TIOL-DDT 1710 · 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 1710</font><br> 11.10.2011<br> Tuesday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Custom House Agents - Old Regulations or New? Litigation and Clarifications</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> used to be Customs House Agents Licencing Regulations, 1984 which were superseded by the Customs House Agents Licencing Regulations, 2004. Now the question arose as to whether those who qualified in the examination under the old regulations can be given a licence under the new regulations without again clearing the examination. The CBEC in Circular No. 42/2004-Cus dated 10.06.2004 clarified that <em>those who have not been granted licence under CHALR 1984 till 23-2-2004 lose their right. They have to meet the qualifications and pass the examinations under regulation 8 of CHALR 2004. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Notification No. 30 of 2010-Customs (N.T.) dated 8-4-2010, Board framed the Customs House Agents Licensing (Amendment) Regulations, 2010, amending various regulations in the CHALR, 2004. The (Amendment) Regulations contemplated a situation whereby the candidates successful under Regulation 9 of CHALR, 1984, are still required to appear in the examination of specific subjects as specified, while candidates successful in the examination conducted under CHALR, 2004 as well as the persons who had been granted licences under CHALR, 1984 are not required to go through the same.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the same day, Board also issued a Circular No. 9/2010 – Cus dated 08.04.2010 stipulating that those who had passed the earlier examination can be granted a licence if they pass an examination in some additional papers on subjects like Patents Act, Copy Right Act, Central Excise Act, etc. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the Gujarat High Court quashed and set aside the Customs House Agents Licensing (Amendment) Regulations, 2010 issued vide Notification No. 30/2010 dated 8-4-2010, insofar as the same impose a condition upon those persons who had passed the examination conducted under Regulation 9 of the Customs House Agents Licensing Regulations, 1984 and have not been granted license under the said Regulations, to clear the examination in additional subjects. <strong><font size="1"><em>[</em></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=27&filename=legal/hc/2010/2010-TIOL-875-HC-AHM-CUS.htm" target="_blank">2010-TIOL-875-HC-AHM-CUS</a></font></em></strong></font><font size="1"><em>]</em></font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board took the matter in appeal to the Supreme Court with the question <em>“whether high court was correct in quashing the Customs House Agents Licensing (Amendment) Regulations, 2010” </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court by an order dated 19 September 2011 <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=26&filename=legal/sc/2011/2011-TIOL-98-SC-CUS.htm" target="_blank"><font size="1"><em>[2011-TIOL-98-SC-CUS</em></font></a><em><font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=26&filename=legal/sc/2011/2011-TIOL-98-SC-CUS.htm">]</a></font></em></strong> noted that in some Custom Houses CHA licenses under Regulation 9 had been issued to the candidates in terms of the old regulations even after the new regulations had come into force in February, 2004. And so, the Supreme Court declined to stay the operation of the Gujarat High Court order. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some other High Courts have also followed the Gujarat way. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Now what is the situation</strong>? Irrespective of what the Board thinks, the situation is that those who have qualified under the 1984 Regulations are eligible for the licence under the 2004 Regulations, without clearing any further examination. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What does the Board think</strong>? In Circular No. 38/2011-Customs, dated August 24, 2011, Board clarified:- </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The intention of allowing these applicants to appear in the examination for additional subjects such as </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The Patents Act, 1970 and Copyright Act; 1957 </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Central Excise Act, 1944 </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Export promotion schemes, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Procedure on appeal and revision petition, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Prevention of Corruption Act, 1988, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Online filing of electronic Customs declarations, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Narcotic Drugs and Psychotropic Substances Act, 1985 and </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Foreign Exchange Management Act, 1999 </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">was to ensure that they have working knowledge in these subjects as prescribed under CHALR, 2004. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has decided that all such applicants who had already passed the examination held under regulation 9 of CHALR, 1984 but have not been granted licence and are seeking qualification in additional subjects shall be allowed to clear the examination by 31.12.2012 irrespective of number of chances to become eligible for grant of CHA licence in terms of Regulation 9 of CHALR, 2004. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>But this is Contempt!</strong> Board's latest Circular is clearly against the directions of the Gujarat High Court. The High Court order was delivered on 1 st October 2010 and the Board had appealed against that order to the Supreme Court. While the matter was pending in the Supreme Court, Board had issued this circular asking the already passed candidates to pass another examination, totally against the High Court order. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board might not have any intention of contempt, but perhaps the person who issued the circular was not aware of the High Court order and the pending appeal in the Supreme Court! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A Little History:</strong> The institution of Customs House Agent seems to be as old as the Customs Act itself. Section 22 of the Customs Act 1878 had a provision to issue licences for agents. In 1955, the 1878 Act was amended to provide for a licence to be issued under Rules to be framed. And so the custom House Agents Licencing Rules 1960 were issued, which were promptly challenged in the Supreme Court. One of the grounds was the requirement of passing an examination in procedures on refund, appeals and revision under the Customs Act. The petitioners urged that these are matters for the owners and Customs officers and not for the agents. Incidentally, the 1955 Rules prescribed a renewal fee of Rs. 50/- while earlier it was only 50 ps. The Supreme Court struck down this Rs. 50 fee! </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Policy for export of cotton waste including yarn waste </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended the entries against ITC(HS) Code 5202 at Sl. No. 161 A in Chapter 52 of ITC(HS) Classification. Export of cotton waste [ITC(HS) Code 5202] will continue to be free. Registration of contracts for cotton waste is not required now. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not078.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 78 (RE-2010)/2009-14: Dated: October 10 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Liberalised Remittance Scheme for Resident Individuals - Revised Application cum Declaration form </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> resident individual has been permitted to make a gift / loan in rupees to a Non-Resident Indian /Person of Indian Origin close relative (s), subject to certain terms and conditions. One of the conditions is that the gift / loan amount should be within the overall limit of USD 200,000 per financial year as permitted under the LRS for a resident individual.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI has notified the revised Application cum Declaration form for purchase of foreign exchange under the LRS. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2011/rbi11cir032.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI Circular No. 32 Dated: October 10 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Proposes Amendments to Gr-A Recruitment Rules - Unnecessary Litigation Planned - 13:2:1 ratio for Gr-B </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CBEC has proposed several amendments to the <em>Indian Customs and Central Excise Service Group ‘A' Rules, 1987. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">One of the amendments proposed is for Rule 19(2) - the amended version reads exactly as the previous one, but there is humour here. The Board explains, “<strong>the change is required for <font color="#FF6633">unnecessary litigation</font> in future</strong>”. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Superintendents who have completed two years of service will now be eligible for promotion as Assistant Commissioners. Earlier, it was three years of service. The fact is that there are Superintendents who have completed twenty years of service, waiting for that elusive promotion.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ratio for promotion to Assistant Commissioner from Group B will be 13:2:1 among Superintendents of Central Excise, Superintendents of Customs and appraisers. This was earlier 6:2:1. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The amendments are to be approved by DOPT and UPSC. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/RR-gpA-proposed.pdf"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Proposed Gr.A Recruitment Rules</font></strong></a></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"> – Wednesday'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">Show-cause notice has to be issued within one year of knowledge obtained: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN</strong> it was in the knowledge of the department that the activity undertaken by the appellant at site amounts to manufacture on 27/01/1999, the show-cause notice has to be issued within one year from 27/01/1999. As the show-cause notice has been issued on 24/06/2002, held that the extended period of limitation is not invokable in this case.</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 fails to prove source of deposits in brothers' NRI accounts, payments received by assessee as gift are liable to be charged to tax - YES, rules ITAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the Third Member are - Whether the interest paid to the income tax department on late payment of tax can be deducted while computing the business income of the assessee and Whether the interest received from and paid to the income tax department can be adjusted or netted against each other. <strong>NO is the answer</strong>.</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">Refund of service tax on services provided to SEZ - Appeal to be heard by Division Bench, as SMB is not competent to hear matter: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> perusal of the Notification makes it abundantly clear that the issue involved herein relates to determination of the rate of service tax payable on the taxable service rendered. Section 35D(3) of the Central Excise Act, 1944, which has been made applicable to Chapter V of the Finance Act, 1994, excludes from the scope of a Single Member Bench a case where the determination of any question having a relation to the rate of duty of excise or to the value of the goods for the purpose of assessment is an issue or is one of the points in issue. Therefore, this Bench is not competent to hear the aforesaid matter. </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="left"><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> </body> </html>