TIOL-DDT 1469 · 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 color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif"><strong>TIOL-DDT 1469 </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><br> 19.10.2010 <br> Tuesday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>LTUs - Has Degeneration Started? </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>LTU</strong> <strong><font color="#FF6633">(Large Taxpayers Unit) is a self-contained office to provide single window facilitation to taxpayers who pay direct and indirect taxes above a threshold limit. This office would deal with Central Excise/ Service Tax/ Income Tax/ Corporation Tax issues of all units holding a single PAN. It also provides certain tangible advantages (such as duty free movement of goods across the different units/ premises of a PAN holder, transfer of credit amount from one such premises to other); to ensure time bound disposal of refund claims and dispute settlements; and to follow single set of simple procedures for all units. </font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">The underlying commitment is of providing better service to the taxpayer, through personalized attention, quality of service, transparency in transactions and cordial atmosphere. This will reduce tax compliance cost, reduce delays and ensure uniformity in the matters of tax/ duty determination . </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These were the lofty goals with which LTUs were established in the Metros amidst great fanfare. But there was really no quality selection of officers. Some sincere officers slogged to make the LTUs relevant and useful but slowly things have started degenerating. The paint is peeling off and the dirty side is showing up. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Recently we received a mail from a <strong>concerned</strong> Netizen about the pathetic affairs in one of the LTUs . </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Generally there is no officer in the Central Excise Area till 11.00 A.M. that too on only some of the desks, even the person supposed to receive the DAK is not available on the desk. And in the evening also the scene is no different. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The officers (basically Inspectors and Superintendents) are clueless of the basic Central Excise Procedures as either it is the first time they have been posted in Excise (earlier most were with Customs) or the inspectors are promoted from the LDC level and in some cases the fresh recruits. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ As per LTU process as soon as the consent is accepted/granted the LTU office is supposed to write to the erstwhile jurisdictional authorities for transfer of records/files but in one such case this correspondence is yet to be sent even after 2 months. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ It has become difficult to get a Bond accepted as the Inspector and the Superintendent had not seen this form earlier and they do not know what to do with it. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> He mentioned several other technical issues which are not being addressed in the LTU. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I personally had a pleasantly different experience when I visited the Bangalore LTU, nearly a year ago. The office had a corporate look and even the toilets were incredulously clean. (In fact when the then Finance Minister P. Chidambaram inaugurated the LTU, he specifically mentioned about the cleanliness of the toilets). The officers were very courteous and the dynamic Commissioner who headed the Central Excise wing was the perfect leader passionately in love with the LTU concept. Not that there were no problems in Bangalore LTU, but every problem was addressed and not always with great success, but there was a sincere attempt for an amicable solution. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The success of LTUs depends purely and wholly on the calibre of the officers posted there and the Board should ensure that only top quality officers are posted to the LTUs . But why should top quality officers work in LTUs without any incentive? Now good officers work in the CESTAT, LTUs , some Directorates and even the Board office only for the incentive of working in a particular city. They have to get something more. Maybe they should all get double the salary. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> WCO, INTERPOL and UNODC collaborate on illicit use of precursor chemicals </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EIGHTY-six</strong> countries joined representatives of the World Customs Organization (WCO), the International Criminal Police Organization (INTERPOL) and the United Nations Office on Drugs and Crime (UNODC) to discuss an unprecedented international effort to counter the illicit diversion and trafficking of precursor chemicals that may be used by terrorists and other criminal organizations to manufacture explosive devices. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The seminar which took place at WCO headquarters yesterday focused on increased cooperation among Customs and police agencies, the sharing of information and best practices, and collaboration on investigations. Stronger Customs/police partnerships on the ground bolstered by the support of key anti-crime stakeholders will improve the ability of frontline officials to identify, target and seize illegal shipments at land, sea and air border crossings including container facilities. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chemicals that can be used to manufacture improvised explosive devices (IED) include ammonium nitrate, used in the 1995 bombing of a US Federal Building in Oklahoma City that killed 168 and injured over 650, and hydrogen peroxide, used in the 2005 bombing of London's public transportation system that killed 52 and injured over 700. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">According to the US National Counterterrorism Center's 2009 Report on Terrorism, there were approximately 11,000 terrorist attacks in 83 countries, resulting in over 58,000 victims, including nearly 15,000 fatalities. IEDs were responsible for injuring almost 23,000 people in 2009 and can be employed in multiple ways; a bomb placed inside a maritime container, a car laden with bombs, and even a suicide bomber strapped with explosives. