TIOL-DDT 1578 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1578 </font><br>
29.03.2011 <br>
Tuesday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central
Excise - Who need not file Electronic ER-4 RETURN? - CBEC Clarifies </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=10986" target="_blank"><strong>DDT 1379-14.06.2010</strong></a>, we raised this question,</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>As per Rule 12 (2) of the Central Excise Rules, every assessee shall submit to the Superintendent of Central Excise, an Annual Financial Information Statement for the preceding financial year to which the statement relates in the form specified by notification by the Board by 30th day of November of the succeeding year. [Board has by Notification No. 36/2004 prescribed the Form ER-4]</em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided that where an assessee has paid total duty of rupees ten lakh or more including the amount of duty paid by utilization of CENVAT credit in the preceding financial year, he shall file the said Annual Financial Information Statement electronically: </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Government may, by notification, and subject to such conditions or limitations as may be specified in such notification, specify assessee or class of assessees who may not require to submit such an Annual Financial Information Statement. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Assessees who have paid a duty of less than Rs. 1 crore through PLA (Account current) during any financial year were not required to file this return, as per Notification 17/2006 CE NT Dated 01.08.2006 (Earlier 35/2004 CE NT). </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This condition has been amended vide Notification 42/2008 CE NT Dated 29.09.2008 whereby, those who have paid a duty of less than Rs. 1 Crore, irrespective of the mode of payment (PLA or utilization of CENVAT credit) alone are entitled for exemption. In other words, those who have paid a duty of over Rs. 1 crore, either by way of PLA (Account current) or by way of utilization of CENVAT credit or both, shall file this return. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Notification No. 20/2010-CX.,(N.T.), Dated: May 18, 2010, a proviso was added to Rule 12, </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Provided that where an assessee has paid total duty of rupees ten lakh or more including the amount of duty paid by utilization of CENVAT credit in the preceding financial year, he shall file the said Annual Financial Information Statement electronically:” </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, now the situation is </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If you have paid more than Rs. 10 Lakhs duty, you are required to file ER-4 electronically. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">If your duty payment is less than one Crore Rupees, you are not required to file the ER-4 return at all. </font></strong></font></em></p>
<p align="justify"><font color="#FF6633"><strong><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When you are not required to file the return at all, where is the question of filing them electronically? </font></em></strong></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will the CBEC clarify? And what about ER-5 and ER-6?</font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now CBEC has clarified that, “The exemption provided under Notification.17/2006-Central Excise (NT) dated 01.08.2006 and Notification No. 39i2004-Central Excise (NT), dated 25.11.2004, as amended, is available to interalia assessee who paid duty of excise less than Rs.1crore including the amount paid by utilization of CENVAT credit. It is, therefore, clarified that the assessees or class of assessees who are not required to file the ER-4, ER-5 & ER-6 returns because of the above exemption, <em><strong>are not required to file such returns electronically</strong></em> even if the duty paid by them including the amount paid by utilization of CENVAT credit in the preceding financial year exceeds Rs.10l acs.” </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2011/file_209_15_2011.htm" target="_blank">CBEC Letter in F. No. 209/03/11-CX-6 Dated: February 15, 2011 </a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG Objection not clear – Customs Reply confusing – report goes to President!</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CAG is the official fault finder of the Government of India. Extracted below are three paras from the CAG's latest report to the President of India on Customs. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>M/s Abxxx and M/s Euxxxx, two EOUs under Pune II Commissionerate, manufacturing cotton yarn from duty free imported raw cotton, cleared ‘cotton waste' (arising out of the production process) in DTA during the period 2005 to 2009 at ‘nil' rate of Central Excise duty under the notification no.23/2003-CE dated 31 March 2003. Since effective basic customs duty and CVD under the notification were ‘nil' for DTA sale, the cotton waste was </em></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span"><em>non excisable</em></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em> in terms of paragraph 6.8 (j) of the FTP 2004-2009. Therefore, duty of Rs. 75.86 lakh was payable on that portion of inputs which was generating the cotton waste. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When we pointed this out (December 2009), the department stated (March 2010) that cotton waste classifiable under Central Excise Tariff Act (CETA), 1985 heading 5202 was excisable and attracted ‘nil' rate of duty. It was also stated that cotton waste could not be considered as non excisable merely because it was not liable for duty as per first schedule of CETA or under some exemption notification. The department's reply is not acceptable. This was a case of DTA sale of goods manufactured by EOU, where BCD and CVD was ‘nil' rendering such goods (‘cotton waste' in this case) as non excisable for payment of duty in terms of aforesaid paragraph 6.8 (j) of the FTP. This was communicated to the department in August 2010, its response had not been received (December 2010). </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We reported (October 2010) the matter to the Ministry; its response had not been received (December 