TIOL-DDT 1608 · 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 1608 </font><br>
13.05.2011 <br>
Friday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Prosecution - Board Instruction </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WITH</strong> the enactment of Finance Bill, 2011, prosecution in Service Tax is now a reality. Board has issued instructions on this new persecution. Board says, “<em>prosecution is meant to contain and tackle certain specified serious violations; Since the objective of the prosecution provision is mainly to develop a holistic compliance culture among the tax payers, it is expected that the instructions will be followed in letter and spirit.</em>” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sanction for prosecution has to be accorded by the Chief Commissioner of Central Excise, in terms of the section 89(4) of the Finance Act, 1994. In accordance with Notification 3/2004-ST dated 11 th March 2004, Director General of Central Excise Intelligence (DGCEI), can exercise the power of Chief Commissioner of Central Excise, throughout India. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has decided that monetary limit for prosecution will be Rupees Ten Lakh in the case of offences specified in section 89(1) of Finance Act, 1994, to ensure better utilization of manpower, time and resources of the field formations. Therefore, where an offence specified in section 89(1), involves an amount of less than Rupees Ten Lakh, such case need not be considered for launching prosecution. However the monetary limit will not apply in the case of repeat offence. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provisions relating to prosecution are to be exercised with due diligence, caution and responsibility after carefully weighing all the facts on record. Prosecution should not be launched merely on matters of technicalities. Evidence regarding the specified offence should be beyond reasonable doubt, to obtain conviction. The sanctioning authority should record detailed reasons for its decision to sanction or not to sanction prosecution, on file. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Prosecution proceedings in a court of law are to be generally initiated after departmental adjudication of an offence has been completed, although there is no legal bar against launch of prosecution before adjudication. Generally, the adjudicator should indicate whether a case is fit for prosecution, though this is not a necessary pre-condition. To launch prosecution against top management of the company, sufficient and clear evidence to show their direct involvement in the offence is required. Once prosecution is sanctioned, complaint should be filed in the appropriate court immediately. If the complaint could not be filed for any reason, the matter should be immediately reported to the authority that sanctioned the prosecution. </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">But who is to file the complaint? This is not clarified either in the Act or the instructions!</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The following are the offences for which prosecution can be launched </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Offences and penalties.</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>89. (1) Whoever commits any of the following offences, namely: - </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) provides any taxable service chargeable to service tax under subsection (1) of section 68 or receives any taxable service chargeable to tax under sub-section (2) of said section, without an invoice issued in accordance with the provisions of this Chapter or the rules made thereunder; or </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) avails and utilises credit of taxes or duty without actual receipt of taxable service or excisable goods either fully or partially in violation of the rules made under the provisions of this Chapter; or </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) maintains false books of account or fails to supply any information which he is required to supply under this Chapter or the rules made thereunder or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information; or </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) collects any amount as service tax but fails to pay the amount so collected to the credit of the Central Government beyond a period of six months from the date on which such payment becomes due.</font></em></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2011/sercir140.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 140/9/2011 – ST., Dated: May 12, 2011</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI and 926 branches of Banks to accept Advance Income Tax</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>926</strong> computerised branches of public and private sector banks will receive advance income tax in Mumbai and Navi Mumbai. These arrangements have been made for the convenience of the income tax assesses. Of the 926 bank branches 862 branches are public sector bank branches, 35 HDFC bank branches, 10 ICICI bank branches and 19 AXIS bank branches. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Reserve Bank of India has advised income tax assesses to take advantage of these standing arrangements made for their convenience. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Long queues and inconveniences can be avoided at the Reserve Bank of India counters if the assesses in Mumbai and Navi Mumbai utilise the services being made available at various designated branches of banks and deposit their income tax dues well in advance of the last date, advises RBI </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT wants to upgrade Infrastructure in offices of CIT(Appeals)</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT</strong> has asked for proposals from CITs(Appeals) to upgrade the infrastructure facilities for their offices and the officers posted in their uinits. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe the CBEC should follow this initiative. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Commissioner (Appeals) is a neglected and insulted post in the Department. They have to depend on a jurisdictional Commissioner for even their minimum needs like paper, computer, car and many other frills of office. Some jurisdictional Commissioners go out of the way to insult the Commissioner (Appeals) and humiliate them. Many of the appellate Commissioners do not have access to ExCus, XCuSE, TIOL etc,. and they don't have independent funds. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Both the Boards should also seriously consider making the offices of the Commissioner (Appeals) look like courts. They should hold open courts at fixed hours and the proceedings should be transparent. As far as possible, orders should be dictated in the open court.</font></p>
