TIOL-DDT 1636 · 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 1636</font><br>
23.06.2011<br>
Thursday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Issue of CHA Licences - Disobedient Commissioners and Gussa Board </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>KENDRIYA</strong> <strong>Utpad Evam Seema Shulk Board</strong> (that is CBEC for you) is again angry and is taking a serious view.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What causes the Board to take a serious view is often the blatant disobedience by the Commissioners and this time it is about granting Custom House Agent licences. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board had earlier directed the Commissioners to grant licences to all eligible candidates and in Circular No. 9/2010 dated 8.4.2010 clearly stipulated that the requirement of number of licences will be determined by market forces and no numerical criterion can be fixed.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has come to know that in spite of the instructions and Circular, “<em>individual Commissioners are still continuing to regulate the number of CHA. Despite qualifying in the examinations and passing additional subjects, licences are still not being granted under Regulation 9 of CHALR, 2004 by concerned Commissioner on the ground that the Commissionerate have to issue a separate public notice inviting fresh applications in this regard.</em>” </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has taken a serious note of non-compliance of its instructions by the Commissioners who are not issuing licence to eligible applicants. </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board reiterates that C<em>ommissioners should not restrict the number of CHAs and shall grant licences to all eligible applicants. A compliance report indicating number of eligible applicants who have been granted licence may be sent by 15.07.2011</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">How many times will the Board view this indiscipline<strong> seriously</strong>? And what happens when the Board is taking a serious view? Absolutely nothing. Board instructions continue to be blatantly disobeyed and with boring regularity Board continues to take a serious view. Either the Board should stop taking a serious view or they should ensure that Commissioners also take them seriously. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_025.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 25/2011-Cus.,Dated: June 22, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Branded Readymade Garments - Excise Duty - Clarifications</font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> has issued clarifications on certain issues raised by the Trade. </font></p>
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Applicability of excise duty on school uniforms, uniforms for private security guards, companies, hotels, airlines etc and made-ups such as linens, towels etc bearing the name or logo of a hotel, restaurant or airlines etc; and
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Applicability of mandatory levy of excise duty on made-ups such as blankets bearing the name of the manufacturer and supplied to the Ministry of Defence or its organisations </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Clarification:</strong> such products would not merit treatment as “branded” products merely because the name of the school, institution or company or their logo is printed, embroidered or etched on them. This is equally true of made ups such as towels, linen etc bearing the name of a hotel, restaurant or airlines. In all these cases, there is no nexus between such a name or logo & the product at the time of its sale which is essential ingredient in the definition of the term “brand name”. Unless such garments/made- ups also bear a brand name in addition to the name or logo of the school, security agency, hotels, airlines and company, such goods would not attract the excise duty. It is also gathered that in some cases, apart from the name or logo of such organisations, the name of the tailor or manufacturer is affixed on such garments. However, mere affixing of name of the tailor or manufacturer would not constitute a brand name. Another related issue is the applicability of the mandatory excise duty to blankets which are supplied to the defence establishment, armed forces, police forces etc against tenders that stipulate that the name of the manufacturer should be clearly indicated or marked on the product. As pointed out above, affixing the name of the manufacturer on such goods would not, by itself, bring them within the ambit of branded goods. </font></p>
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<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ <strong>SSI Benefit: Self-Certification</strong>. Determination of eligibility of a manufacturer or factory to the benefit of small-scale exemption contained in notification no. 8/2003-CE dated 1.3.2003. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Clarification</strong>: Under the exemption, a manufacturer or a factory whose aggregate value of clearances for home consumption did not exceed Rs.4 crore in the preceding financial year is eligible for full exemption on similar clearances not exceeding Rs. 1.5 crore in this financial year. It has already been clarified that a certificate from a chartered Accountant about the aggregate value of clearances for home consumption in the preceding financial year may be accepted. It has now been decided that self certification by a manufacturer may also be accepted for this purpose.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Clarification on Maintenance of records</strong>: Central Excise law does not prescribe any specific record, which is to be maintained by an assessee. Hence records of production, clearance & purchases that are maintained for the purpose of VAT purposes can be accepted for purposes of Central Excise. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2011/excircular947.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 947/8/2011- CX.,Dated: June 21, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Enhanced Exemption to Imports from SAFTA Countries</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION</strong> No. 107/2008 - Cus dated 06.10.2008, allows a 100 percent exemption on certain items and 75 percent exemption on certain items, on the applied rate of Customs Duty. ‘Applied Rate' is the standard rate read with any applicable notification. Now the 75 percent exemption is enhanced to 100 percent. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This exemption is applicable for imports from Bangladesh, Bhutan, Maldives and Nepal. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_049.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 49 /2011-Cus.,Dated: June 21, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Commissioners - Please inform the Board when you correspond with Other Ministries/Departments - National security in Jeopardy? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has observed that the Commissionerates often correspond on sensitive and policy related issues directly with the Ministry of Commerce / DGFT without keeping Board posted.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In one case where sensitive war material was found in a consignment of heavy melting scrap (HMS) despite a certificate to the contrary from an authorized inspection agency listed in Appendix-5, DGFT Hand Book of Procedures (HBP) (Volume -I), the Commissionerate directly referred the matter to DGFT for appropriate action against the said agency without informing the Board. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants the Commissioners to appreciate that matters of policy that have all India ramifications need to be treated with seriousness by being referred to the Board. Examination of such matters by the Board would ensure appropriate action as well as a uniform approach across field formations. For instance, in the referred case of detection of war material it would have been appropriate to alert all field formations to subject similar imports covered by certificate issued by the identified authorized inspection agency to greater scrutiny. However, this could not be done since the Board was not kept informed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Apparently, the Customs has not learnt anything from the Mumbai Blasts! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Board <strong>desires </strong>that whenever the field formations receive a reference from any other Ministry / Department on a matter having policy implication, the Board shall invariably be kept informed. Also, the field formations should generally avoid corresponding directly with other Ministries / Departments on policy matters, but if the same is required to be done the Board should be informed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When serious instructions of the Board are treated with scant respect by the field, can the Board expect its <strong>desire</strong> to be treated any better? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is yet another classic case of gross disobedience. Board had in Circular No. 80/98 - Cus dated 26.10.1998 had clearly instructed the Commissioners, “<strong>Direct correspondence with other Ministries on policy matters may be avoided</strong>”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But disobedience of the Board is the norm rather than the exception with the field formations. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is really a miracle that the Board is able to function with such total disobedience by its field commanders! </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/instruction11_015.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Instruction in F. No. 528/54/2011-STO (TU) ,Dated: June 21, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Extended Period of Warehousing - Request From Shipyards </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has received a request from a unit engaged in the business of design and construction of various categories of vessels which are thereafter exported, for grant of a greater period of warehousing, given the nature of their activity which has long gestation period, to obviate the need for approaching the Customs for extension of warehousing period, every three months. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Circular No. 47/2002-Cus dated 29/07/2002, Commissioner of Customs can extend the period of warehousing for a period not exceeding six months, on sufficient cause being shown and further extensions as deemed fit can be granted by the Chief Commissioner of Customs. Such extension is to be granted in deserving cases for a period not exceeding three months at a time. The conditions for granting extension, are that the goods are not likely to deteriorate during the extended period of warehousing and that interest accrued on the goods in the preceding period should be collected. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now Board suggests that for <em>Goods used in the units operating under manufacture-in-bond scheme and Machinery, equipments and raw materials imported for building and fitment to ships , Chief Commissioner</em><strong> may consider</strong> granting the extension of warehousing period for a period even greater than 3 months, if she/ he is satisfied that the said goods are in good condition and are not likely to deteriorate in quality in the proposed period of extension and also if interest accrued on the goods in the preceding period is realized. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/instruction11_016.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Instruction in F. No 473/02/2011-LC, Dated: June 01, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on Circular Weaving Machines from China - Corrigenda! </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION </strong>No. 10/2011-Cus dated 16.02.2011 imposed anti dumping duty on Circular Weaving Machines imported from China. But the Para 2 of this Notification says that the anti dumping duty shall be applicable to the goods originating in or exported from, China PR and <strong>Israel</strong>. It was never proposed to impose anti dumping duty on goods imported from Israel! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So by a corrigendum dated 15th April 2011, they corrected Israel as Austria. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why Austria? Because Column 4 of the Table to the Notification mentions Country of Origin / Country of Export, as China PR/Austria. It was not proposed to impose the duty on imports from Austria either, at least if you go by the preamble of the Customs anti-dumping notification as well as the DGAD notification dated November 16, 2010 which notified the final findings on the anti-dumping matter. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So by another Corrigendum dated 14th June 2011, they deleted Austria from Column 4. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All fine!, but the first corrigendum still retains Austria!!. Even the DGAD notification shows Austria in the ‘Duty Table' annexed thereto though its preamble does not include Austria. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So now as per the corrected notification, the anti dumping duty is on imports from China but this duty on imports from China and <strong>Austria</strong> will be valid for five years. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It appears that the entire problem in including Austria has its genesis in the notification issued by DGAD notifying the final findings vide Notification No. 14/25/2008-DGAD dated 16th November 2010 which includes ‘Austria' in the Table annexed thereto. The anti-dumping case has a long story involving the Austrian manufacturer who is the parent company of the Chinese subsidiary. It appears that there is also a dispute between the complainants i.e. the domestic industry and the Austrian company before the Company Law Board. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With such genetic defects in manufacturing notifications by both Customs and DGAD, the legality of the anti-dumping duty itself could be questioned in CESTAT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mind boggling experience in the manufacture of notifications! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/corrigendum_11_10_1.htm" target="_blank"><strong>CBEC Corrigendum in F.No.354/31/2010 -TRU; Dated April 15 2011 </strong></a>+ <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/corrigendum_11_10_2.htm" target="_blank"><strong>CBEC Corrigendum in F.No.354/31/2010 -TRU; Dated June 14 2011 </strong></a></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><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">Application for Stay of operation of order of suspension of CHA licence - Distinction has to be made between stay applications usually filed in Tribunal for waiver of predeposit of duty and penalty and stay application against an order of suspension of CHA licence: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> may be a case for interfering with the order of suspension only if there is undue delay in conduct of further investigation and further proceedings and when the delay not being attributable to the applicant. In the present case, no details are available on further proceedings and the reason for delay, if any. </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">Interest tax - Whether interest received by assessee on loans and advances made under Bills Rediscounting Scheme from different banks does not form part of chargeable interest - YES, rules Kolkata HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong>, a Public Financial Institution under Section 4A of the Companies Act, 1956, is mainly engaged in the business of insurance other than that of life insurance and also engaged in the investment activities like purchase and sale of shares, debentures, bonds, government securities etc. - it also provides various types of loans and advances to different companies as well as Credit Institutions under different schemes like term loans, loans under bill rediscounting scheme, loans by way of deposits as call money, loans against mortgage of property, loans to the State Governments for housing and fire fighting equipment etc. </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">Classification - edible grade coconut oil repacked in smaller sachets - not dutiable: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is clear indication that the goods are of edible grade coconut oil. It is also noted that the assessee has always represented to the market, the product as an edible grade coconut oil and not as a hair care oil. It is also to be noted that Revenue has not produced any contrary evidence that the products are not represented to market as edible grade coconut oil. Revenue did not refute the fact of marketing of the said product as edible grade coconut oil by adducing any contrary evidence.</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><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>
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