TIOL-DDT 1516 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1516 </font><br>
28.12.2010 <br>
Tuesday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs - Interest on Delayed Payment of Duty - Warehoused Goods - CBEC Clarifies - Privately </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per section 47(2) of the Customs Act, where the importer fails to pay the import duty within five working days from the date on which the Bill of Entry for home consumption is returned to him for payment of duty, he shall pay interest on the amount of duty till the date of payment of the duty. A doubt had been raised whether the interest payable under Section 47(2) would apply to goods cleared from a bonded warehouse also. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC had clarified in Circular No. 15/2009 - cus dated 12.05.2009, that <em>the provisions of Section 47 (2) are not attracted in case of clearances made under Section 68. Consequently, no interest is liable to be paid on goods deposited in a warehouse and being cleared for home consumption by filing the Bill of Entry prescribed under Section 68 of the Act, ibid, for delayed payment of duty i.e. if the importer fails to pay the duty within 5 working days from the date on which such Bill of Entry is returned to him for payment of duty. However, interest on warehoused goods is payable when they remain in a warehouse beyond the period specified in sub-section (1) of Section 61 as per provisions of sub-section (2) of Section 61. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner of Customs, Airport Mumbai had a doubt, "<em>Circular 15/2009 Customs states that interest on warehoused goods is payable when they remain in the warehouse beyond the permitted warehousing period specified in Section 61(1), as per the provisions of Section 61(2), whereas as per provisions of Customs Act, 1962, in case of goods covered under Section 61(1)(b), though the initial permitted period of warehousing is up to one year, interest is charged after expiry of ninety days from the date of warehousing (and not after one year), as per Section 61 (2)(ii).</em>" </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To which the Board clarifies, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">'It may be noted that Circular 15/2009 Customs was not issued to clarify on the subject of the effective date from which interest would be chargeable for various categories of warehoused goods. The Circular seeks to clarify the issue as to whether interest is chargeable under Section 47(2) of Customs Act, 1962 on goods deposited in a warehouse and for which a Bill of entry for home consumption has been filed under Section 68 of the said Act, if the duty is paid after 5 working days from the date on which such Bill of Entry is returned to importer for payment of duty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has been stated in the Circular that <em>'interest on warehoused goods is payable when they remain in a warehouse beyond the period specified in sub-section (1) of Section 61, <strong>as per provisions of sub-section (2) of Section 61'. </strong></em>The subject Circular does not merely state that interest on warehoused goods is payable when they remain in a warehouse beyond the period specified in sub-section (1) of Section 61; it states that said interest amount is payable as per the provisions of sub-section (2) of Section 61, which lay down the effective date from which the interest is chargeable on various categories of warehoused goods. Thus, the Circular 15/09 Customs does not clarify anything contrary to what is stated in the Section 61 of Customs Act, 1962." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This clarification is contained in a letter from the Board to the <strong><em>concerned </em></strong> Commissioner, with copies to all Chief Commissioners and DGs . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Apparently,
Board did not understand the query raised by the Commissioner. He was saying
that the permitted period of warehousing as per Section 61(1)(b) is one year
while interest is charged after expiry of ninety days as per Section 61(2)(ii),
whereas Board in Circular No 15/2009 stated that <em>as per the provisions
of Section 61 (2), interest on warehoused goods is payable when they remain
in the warehouse beyond the <strong>permitted warehousing period </strong> specified
in Section 61 (1)</em>, <font color="#FF6633"><strong>which is not correct</strong></font>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What all this means in simple English is, "the interest under Section 47(2), is not applicable for clearances from bonded warehouse, under Section 68." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was also the view taken by the CESTAT in <em>Commissioner of Customs v Acalmar Oils & Fats Ltd </em> - <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=28&filename=legal/cestat/2009/2009-TIOL-1259-CESTAT-BANG.htm" target="_blank"><font size="1">2009-TIOL-1259-CESTAT-BANG </font></a></strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why should the Board confuse such simple issues? Let us hope there will not be further complications in the field consequent to these clarifications. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/instruction10_011.