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">WCO Secretary General, Kunio Mikuriya said, “Cross-border trade has to be safe and secure from threats that may hinder or damage the global trading system and innocent citizens should be protected from threats that may risk or imperil their lives.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Taking chemicals that are legal commodities and using them to create devastating explosive devices is a threat to all nations but with the cooperation of countries from around the world, this global effort will ultimately save countless lives. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti-smuggling – Global Operations </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SECRETARY</strong> General of the WCO , Kunio Mikuriya says, “Using postal and express courier channels to move tens of thousands of counterfeit and pirated goods around the world is increasingly being exploited by criminal traders.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Recently the World Customs Organization (WCO) conducted Operation Global Hoax aimed to stem the growing trade and stop the economic saboteurs from using postal and courier channels to move their illegal goods around the world. More than 782 parcels were seized, yielding in excess of 142,000 DVDs and 28,000 CDs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs also seized over 271,000 other counterfeit items, including razors, pharmaceuticals, curling irons, household goods, watches, mobile phones and accessories, clothing, computer accessories, jewellery, video game gadgets, MP3/ MP4 players, and leather goods. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some Customs administrations went even further; raiding street markets selling counterfeit and pirated goods, either on their own or in collaboration with other enforcement agencies. These informal markets have become a common point of sale for counterfeiters with a veritable “supermarket” of illegal goods available including pyramids of DVDs and CDS. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Global Hoax was coordinated by the WCO who facilitated the sharing of information and made available CENcomm – its secure communication tool – to participating administrations for exchanging data on pirated and counterfeit products seized. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Presidential Awards 2011 in CBEC – Nominations Invited</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has invited proposals for grant of Presidential Award of Appreciation Certificates for the year 2010 on the occasion of Republic Day, 2011. The Proposals from the field are to be sent to DG, DRI in respect of Customs and DG, CEI by 29 th October 2010. All those who want to apply for the award should rush – there is hardly ten days left. You have to get ten years ACRs , history of posting and a detailed bio data and get them cleared by your Commissioner and Chief Commissioner and all this in the next ten days. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/pres_award_nomtns.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DRI.F.NO.XII /1- POL /2010: dated October 15 2010 </font></strong></a></p> <p align="center"><strong><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></strong></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">Service Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Vivisection of contract – Writ petition by intervener against CESTAT LB in <font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2010/2010-TIOL-646-CESTAT-DEL-LB.htm" target="_blank">2010-TIOL-646-CESTAT-DEL-LB</a></font> – Clarification on 46th Amendment to Constitution – High Court in writ proceedings does not clarify a provision in vacuum. No writ on a reference matter – High Court</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> far as the clarification for 46th Constitution Amendment is concerned, we cannot dwell upon the said issue unless an issue directly would arise for interpretation of the same, for the simple reason the Court in the proceedings under Article 226 of the Constitution does not clarify a provision in the vacuum; when petitioner was just an intervener and has come up to challenge the order passed by the Special Bench, if it is entertained, , the same would enable every litigant to challenge the order passed in a reference. </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 40(a )( ia ) - Is AO right in disallowing expenditure if TDS is deposited before due date of filing ITR ? - NO, 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 disallowance u/s 40(a )( ia ) is warranted if TDS is deposited before the due date of filing of ITR . Whether the AO is right in making the comparison between the freelance agents and the director to disallow the commission payable to directors u/s 40A ( 2)(b) of the Act and holding the commission as excessive. NO is the answer of the Tribunal. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Unjust enrichment - mere deposit of some money made upon detection by Revenue is not immune from scrutiny of unjust enrichment when refund is claimed - fraud nullifies everything - CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is a long story covering a span of 17 years. The modus operandi adopted by the appellant shows that on detection by search party the appellant came forward to make some deposit having made breach of law. Had the investigation not done, the appellant would have been unjustly enriched at the cost of Revenue. The appellant without proving its claim to be bonafide with cogent evidence made its conduct questionable. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Moral of the Story: Never deposit any money during investigation. Wait for the Adjudication Order.</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 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"><strong>vijaywrite@taxindiaonline.com</strong></a></font></p> </body> </html>