TIOL-DDT 1556 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">TIOL-DDT 1556</font> <br>
24.02.2011 <br>
Thursday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - Exempted Goods - File Bill of Entry - CBEC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Notification No.3/89-Customs, dated 09.1.1989, "Goods intended for display or demonstration at an event" are exempted from the whole of the duty of customs specified in First schedule to the Customs Tariff Act and whole of additional duty of customs specified in Section 3 of the Customs Tariff Act. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But it has been reported by some Custom Houses that in many cases where imported Goods intended for display or demonstration at an event under Notification No. 3/89-Customs, dated 09.1.1989, as amended, no Bill of Entry are filed in those cases. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has decided that in all cases of importation of goods under Notification No. 3/89-Customs, dated 09.1.1989, as amended, a Bill of Entry is required to be filed in terms of section 46 of the Customs Act, 1962, even though no duty is payable under Notification No. 3/89-Customs, dated 09.1.1989. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/instruction11_004.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F. No.401 /202/2010- Cus III ; Dated: February 22, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Yashwant Sinha wants Income Tax Exemption Limit to be Enhanced</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FORMER</strong> Finance Minister and present Chairman of the Standing Committee on Finance, Yashwant Sinha wants the FM to raise the income tax exemption limit to Rs. 2 Lakhs. Sinha wants the FM to introduce some parts of the proposed DTC in this budget. Though DTC is with the Committee, Sinha wants the FM to introduce some of the more acceptable non controversial provision of DTC , in the current budget. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On Income Tax exemptions, the BJP leaders are very liberal - when they are in the opposition! </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Why Should Government Claim Immunity from Promissory Estoppel? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a recent judgement, the Supreme Court lucidly explained the concept of Promissory Estoppel and its applicability to Government. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed:- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under our jurisprudence, the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the Judge of its own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The law may, therefore, now be taken to be settled that where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promisee , acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee , notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>It is elementary that in a republic governed by the rule of law, no one, howsoever high or low, is above the law.</strong> Everyone is subject to the law as fully and completely as any other and the Government is no exception. It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned: the former is equally bound as the latter. It is indeed difficult to see on what principle can a Government, committed to the rule of law, claim immunity from the doctrine of promissory estoppel. Can the Government say that it is under no obligation to act in a manner that is fair and just or that it is not bound by considerations of "honesty and good faith"? Why should the Government not be held to a high "standard of rectangular rectitude while dealing with its citizens"? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There was a time when the doctrine of executive necessity was regarded as sufficient justification for the Government to repudiate even its contractual obligations; but, let it be said to the eternal glory of this Court, this doctrine was emphatically negatived and the supremacy of the rule of law was established. It was laid down by this Court that the Government cannot claim to be immune from the applicability of the rule of promissory estoppel and repudiate a promise made by it on the ground that such promise may fetter its future executive action. If the Government does not want its freedom of executive action to be hampered or restricted, the Government need not make a promise knowing or intending that it would be acted on by the promisee and the promisee would alter his position relying upon it. But if the Government makes such a promise and the promisee acts in reliance upon it and alters his position, there is no reason why the Government should not be compelled to make good such promise like any other private individual. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The law cannot acquire legitimacy and gain social acceptance unless it accords with the moral values of the society and the constant endeavour of the Courts and the legislature, must, therefore, be to close the gap between law and morality and bring about as near an approximation between the two as possible. The doctrine of promissory estoppel is a significant judicial contribution in that direction. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But it is necessary to point out that since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires. If it can be shown by the Government that having regard to the facts as they have transpired, it would be inequitable to hold the Government to the promise made by it, the Court would not raise equity in favour of the promisee and enforce the promise against the Government. The doctrine of promissory estoppel would be displaced in such a case because, on the facts, equity would not require that the Government should be held bound by the promise made by it. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When the Government is able to show that in view of the facts as have transpired since the making of the promise, public interest would be prejudiced if the Government were required to carry out the promise, the Court would have to balance the public interest in the Government carrying out a promise made to a citizen which has induced the citizen to act upon it and alter his position and the public interest likely to suffer if the promise were required to be carried out by the Government and determine which way the equity lies. It would not be enough for the Government just to say that public interest requires that the Government should not be compelled to carry out the promise or that the public interest would suffer if the Government were required to honour it. The Government cannot, claim to be exempt from the liability to carry out the promise "on some indefinite and undisclosed ground of necessity or expediency", nor can the Government claim to be the sole Judge of its liability and repudiate it "on an ex parte appraisement of the circumstances". