TIOL-DDT 1760 · 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 1760</font><br>
26.12.2011<br>
Monday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti-Dumping
Duty on FSP - Singapore Excluded</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> ADD on flexible slabstock polyol or FSP falling under sub-heading 3907 20 originating in, or exported from, the United States of America, Japan, the European Union and Singapore, imposed vide Notification, No. 120/2002-Customs, dated the 31st October, 2002 was extended till 10.2.2008 by Notification No. 12/2007 -Customs dated the 6th February, 2007. Before this could expire, as the Designated Authority had recommended continued imposition of anti-dumping duty against the subject goods originating in, or exported from, the United States of America, to offset dumping and against Singapore and Japan to prevent recurrence of dumping, in order to remove the likelihood of injury to the domestic industry, the Government had introduced Anti Dumping Duty on the goods for another period of five years from 5.2.2008. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this Notification, Sl. Numbers 5 to 8, related to goods originating in, or exported from Singapore. Now these items are omitted from the notification that is, it is not applicable to goods originating in, or exported from Singapore. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_112.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 112/2011-CUS, Dated : December 20, 2011</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Broadening Tax Base - No Clarity about measures to be taken by the Commissionerates - CAG </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> action plan was drawn by the Director General of Service Tax and circulated to Chief Commissioners on 26 May 2003, under which the field formations were required to obtain information: - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ On unregistered service tax providers from yellow pages, service providers' associations, newspaper advertisements, regional registration authorities and websites like Indiamart.com. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ From Banks about property which may be covered under architectural/consulting engineer services. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ From Municipal corporations and major assessees including PSUs and private sector organisations regarding various services being availed by them and to obtain details of such services providers including their addresses. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ From major hotels, auditorium, banquet halls, conference hall about convention services and event management service providers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ By making discrete market enquiries. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ By collecting intelligence and conducting field surveys. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG enquired as to what measures had been taken by the Commissionerates towards broadening of tax base of service tax assessees in pursuance of the specific items of DGST action plan. It was informed by 17 Commissionerates out of 35 test checked Commissionerates that they had not carried out these procedures for broadening the tax base. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Six Commissionerates intimated that the items of work prescribed by DGST were carried out. However, they intimated that the results of such efforts were not available with them. Visakhapatnam I Commissionerate stated that items of works prescribed by DGST for broadening the tax base were being carried out but it was difficult to co-relate number of registrations made with any particular measure. However, the total number of registrations achieved, from a combined application of these measures, was also not furnished. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Delhi ST Commissionerate and ST division, Jaipur, under Jaipur I Commissionerate stated that the DGST instructions were no longer applicable. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG observes that there is lack of clarity about measures to be taken by the Commissionerates. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGST instructions provided for submission of a fortnightly report by the divisional offices to the Commissioners and by the Commissioners to the Chief Commissioners regarding efforts made for increasing the tax base. The report had to specially cover areas such as surveys conducted and outcome thereof, data base maintenance, meetings with the service provider associations etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The selected Commissionerates reported that no fortnightly reports were being submitted regarding efforts to broaden the tax base. The selected Commissionerates also reported that no targets were fixed for the measures required to be taken for broadening the assessee base. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Service Tax Officer tells us : </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGST instructions were issued when there was no small service provider exemption. In most of the instances, the information published in yellow pages need not be correct as they hardly conduct any verification. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Most of the unserviced registrations in every Commissionerate are those because of the registration drive conducted during those days by giving forced registrations to all and sundry. This has caused lot of administrative problems to monitor these unserviced/non serious registrations and Board had to give instructions to close such registrations. After 2003 the service tax administration has come a long way with most of the Commissionerates/even DGCEI booking service tax cases and therefore the instructions of DGST are archaic. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, as rightly mentioned by Visakhapatnam Commissioner, it is very difficult to monitor/record as to which registration has come as a result of which particular measure (yellow pages/telephone directory etc) </font></p>
<p align="justify"><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">++ The Board may prescribe a deadline for Commissionerates to verify cases already pointed out by CAG in the earlier Performance Audit Reports. It may also fix targets for doing such verifications and issue comprehensive guidelines for this work to remove ambiguities and contradictions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ As a long-term measure, the Board may identify sources from where information can be imported electronically into ACES, to form an intelligence gathering system on potential taxpayers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The Board may prescribe an effective monitoring mechanism to identify potential assessees and get them registered. </font></p>
</blockquote>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT Recommends: </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGST and the Chief Commissioners are same rank officers. So, the letters to the Chief Commissioners from DGST are not taken very seriously. In an organisation where “batch protocol” is widely prevalent, no Chief Commissioner would ever welcome a direction from DGST on what needs to be done in his jurisdiction. CBEC should consider upgrading the post of DGST above the rank of Chief Commissioners in the ensuing cadre restructuring. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Source: </strong>CAG's Report No. 25 of 2011-12 (Indirect Taxes – Central Excise and Service Tax)</font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Member - Vineet Ohri - <em>a
