TIOL-DDT 1537 · the untouched capture
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<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1537
</font><br>
27.01.2011<br>
Thursday </strong></font></div>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Drawback - BRC Monitoring - Board Reiterates Circular </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Public Accounts Committee (PAC) has on more than one occasion expressed concerns about the lack of action being taken in the case of non-realization of foreign exchange in respect of consignments exported under the Drawback Scheme. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC had in Circular No. 5/2009-Cus dated 02.02.2009 required that the export realizations in respect of all drawback shipments made during 01.01.2004 to 31.12.2007 should be checked and for exports during the subsequent period such verification/checking should be done for drawback shipments every six months. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board now desires that this should be implemented by all Custom Houses earnestly. Complete and effective implementation would mean that there should not remain any cases in the Custom Houses where the realization has become due but the exporter has not submitted BRC /negative statement and the SCN for such non submission has not been issued within a reasonable time. Thus, the work of feeding the details of BRCs/negative statements into the system and of issuing Show Cause Notices (SCNs) to exporters wherever they are not submitted and taking further action including adjudication of the cases for recovery of drawback has to be accomplished in a methodical and time bound manner. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some Custom Houses have reported to the Board that in many cases, the show cause notices, which have been issued for non-submission of BRCs/negative statements, were returned undelivered as the recipient/address was non-existent. In such instances, Board desires that the Commissionerates should set up an institutional mechanism to liaise regularly with Regional Licensing Authorities (RLAs). The names of such exporters should be reported to the RLAs at regular intervals or during joint review meetings so that action can be taken against them and their IE Codes got cancelled for furnishing wrong addresses to DGFT / Customs. The Board may also be kept informed so that the matter can also be taken up with the DGFT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We know an importer who got a Show Cause Notice in spite of submitting the Bank Realization Certificates. Obviously a hyperactive Commissionerate or there is no system to correlate the documents. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/instruction11_001.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Instruction in F.No. 609/119/2010-DBK., Dated: January 18, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Verification Mechanism And Monitoring Of Export Obligation (EO) Under Duty Exemption/Reward Schemes - Board Directions </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> <em>Circular Nos. 26/2009-Cus. dt. 30.09.2009 and 5/2010-Cus. dt.16.03.2010</em>, instructions were issued regarding verification mechanism and monitoring of Export Obligation(EO) under duty exemption/reward schemes. It was clarified that: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Verification of genuineness of Duty Credit Scrips issued under Chapter 3 of the FTP should be carried out before allowing registration in terms of para 3.11.3 of the HBP Vol.1 (2009-14). Further, the Commissioner could cause random verification of the Shipping Bills based on which said Duty Credit Scrip had been issued. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Export Obligation Discharge Certificate (EODC) issued by DGFT under EPCG Scheme: Fulfilment of export obligation prescribed for the first Block which is at least 50% of the overall export obligation, be verified in detail and if found satisfactory, the EODC issued by the Director General of Foreign Trade(DGFT) at the end of 2nd Block was to be accepted without further verification unless there was a specific intelligence suggesting the need for detailed verification. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Advance Authorization / DFIA Schemes: EODCs may be accepted and detailed verification conducted if there was a specific intelligence suggesting need for such detailed verification. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now Board finds that detailed verification of reward scrips and the EODCs was being conducted inspite of the instructions contained in the Circular No.5/2010-Cus. dt.16.03.2010. [What's new?] </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now Board instructs that: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) The Circular No.5/2010-Cus. is to be implemented rigorously by all field formations. <em><u>For past EPCG cases where the exporter had not come forward for verification after the 1st Block and has submitted the final EODC, the EODCs / Scrips issued by the DGFT should normally be accepted unless there is a reason for detailed verification;</u></em> the AC / DC shall record the reasons in writing in file for such verification . However, random verification of at least 5% of EODCs issued in such past cases may be carried out. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) In cases where Regional Licensing Authority has endorsed on the EODC that customs should verify the Shipping Bills and other documents, the field formations will continue to verify such EODCs till the issue is resolved in consultation with DGFT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) All the Commissioners may immediately formulate an action plan to monitor the Export Obligation in all cases,- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) where the Export Obligation Period (EOP) and the time prescribed for furnishing the EODC has expired but the exporter has not furnished the EODC; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) for EPCG authorizations where the 1st block has expired and the time prescribed for furnishing evidence regarding the extent of block-wise EO fulfilment has expired but the exporter has not furnished the same. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If the EODCs / evidence regarding the extent of EO fulfilment are not furnished, timely action to safeguard revenue may be taken. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) The Customs should strengthen its intelligence machinery and check, in detail, at least 5% of the EODCs / installation of capital goods / availability of inputs imported duty free under the Advance Authorization. An institutional mechanism should be set up whereby the customs officials and the officials of the local RLA meet at least once every quarter, or as per mutually agreed period, to exchange intelligence, check misuse and pursue issues such as EO fulfilment status in cases where Export Obligation period has expired in that quarter/ previous quarter so that concerted action can be taken against the defaulters. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants these instructions to be brought to the notice of all the concerned officers.</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/instruction11_002.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Instruction in F.No. 609/119/2010-DBK., Dated: January 18, 2011 </font></strong></a></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">International Customs Day - India Celebrates Today <br>
