TIOL-DDT 1751 · 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 1751</font><br> 13.12.2011<br> Tuesday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Should AG's Audit be allowed to visit factories and Premises of Assessees? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT</strong> asked this question yesterday. We understand that a High Court has passed an order restraining the Comptroller and Auditor General (CAG) of India from auditing private enterprises and has issued notice to the Government in a writ petition challenging the power of CAG to conduct the service tax audit of private enterprises. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We hoped to bring you the High Court order today, but unfortunately, the order is not yet released. We will bring it to you as soon as possible. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Are Superintendents not Central Excise Officers? </font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ELEMENTARY</strong>, my dear Watson? Not Exactly! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In an order relating to admissibility of deemed credit under Notification No 58/97-Central Excise dated 30.8.1997, the Tribunal has passed strictures against the Superintendent of Central Excise for certifying the duty paid by the assessee operating under Section 3A of the Central Excise Act, 1944. The Tribunal observed: </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is strange how a Superintendent could issue the certificates available on record which were relied upon by the appellant for the claim of deemed credit. Perusal of the definition of Adjudicating Authority under section 2(a) and definition of Central Excise Officers appearing in section 2(b) of Central Excise Act 1944 does not appear to have recognised a Superintendent as <strong>Adjudicating Authority</strong> or <strong>Central Excise Officer</strong>. He was not competent to issue the certificate relied upon by the appellant for no prescription in law. <strong>There is no Notification available on record to appreciate that he is an officer authorised by section 2 (b) of Central Excise Act 1944 under Central Board of Revenue Act, 1963</strong>. If such an Officer is not competent and recognised by law to issue certificate the department should take action against the Officer those who issue the certificates not recognised by law. Ld. CDR is requested to send a copy of this order to the Jurisdictional Commissioner where the Superintendent is working, for appropriate action. So also the Board may be intimated for appropriate redressal if any required. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The above observation brings into focus the question as to whether any separate notification is required to authorise a Superintendent as “Central Excise Officer” under Section 2(b). The provisions of Section 2(b) read as under: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) "Central Excise Officer" means the Chief Commissioner of Central Excise, Commissioner of Central Excise, Commissioner of Central Excise (Appeals), Additional Commissioner of Central Excise, Joint Commissioner of Central Excise, Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise or <em><strong>any other officer</strong></em> of the Central Excise Department, <em><strong>or any person (including an officer of the State Government)</strong></em> invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Officer under this Act;] </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the point is whether any other officer of Central Excise should also be invested with the powers of Central Excise to recognise him as an officer of Central Excise. Obviously there seems to be some confusion as to whether the requirement of being invested with powers is only with regard to any person appearing before the last line or is it also applicable to the any other officer of Central Excise? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, the Tribunal holds that a Central Excise Superintendent is not recognized as an Adjudicating Authority as per Section 2(a) of the Act. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 2(a) reads as, </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Adjudicating authority” means any authority competent to pass any order or decision under this Act, but does not include the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963), Commissioner of Central Excise (Appeals) or Appellate Tribunal” </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This section does not specify any officer by designation as an adjudicating authority and if the Superintendent is not an adjudicating authority, even the Commissioner is not. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In any case, Board by Circular No. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2010/excircular922.htm" target="_blank"><strong>922/12/2010-CX dated 18.05.2010</strong></a> had decided to confer the power of adjudication on Superintendents for cases involving duty upto Rs. 1 Lakh in a show cause notice, except in respect of issues involving rate of duty and valuation or where extended period of limitation has been involved. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the Superintendent of Central Excise is both a <strong>Central Excise officer</strong> and an <strong>Adjudicating Authority</strong>, but the tribunal wants action to be taken against the Superintendent for issuing a certificate.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In fact, the Board had way back in 1995, in Circular No. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/1995/excircular116.htm" target="_blank">116/27/95-CX dated 06/04/95</a></strong> directed Range Superintendents to issue certificate of non-availment of Modvat Credit and further clarified this in Circular No. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/1995/excircular151.htm" target="_blank"><strong>151/62/95-CX dated 04/10/95</strong></a>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board in Circular No. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2002/excircular620.htm" target="_blank"><strong>620/11/2002-CX dated 20.02.2002</strong></a>, directed that even though there is no provision in the Central Excise Rules or in the Central Excise Manual to issue certificate of proof of payment of duty, such certificates may be issued by Superintendents as a trade facilitation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yet, the Tribunal wants action against the Superintendent for issuing a certificate, as he is neither a <strong>Central Excise Officer</strong>, nor an <strong>Adjudicating Authority</strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <em>Pahwa chemicals</em> - <font size="1"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2005/2005-TIOL-43-SC-CX-LB.htm" target="_blank">2005-TIOL-43-SC-CX-LB</a></strong></font>, the Supreme Court held, “<em>the Superintendent had jurisdiction to issue Show Cause Notice</em>” [even though in this case, the Board Circular was against such action]</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <em>Aeon's Construction Products </em>- <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2005/2005-TIOL-88-SC-CX-LB.htm" target="_blank"><strong><font size="1">2005-TIOL-88-SC-CX-LB</font></strong></a>, the Supreme Court reiterated this view. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Central Excise Superintendent has the power to summon any person and the summoned person is bound to attend; He had the power to issue Show Cause Notices; he has the power to adjudicate; he has the power to arrest; he had the power to issue and renew licences; he was an assessing officer. How can he do all these without being a Central Excise officer? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yet, the Tribunal wants action against the Superintendent for issuing a certificate as he is neither a <strong>Central Excise Officer</strong>, nor an <strong>Adjudicating Authority</strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And if they are not Central Excise officers, what are 15000 Superintendents doing in the Department? Maybe the Department should promote all the Superintendents as Deputy Commissioners and all the Inspectors as Assistant Commissioners as part of the cadre review, so that they are recognised as Central Excise officers! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this important order of the CESTAT today. Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=13840" target="_blank">Breaking News</a></strong>.</font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Export of Basmati Rice to Horn of Africa Permitted </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has permitted export of 10,000 tons of non-basmati rice to Horn of Africa (Kenya, Somalia & Djibouti) from Central Pool Stock of FCI at economic cost of Rs. 20,689.50 per ton. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not088.htm" target="_blank"><strong>DGFT Notification No. 88 (RE-2010)/2009-2014; Dated December 12, 2011 </strong></a></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBI chargesheets Ruis and Khaitans - They Deny all charges </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> 2G scam is getting murkier with some top Corporate honchos dragged into the CBI net. The CBI Press Release says, “ The Central Bureau of Investigation has today filed a chargesheet U/s 120-B r/w 420 IPC against two promoters of a Mumbai based private Telecom Group; Director of a Mumbai based Company; another Director of the said Company(an NRI); President of a Mumbai based private Telecom Business Group and three Mumbai based private telecom Companies in the Court of Special Judge(2G Cases), Patiala House Courts, New Delhi.”</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Translated, this means, the charge sheet includes Essar Group's Ravikant Ruia, Anshuman Ruia and Vikash Saraf apart from Kiran Khaitan and her husband IP Khaitan of Loop Telecom.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Essar Group has claimed that:</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Essar denies all charges; will take legal recourse. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Law Ministry & Corporate Affairs Ministry have confirmed that there is no violation of Clause 8 of the UASL guidelines. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Unprecedented that charges have been made despite Government confirming that there is no Clause 8 violation and that this is only a contractual issue.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Similar contractual violations in the past have not attracted any fine/penalty or charges by the Government. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Essar a law-abiding Corporate in full compliance with all regulations and laws of the land, including the UASL guidelines of the DoT </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Chargesheet will not impact business operations of the group </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Essar Group's stand that it is not involved in the 2G irregularities has been vindicated by the CBI today. <strong>There are no charges of corruption or involvement in the 2G scam</strong>. </font></p> </blockquote> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Might of the Government - King Fisher Mallya lands in North Block </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> seems like King Fisher is flying in all the wrong directions. The high-profile Vijay Mallya was in North Block to meet CBEC Chairman Goel to request him to allow him some time to clear the Service Tax dues. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The tax departments should come to the rescue of ailing assessees and should not help in the hastening the funeral rites of industry, which provide taxes and employment. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">RTI - CIC has no power to direct Public Authority to furnish information - No retrospective exemption - SC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“<strong>RIGHT</strong> to Information Act was enacted to promote transparency and accountability in the working of every public authority in order to strengthen the core constitutional values of a democratic republic. It is clear that the Parliament enacted the said Act keeping in mind the rights of an informed citizenry in which transparency of information is vital in curbing corruption and making the Government and its instrumentalities accountable. The Act is meant to harmonise the conflicting interests of Government to preserve the confidentiality of sensitive information with the right of citizens to know the functioning of the governmental process in such a way as to preserve the paramountcy of the democratic ideal. The preamble would obviously show that the Act is based on the concept of an open society”, said the Supreme Court in an order yesterday. We bring you the order today. Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=13843" target="_blank">Breaking News</a></strong>. </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"> -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">Excess sales tax collected not includible in assessable value - No mala fide intention to evade by PSU - CESTAT by majority</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> nature of excess freight has been held as profit on transportation and not as additional consideration, the ratio followed, will be applicable in the case here as the nature of the amount collected by the assessee was in respect of sales tax which is paid to the supplier of the goods. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant being a Public Sector Undertaking, there cannot be mala fide for non-discharge of excise duty, if any, and there cannot be allegation of intention to evade duty. </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 delay in filing return is condoned by CCIT, assessee cannot be denied interest on refund admissible u/s 244A - YES, rules HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> petitioner, an income tax assessee, filed a writ petition that excess TDS (Tax Deducted at Source) by LIC on maturity of policies paid to him, in his case amounting to Rs.19,083/- for the assessment year 1994-95 was initially not refunded as per return of income filed by him as there was delay of four days only in filing such return income, which was due to be filed on or before 31.03.1996, under Section 139 (4) of the Act, but the same was filed on 04.04.1996. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CCIT, Udaipur condoned the said delay of four days, and directed the Assessing Authority to admit the claim of refund of Rs.19,083/- after due verification of TDS certificates and evidence of other tax payments, if any. However, the said authority, Chief Commissioner of Income Tax, added the impugned part in the said order that “no interest will be paid on the belated refund”. </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">When sales tax is paid on gross value of motor vehicles including accessories, no liability to pay service tax: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant, an authorized dealer of Maruti Udyog Ltd is also an authorized service station. In the course of their business, they also purchase and sell various accessories of motor vehicles sold by them. The bills for these accessories are raised showing gross total value received from their customers and they discharge sales tax on such gross value. Revenue contended that since they are fixing accessories in the motor vehicles, such fixing has to be treated as providing services under the category of ‘authorized service station'. </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 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>