TIOL-DDT 1506 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1506</font><br>
13.12.2010<br>
Monday</strong></font></p>
<p align="center"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_1506.jpg" alt="Legal Corner Icon" width="250" height="328" hspace="5" border="0" align="center"></font></strong></p>
<p align="center"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Dear! You are not involved in a single scam! What kind of a Minister are you?</font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Corruption Cartoons</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THROUGH</strong> the
columns of <strong>DDT</strong>, I had the great fortune of acquiring a gem
of a friend, Gopal – Dr. VS Gopalakrishnan, a retired IAS officer, who was
once Development Commissioner of an EPZ. A multi-faceted personality, Dr.
Gopal is a prolific writer, singer, cartoonist and of course a bureaucrat.
We had carried one of his articles and a few of his cartoons earlier. His
wife thought that he was both the cartoonist and the cartoon. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now Gopal says, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“Will it be right to say "A scam a day keeps boredom away"? Apart from their repulsive and depressive values, scams do have some entertainment value too! Modern scams tend to be mega scams. Older scams by comparison would pale into insignificance. Interpreting Hinduism to the West, Dr.S.Radhakrishnan used to say that Hinduism was actually "a way of life in India". His written texts could perhaps be re-edited to state that "Hinduism and corruption are a way of life in India"!</em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Very recently, megascams discovered in India have made a hero of the looters. They preen themselves and shamelessly give flashy million dollar smiles before the TV cameras signifying their Alexandrian conquests! There is some strange, unexplained " vastu " about all our jails by which the jails are simply out of bounds even for the most criminal of our politicians!” </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This would have been a great occasion for Gopal to go back to cartooning, as I suggested to him, but he prefers re-visiting some of his old cartoons, which depict small time corruption as it existed in the good old days. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you one of those cartoons today. We will bring some more in the next few days. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs Quarter Collapses </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> are told that a building in the Customs Colony in Goa collapsed on Saturday. Fortunately the dilapidated building was not occupied and so no one was injured. The quarters in many Customs and Central Excise Commissionerates are very old and due to lack of maintenance, they run the risk of falling down and causing great risk to human lives. It is by accident that people are surviving. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Of course there is another side to the story. In many cities, the CBEC has acquired quarters in most unwanted places and they are lying vacant for years together as there are no takers. Huge amounts of the tax payers' money is wasted in acquiring unwanted quarters and then keeping them vacant, because there are no takers. In many other departments, if a quarter is lying vacant, because there are no takers, it is simply allotted to the senior most officer and if he does not take it, his HRA is cut, but the Revenue Department has no such economic considerations. Quarters acquired at huge costs are kept vacant for years together, because nobody wants them. Several High Courts have held that HRA is not a right and an employee can be forcefully allotted a quarter and if he does not take it, his HRA can be cut. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC should ascertain how many quarters are lying vacant and what they are doing about it. Even the CAG may consider doing an Audit on this. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But before that, they should take up a massive repair and re-construction of the dilapidated quarters. If there is no budget sanction for this, the Government should consider selling part of the land in which these quarters are constructed. Now they are all prime properties and if half of them are sold, that will take care of building super flats in the rest of the plots. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> Personal Hearing - A Big Farce</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> other day, a client wanted me to attend a personal hearing before an adjudication authority of the Central Excise Department. I told him, “it's a waste of time; you can send your clerk or peon and ask him to reiterate the submissions made in the reply to the Show Cause Notice.”</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Client was not impressed and he along with another lawyer appeared for the personal hearing. After a harrowing experience, he cursed himself for not following my advice. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He explained his experience to me: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At the appointed time, we went to the office of the adjudicating authority and we were told that Sir has gone for lunch and not yet returned. We waited patiently – there was no place for us to sit outside his office – the few chairs on the verandah were occupied by important looking sepoys , one of whom was awfully drunk and asked us for money. He was rude to us when we refused to pay him. We were told that drinking while on duty is not a trait with junior employees but even some of the senior officers who are adjudicating officers are drunk while on duty and it is no secret. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After more than an hour, we are ushered into the chambers of the adjudicating authority. He is surrounded by half a dozen officers all with urgent files and he is giving directions to all of them. He gets a few telephone calls and answers all of them leisurely. During all this he asked us a few times, “yes, tell me”, but unfortunately had no time or mood to listen to us. Twice he was called by his boss and he went out and came in after about thirty minutes. Not even once he mentioned to his boss or the telephone callers that he had a personal hearing and the party was before him. After more than two hours, he tells us, “okay you have anything new to submit other than what you have already mentioned in the reply?”. Then he calls his steno and tells us, “you dictate to her whatever you want to say; I will just come back; okay?” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even Supreme Court Judges do not enjoy this kind of privilege; once they come to the court, they have to sit there! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why can't Departmental officers ensure that a particular time is slotted for personal hearing and during that time they are not disturbed by subordinates or superiors? Adjudication should not only be done but seem to be done! </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><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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Valuation - Cost of freight between the factory to the Depot of related person to be included; Penalty - when no fraud or suppression is alleged in the show cause notice, the imposition of penalty is wholly impermissible : Supreme Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>implication of the manufacturer, the assessee and the buyer being related to each other was that the price charged to the related person was presumed to be understated and to dissuade such sales, the legislature had introduced the said proviso as anti-evasion measure. Hence, to give deductions to the assessee as claimed, would defeat the very object of the third proviso. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is well settled that when the statutes create an offence and an ingredient of the offence is a deliberate attempt to evade duty either by fraud or misrepresentation, the statute requires ` <em>mens rea ' </em> as a necessary constituent of such an offence. But when factually no fraud or suppression or mis -statement is alleged by the revenue against the respondent in the show cause notice the imposition of penalty under Section 11 AC is wholly impermissible. </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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Sec 194C vs 194J - payment for hiring of equipment for movement of cargo - Whether technical services availed by service provider from non-resident necessarily makes the services provided to assessee technical in nature, covered under provisions of Sec 194J ? - NO, says ITAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issue before the Tribunal is - Whether technical services availed by the service provider from non-resident makes the services provided to the assessee also technical in nature and is therefore covered under the provisions of Sec 194J and not Sec 194C . NO, rules the Tribunal. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MODVAT Credit on Export Goods - No Credit when the goods were exported without duty : Supreme Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> entitlement to Modvat credit will arise only if excise duty is incident upon the final product. The final product in this instance refers to the finished goods ( PP fabrics) that were exported under the Advance Licensing Scheme without any payment of duty. Therefore, the attempt of the assessee to justify its availing of Modvat credit is seriously undermined by the provisions in Rule 57A . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">See our columns Tomorrow for the judgements</font></strong></font></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>
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