TIOL-DDT 1481 · 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 1481 </font><br> 04.11.2010 <br> Thursday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Red tape at port costlier than shipping between ports </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> Doha Round package on market access in all goods, and on agricultural subsidies, could add USD 121 billion to USD 202 billion to the world economy. A “trade facilitation” deal could cut trade costs by more than the “impact of geographical distance” between countries. Those were just two points made in a WTO workshop on the latest analyses of the negotiations on 2nd November 2010. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For “trade facilitation” (negotiations to cut red tape and streamline customs procedures), a 1% improvement in indicators representing transparency and predictability could increase trade in manufactured products by 0.7%, the workshop was told. A one per cent improvement on formalities, such as those brought by single windows, pre-arrival processing and post-clearance audits, could generate a comparable increase in trade flows for agricultural products. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Enforcement of statutory measures (Phytosanitary requirement) for import of food grains before release of consignments by Customs authorities - CBEC Instructions</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> import of food grains into India is regulated under the Destructive Insects and Pests Act, 1914 and Plant Quarantine (Regulation of Import into India ) Order, 2003 issued thereunder. As per this Order, it is mandatory to conduct the pest risk analysis of each commodity before allowing clearance into the country. The import consignments of food grains are required to comply with certain phytosanitary norms as prescribed under Plant Quarantine (Regulation of Import into India ) Order, 2003. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board desires that these requirements should be scrupulously implemented by the field formations. All consignments of food grains may be referred to Plant Quarantine authorities at respective point of entry for phytosanitary inspection before release by Customs. These consignments of food grains will be allowed clearance only after getting NOC from Plant Quarantine Authorities. </font></p> <p align="left"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_041.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 41/2010-CUSTOMS Dated: November 03, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs Complications - Board solutions? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RECENTLY</strong> Member (Cus & EP) of CBEC, SK Goel chaired a meeting of the Customs Consultative Group in Mumbai. We bring you some of the queries raised and the Member's crisp replies. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Q. Execution of bond/bank guarantee under Advance License Scheme.</strong> As is reported, some Customs Authorities are denying exemption from Bank Guarantee even in cases where a penalty has been imposed by the Adjudicating Authority and Appeal has been filed by the exporter before the appropriate authority. There are some cases where the Appellate Authority has even stayed the orders of the adjudicating authority regarding the penalty but exemption from BG has been denied. This interpretation of the Circular is faulty and causing a lot of hardship to the genuine exporters. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is suggested that a clarification may be issued to all field formations that the imposition of penalty in Para-3.2 (c) of the Customs Circular No. 58/2004 dated 21.10.2004 is meant only for such cases where the imposition of penalty has reached its finality in the legal process. That is, the exporter has exhausted all his legal options in the matter, no appeal is pending and the penal status of the exporter has attained finality. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#FF6633"><strong>A. Circular No. 58/2004, which prescribes the norms for execution of bond and bank guarantees under the Advance Licence and EPCG Schemes, stipulates that relaxation from the circular will not be available to any licence holder who has been penalized under the provisions of the Customs Act / Central Excise Act / FEMA or the FT (D&R) Act during the previous three years. However, if the case of the appellant is strong then there ought not to be any difficulty in obtaining a stay from the appellate authority till the final disposal of the appeal.In the absence of any stay, consequences of the penalty imposed will follow. </strong></font></em></font></p> <p align="justify"><font color="#FF6633"><strong><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The matter will be looked into by Drawback Section. </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Q. Discharge of export obligation under Advance Authorisation Scheme</strong>. Many Customs Houses, especially in case of deemed exports, are referring all the supply documents to various jurisdictional Central Excise Authorities for verification. This verification takes a long time and Bond/BG is not redeemed till the time such confirmation is received by Customs Authorities from the concerned jurisdictional Central Excise Authorities. There have been cases where such confirmations have come after a delay of more than one year and the Bank Guarantee executed by the exporter was not redeemed during the whole period. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is requested that a suitable circular may be issued to Custom Authorities that only in case they have a doubt then only such verification may be insisted upon. In other case, the EODC issued by DGFT authorities may be accepted as proof for discharge of bond/BG. </font></p> <p align="justify"><em><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">A. Circular No.5/2010 dated 10.3.2010 has been issued which, inter alia, stipulates that in cases of Advance Authorisation Scheme the EODC should normally be accepted unless there is specific intelligence to suggest misuse. The grievance that Custom Houses are not redeeming the bond / bank guarantee till independent verification is caused, perhaps, refers to cases where intelligence suggesting such misuse, has necessitated verification. </font></strong></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Q. Includibility of Ship Demurrage Charges in the assessable value:</strong> As per <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2006/cuscir06_26.htm" target="_blank">Circular No.26/2006-Customs dated 26.9.2006</a></strong></em>, the importers are required to pay duty against the ship demurrage charges from back date i.e. from 2.3.2001. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is suggested that for the period between 2.3.2001 – 26.9.2006, the ship demurrage amount may not be considered for assessable value while finalizing the B/E. </font></p> <p align="justify"><em><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">A. Circular No.26/2006-Cus. provides that ship demurrage charges are required to be included in the assessable value of the goods under Section 14 of the Customs Act with effect from 2.3.2001. </font></strong></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Q. Special Valuation Branch is required to facilitate the trade at Bangalore:</strong> The importers are approaching Chennai Custom House for SVB valuation. Previously the SVB valuation cell was opened at Bangalore and the same was closed later on. More than 500 collaborated/ related industries are functioning at Bangalore and they are depending on Chennai SVB cell for valuation. </font></p> <p align="justify"><strong><em><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">A. In principle there is no objection to opening up SVB section at Bengaluru. However, the matter is under examination. </font></em></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We will bring you more clarifications in the next editions of<strong> DDT</strong>. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Politics in America affects economics in India </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> mid-term drubbing that President Obama received, is causing economic jitters all over the world. The US had anyway lost its legitimacy as a leader in the Global Economics. The New York Times today reported that emerging markets — led by China, India and Brazil - outpace industrial nations as drivers of global growth. