TIOL-DDT 1499 · 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 1499 </font><br> 02.12.2010 <br> Thursday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - Classification of PXI Controllers – Board informs field favourable order of Supreme Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> had been informed that there are divergent practices regarding classification of PXI Controllers, Input/Output Modules, Signal Converters and Chassis and its parts. Essentially, PXI Controllers are designed for measurement and automation applications, which require high performance and a rugged industrial form. Further, Input/Output Modules are tailored to a specific function as a part of a regulating and controlling apparatus like a sensor, thermostat etc. Therefore, one has to look at the PXI machine holistically for the purpose of classification but some field formations are classifying these under CTH 8471 as Automatic Data Processing machines while others are doing so under CTH 9032 as automatic or controlling instruments and apparatus. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board invites attention to the Supreme Court Order CA No.5394/2010 (D No.4818/2010), reported in <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=26&filename=legal/sc/2010/2010-TIOL-52-SC-CUS.htm" target="_blank"><font size="1">2010-TIOL-52-SC-CUS</font></a></strong>. As per this order, PXI Controller constitutes a complete system performing work of measurement-programmable Automation Controllers (PACs) by themselves are not measuring, regulating or controlling instrument but perform specific function as parts of sensors and are classifiable under CTH 9032 89 10. Chassis of PXI provides connectivity and housing for embedded controllers and data acquisition modules allowing them to communicate with each other. Input/Output Module is tailored to a specific function and each of them is a part of regulating and controlling apparatus like sensor, thermostat etc. and their primary function is part of measuring and control system and are classifiable under CTH 9032 90 00. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accordingly, the Supreme Court set aside the impugned order of CESTAT and allowed the Appeal filed by the department. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the Board wants Chief Commissioners to ensure uniform practice of assessment of PXI Controllers, Input/output Modules, Signal Converters and Chassis. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_042.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 42/ 2010-Cus., Dated: November 29, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise Inspectors Steal Cigarettes worth 8 Crores from ITC Factory </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Bangalore Police last week arrested a Central Excise Inspector and two of his accomplices while transporting stolen cigarettes from ITC factory. It seems it was their daily practice and four inspectors are said to have stolen cigarettes worth more than Rs. 8 Crores in the last one year. While one inspector was arrested, the others are absconding. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We had ignored this news as the aberration of a few officers but an insider informs us that this is a big scam. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems that the posting to the ITC factory is done by the Chief Commissioner, maybe realising the sensitive opportunity of stealing and smuggling cigarettes. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Cigarette, being an evasion prone commodity, inspectors are posted round the clock in cigarette factories, but what can be done if the fence eats the crops, as it happened in the present case? </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Our insider asks us, </font></p> <blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. How did these notorious inspectors get posted to ITC? </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Are Postings in ITC sold? </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Whether huge racket is going on with blessings of Higher-ups? </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Why the Department did not oppose bail to one of the inspectors who was caught by Bangalore Police? </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Who will bear the duty liability on the Rs. 8 Crores cigarettes stolen – ITC or the Inspectors? </font></p> </blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe the Board should take note and take corrective steps. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">No Organised System to Pursue Appeals - Delhi High Court Slams Income Tax Department - Summons Revenue Secretary and CBDT Chairman </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Delhi High Court was angry with the Income Tax Department, for the casual way the Department is treating appeals before the Court. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court observed, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We have been observing various kinds of shortcomings and lapses committed by the Income Tax Department in filing and pursuing the appeals in the High Court. It is seen even when most of the appeals are filed within stipulated period and limitation, they are hardly in order ever and, substantial time is taken by the Department in removing the objections raised by the Registry. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In most of the cases, delay in refilling the appeals is more than 100 days. Many times the delay in re- filing the appeal after removing objections goes beyond 300 days and even more than 500 days. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sometimes objections relate to non-filing of legible copies of the documents or the impugned order, the Department takes abnormal time for supplying those copies and clearing such objections. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This itself results in delay in taking up these matters. The Registry has, also, informed that many appeals, which were filed 2-3 years ago, are still lying under objections and those objections have not been removed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The tax effect in some of the appeals is very substantial. Even then no due care is taken by the Department in removing the objections and getting the appeals listed. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> It creates another kind of suspicion as well. </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though we find that most of the counsel appearing on behalf of the Revenue are well prepared and well equipped with the knowledge of law and are able to render their assistance to this Court, for lack of proper instruction and information in some of the cases at times they find themselves in helpless situation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Since repeated oral instructions given to the Department from time to time to set its house in order have fallen into deaf years, we have no option but to bring these aspects to the notice of the higher authorities by means of this order. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We also feel it necessary to summon Secretary (Revenue), Govt. of India as well as Chairman CBDT. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see </font><font face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2010/2010-TIOL-768-HC-DEL-IT.htm"><font size="1" face="Verdana, Arial, Helvetica, sans-serif">2010-TIOL-768-HC-DEL-IT</font></a></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Radia Tapes to be given to Supreme Court - CVC to recuse from CBI Investigation</font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">WHILE</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> the Central Vigilance Commissioner PJ Thomas is yet to resign, the Solicitor General Gopal Subramanyan, yesterday told the Supreme Court that the CVC will recuse from the CBI investigation of the 2 G Spectrum case. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court yesterday made the following order. </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>At the commencement of further hearing, Shri?Gopal Subramanian, learned Solicitor General submitted?that he has instruction to make a statement that the present Chief Vigilance Commissioner has volunteered to?recuse from the supervision of investigation of the?case registered by the Central Bureau of Investigation?on 21.10.2009. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The learned Solicitor General further stated?that the Government shall have no objection to an order?being made by the Court for preservation of the?recordings of the alleged conversation of Ms. Niira?Radia and others by the Directorate General?(Investigations), Income Tax. Keeping in view the nature of the case, we?direct the Directorate General (Investigations), Income?Tax that the original conversation of Ms. Niira Radia?and others recorded on hard drive or in the form of?tapes, compact discs or any other electronic device?along with all telephonic call records shall be put in?a sealed cover and made over to the Court Masters by?tomorrow after preparing the number of copies required?by the Department of Income Tax and the Central Bureau?of Investigation. The Court Masters are directed to?handover the sealed envelope to the Secretary General?of this Court, who shall keep the same under lock and?seal. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These recordings shall be made available as and?when required by the Court. ?During the course of further hearing, learned?Solicitor General placed before the Court additional?documents on behalf of respondent no.1 (in spiral?bounded paper book) after supplying copies thereof to?other side. The additional documents are taken on?record. The learned Solicitor General completed his?arguments. Shri T.R. Andhyarujina, learned senior?counsel appearing for respondent no.5 commenced his?submissions, which remained inconclusive.?? </font></em></p> <p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For further arguments, list on 02.12.2010. </font></em></p> </blockquote> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see also our <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11749" target="_blank">CobWeb</a> today</font></strong></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="3">DDT</font> reaches <font size="3">1500</font> mark tomorrow.</strong></font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tomorrow <strong>DDT</strong> will come out with its 1500<sup>th</sup> edition. </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">TN Sales Tax </font></strong></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Sales Tax Exemption given by Tourism Department – Notification given by Government valid – Supreme Court</strong> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHAT</strong> happens if an exemption notification for Sales Tax is given by the Tourism Department? It is still valid, as the notification was given by the Government, which includes the Sales Tax Department. </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">Clandestine Removal – Shortage and excess of raw material enough to conclude clearance without duty - High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> inference drawn, based on shortage of clinkers and the excess quantity of limestone quarried during the relevant period was sufficient enough for the authorities to conclude as to the ultimate quantity of Portland cement which could have been produced from such excess quantity, which were not noted in the stock register, was well justified and no illegality or irregularity in such a conclusion drawn by the authorities for the levy of duty and the demand of duty imposed. </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 271(1)(c) - Whether non-acceptance of particulars by AO amounts to concealment of income inviting penalty? - NO, says Delhi High Court </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 assessee is free to change the method of accounting without any tangible reasons. The second question is - Whether non-acceptance of the particulars by the AO amounts to concealment of income for levy of penalty u/s 271(1)(c). And the verdict has gone in favour of the assessee. </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>