TIOL-DDT 1757 · 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 1757</font><br> 21.12.2011<br> Wednesday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption to aircraft, radars etc. imported for AEW&C </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AIRCRAFT</strong>, parts, radars, machinery, equipment, computer hardware and software and several other goods imported for the Airborne Early Warning and Control (AEW&C) System Programme of Ministry of Defence, are exempted by Sl. No. 31 of the Table to the Notification No. 39/96-Cus dated 23.07.1996. But this exemption is valid only till 31st December 2011. Now, the Government has extended it till 4th day of April 2014. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_110.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 110/2011-Customs Dated: December 19, 2011</font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">IRS v IRS - Transport of Goods by Rail - exempted exemption - Will they continue beyond 2011? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SERVICE</strong> Tax Notifications 7/2010, 8/2010 and 9/2010, after several postponements are to come into force with effect from 01.01.2012, bringing in Service Tax on transport of goods by rail. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will the Indian Railways accept the power of Indian Revenue to levy taxes? </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see </font></p> <blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• <strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9548">DDT 1180 – 21.08.2009</a></strong></font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9601">DDT 1187 – 01.09.2009</a></font></strong></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9607">DDT 1188 – 02.09.2009</a></font></strong></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11035">DDT 1387 – 2 4.06.2010</a></font></strong></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11723">DDT 1495 26.11.2010</a></font></strong></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11830">DDT 1512 – 22.12.2010</a></font></strong></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12319">DDT 1579 – 30.03.2011</a></font></strong></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12644">DDT 1630 – 15.06.2011</a></font></strong></p> </blockquote> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise and Service Tax Officers fail in expanding base, registration, scrutiny - CAG </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CAG conducted a performance audit on working of Commissionerates, Divisions and Ranges on </font></p> <blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Measures to broaden the service tax base; </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Monitoring mechanism for registration of assessees; </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Receipt and scrutiny of returns; </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Internal audit process; and </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Issue of show cause notices </font></p> </blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Their sample comprised 46 Commissionerates, 95 Divisions and 204 Ranges. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some of the findings from the Report released yesterday: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ 17 out of 35 Commissionerates informed that they had not carried out the procedures as prescribed by DGST in its action plan for broadening the tax base. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ CAG had earlier identified 1959 service providers who were not registered. Department could only register 151 out of them. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ CAG found delays in issuing registration certificates and in acceptance of surrender certificates. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Detailed scrutiny of Central Excise and Service Tax Returns were being done only in very few ranges or divisions. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The work of maintenance of assessee master file had not been completed by the audit wings of most of the Commissionerates. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In ten Commissionerates, non-mandatory units were audited at the cost of mandatory units. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ There was no centralised record of all the cases, which required issue of Show Cause Notices. </font></p> </blockquote> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">EPCG - DGFT equally bad - CAG </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CAG also conducted a performance audit on the ‘Export Promotion Capital Goods Scheme' (EPCG) to evaluate the adequacy of the provisions of Foreign Trade Policy, Customs Act and related instructions and to assess their proper implementation in issue of authorisation under the scheme.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG found: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Under EPCG Scheme, the licences issued have to be monitored over an eight year period through many prescribed checks. We observed that authorisations were issued without complete set of documents prescribed and post verification of declarations was usually not done by Regional Licencing Authorities (RLAs) in violation of DGFT's instructions. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Post Issue Audit Wings (PIAW) were not operational in most places except Mumbai.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Many cases of incorrect fixation of specific export obligation due to calculation mistakes.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Authorisations were issued against refusal orders by granting abeyance orders by RLAs without authority.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Neither the RLAs had instituted any system to monitor the receipt of installation certificates of the imported capital goods nor the Customs department initiated any address verification in most of the locations. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ There was lack of monitoring at the redemption stage. The RLAs were not tracking the receipt of redemption applications on the due dates i.e. on completion of eight years from date of issue of licence. </font></p> </blockquote> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Arvind Kejriwal's Resignation Accepted - He paid up Dues</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/anna_1.jpg" alt="Legal Corner Icon" width="300" height="225" hspace="5" border="0" align="left"><strong>IT</strong> was <strong>TIOL</strong> which first broke the news that while being a very important member of Team Anna, Arvind Kejriwal continued to be an IRS officer. <strong>[Please see Is Arvind Kejriwal still an IRS officer?</strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=13096"><strong>DDT 1683 01 09 2011</strong></a><strong>] </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On 3rd November, he paid up over Rs. 9.27 Lakhs, he owed to the Income Tax Department and wrote a letter to the Prime Minister asking him not to harrass six IIT friends who gave him interest free loans to clear his dues. Kejriwal strongly resisted the Income Tax Department's efforts to realize the dues, but had to relent finally. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBDT Notification dated 20.12.2011, states, “The President of India is pleased to accept the resignation of Shri Arvind Kejriwal, IRS (IT:92069) from Central Government Service with effect from 20th February, 2006.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A copy of the notification is sent to the Officer concerned (obviously, Kejriwal). Is he still an officer?</font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax Inspector saves Constable; gets shot</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FIFTY</strong> year old <strong>New Delhi</strong> is not safe – no, not even for a cop. It seems two men in a Santro car rammed the bike of a constable and then started hitting him. An Inspector of Income Tax Rajesh Sharma who was taking a post dinner walk in his colony saw the policeman being attacked and tried to save him. Then one of the attackers shot Sharma in his jaw. Sharma is undergoing treatment in AIIMS and it seems the Cop could not get a bed in the hospital!</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Delhi Police will reward the Income Tax Inspector – maybe around Rs. 500/-. The tax fraternity should be proud of him.</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><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">Gold mountings and findings being items as jewellery are outside purview of Notification No. 62/2004-Cus; Board Circulars are binding only when they are in accordance with Law - CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHILE</strong> the Board under Section 151 (a) of the Customs Act, can issue clarifications with regard to classification of a product or scope of an exemption notification, by such clarifications, the Board cannot expand the scope of an exemption notification issued by the Central Government under Section 25 (1) of the Customs Act, 1962 as the Board is after all an office, subordinate to the Government of India. Constitutional Bench of the Supreme Court in the case of<em> CCE, Bolpur vs. Ratan Melting & Wire Industries reported in <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2008/2008-TIOL-194-SC-CX-CB.htm" target="_blank"><font size="1">(2008-TIOL-194-SC-CX-CB)</font></a></strong></em> has held that Circulars of the Board are binding only when the same are in accordance with the law. </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, for full and true disclosure of information, onus is on assessee to ensure that vital information for AO are not hidden in documents furnished with return - YES, rules Bombay HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> mere production of account books or other evidence from which material evidence could with due diligence have been discovered by the AO does not necessarily amount to a disclosure within the meaning of the first proviso to Section 147. The nature of the material produced and the circumstances in which it was produced assumes some significance. </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">There is nothing in law which requires that input services ought to have been used in factory where credit is taken - Stay granted: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INPUT</strong> Service – Stay/Waiver of Pre-deposit - Denial of <em>CENVAT credit</em> on the ground that the appellant had received ISD invoices from Head Office pertaining to input services not used in or in relation to manufacture of goods at Borivali plant is not warranted in law - till the time rule 7 is amended only two conditions have to be satisfied for distribution of credit - first is that the credit should not exceed the amount of service tax paid and second restriction is that the credit should not be attributable to services used in the manufacture of exempted goods or exempted services - Pre-deposit waived and recovery stayed.</font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements</font></strong></p> <p><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> <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></p> </body> </html>