TIOL-DDT 1758 · 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 1758</font><br> 22.12.2011<br> Thursday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on Sodium Hydrosulphite - Long Story of Resurrection </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PROVISIONAL</strong> anti dumping Duty was imposed on the import of Sodium Hydrosulphite originating in, or exported from the People's Republic of China by Notification No. 28/2001-Customs, dated: March 12, 2001. This Notification lapsed on 11.09.2001. But as far as the Board is concerned, notifications simply don't lapse; they can be resurrected. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Notification No. 114/2001-Cus., dated 2-11-2001, the duty was again imposed, of course, with effect from the date of provisional imposition that is 12.03.2001. So this would have expired on 11.3.2006. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Notification No. 25/2006-Cus., dated 10-3-2006, this notification was extended till the 11th day of March, 2007. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Notification No. 108/2006-Cus., dated 16-10-2006, the duty was re-imposed for another five years. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Notification No. 133/2009-Cus., dated 09-12-2009, the duty was re-imposed to be in force up to 15.10.2011. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, this expired on 15.10.2011. But anti dumping notifications don't expire as notified; they have many rebirths. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has extended the validity of the notification till 13 th October 2012 and that too in a very callous manner. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The amendment says, </font></p> <blockquote> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>"I</strong></font><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#FF6633">n</font></font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633"> the said notification</font> [133/2009-Cus], <font color="#FF6633">at the end, the following shall be added , namely: -</font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">"This notification shall remain in force up to and inclusive of the 13th October, 2012, unless the notification is revoked earlier". </font></strong></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now Notification No. 133/2009 already ends with the following sentence, <strong><font color="#FF6633">"</font></strong><font color="#FF6633"><strong>This notification shall remain in force upto and inclusive of the 15th October, 2011 unless the notification is revoked earlier."</strong></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, with the latest amendment, this notification is valid up to 15.10.2011 and also up to 13.10.2012. Impossible? Board at its best? When the notification provides two options, the importer can choose the one that is better suited to him. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_111.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 111/2011-Customs Dated: December 20, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Audit on Audit – CAG finds Central Excise Internal Audit in Shambles </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CAG conducted a study of the Internal Audit Process in Central Excise and Service Tax Commissionerates. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Internal Audit is empowered, under Central Excise and Service Tax Rules, to access the records of the assessees at their registered premises. Every Commissionerate has an Audit cell, manned by an Assistant/Deputy Commissioner and auditors and headed by an Additional/Joint Commissioner and this cell prepares coordinates and monitors the audit plan. The audit is done by a set of internal audit parties (IAP) consisting of Superintendents and Inspectors. The Board has laid down detailed guidelines in the form of Audit manuals for audit of central excise and service tax units, which prescribe detailed processes for conduct of audit. CAG evaluated five main processes prescribed in the manuals. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Maintenance of Assessee Master File</strong>: As per chapter 9 of Central Excise Audit Manual, 2008 and para 6.1 of the Service Tax Manual, 2003, the Assessee Master File is to be prepared and updated by the Audit cell in the Commissionerate. A list of documents (Registration application, copies of past three years returns, copy of past three years audits, cost audit/tax audit report and financial statements of past three years) & (Details of goods manufactured and exempted, production details, duty payment and issue of SCN of past three years and details of litigation) of the manual is to be kept in each assessee master file. </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG found that this work had not been completed by most of the Commissionerates and the information related to Assessee Master Files was not reflected in the monthly reports submitted by the Audit Cell to the Commissioner.</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Selection of units for audit</strong>: As per para 10.1.1 and 10.1.2 of Central Excise Audit Manual, 2008 and as per para 5.1.4 of Service Tax Audit Manual, 2003, the audit cell of each Commissionerate is to maintain an updated list of all registered assessees. The list is segregated into two categories - mandatory units and non-mandatory units. The units in the non-mandatory category are to be selected for audit on the basis of risk assessment using prescribed criteria. </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">While an elaborate selection procedure was prescribed in the manual, CAG found that in actual practice, the non-mandatory units were selected, by and large, only on the basis of revenue collected.</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No list from DG, Audit</strong>: As per para 10.1.2 of Central Excise Audit Manual, 2008, DG (Audit) is to compute the risk for all the non- mandatory units in a centralised manner, called rupee risk, every year and circulate the list of assessees in each slab of non-mandatory category by 15th April. On the basis of this list, the Audit Cell is to prepare an annual list of assessees to be audited during the year. </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">It was reported by 39 Commissionerates of central excise audited by AG, that none of them received the list of assessees from DG (Audit).</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Audit Plan Registers:</strong> As per para 12.3.1 of Central Excise Manual, 2008, and para 9.5.1 of Service Tax Audit Manual, 2003, a register of units planned for audit in the prescribed format is to be maintained to monitor the different stages of execution of the audit and ensure that all units allotted to an Audit Group have been audited and wherever audit has been completed, the Audit Reports have been issued on time. </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG observed that the Audit Plan Registers were not maintained according to manual and did not reflect whether all planned units had been audited and whether audit reports had been issued timely.</font></strong></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG Recommends : </font></strong></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ that the preparation of Assessee Master Files for each assessee may be completed in a time bound manner. The timelines may be monitored by Commissioners through monthly reports submitted by the Audit Cells. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ the ACES module for internal audit, which is operational, may be implemented in a time bound manner so that multiple parameters can be used for the risk based selection of non-mandatory units. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ MIS reports may be designed in ACES in the format of the Audit Plan Registers to monitor whether all planned units had been audited and whether audit reports had been issued timely. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ the reduction in audit coverage due to staff shortages may be distributed evenly across mandatory and non-mandatory units. The practice of auditing larger number of non-mandatory units at the cost of mandatory units may be curtailed. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems that the DG, Audit has addressed a letter dated 22 November 2011 to Chief Commissioners drawing their attention to the prescribed norms for audit of mandatory and non-mandatory units as well as to the observations of the Audit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT Recommends:</strong> The above paras (pointed out by CAG) in the audit manuals may be deleted with retrospective effect and next time you draft your manuals, do keep in mind that the procedures prescribed in the manuals should be practical and implementable. Otherwise, after 10 years CAG will use your own manual against you. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Objectives of SEZs</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a written reply to a question in the Rajya Sabha, yesterday Minister of State for Commerce and Industry, Jyotiraditya Scindia, stated, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The main objectives of the SEZ Act, 2005 are:- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) generation of additional economic activity </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) promotion of exports of goods and services </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) promotion of investment from domestic and foreign sources </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) creation of employment opportunities </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) development of infrastructure facilities </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In addition to seven Central Government Special Economic Zones (SEZs) and 12 State/Private Sector SEZs set up prior to the enactment of SEZ Act, 2005, formal approval has been accorded to 582 proposals out of which 382 SEZs have been notified. A total of 148 SEZs are already exporting. Physical exports from the SEZs have increased from Rs. 2,20,711 crore approximately in 2009-10 to Rs. 3,15,868 crore approximately in 2010-11, registering a growth of 43.11%. The total physical exports from SEZs as on 30th September, 2011 i.e. in the first half of the current financial year, has been to the tune of Rs. 1,76,479.69 crore approximately registering a growth of 26.20% over the exports of corresponding period of the previous financial year. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The fiscal concessions and duty benefits allowed to SEZs are inbuilt into the SEZ Act, 2005. These exemptions are in the nature of incentives for export and infrastructure creation and are consistent with the principles that guide export promotion initiatives of the Government in general. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">No to Bangalore; Yes to Buffalo: The US Call Center Worker and Consumer Protection Bill - A Blow to Indian BPO Business </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"<strong><em>GOOD</em></strong><em> morning, welcome to Bank of America; this is xxxxx located in India; how may I help you"</em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Could you transfer my call to somebody located in the US?"</font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Sure sir, can I put you on hold for a moment please”. </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is how conversations with customer-care agents of US companies in future would be. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In what the NASSOCAM calls a protectionist measure, a Bill was introduced in the US Congress to<em> require publicly available a list of all employers that relocate a call center overseas and to make such companies ineligible for Federal grants or guaranteed loans and to require disclosure of the physical location of business agents engaging in customer service communications</em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bill also proposes that a call Centre agent shall at the beginning of a call disclose his physical location and if the customer requests, transfer the call to an agent physically located in the United States. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Indian Call Centre industry is likely to be badly affected, if this Bill becomes Law, which is most unlikely. </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">Central Excise </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Imposition of penalty u/s 11AC of CEA, 1944 is not sustainable if there has been no determination of duty under section 11A(2) of CEA, 1944: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FOR</strong> imposition of penalty under Section 11AC, it has to be first established that duty has been short-paid or short-levied or non-paid or non-levied and such short-levy or short-payment or non-levy or non-payment is on account of fraud, suppression of facts, collusion, willful mis-statement of facts or contravention of any of the Rules with an intent to evade payment of duty. As regards demand for interest, liability to pay interest will arise the moment there is a delay in payment of duty and such liability will accrue even when the liability is discharged on assessee's own ascertainment of duty and duty liability can be discharged on such own ascertainment in terms of provisions of Section 11A(2B) of the Central Excise Act </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 wheeling charges paid for transmission of electricity can be construed as rental income within provisions of Sec 194I - NO, rules ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> is a Public Limited Company, doing trading of electricity - it purchased power from the generators of electricity and sold the same to the distribution companies which in turn distributed the powers to consumers. The assessee for the purpose of carrying power from the generation point to the end of distribution companies utilized the transmission lines of some company and paid them - During the course of assessment proceedings the AO was of the view that payments made by the assessee were in the nature of rent and hence attracted the provisions of section 194I and hence the assessee ought to have deducted TDS on these payments. </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">Appellant registered under category of Insurance Auxiliary Services and paying Service Tax on behalf of insurance agents as deemed service provider - CENVAT Credit taken of such payments and utilized - Prima facie case in favour - Stay granted: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> was observed that the appellant had utilized input service tax credit in respect of service tax on insurance auxiliary services. The department was of the view that since the appellant is only a recipient of the service and is not providing any output service, they cannot utilize any input service tax credit for payment of service tax on Insurance auxiliary service. </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><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>