TIOL-DDT 1544 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!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 1544 </font><br> 07.02.2011 <br> Monday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti-Dumping Duty imposed onSynchronous Digital Hierarchy Transmission Equipment - Petitioners Withdraw SLP in Supreme Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PROVISIONAL</strong> Anti Dumping Duty was imposed on imports of Synchronous Digital Hierarchy transmission equipment, originated in or exported, from China PR and Israel by Notification No. 132/2009 - Cus Dated 08.12.2009. This expired on 07.06.2010. The Government woke up in December and imposed definitive anti dumping duty on 16.12.2010 with effect from 08.12.2009 - the original date of imposition provisional anti dumping. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Telecom equipments company - Vuppalamritha Magnetic Components Ltd along with a number of telecom companies including Tata Teleservices, Idea Cellular and Aircel Ltd had challenged the duty in the Supreme Court. The Supreme had Court observed that the proper course would be to approach the CESTAT. Perhaps sensing the mood of the Court, the petitioners sought permission to withdraw the SLP and on 4 th February, 2011, the Supreme Court disposed of the SLPs as withdrawn. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax on Renting - The Ping Pong - Supreme Court Extends Stay </font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PLEASE</strong> see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12013" target="_blank">DDT 1540 – 01.02.2011</a></strong> for Round No. 1 to 9 of the case. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Round 10: The matter came up in the Supreme Court on 04.02.2011. The Supreme Court has extended the stay till disposal of the writ petitions by the High Court. The Court made the following order. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">UPON hearing counsel the Court made the following O R D E R We are informed by the learned counsel appearing for the respondents that all the Writ petitions pending in the High Court are now listed for final hearing on 15.2.2011. In that view of the matter, we would request the High Court to hear and dispose of all the writ petitions as expeditiously as possible. In view of the aforesaid order passed by us today, we would not like to pass any further order in this case. In terms of this order, the Special Leave Petition is disposed of. The interim order which was passed by this Court on 10.1.2011 would, however, continue to operate till the disposal of the Writ Petitions in the High Court. We would also request the parties not to seek for an adjournment in the High Court unless there is any unavoidable circumstance and compelling reason. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ball is back in Delhi High Court! </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Chief Commissioner is again angry! </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REMEMBER</strong> BR Tripathi ? He is the Chief Commissioner of Customs, Central Excise and Service Tax, Lucknow , angry young man of the Department. For his earlier outbursts, please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=10845" target="_blank">DDT 1359 - 14.05.2010</a></strong> and <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11905" target="_blank">DDT 1524 - 07.01.2011</a></strong> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the vociferous Chief Commissioner takes on the Board. He has sent us this letter which he wants us to give wide circulation. Here is the full text of his letter with no editorial interference – not even on spellings.</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399"><em>Offlate it is noticed by the departmental officers, the duty and tax paying fraternity, consultants and by other stake-holders that so many circulars are emanating from the pigeon holes of the North Block. At times addressed to Chief Commissioners and Director Generals but other times to All Commissioners of Customs (A),Commissioners Customs (P), CDRs and to elk of that kind. 4 circulars were received by the under-signed in the ' tapal ' for 27/01/2011- </em></font></strong></font></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Circular 3/2011- Cus dated 06/01/2011 issued from F.No 450/115/2009 Cus.IV on the subject of <u>"Import of edible/food products-regarding."</u> Addressed to-"Sir/Madam". </font></strong></font></em></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Circular no 01/2011-Customs dated 04/01/2011 issued from F.No 401/179/2009- Cus III on the subject matter of<u> "Provisional release of export-goods detained for investigation-reg."</u> </font></strong></font></em></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Circular no. 06/2011- Cus dated 18/01/2011 issued from F. no 609/119/2010- DBK on the subject matter of <u>"norms of execution of Bank Guarantee in respect of Advance Authorization/duty free import Authorization ( DFIA )/Export Promotion Capital Goods( EPCG ) Scheme-reg." </u></font></strong></font></em></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) Circular No 7/2011 dated 18/01/2011 issued from F.no 609/119/2010- DBK on the subject matter of <u>"export of handicraft and artware items under Drawback Scheme-reg." </u></font></strong></font></em></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. On 27/01/2011 itself on Tax India Online.com I read about an article written by Mr.S . Shivkumar , CA under heading- Remanding of Service Tax refund claims-Appellate Commissioners find ingenious way to reject Board's Circulars. On the efficacy of CBEC Circular no 120/01/2010 dated 18/02/2010 issued from F.No 275/34/2006-CX 8(A), Mr Shiv Kumar is lamenting while highlighting the precarious conditions of the exporters about the settlement of their refund claims. </font></strong></font></em></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. If in less than one month, 4 circulars had been issued from the desk of Customs/drawback side one can imagine by the end of the year how many circulars would be out. Those runs in 3 to 4 pages i.e. at time are larger in lines and number of words than a judgment issued, at times, by Hon'ble Supreme Court/High Court Even the orders of the CESTAT are many a times