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Letter F. No.473 /01/2007-LC Dated, October 25, 2010</strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Letter of Approval For Providing Infrastructure Facilities in SEZ - Form C Amended </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> the <strong>Form C </strong> to the SEZ Rules - <strong>Letter of Approval For Providing Infrastructure Facilities in SEZ,</strong> condition viii states, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"This approval is valid for a period of three years within which time the Co-developer shall create the approved facilities. The progress of implementation will be submitted to Government of India every six months" </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this is substituted with, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"The validity of this approval shall be co-terminus with validity of the Letter of Approval issued to the Developer and the progress of implementation will be submitted to Government of India every six months". </em></font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=259&filename=sez/sez_notifications/amendment_2010_VI.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Special Economic Zones (Sixth Amendment) Rules, 2010 NOTIFICATION NO. G.S.R . 982(E), Dated: December 16, 2010 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FTP - Decline in Export - Re-fixation of Export Obligation </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PARS</strong> 5.11.2 of the Hand Book of Procedure Volume -1 ( HBP V-I) permits re-fixation of Annual Average Export Obligation, in case the export in any sector/ product group decline by more than 5%. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has issued a list of product groups showing the percentage decline in exports during 2009-10 as compared to 2008-09. RAs have been requested to re-fix the annual average export obligation for EPCG Authorizations for the year 2009-10 accordingly. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2010/dgft10cir008.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Circular No. 8/(RE 2010) 2009-2014 , Dated: December 24, 2010 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Justice Krishna Iyer wants probe against Justice Balakrishnan </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ONE </strong>of the most respected judges in the annals of Indian Judiciary, Justice Krishna Iyer has demanded a probe into the allegation that the son-in-law of former CJI , KG Balakrishnan had amassed crores. He also wants the President to politely ask Justice Balakrishnan to resign from his present post of Chairman of the National Human Rights Commission. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe we expect too much from our Judiciary! When everybody else is corrupt, why do you wish the judges to be honest? After all they are also part of this society! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And when people who are supposed to prevent corruption are themselves alleged to be corrupt, is there a way out? Maybe it is a way of life and we have to live with it! It is not even worth laughing at - so let's say <em>adieu </em> to Gopal's cartoons for now. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="4">tiol</font><font color="#006600"> - Wednesday's cases</font></strong></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399"><strong><font color="#663399"><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"></font></strong>Central Excise </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Classification - Assessee claims a particular Tariff Heading after getting clarification from the Department - No Suppression - No extended period of Limitation</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee was entitled to entertain a <em>bona fide </em>belief that the product manufactured by it would fall under the said sub-heading. If upon entertaining such a belief the assessee has made a claim that the goods manufactured by it are classifiable under Chapter sub-heading 56 of the Tariff Act, that too after obtaining clarification in this regard, the same cannot be equated with suppression ormis-declaration. The Tribunal, upon appreciating the evidence on record has found that there is nomis-declaration of the description of manufacturing process. As to whether there is suppression,mis-statement ormis-declaration is basically a question offact whichdoes not give rise to any question of law. In the circumstances, on facts when the Tribunal has found that there is nomis-declaration, it was fully justified in holding that the extended period of limitation could not have been invoked. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Income Tax </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether ITAT has inherent power to recall order in entirety u/s 254(2) - Tribunal can rectify only error apparent and cannot review own order: Delhi High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues are - Whether ITAT has inherent power to recall the order in entirety under Section 254(2) of the Act and whether the judgement of the Apex Court in the case of Honda Siel Power Products Ltd is the authority for the proposition that the tribunal has the power to recall. And the HC verdict is that the Tribunal can rectify only error apparent. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Valuation - norms fixed by Commissioner cannot be mechanically applied, irrespective of genuineness of transaction value; Normally High Court not to interfere with assessment, but when valuation has not been fixed as per statutory provisions, same has to be set aside </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>said norms cannot be mechanically applied, irrespective of genuineness of transaction value or value as may be arrived at as per statutory requirements. Normally, it is not for this Court to lay down the valuation in individual cases or to interfere with an order of assessment or appellate order on the issue of assessment of value but when valuation has not been fixed as per statutory provisions, the same has to be set aside and matter remanded for fresh assessment. </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 DDT </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">vijaywrite@taxindiaonline.com </a></font></p>
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