la</em> - Laxman Das </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CHIEF</strong> Commissioner of Income Tax and a 1974 officer of the IRS, Laxman Das had challenged the 2010-11 panel of CBDT Members and got a favourable order from the CAT in September 2011, in which the CAT quashed the appointment of AK Basu as Member, CBDT and directed the Government to constitute a review Selection Committee to consider the application of Laxman Das for the post. Government was supposed to complete this exercise before 2 nd December 2011. We do not know what happened, but now an IRS officer of the Customs and Central Excise, Vineeth Ohri has a similar order from the CAT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vineet Ohri, Chief Commissioner of Customs (Prev), New Delhi is a 1975 officer of the IRS and he has challenged the selection of Members for the Panel Year 2010-11. The CAT found that this was a similar case to that of Laxman Das and directed the Government to constitute a Review Selection Panel to consider Vineet Ohri's application within six weeks from November 30th that is by about 15th January 2012.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If things go well for Vineet Ohri, he may even become Chairman of CBEC, but then it seems the Government has found enough holes in the Laxman Das case and may take the legal battle further. Certainly uncertain days ahead for both the Boards! We carried the Vineet Ohri case yesterday. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see</strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=78&filename=pitara/sercaselaw/caselaw/2011/2011-TIOL-04-CAT.htm"><strong>2011-TIOL-04-CAT </strong></a></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">The Jan Lokpal wants to swallow CBI? </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FORMER</strong> Director General of BSF, Prakash Singh, in an article says,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government's sins of omission are coming home to roost. The Jan Lokpal wants to swallow the CBI. Must we destroy an institution built over the last sixty years to create another? The parliamentary committee has also tripped in suggesting the approval of Lokpal before the submission of charge sheet/closure report. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The parliament would do well to remember certain basic principles: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ the Lokpal should be saddled with only as much as it can properly cope with; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ concentrating too much power in the hands of a single individual/organization would be fraught with complications and that a decentralised structure would have better chances of success in a country of India's size and population; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ the existing institutions which have served reasonably well should not be tampered with, though minor structural changes could be made in the light of experience gained; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ that any change which impinges on the basic character of the Constitution must not be entertained; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ that we should have an integrated anti-corruption mechanism in the centre and the states; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ that the sanctity of the investigative process must not be sullied by any external agency. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If there is clarity and agreement on these fundamentals, it should not be difficult to arrive at a consensus in finalising the Lokpal Bill. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">State Elections to Push Back Union Budget?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FIVE</strong> States, Uttar Pradesh, Uttarakhand, Punjab, Goa and Manipur are to go to polls in the next couple of months with elections in Goa being the last to be finished by 3rd March 2012. Now, there is a code of conduct which prohibits the government from making announcements which can influence voters in any way or accord any undue benefit to the party in power. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now can the Union Budget be presented on 29th February and the Railway Budget a few days earlier? Pundits say that the code of conduct will not apply to the Centre and they can go ahead with the budget. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is no rule that the Union Budget should be presented on the last day of February; it is only a convention – which had been bypassed several times. So why should a Finance Minister who is also the trouble-shooter for the ruling party risk a budget without knowing how the political wind is blowing. So, in all probability, the Budget will be postponed. With this uncertainty, we are not sure when we should start our Budget Run up.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If the Budget is not allowed to influence the elections, the election results will certainly influence the budget.</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"> – Tuesday'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">Excisability - Chlorination Plants - there is no evidence that plants can be removed as such without dismantling - Strong prima facie case in favour - Pre-deposit waived: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INTERESTINGLY</strong>, there are still some officers in the department who have a firm belief that all the “Plants” assembled at site are excisable and hence chargeable to Central Excise duty. The meticulously issued Section 37B order no. 58/1/2002-CX dated 15 th January, 2002 on the subject “Excisability of plant and machinery assembled at site – reg.” fails to find takers, and as is the norm, these officers prefer to err on the side of 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"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether interest u/s 234C is to be levied on tax determined on book profits on deferment of advance tax liability - YES, rules ITAT</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RETURN </strong>declaring book profits in terms of provisions of sec. 115JB was filed which was processed u/s 143(1). AO observed that the assessee deferred its advance tax liability and failed to pay various instalments of advance tax at the prescribed percentage in terms of provisions of sec. 211 of the Act and levied interest u/s 234C. Assessee filed an application u/s 154 that interest u/s 234C was not leviable. AO rejected the application on the ground that the interest u/s 234C of the Act in case of book profits determined u/s 115JB of the Act was a question of law on which different opinions exist and thus, the there was no mistake apparent from the record and it did not fall within the scope of section 154. </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">CENVAT Credit on input services used for construction of mall – Pre-deposit waived and recovery stayed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> can be seen from the definition of input service that it is an inclusive definition which grants credit to the services which in relation in setting up...... premises of provider of output service. Prima-facie we find that the decision of the Tribunal in the case of <em>Sai SamhitaStorages P. Ltd. Vs. C.C. & C.E., Visakhapatnam</em> - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2010/2010-TIOL-1751-CESTAT-BANG.htm"><strong><font size="1">(2010-TIOL-1751-CESTAT-BANG)</font></strong> </a>covers the issue in favour of the assessee. the appellant has made out a prima-facie case for the waiver of pre-deposit of the amounts involved. The application for waiver of pre-deposit of the amounts involved is allowed and recovery thereof stayed till the disposal of appeal. </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"><strong> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p>
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