TIOL-DDT 1633 · 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 1633</font><br>
20.06.2011<br>
Monday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DEPB Extended for Three Months</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT'S</strong> now official. The DEPB Scheme has been extended. This was announced by the Revenue Secretary last week, the DGFT on Friday issued a Public Notice amending the Handbook of Procedures (vol I) to officially declare the extension. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Para 1.1 of the HBP(vI) reads as,</font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In pursuance of the provisions of paragraph 2.4 of FTP, the Director General of Foreign Trade (DGFT) hereby notifies the compilations known as HBPv1, HBPv2 and Schedule of DEPB rates. These compilations, as amended from time to time, shall remain in force until 31st March 2014, <strong>except DEPB scheme, which shall continue to be operative</strong> <font color="#FF6633"><strong>till 30th June 2011</strong></font>. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now <font color="#FF6633"><em><strong>till 30th June 2011</strong></em></font> it is amended to read as <font color="#FF6633"><em><strong>till 30th September 2011</strong></em></font> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The same para 1.1 of the HBP as on 27.08.2009 read as, </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In pursuance of the provisions of paragraph 2.4 of FTP, the Director General of Foreign Trade (DGFT) hereby notifies the compilations known as HBPv1, HBPv2 and Schedule of DEPB rates. These compilations, as amended from time to time, shall remain in force until 31st March 2014, <strong>except DEPB scheme, which shall continue to be operative till 31st December 2010</strong> <font color="#FF6633"><strong>or till a replacement scheme is announced, whichever is earlier</strong></font>.</font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The 2010 HBP did not contain anything about a replacement scheme. However, it seems the Government is working on a replacement scheme and most probably, it will get merged with the drawback scheme. In any case, Government is serious that the DEPB scheme should end by 30th September 2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DEPB was introduced in the Exim Policy 1997-2002 with effect from 1.4.1997, as an export promotion scheme to allow credit as a specified percentage of FOB value of exports. As with any scheme, the DEPB was marred by intensive litigation, confusion, clarification and fraud. Nearly a thousand cases, more than a hundred circulars and tons of audit objections, notwithstanding, the scheme was very popular with the trade. Even in the very first year of its existence, CAG raised objections about the rates of DEPB. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Come September and it seems to be a final <strong>ADIEU </strong>to DEPB </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn054.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 54/(RE-2010) /2009-2014, Dated: June 17, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Export of cotton - Conditions and modalities </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION</strong> No. 57(RE-2010)/2009-2014 dated 9th June, 2011 has now permitted export of 65 lakh bales of cotton during the current Cotton Year 2010-11 (01.10.2010 to 30.09.2011) subject to registration of contracts with Directorate General of Foreign Trade for export of cotton under ITC(HS) Code 5201 & 5203. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Out of the above quantity of 65 lakh bales, allocation of 55 lakh bales has already been made by the Textile Commissioner, Mumbai in October 2010 and subsequently by DGFT in January, 2011. Accordingly, for balance export of 10 lakh bales (1,70,000 MTs) of cotton, applications are invited for grant of registration certificates, as per the procedure prescribed. Such applications may be sent between 12 noon of Monday 20th June 2011 and 5 pm of Saturday 25th June 2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Allocation will be made as per the following criteria:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ An applicant must have exported cotton in either of the two previous cotton years (1st October to 30th September) 2008-09, 2009-10; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Allocation will be done on a pro-rata basis with a ceiling of 4,250 MTs per IEC (equal to 25, 000 bales) and floor of 100 MTs per IEC. (100 MTs would come to 4 container load; if a standard bale of cotton contains 170 kgs, then 150 such bales would constitute approximately 25 MTs or 1 container load; so 600 bales would be 4 container load); </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ An applicant can apply for a quantity which is the higher of its export of cotton in the two previous cotton years (2008-09 and 2009-10) subject to a quantity ceiling of 4,250 MTs. <strong> All applications must be in Metric Tons (MTs) only</strong>. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Failure to export the allocated quantity within the stipulated time would invite debarment from further allocation. In addition, penal action as per Section 11(2) of the Foreign Trade (D&R) Act would also be initiated. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 11(2) reads as:- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11(2). Where any person makes or abets or attempts to make any export or import in contravention of any provisions of this Act or any rules or order made there under or the Foreign Trade Policy, he shall be liable to a penalty of not less than ten thousand rupees and not more than five times the value of the goods or services or technology in respect of which any contravention is made or attempted to be made, whichever is more . </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn055.