TIOL-DDT 1697 · the untouched capture
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<p><font size="3"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 1697</font><font face="Verdana, Arial, Helvetica, sans-serif"></font></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <br>
<strong>21.09.2011<br>
Wednesday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Ban on Export of Onions Lifted</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT </strong>has lifted the ban on export of onions. Export of all varieties of onions is now allowed. Onions can now be exported subject to a Minimum Export Price (MEP) of USD 475 per tonne. This is exactly the position that was prevailing on 8th September 2011, immediately before the ban on the export of onions was imposed on 9th September 2011, by Notification No. 73(RE-2010)/2009-14. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Commerce Secretary Rahul Khullar said that, MEP will be reviewed every fortnight and a close watch would be kept on domestic arrivals, total exports, overall domestic availability and domestic prices. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The immediate response will be a hike in price of onions in the domestic market. Traders are happy while onions will bring in more tears for the consumers. One happy country would be Bangladesh, which gets 75 percent of its onions from India. After the Indian Government banned the export of onions, Bangladesh was trying to get onions from Turkey. Now they can move back to India. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not075.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 75 (RE – 2010)/2009-2014 , Dated: September 20, 2011</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Two Notifications; Two Rates; Which one Applicable? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YESTERDAY'S</strong> <strong>DDT</strong> had mentioned about two effective rates of duty for certain goods falling under Chapter 30. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGM of a Pharma Company wrote to us: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“On this issue, the Board has clarified when Notification 2/2008-CE was issued. In his letter addressed to all Commissioners, JS TRU has stated as follows in para 2.2 of D.O.F.No.334/1/2008-TRU New Delhi, dated the 29th February, 2008.:-</font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.2 Since the reduction in the general rate has been carried out by notification, the possibility of the same product/ item being covered by more than one notification cannot be ruled out. In such a situation, the rate beneficial to the assessee would have to be extended if he fulfils the attendant conditions of the exemption. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The manufacturer-exporter particularly from Pharma sector started paying duty under 2/2008-CE for exports and under 4/2006-CE for domestic so that unutilized cenvat credit can be encashed. There is no compulsion on assessee to follow any one Notification. Unfortunately, neither the jurisdictional ACCE, nor the Commissioner of Central Excise has given findings on this aspect of the LETTER OF TRU. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They simply said that the assessee has to adopt any ONE Single Notification. Either he has to follow 4/2006-C.E else 2/2008-CE both for domestic and export clearances. The negative attitude of the departmental officers is always found in the Orders passed by them, not only in this case but practically in all the cases. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The good news for the trade is that the grounds taken by Department are foolish grounds that it becomes easy for the legal advocates to fight when the matter is heard by the GOI or the Tribunal. Anyway on this issue, we understand that the Pharmaxil have referred the matter to TRU long back and we expect the TRU to resolve the same. Let's hope the Finance Ministry take up the issue strongly and should also take proper course of action to train the ACCE to follow the instructions issued by Board. They simply cannot take it for granted and take the industry for a Long Ride”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sometime back, we had carried an article on this issue - <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12031"><strong>Denying Rebate claims by invoking section 5A(1A) of CEA, 1944 </strong> </a></font></p>
<p><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us hope the Government reacts.</font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Cadre Review - Gathering Dust in DOPT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HUNDREDS</strong>, if not thousands of officers in the Customs and Excise Department are eagerly waiting for that much elusive cadre review and resultant promotions. They hope, wish, pray and publicise that they are going to get a promotion any day. Some of them expressed their anger at us for not carrying a letter written by a Board Member to the field about getting ready for the big event and detailing about the number of posts from Sepoy to Chief Commissioner and Principal Chief Commissioner. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the fact is that while the CBEC is ready and had been answering all the queries from DOPT at
lightning speed, the file is unfortunately gathering dust in DOPT. Though DOPT is sitting on the file for nearly four months now, there seems to be no hurry there to clear this file. It is unfortunate that a file that had been cleared by so many committees and Expenditure Department and the FM himself is crying for attention of some babu in DOPT. The babus who delay files of others for no good reason are in for a surprise when their file is delayed by another babu – for the same reason – no good reason. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And to add to the agony, it is understood that CBDT is yet to answer all the queries raised by DOPT. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CESTAT ordering that remand proceedings should be completed within three months - can such orders be really implemented? </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> received this mail from a netizen –</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“On an appeal made by us before the CESTAT against the order passed by the Commissioner of Central Excise, the matter was remanded with a direction to the adjudicating authority to <strong>pass an order within three months</strong> of receipt of the order. The Tribunal also asked us to co-operate in the remand proceedings. This was because the matter was being remanded for the third time and the case pertained to the year 1990. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We enclosed a copy of the CESTAT order and requested the adjudicating authority to grant us a personal hearing in the matter. However, to our surprise the authorities concerned informed us (verbally) that since the department was contemplating filing an appeal before the High Court and they had ample time to do so (6 months) u/s 35G of the CEA, 1944, the CESTAT directions could wait for the time being. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is our view that since the law allows the department to pursue legal remedies against the order of the CESTAT such orders of the appellate Tribunal carry only perfunctory value. The department view also appears to be fair but for the reason that they ought to get a Stay of the order of the CESTAT before the expiry of the appeal period. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Admittedly, CESTAT has passed these directions in exercise of the powers contained in rule 41 of the CESTAT (Procedure) Rules, 1982 but it does not have the power to initiate contempt proceedings without referring the matter to the High Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal once observed –</font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“When sanctity is attached to established Courts and Tribunals it follows as a corollary that all orders emanating from these Public Institutions should be respected and strictly complied with. The order must be implicitly observed, every diligence must be exercised to obey. The welfare of the people is the supreme law. The welfare of the people can be attained only when there is justice administered lawfully, judicially without fear or favour and those that are responsible for the administration of such justice, and those seek justice as parties and those who help in the administration of justice have to be protected from insults, annoyance or even obstructions. Administration of justice cannot be effective unless respect for it is fostered and maintained. Interference with it shakes the very pillar of the administration of justice and the confidence of the people in courts, which is of a prime importance to the litigants in their struggle for the protection of their rights and liberties. No Tribunal can function properly unless it is allowed to keep up its dignity, and unless it has <a>power to enforce discipline and respect in its administration of justice. </a>The object of discipline enforced by Tribunals is not to vindicate the dignity of the Tribunals but to prevent undue interference with the administration of justice.” </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of the above, our question is – <strong>Whether CESTAT should pass such “remand” orders which carry a ‘mandatory' period of disposal in the first place?” </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Maharaja Begging? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“<strong>EVERY</strong> month end, I go to Pranab Mukherjee's house at midnight and ask for money”. He asks, “how much”. “I say I want 200 Crores”. He asks, “200 Crores in the night?” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is the plight of Civil Aviation Minister Vayalar Ravi as every month he has to ask the Finance Minister money for paying salaries of Air India staff. His first priority is to make enough money to pay the salaries. </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><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">Central Excise</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">A quantum of duty already determined by jurisdictional officers of supplier unit cannot be contested or challenged by officers in charge of recipient unit: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN</strong> the provisional assessments were finalized, the assessing authority found that excess amounts of duty had been paid than what was leviable by those units at the time of clearance of the goods. The excess amount of duty could be claimed as refund by the manufacturer. <strong>The manufacturers, however, did not claim any such refund</strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The case of the Revenue is that the assessees were not entitled to avail CENVAT credit of any amount of duty in excess of what was liable to be paid on the inputs by the other two units (input-manufacturers) as per the finalized assessments. </font></p>
<p><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 ICAI holds classes for students and provides materials and charges fees, such activities are to be regarded as business activity, and thus assessee loses entitlement to exemption as charitable body - NO, rules: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>assessee is the Institute of Chartered Accountants of India. The issues before the Bench are - Whether the order u/s 263 can be passed without assigning any reasoning as to the object and role of the institute in proper and correct perspective for denying the exemption as charitable institution - Whether activities of the institute approved u/s 10(23C), viz. holding classes for students/article clerks/members and charging fee for classes and for providing literature/material can be regarded as a business activity and hence not entitled to exemption as a charitable institution. NO is the High Court's answer. </font></p>
<p><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">Whether services like chipping, cleaning, painting etc. done on marine vessels within port premises are chargeable to Service Tax under head 'Port Services' for period prior to 01.07.2003 - Matter remanded: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>SDR is of the opinion that the present appeal must wait for the outcome of the Central Excise Appeal pending before the High Court, wherein identical question of law has been framed for a decision by the High Court. Tribunal was of the view that the adjudicating authority, rather than the Tribunal, can afford to wait for the High Court's decision in Homa Engineering Works case inasmuch as that authority appears to have taken a view against the assessee merely on the strength of a Circular of the Board without considering the judicial authorities on the point cited by the party. </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">Unless Department is able to show that government undertakings are totally different from all angles, it is not possible to accept argument of 'unjust enrichment' on part of State undertakings: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Bench observed that the High Court had while deciding the issue whether question of unjust enrichment is applicable to State undertakings held that unless the Department is able to show that the government undertakings are totally different from all angles, it is not possible to accept the argument of 'unjust enrichment' on the part of the State undertakings; that State and the State undertakings represent the people of the country. </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>
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