would not be competent to decide cases that involve taxability of services, valuation of services, eligibility of exemption and cases involving suppression of facts, fraud, collusion, willful mis-statement etc. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">++ They would be competent to decide cases involving wrong availment of CENVAT credit upto a monetary limit of Rs. one lakh. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The jurisdictional Commissioners of Central Excise may redistribute the pending cases in the Commissionerate based on above factors. </font></p> </blockquote> <p align="left"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2010/sercir130.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC CIRCULAR NO. 130/12/2010-CX, Dated : September 20, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Export/Import of services - Board's callous clarification </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CROSS</strong> border transactions of services has always been a bone of contention between the revenue and the tax payers. While the law is almost settled now that the tax is levied only with effect from 18.4.2006 after insertion of Section 66A, whenever any new service is brought into the tax net, export / import service rules need to be amended to incorporate the new services into one of the three categories of the services specified therein. In the first category of services, the export / import of the service is decided by the place where the immovable property is located. Place of performance of the service is the factor that determines the export / import in respect of the second category of the services. Third category is the residuary one where the service is deemed to be received in India if the recipient is located in India and vice versa. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, the Board almost forgot to issue simultaneous amendments to these rules after notifying the new services in 2010, but issued a clarification Vide <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2010/sercir129.htm" target="_blank">Circular No 129/11/2010-ST, Dated September 21, 2010</a></strong></em> that all the new services notified through the Finance Act 2010 fall in category (iii) of clause (3) of services listed in the Export of Services Rules 2005 and Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, (residual category), no notification regarding individual classification was issued. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It appears that the above clarification was issued without any homework and just to cover up the inaction on the part of the Board to make timely amendments to the export / import of services rules. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For example, construction service has been notified earlier under category 1 service and the export / import of this service depends on the place where the immovable property is located. Now the incidental new service, i.e., Special services provided by a builder etc. to the prospective buyers such as providing preferential location or external or internal development of complexes on extra charges [Section 65 (105) (zzzzu)] will fall under the residual category, which is a clear anomaly. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similarly, for Health services, ideally, the export/import should have been decided based on the place where the service is performed (Second category of services ...like Maintenance or Repair Services). But this service has been now clarified to be under third category of service. This means if an employee is sent abroad for treatment by a business entity, the recipient has to pay service tax irrespective of the place of rendering the service. Now, who is the recipient of the service? Individual Employee or the Business entity which has sent the employee? Can the service be treated as being received for use in relation to business or commerce, which is the fundamental requirement for category three services to be taxable in the hands of the recipients of the service? Another clarification ? </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"> - Friday's cases</font></strong></font></strong></font></p> <p><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">Central Excise</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Second stage dealer issuing CENVATable invoices in October, 2004 without physically supplying goods to manufacturer – Penalty u/r 25 of CER, 2002 not imposable: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant obtained 10 invoices from a Delhi based dealer without receiving the goods physically. Thereafter, the proceedings were initiated against the appellant as well as against the manufacturer who has availed the credit on the basis of the said invoices. </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">Stay - Is an order u/s 201(1A) a consequential order of Sec 201(1) and therefore, stay granted by Tribunal in regard to stay application against Sec 201(1) demand is equally applicable to demand u/s 201(1A)? - YES, says ITAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the Tribunal is - Whether an order under-section 201(1A) is a consequential order of section 201(1) and hence the stay granted by the ITAT in pursuance to a stay application against the demand of Sec 201(1) is equally applicable to section 201(1A) also. </font></p> <p><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Import of Wallets made of python skin - since in country of import it can be used freely, re-export allowed – redemption fine cannot be imposed: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant imported various consumer items namely ball point pens, sunglasses, leather bags, wallets etc. and filed a bill of entry to clear the same. The wallets mentioned in the invoices were of Python skin for which the Wild Life Regional Office did not give NOC for their clearance holding that “Python reticulates” being mentioned in the Schedule-1 of the Wildlife Protection Act, 1972 which is a prohibited item. </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"><strong>vijaywrite@taxindiaonline.com</strong></a></font></p> </body> </html>