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Ohm Obama - Welcome Mr President </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> weekend President Obama and the First Lady will be in India – the visit is more economic than political and symbolically the visit starts from India's economic capital Mumbai and not from the Political Capital. There was a time when an Indian Prime Minister visiting US was derisively depicted as carrying a begging bowl and an American President visiting India was to be carrying moneybags or at least wheat bags for distribution. Today we have an American President visiting India to do business with India, where India is the stronger participant. We can all be proud. And we have achieved this in spite of the rampant corruption of our netas and babus. Just imagine where we would have been if they were a less corrupt!</font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">White House on India - How does an American feel when he calls an Airline or a Credit Card company and an Indian answers the phone? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> White House Officials conducted a series of Press Meets to unveil the President's Asia tour. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They said, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We worked very closely with India in the context of the G20, and the G20 was really all about bringing countries like India to the table on economic - on global economic issues. And we have a very strong and growing bilateral relationship. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With 1.2 billion people and an economy growing - expected to grow at 8 percent a year for the next several years, we really see India as a potentially very important market for U.S. Exports. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">U.S. exports have already -- goods exports have already quadrupled over the last seven years to about USD 17 billion. And service exports have tripled to about $10 billion a year. So it's a fast-growing economic relationship. And it's a two-way street as well. Indian companies are the second-fastest-growing investors in the United States. And they are creating - they now support about 57,000 jobs here in the U.S. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So it's a great market for U.S. exports. It's a good place - source of investment for the United States. There are a lot of jobs in the United States tied to both of those things. And that's the reason why the President will be there, focusing, on the first day on the economic and commercial relationship... </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And a couple of questions and the American Babu's answers – they are same everywhere! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Q. Just to briefly follow on that, I wonder how will he deal from a communications standpoint with the concern that many Americans express that so many jobs are being outsourced to India - that when you call a credit card company or an airline, the phone is picked up by somebody in India? Will he acknowledge and address that in any way? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> A. Look, India is in many ways fundamental to his economic message and has been for many years. I think, we are -- and I think we'll see as we get closer -- not just the genuine potential of the market for American companies but some tangible impact in supporting and creating jobs here in America. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Q. So he's okay with the number of times Americans pick up the phone and they get somebody in India answering their questions so long as other exports have greater access there? <br> A. That is not to say that given the size and the emergence of the market, that we're going to ignore opportunities for companies - big, recognizable companies here in the United States to sell and distribute their goods in India, which creates jobs back here in America.</font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Rajiv Shah highest-ranking Indian American in Obama Administration will accompany President</font></strong></p> <p align="center"><img src="http://www.taxindiaonline.com/RC2/image/stories/bio_rshah.jpg" alt="Legal Corner Icon" width="150" height="225" hspace="5" border="0" align="center"></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>COMING</strong> to India along with the President will be the highest ranking Indian American in the Obama Administration, Dr. Rajiv Shah who was sworn in as the 16th Administrator of the United States Agency for International Development (USAID) on December 31, 2009. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For seven years Dr. Shah was with the Bill and Melinda Gates Foundation . He is an MD from the University of Pennsylvania Medical School and a Master of Science in health economics at the Wharton School of Business. He has attended the London School of Economics, is a graduate of the University of Michigan. Shah previously served on the boards of the Alliance for a Green Revolution in Africa (AGRA), the Seattle Public Library, and the Seattle Community College District. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In 2007, he was named a Young Global Leader by the World Economic Forum.</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"> – Monday's cases</font></strong></font></strong></font></p> <p><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">Customs </font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Provisions of section 27 of Customs Act, 1962 applies only when refund that is being sought is of customs duty - 4% Additional duty paid by mistake not a Customs duty – Matter remanded: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PROVISIONS</strong> of section 27 of the Act applies only when the refund that is being sought is of customs duty otherwise leviable under the Act . In this case, the appellant is claiming the refund of the 4% Addl. Duty paid which was not leviable on the appellant. Hence, the provision of section 27 of the Act, which bound the appellant to file refund claim within six months of the assessment of the Bill of Entry, are not applicable to the case of the appellant. Accordingly, the impugned order is set aside. As observed in the impugned order that the refund claim has been dismissed being time barred and there is no finding given on merits. </font></p> <p><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax</strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Sec 35(1)(ii) - Can Revenue deny exemption u/s 10(21) to assessee academy merely because it was granted approval for scientific research in category of 'other institution'? - 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 Revenue can deny exemption u/s 10(21) to assessee academy merely because it was granted approval for scientific research in category of 'other institution'. NO, says the Tribunal. </font></p> <p><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise</strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">MODVAT Credit – Denial of Credit on ground that invoice did not contain some particulars – Credit cannot be denied when duty payment and utilisation of inputs not doubted: High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is no dispute regarding duty payment and use of goods in manufacture of final product and the credit has been denied only on the ground that necessary particulars were not mentioned in the invoices and the supplier, which issued those invoices, did not enter the particulars in their statutory records. </font></p> <p align="center"><strong><font color="#0000FF" size="5" face="Courier New, Courier, mono">Wish you a bright Deepavali </font></strong></p> <p align="center"><img src="http://www.taxindiaonline.com/RC2/image/stories/diwali_2010.jpg" alt="Legal Corner Icon" width="600" height="400" hspace="5" border="0" align="center"></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements</font></strong></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong> </font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice weekend. </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"><strong> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p> </body> </html>