TIOL-DDT 1772 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">TIOL-DDT 1772 </font><br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>11.01.2012 <br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Wednesday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax - Last Date to File Return - Again Extended </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC </strong>has extended the last date for filing the half yearly return for the period April 2011 to September 2011, from 6th January 2012 to 20th January 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board explains, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"<em>This is being done in view of the fact that assessees are facing problems in electronic filing of returns due to various reasons.</em>"</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was the same reason for which it was extended earlier. Apparently, the problems are not solved. Will they solve them in the next ten days? </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2012/st_order_12_01.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Order No. 1/2012-Service Tax, Dated: January 09, 2012 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise/ Service Tax - Scrutiny of Returns - CAG slams ACES </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> preliminary scrutiny of returns has been largely automated through the Automation in Central Excise and Service Tax (ACES) system and according to the Manual for Scrutiny of Service Tax Returns, 2009 (Para 1.2B), this would release manpower for detailed manual scrutiny which then would become the core function of the range. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG ascertained the degree of implementation of ACES in the Commissionerates so as to ascertain whether automated preliminary scrutiny through ACES would free up time for the ranges to attend to other important items of work, as envisaged. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What the Audit found were sad and startling facts. Of the 196 sample ranges checked, there were functional problems in 112 ranges such as: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Interruptions in connection </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Lack of infrastructure including absence of power backup </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Non-allotment of user-id and password </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Frequent link failure </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Slow system response time </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Power supply of insufficient capacity </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. Non-installation of hardware </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT </strong> checked up with some ranges to find out if the situation has improved after Audit and found that it has only worsened. There is a strong feeling in the field that ACES is a big scam and Crores of rupees have been wasted and not even the 14 paise of the rupee has reached the range offices. Thousands of returns are pending scrutiny because of the mess by ACES and blame game is going on merrily, but returns are not getting scrutinized. And costly equipments from generator to computers are going to be junk soon. Everyone is convinced that it is CBI, which should investigate, and not CAG, which should audit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CAG also noted that Assistant Commissioners/Deputy Commissioners/Joint Commissioners/Additional Commissioners who are also required to scrutinize high value returns are not normally doing their job. CAG found that only 7 out of the 71 Divisions audited had scrutinized returns. Audit also sadly notes that a Commissionerate in Hyderabad did not furnish any information on this issue. That is perhaps the best way to treat Audit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CAG Recommends: </strong></font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The following MIS reports may be generated by ACES and corrective action taken: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ list of non-filers - which may be investigated to detect stop filers </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ returns submitted with delay - suitable penalty may be imposed </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ assessees who had delayed the payment of duty - prescribed interest may be imposed </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ details of returns marked by the system for review and correction but </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">corrective action not taken. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The function of detailed scrutiny may be implemented in all the ranges. Till such time that ACES does not do the sample selections of returns, the samples may be selected manually, as prescribed in the scrutiny manuals. It may also be ensured that AC/DC/JC/ADC may conduct the detailed scrutiny of high monetary value returns as prescribed in the returns manual. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The challan details submitted online and manual returns may be reconciled with the challan details captured through EASIEST. Such a process would become fully automated when all returns are submitted through ACES. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">From CAG's Report No. 25 of 2011-12 (Indirect Taxes - Central Excise and Service Tax)</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Indirect Tax Revenue Up by 16% </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399"><img src="http://www.taxindiaonline.com/RC2/image/stories/goel_ddt.jpg" alt="Legal Corner Icon" width="156" height="189" hspace="5" border="0" align="left"></font>A </strong>visibly happy Chairman of the CBEC, SK Goel, yesterday released to the Press details of his revenue collections for the first three quarters of the fiscal. "We hope we will be able to meet the budget estimates of Rs. 3.93 lakh crore this fiscal", said the Chairman. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs collections from April to December was Rs 1,12,670 crore, up 13.8% while excise collections were Rs. 1,05,411. Service Tax is also catching up with Rs. 67,706 crore during April-December. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue officers are really not to blame for increase or decrease in Revenue, but we find them happy when the collections are good. Let us hope the overzealous revenue officials would not harass the trade more for their targets. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IPRs