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If the Government wants to resist the liability, it will have to disclose to the Court what are the facts and circumstances on account of which the Government claims to be exempt from the liability and it would be for the Court to decide whether those facts and circumstances are such as to render it inequitable to enforce the liability against the Government. Mere claim of change of policy would not be sufficient to exonerate the Government from the liability: the Government would have to show what precisely is the changed policy and also its reason and justification so that the Court can judge for itself which way the public interest lies and what the equity of the case demands. It is only if the Court is satisfied, on proper and adequate material placed by the Government, that overriding public interest requires that the Government should not be held bound by the promise but should be free to act unfettered by it, that the Court would refuse to enforce the promise against the Government. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Court would not act on the mere ipse dixit of the Government, for it is the Court which has to decide and not the Government whether the Government should be held exempt from liability. This is the essence of the rule of law. The burden would be upon the Government to show that the public interest in the Government acting otherwise than in accordance with the promise is so overwhelming that it would be inequitable to hold the Government bound by the promise and the Court would insist on a highly rigorous standard of proof in the discharge of this burden. But even where there is no such overriding public interest, it may still be competent to the Government to resile from the promise "on giving reasonable notice, which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position" provided of course it is possible for the promisee to restore status quo ante. If, however, the promisee cannot resume his position, the promise would become final and irrevocable. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The doctrine of Promissory Estoppel is an equitable remedy and has to be moulded depending on the facts of each case and not straight jacketed into pigeon holes. In other words, there cannot be any hard and fast rule for applying the doctrine of Promissory Estoppel but the doctrine has to evolve and expand itself so as to do justice between the parties and ensure equity between the parties i.e. both the promissor and the promisee . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We will bring you this case tomorrow. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Today is Central Excise Day - New ACES </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> Excise Officers all over the country will be celebrating Central Excise Day today. Officers at the level of Inspectors and Superintendents of Central Excise are not happy with their promotion prospects and some associations even contemplated boycotting the celebrations. It seems there are Inspectors and Superintendents with nearly twenty years of service in the same post, eagerly waiting for that much elusive promotion.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT asked at least 15 officers as to why Central Excise Day is celebrated on 24 th February and surprisingly, none of them had a clue.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC is to launch a new look ACES today as part of the Central Excise Day Celebrations. Let us hope it does not complicate matters - further.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">TIOL greets all the Central Excise officers on Central Excise Day.</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">Service Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification 1/2006-ST - Condition of not taking "credit of duty paid on inputs or capital goods used for providing such taxable service" necessarily should relate to the services actually rendered: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION</strong> 1/2006-ST allowed abatement of 75% of the taxable value for the purpose of discharge of service tax under the category of GTA service on the condition that the service provider had not availed credit on inputs and capital goods and input services used for providing the service. Exemption is also subject to the condition that the service provider has not availed the benefit of Notification no. 12/03-ST dated 20.6.2003. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Sec 132 - Whether when assessee makes prima facie case against validity of search, Income Tax Department is obliged to share information relating to 'reasons to believe' for authorising search except source of information - YES, says High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> two
issues are - Whether when assessee makes a prima facie case against validity
of search, Revenue is obliged to share information relating to 'reasons to
believe' for authorising search except the source of information and Whether
Income tax can conduct search in SEZ area without taking prior approval of
Development Commissioner. And the answers to the first goes in favour of
the assessee and the other in favour of Revenue.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Sales
Tax</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>It is indeed difficult to see on what principle can a Government, committed
to the rule of law, claim immunity from the doctrine of promissory estoppel,
but it must yield when the equity so requires: Supreme Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue that
falls for consideration in this appeal is whether the Respondent is entitled
to the benefit of Sales Tax exemption on the entire investment made by them
in setting up the industrial unit i.e. Solvent Extraction Plant, or on the
investments made up till 16.12.1996, the date on which the exemption granted
under Rule 28A of the Haryana Sales Tax Rules ("HSTR" for
short) was withdrawn by the State by putting the Solvent extraction plant in
the negative list.</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 Time. </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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