TIOL-DDT 1587 · 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 1587 </font><br> 11.04.2011 <br> Monday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Implementation of ‘Self-Assessment' in Customs - Board's Clarifications </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FINANCE</strong> Bill, 2011 stipulates ‘Self-Assessment' of Customs duty in respect of imported and export goods by the importer or exporter, as the case may be. As per the new scheme, while the responsibility for assessment would be shifted to the importer / exporter, the Customs officers would have the power to verify such assessments and make re-assessment, where warranted. Board directs that the new legislative provisions are carefully studied and applied correctly to ensure that there is no disruption in the assessment work, and clearance of imported and export goods continues smoothly. </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Salient features of the self assessment scheme: </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The new Section 17 of the Customs Act, 1962 provides for self-assessment of duty on imported and export goods by the importer or exporter himself by filing a Bill of Entry or Shipping Bill, as the case may be, in the electronic form (new Section 46 or 50). The importer or exporter at the time of self-assessment will ensure that he declares the correct classification, applicable rate of duty, value and benefit of exemption notifications claimed, if any, in respect of the import / export goods while presenting Bill of Entry or Shipping Bill. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Important changes are also made in Section 46 of the Customs Act, 1962 whereby it has been made mandatory for the importer to make entry for the imported goods by presenting a Bill of Entry electronically to the proper officer except for the cases where it is not feasible to make such entry electronically. While this is not a new requirement, it provides a legal basis for electronic filing. Where it is not feasible to file these documents in the System, the <font color="#FF6633"><strong><em>concerned</em></strong></font> Commissioner can allow filing of Bill of Entry in manual mode by the importer. These Bills of Entry would continue to be regulated by Bill of Entry (Forms) Regulations, 1976. <font color="#FF6633"><strong>Interestingly, in the circular, for imported goods, the concerned Commissioner can allow manual filing of Bill of Entry while, for export, Commissioner concerned, can allow manual filing of shipping bill. Maybe for exports the Commissioner does not show as much concern as he does for imports! </strong></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under the new scheme of self-assessment, the Bill of Entry or Shipping Bill that is self-assessed by importer or exporter, as the case may be, may be subject to verification with regard to correctness of classification, value, rate of duty, exemption notification or any other relevant particular having bearing on correct assessment of duty on imported or export goods. Such verification will be done selectively on the basis of the output of the Risk Management System (RMS), which not only provides assured facilitation to those importers having a good track record of compliance but ensures that on the basis of certain rules, intervention, etc. high risk consignments are interdicted for detailed verification before clearance. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">One of the important features of this scheme is that verification of declarations and assessment done by the importer or exporter, except for cases wherein a speaking order has been passed by the proper officer while re-assessing the duty, can also be done at the premises of the importer or exporter. This provision will be applicable as a part of an ‘On Site Post Clearance Audit' (PCA) programme, which is likely to be implemented soon. Suitable legal cover has been provided vide Section 17 and Section 157 of the Customs Act, 1962. The programme is being developed and detailed instructions will follow in due course. Till that time, the current Post Clearance Audit will continue. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In cases, where the importer or exporter is not able to determine the duty liability / make assessment for any reason, except in cases where examination is requested by the importer under proviso to sub-section (1) of Section 46, a request shall be made to the proper officer for assessment of the same under Section 18(a) of the Customs Act, 1962. In this situation an option is available to the proper officer of Customs to resort to provisional assessment of duty by asking the importer / exporter to furnish security as deemed fit by the proper officer for differential duty equal to duty provisionally assessed and duty finally payable after assessment. In this regard, it is clarified that importer should not resort to this provision in a routine manner and it is expected that this would be done in deserving cases only where importer or exporter is not able to assess the goods for duty for want of certain information / documents etc. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Hence, in both the cases where no self-assessment is done and when self-assessment is done and reassessment is required under Section 17, the importer or exporter can opt for provisional assessment of duty by the proper officer of Customs. <strong><em>The difference is that when no self-assessment is done, the provisional assessment shall get converted into final assessment and when self-assessment is done, the provisional assessment shall get converted into re-assessment.</em></strong> Consequential changes are being made in the Customs (Provisional Duty Assessment) Regulations, 1963. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Effective Date:</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The aforementioned changes will come into effect when the Finance Bill is enacted. Board clarifies that all Bills of Entry or Shipping Bills which have been presented either electronically or manually before the date of enactment of the Finance Bill shall be governed by provisions of erstwhile Section 17 or Section 18 of the Customs Act, 1962. <font color="#663399"><strong>(It may be noted that Finance Bill, 2011 was enacted on 08.04.2011 and these provisions have come into effect from that day itself.)</strong></font> </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_017.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No.17/2011- Customs, Dated: 8th April, 2011. </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Arrival Card for Passengers arriving through Land Customs Stations and Sea Ports - Board's Clarification </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD'S</strong> Circular No.16/2011-Customs dated 31.03.2011 [please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12329" target="_blank">DDT 1581 -01.04.2011</a></strong>] has brought out certain changes in Customs part of Arrival Card for passengers arriving at International Airports in India pursuant to Notification No. GSR 113(E) dated 24.02.2011 issued by Ministry of Home Affairs (MHA). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Doubts were raised as to whether the changes made vide Notification No. GSR 113(E) dated 24.02.2011 issued by MHA would also apply to passengers coming from Land Customs Stations and the Sea ports. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The matter was examined in consultation with Ministry of Home Affairs and it is clarified that the new arrival card vide MHA Notification No. GSR 113(E) dated 24.02.2011 should also be used by the Customs Authorities at Land Customs Station or the Sea Port. In this regard, it is further clarified that against the Column ‘Flight Number', it can be mentioned either as “Not Applicable” or details of train / vessel could be filled in. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board's Circular No.16/2011-Customs dated 31.03.2011 stands modified to the above extent. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_018.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No.18/2011-Customs, Dated: 8th April, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Levy of ECess and SHE Cess when services are exempted from ‘whole of service tax' - Board's Clarification </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> received representations from field formations, seeking clarification regarding applicability of service tax exemption to Education Cess (refers to both Education Cess leviable under Finance (No.2) Act, 2004 and Secondary and Higher Education Cess leviable under Finance Act, 2007), under notifications where ‘whole of service tax' stands exempted. Apparently, the doubts arise in the context of Tribunal's Order in the matter of <em>M/s. Balasore Alloys Ltd. Vs CCE, Customs and Service Tax, BBSR-I</em> </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2010/2010-TIOL-1659-CESTAT-KOL.htm" target="_blank">(2010-TIOL-1659-CESTAT-KOL</a></em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2010/2010-TIOL-1659-CESTAT-KOL.htm">)</a></strong>.</font> </p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After examining the issue Board clarifies as follows: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though Tribunal's Order referred above is in favor of revenue, it is inconsistent with the policy intention of the Government to exempt education cess in addition to service tax, where ‘whole of service tax' stands exempted. According to section 95(1) of Finance (No.2) Act, 2004 and section 140(1) of Finance Act, 2007, Education Cess and Secondary and Higher Education Cess are leviable and collected as service tax, and when whole of service tax is exempt, the same applies to education cess as well. Since Education Cess is levied and collected as percentage of service tax, when and wherever service tax is NIL by virtue of exemption, Education Cess would also be NIL. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This being the principle, field formations are directed not to initiate proceedings to recover the education cess, where ‘whole of service tax' stands exempted under the notification. Extending the same principle, where education cess has been refunded to exporters along with service tax, by virtue of exemption notifications where ‘whole of service tax' is exempt, the same need not be recovered. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please recall our story, Setback to exporting community – <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12063"><strong>Tribunal rules no refund of education cess under Notification No 41/2007 ST for services used in goods exported</strong></a>, reacting to which a netizen remarked in our “message Board”, “ It is very sad for the exporting community to have such an order which in my opinion is weak on the findings vis-a-vis the levy. xxxx The basic intention of the GOI was to provide the refund of all taxes and levies used for export. Hence in my personal opinion there is an infirmity in the opinion of the Tribunal…. ” </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">For once, it is refreshing to note that Board has taken a pragmatic view to mitigate unwarranted litigation in such matters even disregarding CESTAT's order in favour of Revenue. This is how the Board should work; maybe the Board should review some more favourable decisions, which it knows to be against the intention of the Law and issue such directions. </font></strong></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2011/sercir134.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 134/3/2011–ST, Dated: 8th April, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Be a Little more responsible while arresting Customs Officers! </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MALAYSIA</strong> Customs Officers Union president urged the Malaysian Anti-Corruption Commission, to be more responsible when making arrests. He said many arrested Customs officers were later released without being charged as investigations revealed that they had done nothing wrong. He cited the example of a senior lady officer who was arrested but released later as they could not find any evidence of wrongdoing, reported the newstaitstimes. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Huge Win for Revenue before CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a path breaking judgement, a Division Bench of the CESTAT upheld every plea of the Revenue and dismissed the assessee's appeal on all counts including penalty under both the sections – 76 and 78. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal held, <strong>Services covered under works contract service taxable even prior to 1.6.2007 – Section 65(105) (ZZZZa) is more like heading 98.01 of India Customs Tariff - Penalty under both section 76 and 78 imposable</strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal even relied on a decision of the Tribunal which was set aside by the High Court and held that another order of the High Court is not a binding precedent as the High Court had not explained as to how prior to 1.6.07, the type of contracts mentioned in Explanation to Section 65(105) (ZZZZa) were not taxable under Section 65 (105) (ZZd), 65 (105) (ZZq) or 65 (105) (ZZZh). </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>We will bring you this case on Wednesday. </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Jurispruden<font color="#FF6633" size="4">tiol</font> – Wednesday's cases</strong></font></p> <p><strong><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"></font><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">TDS - Whether even if findings of AO are not conclusive but assessee accepts quantum proceedings, it warrants levy of penalty for deducting tax at source under wrong provisions of law - NO: Delhi High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> question before the High Court is - Whether, even if findings of AO are not conclusive but the assessee accepts quantum proceedings, it warrants imposition of penalty for deducting tax at source under wrong Sections of the Act. And the High Court says NO. </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">Conversion of shipping bills from one scheme to another - Exporter could not claim amendment in routine and as a matter of right. The discretion is vested in Proper Officer to permit amendment - High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FROM</strong> the plain reading of Section 149, it may be seen that exporter could not claim amendment in routine and as a matter of right. The discretion is vested in the Proper Officer to permit amendment in any document after the same has been presented in the Customs house. Though this discretion was to be exercised judiciously, but it was qualified with the proviso that the amendment could be allowed only if it was based on the documentary evidence in existence at the time the goods were exported. </font></p> <p align="justify"><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tomorrow is a holiday – <font size="3">Sri Ram Navami</font></font></strong></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Wednesday for the judgements</font></strong></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Wednesday with more <strong>DDT</strong></font></p> <p align="left"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day. </font></p> <div 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> </div> </body> </html>