of IRS Officers - Scant Respect for DoP&T Instructions </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS </strong>per
DoP&T instructions, the Immovable Property Returns of the officers are to
be placed in the website of the department. The website, <a href="http://www.dghrdcbec.gov.in/" target="_blank">www.dghrdcbec.gov.in </a>of
CBEC, as of now displays the IPRs of 6, yes SIX officers - five Assistant
Commissioners and one Commissioner. These are IPRs as on 1.1.2011 and we
are already into 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has again written to all Chief Commissioners to send copies of the IPRS of their officers and as per the details in the website, all Chief Commissioners are defaulters. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC - Promotion from DC to JC - Missing ACRs </strong></font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>CBEC has communicated a list of 275 Deputy Commissioners whose confidential reports are not updated with the Board and these officers are to be soon considered for promotion. While officers in the field are eagerly waiting for promotion, the Board is struggling to get the confidential reports updated! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has written to all Chief Commissioners to send these on priority basis. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What will happen when the Board has to give over four thousand promotions, if the cadre review is through? And we understand that DOPT is ready to clear the Cadre Review proposals, at least for the lower level posts. The only hitch now seems to be the number and pay scales of Principal Chief Commissioners. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/acr_dc_jc.htm" target="_blank">CBEC F.No.A-32012/46/2011-Ad.II Dated: January 09, 2012 </a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT no Better </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>POOR</strong> cadre management is not the exclusive privilege of the CBEC - its sister Board, CBDT is facing the same problem. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a DO letter to the DGIT, Vigilance, the Chairman, CBDT says that there are more than 400 vacancies in the post of Assistant Commissioner, IT, which adversely affect the Revenue Collections. Board is unable to process the promotions for want of ACRs and Vigilance clearance. "I shall be grateful, if you can kindly get the matter expedited", requests the Chairman. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What happened to arrested ITAT Member? </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7302"><strong>DDT 865-15.05 2008</strong> </a> had reported about the arrest of an ITAT Member while accepting a bribe of Rs. 30 Lakhs. It seems the CBI is ready to file the charge sheet after extensive investigation for over three years. It seems CBI found about sixty orders passed by the dishonoured ITAT Member, in the computer of a consultant. The charge is that the consultant used to prepare the orders, which the Member used to pronounce in the court. </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 align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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"></font><font color="#663399">Central Excise </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>When two different Notifications prescribed two rates of duty, assessee is at liberty to opt for whichever is beneficial to him: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>COTTON</strong> fabrics exported under claim for rebate of duty - Notfn 29/2004-CE prescribed a 'nil' rate and Notfn 59/2008-CE levied '@4% adv.' duty - When two different Notifications prescribed two rates of duty, the assessee is at liberty to opt for whichever is beneficial to him - CENVAT credit available in respect of inputs used in manufacture of final products being exported irrespective of the fact that the final products are otherwise exempt - Rule 6(3) of CCR, 2004 not applicable - Prima facie strong case in favour - Pre-deposit waived & stay granted. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether where demand is raised and assessee pays partly during pendency of appeal and gets refund after appeal is disposed of by CIT(A), assessee is liable to pay interest u/s 220(2) after original assessment order is restored by Tribunal - YES, rules Delhi High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PETITION </strong>was filed seeking a direction quashing the order passed by CIT u/s 220(2A) not to levy interest u/s 220(2) for the period for which allegedly there was no demand outstanding and payable by the assessee and issuance of a direction to the revenue to refund the tax along with interest already recovered by them as interest u/s 220(2). </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Services utilized to advise farmers for production of good quality tobacco to be used in manufacture of quality cigarettes - Tax paid on such services eligible as CENVAT Credit: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FOR</strong> production of good quality tobacco, tobacco seeds supplied to farmers free of cost and necessary supervisory and advisory services availed for farmers in relation to cultivation of tobacco - Cost of rendering services to farmers included in value of final products manufactured and not recovered from farmers - Nexus exists between services utilized for production of good quality tobacco which is consumed for manufacture of good quality cigarettes - Services used directly or indirectly in the manufacture of cigarettes to qualify as ‘input services' under Rule 2(l) of CENVAT Credit Rules, 2004 - Impugned order set aside </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Tomorrow for the judgements </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more DDT </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day. </font></p>
<div 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></div>
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