TIOL-DDT 1645 · the untouched capture
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<!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 1645 </font><br> 06.07.2011<br> Wednesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Summons Under Central Excise/Customs/Service Tax/NDPS - Presence of Lawyer - Not a Right - SC</font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9058"><strong>DDT 1115</strong> </a> had commented;</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the famous <em>Nandini Satpathy</em> case, the Supreme Court held that if an accused person expresses his wish to have his lawyer during examination, this facility should not be denied. It is this case that many lawyers rely on, while insisting on their right to be present when their clients are summoned to give evidence before a Central Excise Officer. But it is often (conveniently) forgotten that the <em>Nandini Satpathy</em> case is not relevant to Central Excise & Customs matters.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <em>Romesh Chandra Mehta V. State of West Bengal</em>, the Supreme Court held that a person who was asked to give evidence under the Sea Customs act is not an accused. In <em>Ilias V. Collector of Customs</em>, Madras, the Supreme Court held that a statement made to a Customs Officer is not hit by Section 25 of the Evidence Act since Customs Officers are not Police Officers (Section 25 of the Evidence Act states “No confession made to a Police Officer shall be proved as against a person accused of any offence.”) Thus the ratio of <em>Nandini Satpathy</em> case is applicable to an accused before a Police Officer, and not to a person summoned under the Central Excise Act or Customs Act, because the person summoned is not an accused and the officer summoning is not a Police Officer.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The view was emphatically reiterated by the Supreme Court in <em>Poolpandi V. Superintendent of Central Excise <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2002/2002-TIOL-625-SC-CX.htm" target="_blank"><font size="1">(2002-TIOL-625-SC-CX)</font></a></strong></em> where it was pointed out that the first case was one in which an accused was entitled to protection under Article 20(3) and the Officers were Policemen, whereas in a case under the Customs Act, the person does not become an accused during the enquiry stage, nor are Customs Officials police Officers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thus the position is very clear that a person summoned before a Central Excise/Customs/Service Tax Officer does NOT have the right to be accompanied by an Advocate. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday, the Supreme Court delivered another landmark judgement once again not accepting<em> Nandini Satpathy</em> and following <em>Poolpandi</em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However there was a slight difference in this case; the summoned person accused the DRI of torture and he had suffered a heart attack. So the Supreme Court allowed the presence of an advocate or an authorized person, but the advocate may watch the proceedings from a distance or from beyond a glass partition but he will not be within the hearing distance and it will not be open to the respondent to have consultations with him in course of the interrogation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please also see</strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11723"><strong>DDT 1495</strong> </a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you today this important judgement delivered yesterday.</font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12729" target="_blank">Breaking News </a></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Textile Products Falling Under Chapter 55 - CBEC Clarification </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DOUBTS</strong> have been raised as to whether the benefit of proportionate Cenvat credit as clarified by Circular 845/03/2006-CX dated 1.02.2007 would be available to textile items of heading 5508, 5509, 5510, 5511, 5512, 5513 and 5514 since a reference to these headings was omitted in Notification No.29/2004-CE dated 9th July, 2004 vide Notification No.11/2009-CE dated 7th July,2009. The Circular provided for taking proportionate credit at the end of the month. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board goes on a complicated explanation and states, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The non -mention of these headings in notification No.29/2004-CE has no bearing on the availability of Cenvat credit and applicability of Circular no. 845/3/2006. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is hereby clarified that the benefit of proportionate credit would continue to be available to textile items falling under the aforementioned headings. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see</strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4910"><strong>DDT 544</strong></a>, <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9406"><strong>1158</strong> </a> <strong>and</strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9275"><strong>1146 </strong></a></font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2011/excircular948.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 948/09/2011-CX.,Dated: July 05, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Rationalise Tax Structure to Encourage Aviation MRO Units - Assocham</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSOCHAM</strong> yesterday called for streamlining various taxes to encourage aviation maintenance, repair and overhaul (MRO) facilities as the country has huge potential to become a major hub due to low cost benefits, favourable geographical location and sharp upswing in air passenger traffic. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Indian civil aviation sector is currently celebrating 100 years of existence but its share is just one per cent in the 50 billion dollar global MRO market. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Passenger traffic of scheduled airlines jumped from 73 million in 2005-06 to 142 million in 2010-11. At the same time, cargo traffic is expected to touch nine million tonnes from 2.33 million tonnes in the last financial year. India's scheduled airlines have 430 planes now. Industry estimates suggest this figure is likely to go up to 1,500 by 2025. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With a fleet size of Indian scheduled and non-scheduled operators likely to treble in the next one-and-a-half decade, the need for a strong domestic MRO industry gains ground. India's unique geographical position offers an opportunity to become a global hub for international airlines as well. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The minimum requirement for an MRO facility is about 100 million dollars. Indian rules allow 100 per cent foreign direct investment for greenfield MRO projects through the automatic route. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A full-fledged MRO unit doing all types of checks requires 35,000 to 45,000 engineers. Besides shortage of skilled personnel, the country faces stiff competition from neighbouring MRO hubs like Dubai, Singapore, Malaysia and China. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Lady IRS Officer Sentenced to Three years </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> CBI Court in Bangalore yesterday sentenced a woman Assistant Commissioner of Income Tax of the 2004 batch in a bribery case. The CBI laid a trap and the accused was caught red handed while demanding and accepting a bribe of Rs.2 lacs from the complainant on 2nd January, 2009. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Trial Court found the accused guilty of the offence and convicted her with three years Simple Imprisonment and a fine of Rs.1.50 lacs. In trap cases, the CBI's success rate in getting conviction is almost 100 per cent. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A senior IRS officer told DDT, “in our days, about 80 percent of those joining the service were honest - today it is about 20 per cent!” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A young lady who must have struggled hard to get into the service is now in jail as a common criminal - all because of avarice. </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"> - Thursday's cases </font></strong></font></strong></font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a></a><strong><font color="#663399"><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></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Import of old and used digital multifunctional print and copier machines not barred by Para 2.17 of FTP - License not required for imports - CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> explanatory notes to HSN under Chapter 84.43 specifically categorized the machines falling under Chapter heading No. 8443 into four different groups viz., printers, copying machines, facsimile machines and combinations of printer, copying machines or facsimile machines. A careful reading of the said explanatory notes under HSN indicates that the photocopiers are specifically arranged under the head of copying machines and the said heading does not include the machines which are capable of performing two or more functions of printing, copying or facsimile etc. Since it is not in dispute that the imported goods are a combination of printers, copying machines and/or facsimile machines, the digital multifunction print & copier machines cannot be termed as photocopiers to attract the bar of Para 2.17 of the FTP. </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 grant of redevelopment rights on property amounts to transfer of property, and thus, gives rise to capital gains liable to tax - Yes, rules ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is a Chartered Accountant. During the course of assessment, the AO noted that the assessee had shown long term capital gains as Nil. This capital gain had arisen to the assessee on account of transfer of its 50% share in a building as per development agreement. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">C&F Agents - Expenses on Clerks and telephone charges - Even if these expenses are separately billed to client, they will form part of value of taxable service: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Appellant could not have provided the service of C&F agents without employing clerks or having a telephone in his office. Even if these expenses are separately billed to the client, the expenses will form part of the value of taxable service.</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> <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></p> </body> </html>