TIOL-DDT 1769 · 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 1769 </font><br>
06.01.2012 <br>
Friday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Refund
of 4% SAD - Cost Accountant can sign </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> had in Para 4.1(d) of <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_018.htm" target="_blank">Circular No. 18/2010-Customs, dated 08.07.2010</a></strong>, stipulated that the amount of 4% CVD refund shall be sanctioned in full, on preliminary scrutiny of the documents and certificate of statutory auditor/Chartered Accountant, for correlating the payment of ST/VAT on the imported goods with the invoices of sale and also to the effect that the burden of 4% CVD has not been passed on by the importer to the buyer. However, as Para 6 of the said Circular only Charted Accountant can issue a certificate that incidence of burden of 4% CVD has not been passed on by the importer to the buyer. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC has noted that:</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Circular No. 18/2010-Customs dated 08.07.2010 disentitles Cost Accountants in regard to issue of requisite certificate though they may be statutory auditors of the importer.
</font>
</p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Several States currently recognize Cost Accountants for purpose of VAT audit and it would be a hardship to trade already using statutory auditors/Cost Accountants to get required certificate for amount of 4% refund from Chartered Accountants. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As a measure of facilitation, Board has now authorized Statutory Auditors/ Cost Accountants/ Chartered Accountants to issue a certificate, certifying that burden of 4% CVD has not been passed on by the importers to any other person. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The SAD story of 4% SAD refund claims is turning out to be a long winding soap opera. [Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11102"><strong>DDT 1398 – 09 07 2010</strong></a>]. Please also see Also see our reports on this refund saga in <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=6082"><strong>TIOL-DDT 701 18.09.2007</strong></a>, <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7230">T<strong>IOL-DDT 854 29.04.2008</strong></a><strong>, <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7540">TIOL-DDT 902 07.07.2008</a>, <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8005">TIOL-DDT 970 14.10.2008</a>, <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11060">TIOL-DDT 1391 30.06.2010</a></strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11060"> </a>and the story Indian Customs: <a href="http://www.taxindiaonline.com/RC2/print_story.php?&newsid=9890"><strong>The SAD Refund Circus! contributed by a hapless netizen </strong></a></font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2012/cuscir12_001.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 1/2012-Cus., Dated: January 05, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - No Demand less than Rs. 100</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> has been reported in some sections of the press that the Central Processing Centre, Bangalore is sending notices for payment of taxes which are as small as Rs. 1/-, 4/-, 6/-, causing unnecessary hardship to assesses. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Income Tax Department clarifies that it had created a central repository of all demands for better demand management. To achieve this, all officers were asked to collate demand lying at various places viz. IRLA, TMS and manual registers and upload onto CPC portal. This was also part of the annual action plan. Consequently, AOs have uploaded the same. During a meeting with Bangalore Chartered Accountants association, it was suggested that taxpayers should also be informed about the same so as to enable them to take necessary action if the outstanding demands were incorrect. This measure was aimed at providing greater transparency. Therefore, a communication has been sent to taxpayers informing them about existing arrears. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is clarified that this communication is <strong>not a demand notice</strong>. This measure is, in fact, an assessee-friendly exercise. The Department has also written to all chief commissioners to amend such entries, if found incorrect, when approached by taxpayers. This would correct the database if a taxpayer has proof of payment etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the extant procedure, demand of less than Rs. 100 is not enforced but is liable for adjustment against future refunds. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax Commissioner's Appeal Against Transfer Dismissed by Delhi High Court:<br>
Who should be transferred where, is for appropriate authority to decide </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Commissioner of Income Tax submits to the Court that in the year 1999, he was posted as Deputy Commissioner at Delhi and subsequently promoted as Joint CIT and Additional CIT and retained at Delhi; that in the year 2007, he was placed under suspension and owing whereto the recommendations of the DPC held on 30.03.2007 qua him were placed in the sealed cover; that the order of suspension challenged by filing O.A. No.3661/2009 was set aside vide order dated 31.05.2010 therein for the reason of having been continued without substantial progress in the inquiry; that the sealed cover aforesaid was opened and the petitioner was ordered by the Appointment Committee of the Cabinet to be promoted to the rank of Commissioner of Income Tax with effect from 28.08.2007 i.e. the date of promotion of his junior with consequential benefits; however he was not so promoted and posted; that the Tribunal vide order dated 19.11.2010 in O.A. No.271/2010 directed the respondents to issue his posting and promotion orders on the basis of option already given by him; that the said order was also not complied with and on notice being issued in contempt proceedings initiated by him, he was on 11.05.2011 promoted as Commissioner of Income Tax and posted in Delhi; that owing to the same, the contempt proceedings were discharged; however on 14.07.2011 he was arbitrarily transferred to Ranchi. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He submits that his performance has generally been rated as outstanding and very good; that because of his opposition to corruption and moral depravity in the Income Tax Department and because of his having detected and reported theft of public money and public revenue in excess of Rs. 10,000/- crores by corrupt and morally deprived IRS Officers, he has been targeted and impleaded in false and mischievous cases. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He challenged his transfer, before the Central Administrative Tribunal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal in the impugned order, at the outset observed that the interference in transfer and posting of government employees is limited and confined only where </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ the authorities who issued the transfer orders, were not competent to pass the orders; or, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ the service rules, transfer policy / guidelines prohibit such transfer; or, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ the order is mala fide; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ the order suffers from arbitrary and discriminative action of the Executive. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It was observed that the petitioner had All India Transfer liability and it was not in dispute that the transfer and posting orders of the petitioner to Ranchi had been passed by the competent authority i.e. the Finance Minister. As far as the challenge to the transfer as contrary to the Transfer Guidelines was concerned, the Tribunal found that as per the said Guidelines, on promotion Group “A? Officers were normally to be transferred out of the region; that the petitioner had been working in Delhi with effect from 07.06.1999; that even during his suspension, his headquarter was at Delhi and thus the period of suspension was not to be excluded; the stay of the petitioner at Delhi was computed as of eight years and four months; that the petitioner, on promotion was thus due to be transferred out of the region. The allegations of mala fide and arbitrariness were also found to be not substantiated. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CIT is before the High Court. <strong>The High Court observed: </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Merely because the Petitioner has filed a Writ Petition against one of the members of the Placement Committee cannot allow the Petitioner to label the decision so taken as <em>mala fide </em>for the reason of pendency of the said Writ Petition. If such a course were to be permitted, it would open the gates for unscrupulous persons to initiate proceedings against persons likely to take decisions qua them, to subsequently in the event of the decision being against their like, label the same as mala fide. </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Who should be transferred where, is for the appropriate authority to decide and order of transfer cannot be interfered with on the ground that some others have not been transferred. </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Clause 4.3 (i) of Transfer Guidelines providing liability from transfer on completion of eight years at Delhi does not create any right to remain in Delhi for eight years and in any case is not attracted to cases of promotion. </font></strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court did not find any merit in the challenge and dismissed the same. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FEMA - External Commercial Borrowings (ECB) </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> ECB limit for eligible borrowers under the automatic route was enhanced to USD 750 Millions or equivalent per financial year per borrower for permissible end-uses under the automatic route vide A.P. (DIR Series) Circular No. 27 dated September 23, 2011. Consequent to the enhancement in limits, the revised average maturity guidelines under the automatic route are:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) ECB up to USD 20 million or equivalent in a financial year with minimum average maturity of three years; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) ECB above USD 20 million and up to USD 750 million or equivalent with minimum average maturity of five years. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accordingly, the requirement of average maturity period, prepayment and call / put options specified vide A.P. (DIR Series) Circular No.17 dated December 4, 2006 (for additional amount of USD 250 million) has been dispensed with. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Necessary amendments to the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 dated May 3, 2000 and Foreign Exchange Management (Transfer or Issue of any Foreign Security) (Amendment) Regulations, 2004 dated July 7, 2004 are being issued. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2011/rbi11cir064.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AP (DIR) Series Circular No. 64/RBI; Dated January 05 2012 </font></strong></a></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"> – Monday'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">Barcode Printer imported for sale in Shopping Malls - Retail sale price is required to be declared on package: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BARCODE </strong>Printer imported for sale in Shopping Malls – Shopping Mall or Stockist cannot be regarded as Institutional Consumer – they are also not similar to service industry or akin to a transporter or hotel as defined under rule 2A of the SWAM Rules, 1977 – Retail sale price is required to be declared on package and Additional duty of Customs to be calculated based thereon. </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" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income
tax - Whether when assessee provides lab testing services to sample collection
centres on on-exclusive basis, provisions of Sec 194H will not apply to
discount offered as there does not exist principal-agent relationship between
them - Yes, ITAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issues before the Bench are - Whether
when assessee provides lab testing services to sample collection centres
on non-exclusive basis, provisions of Sec 194H wll not apply to discount
offered as there does not exist a principal-agent relationship between
them and whether when the assessee has not paid or credited any amount
to the account of the the collection centers, section, provisions of Sec
194H will not come into play. And the verdict goes in favour of the assessee.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">For imposition of penalty under rule 26 of CER, 2002 goods should be held liable for confiscation: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TO</strong> impose penalty, the first requirement is that the goods should be held liable to confiscation. In the show cause notice issued in the instant case there is no proposal to confiscate the goods which have been cleared for export but diverted under Rule 25 of the Central Excise Rules. Similarly, in the impugned order passed by the learned Commissioner, there is no finding whatsoever, either confiscating the goods cleared or holding that the goods are liable to confiscation. In the absence of such a finding, imposition of penalty under Rule 26 on the appellants is not sustainable in law. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Weekend. </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>
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