TIOL-DDT 1716 · 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 1716 </font><br> 19.10.2011 <br> Wednesday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RAC Meetings - Irrelevant?</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Central Excise Department had long ago devised an effective system for redressing the grievances of the assessees and for assisting them with compliance of the laws. In each Commissionerate, a Regional Advisory Committee (RAC) was constituted, with the Collector/Commissioner as the Chairman and Members selected from various Industry groups. The RAC came into existence in 1959. Selection of members was by an elaborate process to be approved by the Board and a Member appointed to the RAC was made to feel as if he got nominated to the Rajya Sabha. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Over the years, like all other schemes of the department, started with noble intentions, RAC degenerated into a farce. Once upon a time captains of industry used to proudly attend the RAC meetings and these meetings were useful in solving many problems. In course of time, officers developed the habit of not taking decisions and learned to err on the side of revenue. They started giving all kinds of evasive and confusing replies in the meetings. In some cases even innocent queries by the assessees were used to book cases against them. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Slowly the trade realised the futility of attending RAC meetings and stated avoiding them or sending junior employees to RAC meetings. Now a days the meetings are attended by 3 assessees and thirty departmental officers and if you see the minutes of RAC meetings, you will find they all end with an expression of thanks to the Chairman (Commissioner). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Recently the Board decided that <em>to facilitate greater participation of the representatives of the trade and industry and also to raise the quality of deliberations in the forum, the RAC should be constituted at the zonal level and the Chief Commissioner should preside over the RAC meetings.</em> <strong>[<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2011/excircular953.htm">Circular No. 953/14/2011, Dated: September 12, 2011</a>] </strong></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will this really facilitate greater participation and raise the quality of deliberations ? </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When the field works with constant fear of Audit and Vigilance with absolutely no fear or respect for the Board and the Judiciary, will it make any difference as to who presides over the RAC meetings? </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A DDT report on two RAC meetings: </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Chief Commissioner decided to convene a combined meeting of the RACs of all his Commissionerates and wanted participation by top managers from the trade. The Commissioners persuaded the senior managers of companies to participate and also told them not to raise any inconvenient questions. The Hon'ble Chief Commissioner walked into the meeting – 45 minutes late and haughtily took his exalted seat, without even a perfunctory apology for keeping the captains of industry waiting. He gave a long speech about his activities and the need for more revenue. Then he asked the members if they had any questions. A few members spoke and said with their dynamic Commissioner at the helm of affairs, they had no problems. The meeting came to an end with a vote of thanks to the Chair from a leading member of the trade. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Another Chief Commissioner convened a similar meeting. He came on time. There was a presiding officer's elevated chair for him with the officers on one side and the assesses on the other. He refused to occupy the special chair and sat along with the assesses on the side opposite to the officers and declared, “I am with them.” He almost received a standing ovation. He grilled the Commissioners on the points raised by the trade, but the Commissioners stood their ground and everybody agreed that the culprits were the Statute and the Board, while the Chief Commissioner and Commissioners were exceptionally good people. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Self Assessment in Customs - Priya Blue Effect? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SELF Assessment </strong>has been introduced in the Customs Act by Finance Act 2011 and the ‘<strong>On-Site Post Clearance Audit</strong>' is now a reality. Now what will happen to refunds and demands. How does the Department or an importer/exporter challenge the self assessment? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A concerned netizen writes to us: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“The Department had been rejecting all refund claims if made without challenging the orders of assessment – Bill of Entry, relying on the decisions of the Supreme Court in <em>Collector of Central Excise, Kanpur vs Flock (India) Pvt Ltd – </em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2002/2002-TIOL-208-SC-CX.htm" target="_blank"><font size="1">2002-TIOL-208-SC-CX</font></a></strong><em> and Priya Blue Industries Ltd. Vs. Commissioner of Customs (Prev) </em>- <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=26&filename=legal/sc/2004/2004-TIOL-78-SC-CUS.htm" target="_blank"><font size="1">2004-TIOL-78-SC-CUS</font></a></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the Flock case, a refund was applied for without challenging the approved classification, while in the Priya Blue case, Flock was followed and it was held that as long as the assessment order was not set aside, duty was payable as per that order and such an order obviously could not be set aside by a refund claim. CBEC happily lapped up the decisions because they were in favor of revenue. Refunds got rejected even when the Department's computers made mistakes in calculating the duty! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, in the self-assessment scenario, what will happen to Flock and Priya Blue ? Are they still applicable and if, so how can one go about applying them?” </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><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">It is well settled that onus to prove under-valuation is on revenue but once revenue discharges burden of proof by producing evidence of contemporaneous imports at higher price, onus shifts to importer to establish that price indicated in invoice relied upon by him is correct: SC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">‘<strong>REASON</strong> to doubt' does not mean `reason to suspect'. A mere suspicion upon the correctness of the invoice produced by an importer is not sufficient to reject it as evidence of the value of imported goods. The doubt held by the officer concerned has to be based on some material evidence and is not to be formed on a mere suspicion or speculation. Although strict rules of evidence do not apply to adjudication proceedings under the Act, yet the Adjudicating Authority has to examine the probative value of the documents on which reliance is sought to be placed by the revenue. </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 mere omission to include certain income in return of income warrants penalty - NO, says ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOTH</strong> the assessees are individuals and assessed by the Income Tax Authorities as per the new provision of search and seizure u/s 153 A (a). In response to the notices of 153 A, both the assessees includes certain incomes which they have not disclosed in their original returns. Observing this anomaly, the AO levied the penalty u/s 271(1)(c). The issues before the Tribunal are - Whether there is a difference between furnishing of inaccurate particular and making a wrong claim under some <em>bonafide </em>belief and Whether mere omission to include certain Income in the ROI would attract penalty. And the Tribunal's answer is NO. </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">Leviability of tax on outbound tours - When planning, organizing, scheduling are done in India, it would mean that service is partly performed in India and partly outside India, covered by Board Circular No. 117 dated 31.10.2009 - Prima facie case for waiver of pre-deposit – CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EVEN </strong>if a view is taken that planning, scheduling, organizing or arranging etc are done in India, it would mean that the service is partly performed in India and partly performed outside India. In such circumstances, the services provided by the appellant are prima facie covered by the Circular issued by the Board and therefore, a fit case for waiver of pre-deposit. </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="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day. </font></p> <p align="justify"><font color="#FF6633" 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>