shorter than CBEC Circular. The CBEC circulars either ends with <u>" Kindly acknowledge receipt of this circular" and invariably with "Difficulty faced, if any, in implementation of this circular may be immediately brought to the notice of the Board." One invites or prompts for other. </u></font></strong></font></em></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. On 27th itself, again I read about the comments made by editorial Board of TI0L published on 19/01/2011 under heading-"Export of handicraft and artware - please obey Board ". </font></strong></font></em></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. The holding of Tariff conference and issuance of tariff advices were foreclosed and issued in the past were recinded in the last decade of the 20th century by the Board. Many a times doubt are expressed about efficacy of CBEC Circulars/instructions which creates more confusion than it clarifies. The Commissioners the Chief Commissioner and the Board under the scheme of Central Excise, Customs and Service tax laws are empowered/authorized to issue circulars, instructions, supplementary instructions, trade notices etc to give effect to the provisions of the acts and the rules i.e. by way of supplementing it or complimenting it. However, generally such instruments are brought in circulation mostly on the strength of the Board's instructions, directions/ orders including statutory orders etc. </font></strong></font></em></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. The Board's instructions should be and ought to have been obeyed and abided by the officers of the field formations as such instruments are issued by the Board, certainty for the length and breadth of the country, being concerned with implementation of such rules/laws and procedures which relates to commodity/services taxation and for which the laws had to be implemented uniformly for the entire territory of India. But many a times the trade, industry, consultants and the tax payers and all others are nurturing the view that Board's Circulars are not being obeyed and is not being implemented by the lower authority, without any risk and that is disobedience no consequences would follow. </font></strong></font></em></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. Be that as it may, I do notice that most of the times what is already known and obvious are being clarified or being ruled by the Board. Secondly the Board's Circulars, either if "modifies to above extent" or it supersedes the earlier circulars. But always the Board advises- <u>"through trade notice or standing order for guidance and strict adherence should be issued by the Commissioners and difficulties if any faced should be brought to the notice of the Board"</u>.</font></strong></font></em></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. I do not feel hesitant or reluctant in acknowledging that the Board's Circulars are not being obeyed through out the length and breadth of the country because of-</font></strong></font></em></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) There is no sense of accountability on account of non-fixing and not fastening on the liability for disobedience-as the " bunderghudki " does not work. </font></strong></font></em></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) One is not sure, when such instructions will stand corrected, modified or overruled on that very subject </font></strong></font></em></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) At times the clarifications are not to the point, rather are on account of a particular representations in a peculiar fact and circumstances of the case or of a group, and it redress only those isolated issue- which is got turned out twisted and those ratio are applied to other cases, giving cause to another circular. </font></strong></font></em></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) The CBEC circulars at times are open to many meanings, constructions and apparently are not that legally sustainable. At times it serves like spoon feeding to new born babies. </font></strong></font></em></p> <p align="justify"><em><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. The communication should be allowed to travel not only from top to bottom, rather at times it should be allowed to travel from bottom to top. Bare minimum circular instructions should be issued. What is not permissible from doors, should not be allowed from windows/ ventilators. Too many clarifications, by way of circulars and instructions, on same subject like provisional release of exports- goods detained for investigation-cannot and should not bound hand and foot, the lower authorities when the senior authorities keep aloofness, showed lack of interest and leadership and displayed an attitude of non-indulgence. Better would be if the Chief Commissioner and Commissioners are held more responsible, accountable and disciplined. At the same time, the CBEC should ensure whether they are getting enriched on legal, technical and financial issue/matters and whether Commissioners and the Chief Commissioners are keeping themselves, abreast and upto date in such fields while keeping their consciousness clear. There would be no harm if there are more intiatives , more interpersonal and visits of Hon'ble member to filed formatives than in approaching the Board's Circular. </font></strong></font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This Chief Commissioner is very vocal but perhaps all other Chief Commissioners share his views – only they don't express them publicly. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Once I took a young colleague to a Central Excise office. We met an Additional Commissioner who had unadulterated contempt for his thoroughly useless Commissioner. We met the Commissioner who told us that his Chief Commissioner was a joker. We called on the Chief Commissioner who honestly believed that he was slightly greater than Manmohan Singh and Montek Singh put together and was sorry that the dunces sitting in the Board would not understand taxation or economics. My young colleague understood the Department thoroughly. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Voluntary Retirement Scheme - Not a Right of Bank Officer - Discretion of the Management </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a landmark judgement, the Supreme Court on Friday ruled that accepting the voluntary retirement of a bank officer was fully the discretion of the management and the officer had no right of VRS. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this case, the Indian Overseas Bank had rejected the VRS application of an officer. The Officer approached the High Court which directed the Bank to reconsider his application. On such reconsideration, the Bank again rejected his application. The Officer again approached the High Court. The Bank submitted that acceptance or rejection of the request for voluntary retirement under the scheme lay within the absolute discretion of the competent authority. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This seems to have offended the High Court and it wrote a rather angry judgment. The High Court observed thatthebank and its officers had acted in a highly arbitrary, discriminatory and mala fide manner and had not shown any respect to the High Court by totally flouting its earlier judgment. It further said that despite the clear observation in its earlier judgment, the bank authorities had again "dared" to take the stand that it was the absolute discretion of the competent authority either to accept or reject the application. The Court went on to say that the Chief Regional Manager of the bank who had filed the counter affidavit had absolutely no respect for the High Court and further that the court was at first inclined to issue a notice of contempt to him for invoking the absolute discretion of the competent authority which, according to the High Court, amounted to grossly contemptuous averments. The High Court, however, refrained from issuing any contempt notice assuming in his favour that he was probably not able to understand what he said in the affidavit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court directed the Bank to accept the officer's application for VRS. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On appeal by the Bank to the Supreme Court, the High Court order was stayed. In the meantime, the officer retired in the normal course and so the Supreme Court asked the parties to come to a settlement, but the officer wanted a decision on merits – and he got it – against him. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Discretion not absolute:</strong> The Supreme Court observed that the discretion vested in the employer is not absolute in the manner <strong>of an unruly horse prancing beyond the control of anyone or anything</strong>. In the 62nd year of the Republic, it is rather late in the day for the State or any of the State's agencies or instrumentalities to claim absolute discretion, like the discretion of a despot or a discretion completely divorced from reasonableness. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But at the same time, the Supreme Court noted, “it must also be realized that reasonableness is not something in the abstract. The reasonableness of a decision or an action can only be judged in the totality of the facts and circumstances and having regard to the object and purpose sought to be achieved. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">it is not difficult to see how the competent authority in the bank would deal with the applications for voluntary retirement made by individual officers; other things being equal between two applicants he would like to let go the one with the inferior service record and lower potential and consequently he would accept the application of the officer with the lower merit and may not accept the request of the officer with superior merit. This is for the simple reason that in the process of shedding surplus manpower no organisation would like to lose its best people.” </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2011/2011-TIOL-14-SC-MISC.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Click here for the judgement </font></strong></a></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">Service Tax</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Penalty - Section 80 does not provide for reducing penalty under Section 76 below prescribed minimum - CESTAT to pass Speaking Orders: High Court </font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> question of law before the High Court is:</font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Whether the penalty under Section 76 of the Finance Act, 1994 can be reduced below the limit prescribed by the section?" </font></em></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The protracted litigation in this case involved an amount of less than one lakh rupees. </font></p> <p><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">Income tax - Sec 10A - Whether foreign exchange gain on account of fluctuation in exchange rate is includible in export turnover even if same is not actually realised by assessee - 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 foreign exchange fluctuation on account of restatement of the amount due on 31st March is to be included in the export turnover while computing the deduction u/s 10A though it was not actually realized. And its answer by the Tribunal is NO. Another question before the Tribunal is - Whether the expenses incurred by the assessee relating to the employees sent abroad for the purpose of training were correctly considered as expenses incurred for providing technical services outside India and to be excluded from the export turnover while computing the deduction u/s 10A. And its answer goes in favour of the assessee. </font></p> <p><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">Customs - DEPB - Transferee not entitled to benefit of DEPB scrips fraudulently obtained by transferor - However Penalty set aside: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue involved in this case is whether the transferee respondents were entitled to the benefit of DEPB scrips fraudulently obtained by the transferor thereof and whether redemption fine and penalty was imposable when goods were not available for confiscation. </font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the Judgements </font></strong></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Time.</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"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p> </body> </html>