<p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/office_memo.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Office Memorandum Dated: May 05, 2011</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Shortage of Customs Officers in SEZs - Board Instructions</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DEPARTMENT</strong> of Commerce has informed the CBEC that a large number of posts of Deputy Commissioners are lying vacant because of shortage of customs officers on account of inability of the Department of Revenue to provide sufficient number of officers at the level of Deputy Commissioner of Customs. It has been mentioned that the Department of Revenue has so far provided only 45 officers against the sanctioned strength of 369 posts of Deputy Commissioner. It has also been mentioned that the officers are placed at the disposal of Department of Commerce for posting in SEZ after considerable delay. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since the Chief Commissioners have already been authorized to post AC/DC level officers in the SEZs, Board wants the Chief Commissioners to take immediate steps for posting of AC/DC level officers as Deputy Commissioner of Customs in the sanctioned SEZs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has recently promoted and posted around 139 Assistant Commissioners in the field formations. Further, 157 Probationers have since been placed at the disposal of the Chief Commissioners as Assistant Commissioners for further posting in different Commissionerates. In view of sufficient number of officers being available at AC/DC level, there should not be any problem for the Chief Commissioners to deploy officers at sanctioned/encadered posts of ACs/DCs in the SEZs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants the Chief Commissioners to ensure that adequate officers at AC/DC level are posted in SEZs immediately. Board wants the Chief Commissioners to confirm the status of posting of AC/DC level officers to SEZs in your zone to the Board by <strong>20.05.2011 positively</strong>. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/deputation/acdcpostings-sez.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Letter F.No. A-35017/39/2008-Ad.II:, Dated: May 09, 2011</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Strange Case – Commissioner (Appeals) passes two orders in same case – CESTAT sets aside both</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>STRANGE</strong> are the ways of our Revenue officers. Here is a classic case of a Commissioner (Appeals) who passed two orders with the same date in the same case, one in favour of the assessee and one against. The Department took the matter to the Tribunal against the order it got, but the assessee submitted that it got a different order. This is how the Tribunal described the case: </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We have found this case to be unprecedented inasmuch as there are two orders of the Commissioner (Appeals) bearing the same number and date but issued on different dates. One was issued on 6.10.2008 and the same is under challenge in the present appeal of the Revenue. The other order was issued on 19.11.2008 and the same was not received by the Commissioner of Customs, Cochin , though it was received by the respondent. Both the orders were apparently passed in an appeal filed by the respondent against Order-in-Original No. 64/2008 dated 13.6.2008 passed by the Joint Commissioner of Customs (SIIB), Cochin. The statement of facts in both the orders passed by the Commissioner (Appeals) appears to be the same. The findings record in the two orders are, however, interestingly different. As the findings are different, the conclusions are also different, one going in favour of the respondent and the other against them. It is, thus, obvious that there was some confusion on the part of the lower appellate authority in the matter of disposing of the assessee's appeal filed against the Order-in-Original. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>We must say that the learned Commissioner (Appeals) should have dealt with the assessee's appeal with such application of mind as expected of an appellate authority and should have avoided this baffling situation .</strong> We have to set aside both the orders of the Commissioner (Appeals) and require him to pass a speaking order afresh on the appeal filed by the assessee against the Joint Commissioner's order, after giving them a reasonable opportunity of being heard. In order to do complete justice in the case, we would invoke Rule 40 of the CESTAT (Procedure) Rules, 1982 to set aside the Order-in-Appeal issued on 19.11.2008 in the absence of an appeal. We have found enough material on record, including the cross-objections filed by the respondent and the miscellaneous application filed by the Revenue, for ourselves to invoke the Rule against the said Order-in-Appeal. </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Rule 40, “<em>The Tribunal shall exercise control over the departmental authorities in relation to all matters arising out of the exercise of the powers or of the discharge of the functions of the Tribunal.</em>”</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But why should the assessee be punished for the blatantly irresponsible order of a Commissioner (Appeals). </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You can see this case in </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=28&filename=legal/cestat/2011/2011-TIOL-521-CESTAT-BANG.htm" target="_blank">2011-TIOL-521-CESTAT-BANG</a></font> </strong></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><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">If main contractor pays Service Tax, should sub-contractor pay - Matter remanded - 'oppressive' circular should be given only prospective effect: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> learned Commissioner, without considering those circulars laid his hands on the circular dated 23.8.2007, which clarified that the sub-contractor was also liable to pay service tax irrespective of any payment of such tax by the main contractor. It appears, the learned Commissioner considered the circular dated 23.8.2007 to be of retrospective operation to cover the period of dispute in this case. One of the contentions which apparently escaped the attention of the learned Commissioner was that an "oppressive" circular should be given only prospective effect and that the benefit of a previous beneficial circular must be given to the assessee. </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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income
tax - Whether tips paid by Customers to employees in restaurants of assessee-hotel
constitute salary within meaning of Ss 15 and 17 - Whether assessees are
liable to deduct tax at source on such payments u/s 192 - YES, rules
HC</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issues
before the High Court are - Whether
tips paid by the customers to the employees in the restaurants of the assessee-hotel
constitute salary within the meaning of Section 15 and Section 17 of the
Act and whether assessees are liable to deduct tax at source on such payments
under Section 192 of the Act. And the verdict goes against the assessees.</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">suspension of CHA licence - Suspension is not a punishment. No need of Notice – Suspension upheld: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Commissioner is empowered to invoke powers in cases like this under Regulation 20 (2) of CHALR. Tribunal found that there is no necessity of putting the party on notice of such action proposed and the material relied on. Suspension is not a punishment. The CHA gets adequate opportunity to present its case before the Commissioner at the post decisional hearing which the CHA is yet to attend pending these proceedings initiated by it. The order is competently and justifiably made. The civil consequences of such an order cannot be avoided. </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>