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 55/(RE-2010) /2009-2014, Dated: June 17, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs Tableau in R'Day Parade 2012 </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A </strong>new attraction in the 2012 Republic Day parade will be the Customs tableau. It is a great honour to watch the magnificent Republic Day parade and it will be a great achievement to be part of the parade. Great world leaders like Nelson Mandela, Queen Elizabeth, Sukarno, Tito, Sirimavo Bandaranaike had witnessed the parade. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Next year, The Customs Act, 1962 will be completing 50 years and to celebrate this event, the Customs Department is most likely to figure in the Republic Day Parade. Though the present Customs Act is just fifty years old, its earlier version, the Sea Customs Act of 1878 is 133 years old and Customs Laws and Custom Houses existed in India much before these recent enactments. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In an interesting article in <strong>TIOL</strong>, <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=10794"><strong>When I met 'The Wall'</strong></a>, the present Chairman of CBEC, Dutt Mazumder had recalled his exhilarating experience of seeing the Customs Wall in Palmyra on which the Customs Tariff was inscribed. Traders from Damascus to Baghdad and vice-versa were required to pay the taxes as per the rates on the wall. Establishment of engraved Customs Tariff in Palmyra was very much welcomed by Caravan traders, since it provided transparency of taxation and prevented arbitrary tariff fixing by the tax-farmers (present day tax collectors) – a measure of trade facilitation indeed. This tariff was dated 18 th April 137 AD and is declared by the WCO as the first Customs Tariff in the history of mankind. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But
Mazumder does not readily accept the WCO declaration of Palmyra Tariff as
the first Customs Tariff. He says, “during the Mauryan period (c. 350-283
B.C.), Chanakya's Arthasastra laid down in prolific detail the Customs Tariff
on Import and Export of goods from the Mauryan Empire. Perhaps, lack of promotion
or publicity is responsible for ignoring this important historical fact.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Customs Department is getting a chance to be on Centre Stage – let us hope they are able to project the glory of the Department and highlight its achievements in the tableau in the Republic Day parade. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Woman abuses Customs Staff at Mumbai Airport </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Dubai based newspaper, The National reported that a woman questioned about gold and mobile phones she was carrying at Mumbai International Airport hurled abuse and threw her jewellery at customs officials. The UAE national, who is believed to be 50 years old, threatened to commit suicide and demanded that the UAE Consulate intervene. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The report added that she threatened to commit suicide and also said her grandson was unwell and Customs officials would be responsible if anything happened to the child. The woman then lay on the ground and refused to move or sign any papers until UAE Consular officials were called. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems the Customs staff filed a report describing her non-co-operation and seized her goods. Members of the UAE consulate eventually escorted her off the airport premises. </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"> – Tuesday's cases</font></strong></font></strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a></a><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">Customs</font></strong> </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Claim of DEPB/Drawback on goods exported from raw materials imported under exemption Notification No 32/97 Cus - No case to deny benefit under Notification No 32/97 Cus - CESTAT. </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants have imported shoe soles free of duty under Notification No. 32/97-Cus. dated 1.4.97 for the purpose of job work and they have exported shoes after satisfying the prescribed value addition of 10%. They have claimed drawback on some of the Shipping Bills and DEPB benefit on some others which has been allowed by the customs authorities after satisfying themselves that the export value does not include the value of exempted soles received under Notification No. 32/97. Subsequently the authorities have sought to deny exemption under Notification 32/97 </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 when assessee makes a claim u/s 43B, a CA's certificate in place of original tax challan is sufficient to prove that tax was deposited - NO, says ITAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee has claimed deduction of certain sum as envisaged in section 43B. The AO disallowed the same for the want of original challan. Appeal was filed in the ITAT which remanded it to the file of the CIT(A) - In the second round, the CIT(A) disallowed the amount. Before ITAT a cicular of the board was relied upon for the proposition that in relation to the payments covered u/s 43B a certificate of CA was also sufficient. </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">Valuation - Jobwork - Jobworked goods consumed by principal manufacturer and not sold - Rules 10A(i) or (ii) or Rule 8 of Valuation Rules not applicable - CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> provisions of Rule 8 will not get attracted in this case. By elimination of Rule 2 to 10 as they may not apply in a situation like in this case provisions of Rule 11 will apply and Revenue has to take the recourse to provisions of Rule 11 which talks about using reasonable means consistent with the principles and general provisions of these rules read with sub-section (1) of section 4 of Central Excise Act. 1944. Keeping this in mind, the ratio laid down by the Supreme Court in the case of Ujagar Prints and followed by various other decisions of this Tribunal and accepted by Revenue in their various Circulars will squarely apply i.e. to ascertain the assessable value on the cost of materials plus processing charges. </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 Day. </font></p>
<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>
</body>
</html>