TIOL-DDT 1552 · 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 1552</font><br> 18.02.2011<br> Friday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Disputes Between Government and PSUs - No More Committee on Disputes </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> OIL AND NATURAL GAS COMMISSION v COLLECTOR OF CENTRAL EXCISE – <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2002/2002-TIOL-196-SC-CX.htm" target="_blank"><font size="1"><em>2002–TIOL–196–SC-CX</em></font></a></strong>, the Supreme Court delivered a landmark ruling that no dispute between a Public sector Undertaking and a Central Ministry should go to any court or tribunal without clearance from a high power Committee of Secretaries, known earlier as COS (Committee of Secretaries) and now as COD (Committee on Disputes)</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Writing in the ELT dated 01.04.2003, I had commented, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“ After 10 years of the Supreme Court's order, today the concept of Public Sector Undertaking has totally changed, What with a minister for disinvestment vigorously pursuing disinvestments and hoping to collect more than the whole year's customs revenue, from selling PSUs, the PSUs are not really that Public. Today the Government's share in many of the major PSUs is less than 50%. And the management control is also in private hands. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court's decision in the ONGC case was in the context of one wing of the Government spending money and time against another wing and wasting the time of the courts – all for nothing. But today when the PSUs are not really PSUs , and when management control is in the hands of private agencies, the question of wasting one department's money and time against another department may not be all that valid. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I humbly suggest that the matter may be taken back to the hon'ble Supreme Court to decide whether in the context of large privatisation, the ONGC order is still valid.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=1146" target="_blank">DDT 52 11 02 2005</a></strong>, I had questioned, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“How much of paper, stationery and precious man hours are wasted for this totally avoidable procedure? Should valuable judicial time be spent in dismissing and restoring the appeals by PSUs ? In the court, precious time is lost on this insignificant piece of work. The members have to pronounce the order in the court, somebody has to type it out and make about 20 copies, the honourable members have to sign it and then the registry has to issue a certified copy and then despatch it to several people - at the time of dismissing the appeal. At the time of restoration –ditto!.Can we really afford this luxury? </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why can't we do away with this useless unproductive work? Why can't we change the law so that PSUs can file their appeals after obtaining clearance from COD? If they <strong>don't give it</strong> (Strictly, the COD cannot refuse permission to appeal; In Canara Bank v Power Grid Corporation of India Ltd, the Delhi High Court held that <strong>“it does not lie with the High Power Committee to refuse clearance; it has only two options - either to resolve the dispute or to grant clearance for the litigation.</strong>”) at least the appeal papers can be saved.” </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Supreme Court is of the opinion that the working of the COD has failed and the mechanism has not achieved the results for which it was constituted and has in fact led to delays in litigation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Supreme Court has recalled the ONGC orders and now there is no requirement of COD clearance for </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Disputes between PSUs and Government Departments.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Disputes between PSUs.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Disputes between government Departments. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now all these cases can be directly agitated in the Tribunals and courts without going through the complicated COD route. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I had suggested this eight years ago. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this landmark decision of the Supreme Court today. As usual we are the first to bring this case delivered yesterday. In another hour, all the other tax sites will carry it – from us. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12094" target="_blank">Breaking News</a></strong>. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">The Crowded COD – CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CESTAT (CEGAT as it then was) made some interesting comments on the working of the COD in <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2002/2002-TIOL-398-CESTAT-DEL-LB.htm" target="_blank"><font size="1"><em>2002-TIOL-398-CESTAT-DEL-LB</em></font></a></strong>. The Tribunal observed, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Such High Power Committee should, as per the decision, endeavour to resolve the matters in dispute. If that Committee is unable to resolve the matter for reasons to be recorded by it shall grant clearance for the litigation. Scant respect to this mandate of the Supreme Court has been shown by the High Power Committee. Committee did not take any measure to resolve the dispute or controversy between the Public Sector Undertaking and the Revenue Ministry. Minutes of the meeting of the High Power Committee which met on 10-6-1999 to consider the fate of appeals of ONGC were made available to us. Forty persons were present at the meeting of this High Power Committee which took up many cases. The decision arrived at by this crowded body as seen from the minutes is : </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“The Committee, having regard to the fact that the disputes in the above cases at serial Nos. 17 and 18 involved mixed questions of law and fact, permitted Oil and Natural Gas Corporation Ltd. to pursue the appeals in CEGAT .” </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Questions of law and facts will arise in disputes before Tribunals and Courts. Such disputes are to be resolved by the High Power Committee. No attempt in this direction was seen to have been made in the instant case. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Power Committee in the case on hand dealt with the issue in a casual manner only to give an impression that the direction of the Supreme Court is complied with. Committee should not have approached the issue to say the least, in the casual manner adopted at its meeting held on 10-6-1996. </font></em></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 11C Exemption for Chapter 68 Goods manufactured at Construction site</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Serial No. 10 of the table to the Notification No. 5/2006 – Central Excise dated 01.03.2006, goods falling under Chapter 68 (except 6804, 6805, 6811, 6812 and 6813), in which more than 25% by weight of red mud, press mud or blast furnace slag or one or more of these materials, have been used, manufactured at the site of construction for use in construction work at such site were exempted. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Notification No. 15/2009 dated 07.07.2009, the exemption was extended to all goods under the tariff heading with no restriction on <em>25% by weight of red mud, press mud or blast furnace slag</em>.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But it appears that nobody was paying duty since 01.03.2006 and so now the government has exempted the duty for the period 1st March, 2006 to 6th July, 2009 (Both inclusive) subject to fulfillment of condition that the benefit under this notification shall not be admissible unless the unit claiming benefit in terms of this notification reverse the input credit, if any, taken in respect of inputs used in manufacture of such goods on which the said duty of excise was not levied during the aforesaid period. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2011/exnt11_01.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 01/2011 Central Excise (N.T.), Dated : February 17, 2011 </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"> – Monday's cases</font></strong></font></strong></font></p> <p><font 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"><strong><font color="#663399">Central Excise</font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 11D - Applicable even on amount collected as representing duty by depot though depot is not liable to pay any excise duty: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SUB</strong>-Section (1) of Section 11D is to the effect that person who is liable to pay the duty under this Act has collected any amount in excess of duty paid, such excess collection represented as duty of Excise, is required to be paid to the Revenue. Simple and plain interpretation of the above provision implies that the Section provides for payment of such excess amount collected as duty of Excise, without going into the economics of the contract price or the fact as to whether such excess amount was profit element of the price or not. The language of said Section is un-ambiguous and no legislative intent is required to be read into. </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 132A - Whether when Revenue receives police information about seizure of cash and silver, it is justified in issuing search warrant, treating seizure as undisclosed assets - YES, says High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the Bench is - Whether issue of warrant of authorization on the basis of information from police authorities is justified on part of Revenue on the reasoning that it had reason to believe that cash and silver which were seized by the police authorities represented undisclosed assets. And the High Court's answer is YES. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Refund - Assessee forced to pay tax - tax deemed to be paid under protest - Claim not barred by limitation: High Court</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> payment made by the assessee was not voluntary and was forced to make the said payment. In such circumstances, the said payment can only be construed as one made under protest. When once the said conclusion based on the above facts are inevitable, then the second proviso to sub section 1 of Section 11B of the Central Excise Act, automatically comes into play. Therefore, the conclusion of the Tribunal in having held that the first respondent made the payment under protest was well justified and the order of the Tribunal in holding that the application made by the first respondent/assessee for refund of the payment made in its application dated 18.08.2006 cannot be thrown out on the ground of limitation. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the Judgements</font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Weekend. </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>