2010). </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On this somebody made a marginal remark - </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span"><em>non excisable</em></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> - <font color="#FF6633"><strong><em>Not clear; Even cus reply part confusing.. please show the DAP file and discuss. </em></strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the report has gone to the President of India with this marginal comment. It is not known whether the DAP file was shown and discussed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Obviously this is how CAG reports are prepared – objections are not clear and replies are confusing and the poor President, Parliament and Press are to consider these reports as sacrosanct! </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Politicians Blocking rail and road - Waging war against nation</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Rajasthan High Court has sought explanation from the Central and State governments, as to why elected representatives participating in or supporting agitations which led to rail and road blockades, should not be booked for waging war against the country. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">India Pak Cricket Match Fixed? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MY</strong> domestic help is an ardent cricket fan and during cricket matches, I have to arrange my schedules according to the timings of the match. So I asked him what the arrangements were for Wednesday for the mega match between India and Pakistan. He told me that it would be the normal schedule as he was not interested in the match as it was fixed. Newspaper reports are doing the rounds that a former Income Tax Commissioner has claimed that he has information that the match has been fixed and India is going to lose deliberately. Gamblers from all around the world have spent billions of dollars on an Indian victory against Pakistan in the epic fixture and ‘bookies' were not prepared to lose out all that money. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now India has to really win that match tomorrow to disprove these allegations. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> Corruption creating chaos in India </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Pakistan Observer carried a story yesterday with the above caption. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The article says, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Especially since the 1971 defeat of the Pakistan Army in the east, the ISI has been seeking to weaken - and if possible destroy - the Indian State. The organisation has been funding, training and equipping multiple sources in India and abroad in furtherance of this objective. However, it has thus far had very little success, mainly because India is too big and too un-coordinated to suffer serious damage from the kind of tactics that the ISI specialises in. However, over the years, an enemy of the Indian people has emerged that is proving to be a potent threat to the future of the Indian Union. This is the shameless, uncontrolled greed of those at the apex of the political system in India. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Xxxxx</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Unless Manmohan Singh takes courage in his hands and stands with Chief Justice of India Kapadia in cleansing the highest levels of his government of corruption,India is in trouble. Only a cleanup at the top can save the country from losing its future,and time is running out for the PM.Soon,unless at least a few big fish go to jail, he will be so politically weakened that resignation will be the only option. Yet another good man will get sacrificed to keep the Money Machine of the Apex of Greed functioning. Should the PM fail in implementing the will of the Chief Justice,the only solution may lie in the streets.” </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"> – Wednesday'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">Customs</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Refund rejected as petitioner could not prove that they had not passed on incidence of duty - No reason to interfere with Tribunal's Order: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REFUND</strong> was to be paid in accordance with the provision of the Act. The petitioner could not produce relevant documents to show that they had not passed the incidence of duty to the customers/consumers. The order dated 2nd June, 1994 passed by the Assistant Collector of Customs, records that repeated opportunities were granted to the petitioner to furnish proof to the effect that the burden/element of duty was not been passed to the customers/consumers, but no documents were produced to substantiate the case. </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 where entire undertaking is transferred as per arrangement approved by HC against preference shares, it can be said to be slump sale for purpose of Sec 2(42C) or only an exchange - this is a case of exchange: ITAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> key issues before the Tribunal are - Whether where the whole undertaking is transferred as per the arrangement approved by the High Court u/s 391 & 394 of the Companies Act against the preference shares, it can be said to be a sale for the purpose of section 2(42C) or only an exchange – Whether where the cost of acquisition and/or the date of acquisition of the asset cannot be determined, it cannot be brought within the purview of section 45 for levy and computation of capital gains. And the verdict goes in favour of the assessee. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">CENVAT Credit - penalty could be levied on person who did not actually deliver goods and merely issued a fake invoice: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> person who purports to sell goods cannot say that he was not a person concerned with the selling of goods and merely issued invoice or that he did not contravene a provision relating to evasion of duty. The appellant issued invoices without delivery of goods with intent to enable evasion of duty to which effect a finding has been recorded and which finding has not been challenged. Appellant was liable to pay penalty.</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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