TIOL-DDT 1717 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1717 </font><br>
20.10.2011 <br>
Thursday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Returns - CBEC Acts – Last Date extended - Notification Today </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=13402" target="_blank">DDT
1711 - 12.10.2011</a></strong>, <strong>asked, Service Tax - Impossible
to File Electronic Returns – Will CBEC Act?</strong> We mentioned that
it is impossible to file the return in the present format and the assessees
are a worried lot. We have been getting frantic calls from anxious assessees
and consultants and professional return filers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">TIOL
called up a Commissioner whose office has been a pioneering champion in the
cause of e-filing. He refused to talk to us and wanted us to talk to his
Additional Commissioner – obviously, the Commissioner was too busy and had
no time for such impossible things like e-filing and attendant hassles. We
tried to contact him the previous day also and the Commissioner was in a
meeting and so we could not get to talk to him. We called up a Superintendent
and asked him how to show the details of the tax as per the POT Rules. He
said such things cannot be discussed over the phone and he wanted us to come
to his office. Many Commissioners were directing the assessees to file electronic
returns and threatening action if they don't, but nobody had a clue as to
how to fill up the form. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">TIOL called up the Chairman of the CBEC – he was terribly busy with too many meetings and other official assignments. Still he found time to talk to us and informed us that the last date for filing the returns was being extended up to 26 th December and the notification was ready and would be issued today. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is heartening that the Board has listened to the woes of the assessees and reacted favourably, though they should have looked into this issue in April 2011. We are indeed grateful to the Board – and so are thousands of return filers. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Preparation of Order-in-Original - a comic kissa </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHILE </strong>it is common knowledge that the orders of the adjudicating authority are almost always prepared by the Superintendent/Inspector working in his/her section or elsewhere, this interesting mail received from a netizen confirms the view. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“When I was promoted as an Inspector in the Central Excise department, the least I expected was a posting in the Adjudication Section of the Commissionerate. I could not make head and tail of the Show Cause notice let aside the allegations levelled therein. So, when the adjudicating authority asked me to prepare a “draft” order-in-original, I went totally blank. That's when a senior officer handed me a copy of the Tribunal decision in Perfect Industries <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2002/2002-TIOL-400-CESTAT-DEL-SB.htm" target="_blank"><font size="1">(2002-TIOL-400-CESTAT-Del-SB)</font></a> </strong>where it is held that the Order is to be drafted by quasi-judicial authority itself, including the portion relating to narration of facts, without the help of anyone else. However, since I could not gather the courage to bring this decision to the notice of my boss (assuming that he didn't know) I found an easy way out. After getting the “soft” copy of the Show Cause Notice (from the Preventive section) and the reply to the same (from the assessee), I employed Microsoft's gift to the world – “Word” to be precise, copied and pasted paragraphs and prepared brief facts plus the contents of the personal hearing memorandum. As for the ‘discussion and findings', I could not find a way out and so did what I could do best – took print out of the brief facts and left a few blank pages after that – all neatly stapled, the last page beginning with a caption “Order”, a void thereafter and then the name and designation of the adjudicating authority and finally the list of Noticees etc. at the bottom. Having done a job, which to my belief was a fairly commendable one, I handed the same to the learned adjudicating authority. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Expecting brickbats when I was summoned, I entered his cabin trembling. But to my surprise, the adjudicating authority burst into laughter and patted me on my back! </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The story did not end there. He became my good friend and a guide who taught me the intricacies of the Central Excise law. But naturally, I remain indebted to him.” </font></em></p>
</blockquote>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Farce of Adjudication and Appeal </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOBODY</strong> would have any doubt on the authenticity of the above story. While Members of the Tribunals and Judges of the High Courts and Supreme Court have to make their own orders, it is strange that the Departmental adjudicating authorities have a battery of Superintendents and Inspectors to draft their orders and these learned adjudicators have to just sign on the dotted line. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sometime back, I had gone to interview a Chief Justice of a High Court at his house. I was given appointment at 7.30 pm. When I went there, the Chief Justice was dictating an order to his steno. The CJ was in the Court till 5pm and by 7.30pm, he was at his house doing his adjudication work! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And now a days, the trend in the department is to simply confirm the demands made in the Show Cause Notices. These Show Cause Notices are also drafted by lower level officers. Adjudication and appeal at the level of Commissioners and below has become a joke or a farce. Nobody has any faith that they can hope to get a reasonable order at this level. If orders are to be drafted by subordinate officers, why should we have adjudicators – just for signing? The one who drafted the order could perhaps sign better! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the case referred by the Netizen <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2002/2002-TIOL-400-CESTAT-DEL-SB.htm" target="_blank"><font size="1">(2002-TIOL-400-CESTAT-Del-SB)</font></a></strong></em>, the Tribunal had observed, </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“This being a serious matter we are of the opinion that it should be referred to the Chairman of the CBEC, New Delhi for reference and enquiry into the matter. Central Board of Excise and Customs, however, may like to make a general enquiry and issue suitable instructions to the adjudicating officers to desist from taking the help of the subordinate officers in drafting the orders. A quasi-judicial officer has to apply his own mind to the facts and circumstances of the case and reach at his own decision unfettered by anything else. From this it follows that even the narration of facts in an adjudication order has to be drafted by the adjudicating officer himself.” </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even if the Board had issued instructions, they would have been flouted with impunity. The present practice is the drafting officer prepares the draft and puts it up to the adjudicating officer with the remarks, “draft order as dictated, put up”. Everybody knows that there was no dictator! </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FCNR(B) accounts in any freely convertible currency </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Committee to Review the Facilities for Individuals under FEMA, 1999 in its Report has recommended that Foreign Currency (Non-Resident) Account (Banks) Scheme, FCNR(B) accounts may be permitted to be opened in any freely convertible currency. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On a review, it has been decided that AD banks in India may be permitted to accept FCNR (B) deposits in any permitted currency. It may be noted that 'Permitted currency' for this purpose would mean a foreign currency, which is freely convertible as defined in terms of Regulation 2(v) of FEMA 14/2000-RB dated May 3, 2000, as amended from time to time. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2011/rbi11cir036.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 36/RBI, Dated: October 19, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Repatriation of NRI Income from and to India </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Committee to Review the Facilities for Individuals under FEMA, 1999 has suggested in its Report that necessary clarifications may be issued forthwith clarifying the position that income and sale proceeds of assets held abroad by NRIs who have returned to India for permanent settlement and income and sale proceeds of assets held abroad through remittances under <strong>Liberalised Remittance Scheme (LRS) </strong>need not be repatriated. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI has clarified: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ in terms of sub-section 4 of Section (6) of FEMA, 1999, a person resident in India is free to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ an investor can retain and reinvest the income earned on investments made under the Liberalised Remittance Scheme. </font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2011/rbi11cir037.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 37/RBI, Dated: October 19, 2011 </font></strong></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>We all win if India wins - FM </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADDRESSING</strong> the Economic Editors Conference, the FM said, “I am aware that journalists will want to win accolades for what they write, sportsmen will want to win prizes and, in a democratic system, politicians will try to win elections. But at the same time, we must all remember that we all win if India wins. That will happen if the reform process gains momentum and economy surges ahead. I solicit your cooperation in this endeavour and look forward to your views”. He added, “The setting up of the Goods and Service Tax Network and Expenditure Information Network would enable improved governance.” </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"> – Friday'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">Customs </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Budgetary Proposals and speech of Finance Minister in Parliament introducing them are, not enacted law. Parliament may or may not accept proposal. Law as enacted is what is contained in Finance Act after it is legislated upon by Parliament - Court cannot interfere in Government's power to issue notifications: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> power to issue a notification under section 25(1) of the Customs Act, 1962 has been conferred upon the Central Government where it is satisfied that it is necessary in the public interest so to do. The Court under Article 226 of the Constitution would not be justified in usurping the jurisdiction, which is vested in the Central Government. Parliament has conferred that power on the Central Government on specific grounds of public interest. </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 payments made towards maintenance contracts are to be treated as fees for technical services u/s 194J - NO, rules ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is a public sector enterprise under the administrative control of the Department of Atomic Energy (DAE), Government of India, engaged in the operation of atomic power stations and implementation of atomic power projects for electricity generation. The two questions before the Tribunal are - Whether lumpsum food allowance provided by the assessee company to its employees working in a remotely located plant amounts to perquisite, liable to tax and Whether payments made by the assessee towards maintenance contracts amount to fees for technical services u/s 194J. The ruling partly goes in favour of 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">Security service - Security Guards Board is a statutory Authority. Whether service itself is taxable, is a triable question - Pre-deposit order of Tribunal set aside: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Appellant is a statutory body. But apart from that, the question as to whether the Appellant carries on the business of rendering services relating to the security of any property including the business of providing security personnel is a serious triable question. Consequently an order for pre-deposit was not warranted in the circumstances of the case. </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>
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