</font></strong><font color="#006600"><strong>Knowledge - Catalyst for Customs Excellence </strong></font></font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">INTERNATIONAL</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Customs Day was celebrated all over the World yesterday. Since it happens to be our Republic Day, India celebrates it today. There is a function in the Capital in the evening, in which the Chairman, CBEC will present the WCO Certificate of Merit to 7 officers of the Department and three private representatives, including <strong>TIOL</strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This year the WCO theme is "Knowledge, a catalyst for Customs excellence”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In his message, WCO Secretary General, Kunio Mikuriya says, “In our fast-moving world, Customs administrations need to continuously adjust, often rapidly, to social, economic and political developments. They have to change in response to their experience; monitoring their operations, their environment, and their partners for clues to the efficiency and effectiveness of their performance and delivery. <font color="#FF6633"><strong>An investment in knowledge is an investment in our future</strong></font>” . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Our Finance Minister Pranab Mukherjee says, “The pursuit of knowledge has always been encouraged in the Indian ethos. In the present context of catalysing Customs excellence it becomes an even more worthy pursuit. By enhancing effectiveness and promoting efficiency - it creates a win-win situation for Indian Customs, the trading community and society at large” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue Secretary Sunil Mitra wants introspection and assessment to see how best we can utilise domain knowledge and build expertise for even better performance in the coming days, with the objective of providing our trading community better services in a transparent, equitable and fair manner. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Chairman Dutt Mazumder says, “The Indian Customs administration has always encouraged excellence achieved through acquisition and application of knowledge. In the coming years, I visualise a change in the role and function of the Department for which knowledge upgradation would be a key factor. No Customs initiative can be successful without partnership of our stakeholders. I am happy that this year's celebration of International Customs Day is being marked by honouring both Departmental officers as well as representatives of the private sector. This is symbolic of the new era of Customs – private partnership”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Member (Customs) SK Goel joined the Members of the Indian Customs Department in “rededicating ourselves to continue to work with greater efficiency, effectiveness, transparency and to be innovative and creative in taking forward the knowledge theme in all its facets.” </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Governance Deficit - Enough is Enough - Premji </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WIPRO</strong> Chief Azim Premji is thoroughly disappointed, notwithstanding the Padma Vibhushan the Government gave him. "I am extremely disappointed. I think it is a national calamity and is personally very devastating because one had so much confidence when they (UPA-II) came in", he said in Davos yesterday. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"But I think, it has reached a point of catharsis. And when something reaches a point of catharsis, there seems to be no alternative but to change; "One has reached a point in public governance where one has to take stock... Enough is enough, we have to reform ourselves. If we don't do that, we are not going to leave children behind us proud of the country, despite 8-9 per cent (economic) growth”, he added <br>
</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 align="justify"><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>Goods Cleared to EOU - Not liable to pay duty: High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>OBVIOUSLY</strong>, the assessee committed an error in paying the excise duty. When the said goods were returned because of certain defects, in law they were entitled to claim CENVAT credit which they did. Later, after rectifying the defects in pursuance of a fresh purchase order, they supplied the very same goods to their customer, a 100% EOU. They were under no obligation to pay any duty as payment of duty was exempted vide notification No. 22/2003. On the date of second supply they were also in possession of CT3 certificates. When these facts are not in dispute, though there is no liability on the part of the assessee to pay excise duty, the proceedings initiated against the assessee claiming excise duty was without jurisdiction. </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">Whether when Sec 148 notice is not served on Principal Officer of assessee-company, such notice is to be treated as illegal, and assessment made on its basis is bad in law - Yes, 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 when Sec 148 notice is not served on the Principal Officer of the assessee-company, such notice is illegal, and the assessment order passed on this basis is bad in law. YES is the Tribunal's decision. </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">Imported Cottonseed Oil detained by DRI - Ordered to be sent for chemical examination and clearance to be allowed if found fit: High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SINCE</strong> the directions have been issued merely to obviate the hardships that could be caused to the petitioner on account of an irreversible situation arising in case the petitioner finally succeeds in the adjudication proceedings, it is clarified that the petitioner shall not claim any equity based on this 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>
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