TIOL-DDT 1699 · 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 1699</font><br> 23.09.2011<br> Friday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">New Drawback Rates Notified </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=13240" target="_blank">DDT 1695 – 19.09.2011</a></strong>, we reported the CBEC Chairman telling us that the New drawback Scheme merging the DEPB with Drawback would be notified latest by 23rd September. Board has kept up the promise; the new drawback scheme is notified a day earlier on 22nd September. Notification No. 84/2010-Customs (N.T.), dated 17th September 2010 is superseded by a new notification for this purpose.</font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2011/cnt11_068.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 68/2011-Cus(NT), Dated : September 22, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Drawback Rules Amended - An Eight Year Old Aberration Rectified</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Section 75A(1) of the Customs Act, “<em>Where any drawback payable to a claimant under section 74 or section 75 is not paid within a period of <strong>one month</strong> from the date of filing a claim for payment of such drawback, there shall be paid to that claimant in addition to the amount of drawback, interest at the rate fixed under section 27A from the date after the expiry of the said period of <strong>one month</strong> till the date of payment of such drawback.” </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This <strong>one month </strong>was actually two months earlier. It was changed to <strong>one month</strong> with effect from 14.05.2003. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now let's cut back to the Drawback Rules. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rule 13(4) of the Drawback Rules states, “<em>For computing the period of <strong>two months</strong> prescribed under section 75A for payment of drawback to the claimant, the time taken in testing of the export goods, not more than one month, shall be excluded.” </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As mentioned above, Section 75A does not prescribe <strong>two months</strong>, but only <strong>one month</strong> (as amended in 2003). But when they amended the Customs Act in 2003, they forgot to amend the Drawback Rules and this aberration continued merrily for the last eight years. This has been corrected now. <font color="#FF6633"><strong>DDT Congratulates the Board</strong></font>.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Drawback on Cotton Yarn</strong>: Drawback was not allowed earlier on Cotton Yarn falling under heading 5205, 5206 and 5207. Now this restriction is removed. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2011/cnt11_069.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 69/2011-Cus(NT), Dated : September 22, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Board Explains New Drawback </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FIRST</strong> <strong>a disclaimer:</strong> Though all care has been taken, the possibility of inadvertent errors/omissions cannot be ruled out. It is requested that any error/omission noticed during the implementation of the rates be brought to the notice of the Board immediately for suitable corrective action. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Be Prepared for the Rush:</strong> Benefits under the DEPB scheme are available only up to September 30, 2011. Thus, all exports under DEPB scheme up to and including September 30, 2011, where the “Let Export Order” (LEO) has been issued by the Customs officer shall be eligible for the issue of DEPB Scrips. Since, export consignments with ‘Let Export Order' after this date would no longer be eligible for benefits under the DEPB scheme, it is likely that there may be a rush of DEPB export consignments before this date causing extra load on the EDI system. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants all Custom officers posted at ports to take due care and ensure that DEPB export consignments are accorded priority and processed/cleared expeditiously. Further, officers handling export assessment/examination with specific regard to DEPB Shipping Bills must ensure that the bills in the EDI queue are cleared expeditiously. If for any valid reason, the LEO cannot be given on the EDI on the said date, then the Commissioner of Customs may allow an endorsement of the LEO on the DEPB shipping bills manually. However, this may only be allowed as an exception. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No CENVAT facility means no credit of inputs and input services:</strong> The expression “When Cenvat facility has not been availed”, as far as the drawback provisions are concerned, has always meant Cenvat facility on inputs and input services, and is to be understood as such. The drawback notification has been suitably amended to further clarify the matter. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Vehicles:</strong> At present the DEPB rates are available for two wheelers, three wheelers, commercial vehicles and tractors. Appropriate duty drawback rates have been provided for these items in the proposed schedule without any value cap. Exporters of passenger cars are presently opting for brand rate of duty drawback. Government has received requests from these exporters; appropriate All Industry Rate of duty drawback for export of Passenger Cars has been provided in this year's Drawback Schedule. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Basis for Determination:</strong> As in previous years, the drawback rates have been determined on the basis of certain broad parameters including, inter alia , the prevailing prices of inputs, Standard Input Output Norms (SION), share of imports in the total consumption of inputs, FOB value of export goods and the applied rates of duty. The incidence of duty on HSD/Furnace Oil has been factored in the drawback calculations. The incidence of service tax paid on taxable services, which are used as input services in the manufacturing, or processing of export goods has also been factored. Board wants Commissioners to ensure that the exporters do not avail of the refund of this tax through any other mechanism while claiming the All Industry Rates of duty drawback. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_042.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 42/2011-Cus., Dated: September 22, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Appeals in Wrong Forum - Board Concerned </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">IT</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> has come to the notice of the Board that field formations have filed appeals in the jurisdictional High Courts in matters relating either to determination of rate of duty or value of the goods which ought to have been filed in the Supreme Court. Such appeals get dismissed by the High Courts on the ground of jurisdiction alone, invariably after pending for a long time. Civil Appeals filed in the Supreme Court in such cases have frequently been dismissed on the ground of limitation. It may also be noted that the time period for filing Civil Appeal is 60 days from the date of receipt of the Tribunal order in the Commissionerate. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has directed the Commissioners to examine the issue involved in the dispute very carefully for deciding the appellate forum. The jurisdictional Chief Commissioners, while giving concurrence to the proposal for filing appeal, are expected to ensure that appeal is being filed in the correct forum in order to avoid needless litigation being pursued in the wrong forum and consequent loss of revenue. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">BOARD WANTS SCRUPULOUS COMPLIANCE. </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not that many of the Commissioners do not know where to file appeal. Normally after receipt of the Tribunal order, the decision to file appeal is not taken immediately. They take their own sweet time and by the time they decide to file appeal, the deadlines for sending proposal to the Board for filing appeal in SC will be over. (10 days from the date of receipt of CESTAT order). Instead of offering explanation to the Board for delay, the safest way to get over the situation is to file appeal in High Court. (Plenty of time available - 180 days u/s 35G). Normally the disposal in High Court takes not less than four to five years and by that time, the Commissioner becomes the Board Member (possibly with charge of L&J) and the Standing Counsel becomes the Judge of the High Court! </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today we are carrying a case from Chennai CESTAT, in which the Commissioner filed an appeal before the CESTAT in a baggage case which was dismissed due to filing in wrong forum - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=28&filename=legal/cestat/2011/2011-TIOL-1251-CESTAT-MAD.htm" target="_blank"><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>2011-TIOL-1251-CESTAT-MAD</em></strong></font></a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You may also like to read <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=555"> </a><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4174&PHPSESSID=%20f01782e282b28cdc8387c2d0a428d41b"><strong>Why and how does the Revenue lose cases? </strong></a><strong>And <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=555">If a case is worth fighting, is not it worth fighting well? TIOL-DDT 32</a></strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=555"></a></font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2011/cxinstruct06.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F.No. 390/Misc./100/2010-JC, Dated : September 22, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">High Officers as Respondents in Writ Petitions - CabSec Instructions </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> cabinet Secretary has noted that when Secretaries and other officers are shown as respondents in writ petitions with which they are not concerned, they refuse to accept the correspondence on the plea that it does not concern them. Their sole focus is to seek their exclusion from the Writ Petition. But, they simultaneously do not provide suitable guidance directly to the Law Officer regarding the Ministries/ Departments that are actually responsible for the matter at issue. As a result, much time is lost. The Law Officer has to spend his time and resources in needless correspondence with these Respondents.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Cabinet Secretary has advised that when a Court matter is inadvertently marked to an officer, the Law Officer concerned should be suitably advised regarding the Respondent actually concerned with the legal matter at issue. It is for the Ministry/ Department that receives the court order to directly inform the Law Officer of the correct Ministry/ Department dealing with the matter. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC has communicated the CabSec's letter to all the Chief Commissioners and Commissioners. </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2011/cbec_order269_2011.htm" target="_blank">CBEC File No. 296/15/2011-CX.9, Dated: September 15, 2011 </a></font></strong></p> <p align="center"><strong><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></strong></p> <p><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">Since assessee is clearing the goods at their factory gate transportation cost shown separately is not includable: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per new Valuation Rules, which came into force w.e.f. 1.7.2000, if the assessees are clearing the goods at their factory gate the transportation cost is not to be includable. In this case, it is not disputed that the respondents have cleared the goods at their factory gate and charged transportation cost separately. </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 merely because assessee was once 100% EoU entitled to Sec 10B benefits, it cannot avail benefit otherwise available on block of assets on expiry of tax holiday for working out capital gains u/s 50 - NO, it can avail: Madras HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is an individual engaged in the business of rig operation, transportation of LPG gas, marbles etc. The assessee had an export oriented unit run under the name and style of 'GTP Granites'. The questions before the Bench are - Whether merely because assessee was once 100% EoU entitled to Sec 10B benefits, it cannot avail benefit otherwise available on block of assets on expiry of tax holiday for working out capital gains u/s 50(2). And the verdict goes in favour of the assessee. </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">Tax liability cannot be determined by two persons by a contract - It is determinable exclusively under taxing statute: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> tax liability cannot be determined by two persons by a contract. It is determinable exclusively under the taxing statute, which, in the instant case, is the Finance Act, 1994. It is not in dispute that, prior to 1.1.2005, the taxing statute did not recognize Indian recipient of service provided by a non-resident from abroad (the latter having no office in India), as a “person liable to pay service tax”. It was only w.e.f 1.1.2005 by notification no. 36/2004-ST that the statute recognized such recipient of service to be a person liable to pay service tax. But, even prior to that date, the Service Tax Rules had recognized such a person as the person liable to pay service tax. </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>