TIOL-DDT 1808 · 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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=14276"><img src="http://www.taxindiaonline.com/RC2/image/ddt/ddt_1794.jpg" alt="DDT in Limca Book of Records" width="175" height="120" hspace="5" border="0" align="right"></a></font></strong></font><font color="#663399" size="3">TIOL-DDT 1808</font><br> 05.03.2012<br> Monday</strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Clarification regarding levy of Excise duty on branded precious metal jewellery </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>D.O.F</strong>. No. B-1/3/2011-TRU Dated: 25.3.2011 issued at the post-budget stage 2011-12 contained the following clarification about the scope of Central Excise levy applicable to precious metal jewellery of CETH 7113 manufactured or sold under a brand name: </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"ABC jewellers" advertises and sells its products under the brand "Star" or puts a logo like ABC i.e. in a stylized manner. It also puts the same brand name or an abbreviation thereof or a mark which has a connection with such brand name either on the jewellery or article itself or on the packing such as the jewellery box or pouch or even on the warranty card or certificate of quality. Such goods will clearly be treated as branded and will be liable to duty." </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Based on the said clarifications some enquiries have been initiated by the departmental agencies seeking to demand duty on such articles of jewellery which are packed in boxes, pouches etc. bearing a trade name or brand name or mark. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">References were received from the Trade requesting for providing clarity on levy of excise duty on jewellery sold under a Brand name. The industry has drawn attention to Condition No.8 of Notification No.5/2006-CE dated 1.3.2006 which provides that the exemption shall not be applicable to articles of jewellery of heading no. 7113 on which brand name or trade name is indelibly affixed or embossed on the articles of jewellery itself. It has been argued that accordingly only such jewellery where brand name or trade name is indelibly affixed or embossed on the articles of jewellery itself should attract excise duty and duty should not be charged on the articles which do not themselves bear such marking but which are packed in a jewellery box or pouch bearing a trade name or brand name or in whose case, the warranty card or certificate of quality issued at the time of sale bears a trade name or brand name. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After examining the issue, Board clarifies that Condition No. 8 of Notification No.5/2006-CE dated 1.3.2006, is also relevant in this regard. The said condition provides that "the exemption shall not be applicable to articles of jewellery of heading no. 7113 on which brand name or trade name is indelibly affixed or embossed on the articles of jewellery itself." </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is clarified that the excise duty leviable on precious metal jewellery, manufactured or sold under a brand name, is attracted only on such jewellery on which the trade/brand name or any such mark or symbol or even a number which is cross referred with such trade/brand name (not being a house mark used by jewellers for identification of jewellery at the time of exchange/resale) is indelibly marked or embossed. If such brand name is not affixed or embossed on the jewellery or article itself but appears on the packing such as the jewellery box or pouch or even on the warranty card or certificate of quality, such goods will not be treated as branded jewellery and thus will not be liable to excise duty. The clarification issued in this regard vide D.O.F. No.B-1/3/2011-TRU, dated the 25th March, 2011 stands modified to this extent. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2012/order_354_12.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F. No. 354/38/2011-TRU, Dated: March 2, 2012</font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Subject of DGFT Notn No. 98 (RE-2010)/2009-14 changed </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> Notification No. 98 (RE-2010)/2009-14 dated 23.02.2012, the “Subject” heading at the top was mentioned as “Permission for export of non-basmati rice through Land Custom Stations (LCS) on Indo-Bangladesh and Indo-Nepal border”. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The contents of the notification, however, covered some other issues in addition to export through Land Custom Stations (LCS). Hence the “Subject” of the notification was not an accurate description of the contents. To avoid any chance of mis-interpretation, DGFT decided to amend the “Subject” to read as <strong>“Re-notification of Sl. No. 45 A of Chapter 10 of ITC (HS) Classification of export & import items” </strong>for export of non-basmati rice. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not101.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 101/(RE-2010)/2009-2014, Dated: March 2, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Suggestions/inputs/feedback invited from taxpayers, Trade Associations and other stake holders as regards rising litigation </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RISING</strong> litigation with taxpayers is matter of serious concern for the Government. A need for reducing the litigation has been emphasized by the Finance Minister on various occasions. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the directions of the Finance Minister, a Standing Committee has been constituted in the Central Board of Excise and Customs to identify systemic causes for litigation and preparing a roadmap for reducing the existing litigation and avoiding litigation in future on the indirect tax side. The Committee consists of two Members of the Board, nominated officials of CBEC, and a representative of Law Ministry. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Committee seeks feedback from taxpayers, Trade Associations and all other stake holders as regards the causes, systematic or otherwise, that are perceived as contributor to avoidable litigation on indirect tax side, and any relevant suggestions/ inputs/feedback in this context. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Response may please be emailed at gd.lohani@nic.in to Shri G. D. Lohani, Director (Legal), CBEC (Phone No. 011-26162152 and Fax No. 011-26177515) by 31st March, 2011. </font></p> <p align="justify"><strong><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps the CBEC itself is to blame for the litigation. “Branded Jewellery” clarification carried at the top of today's DDT stands testimony to this. Based on the circular dated 25 th March 2011, many Show Cause Notices must have been issued. Now on 2 nd March 2012, they simply reverse the stand. Why did they issue the circular dated 25 th March 2011 in the first place? Don't they read their own notifications properly? Should trade and industry point out the condition No 8 of the Notification to them? Will any action be initiated on the person responsible for issuing such incorrect clarification dated 25 th March 2011 and causing unnecessary and avoidable litigation? </font></strong></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/suggestions.htm" target="_blank">CBEC Letter </a></font></strong></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IRS Officer for Top OECD Job </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Monica_Bhatia.jpg" alt="Legal Corner Icon" width="198" height="255" hspace="5" border="0" align="left"><strong>MONICA BHATIA</strong>, a serving officer of the Indian Revenue Service (Income Tax) has been appointed Head of the Secretariat of the Global Forum on Transparency and Exchange of Information for Tax Purposes, within the Centre for Tax Policy and Administration (CTPA) of the OECD. She will take up her duties on 1 April 2012. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Bhatia will lead this major OECD programme put in place in 2009 to advance the transparency agenda. She will have to ensure the quick and effective implementation of the peer review schedule, which will soon start focusing on practical aspects of information exchange. She will also manage the fast extension of the Global Forum which now includes 108 members on an equal footing. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Monica Bhatia has over 20 years of experience in the IRS and is currently Director in the Department of Personnel and Training of the Government of India. She has held different positions in the Ministry of Finance and its Revenue Department related to international tax policy, including treaty negotiations and drafting of tax legislation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Monica, a 1990 batch IRS officer, holds an MBA from Zicklin School of Business, New York and an LLM from the Punjab University, Chandigarh, besides holding a Certified Public Accountant certification from the US. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appointment of an Indian Lady Officer for this top OECD job, when India is not even a member of the OECD is significant. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Spat between Members of ITAT Chandigarh Bench - CAT unhappy with acrimony between Members </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DIFFERENT</strong> bunches of identical appeals were assigned to different combination of Benches. A particular bunch was heard by a Bench consisting of the applicant and Judicial Member (complainant) on 3/4.11.2011. Applicant being part of another Bench with a different Member heard the other bunch on 22.11.2011. Since the first bunch was allotted to Judicial Member for dictation, she prepared a draft on 4.11.2011 and forwarded it to the applicant who retained it till 30.12.2011 and thereafter, returned it to her with an endorsement that the other Bench consisting of the applicant and another Member had taken a contrary view in the course of their decision announced on 26.12.2011. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A complaint was made to the Competent Authority against the applicant and an enquiry was conducted by a Senior Vice President of ITAT who without providing any opportunity of hearing the applicant, indicted the applicant and submitted a report. This report was considered by the Collegium consisting of the President, ITAT, Senior Vice President (who conducted the enquiry) and another Vice President which recommended transfer of the applicant from Chandigarh Bench to Rajkot Bench. This transfer order was challenged in CAT on the ground that it was malafide, punitive and based on an enquiry report which was biased and violated principles of natural justice. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After considering the entire factual matrix, CAT observed that the wisdom of the Collegium which recommended the transfer order cannot be faulted in as much as the applicant cannot be said to be free from blame as he violated the Conventions issued by the Competent Authority while disposing of cases where Members disagreed with each other. Expressing concern over the acrimony between Members, the CAT observed that competent authority may consider the feasibility of doing something more in the context of establishing appropriate ambience at the local Bench of the ITAT in the light of the facts available with the Competent authority itself. </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Click here for <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=78&filename=pitara/sercaselaw/caselaw/2012/2012-TIOL-01-CAT.htm" target="_blank">CAT Order</a> </font></strong></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><font 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"><strong><font color="#663399">Service Tax</font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Repairs, renovation, widening of roads etc. is not a ‘Commercial or Industrial Construction Service' - In view of clarification given by CBEC in Circular dated 23.02.2009, appellant has established a prima facie case in their favour - Pre-deposit waived and stay granted: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is engaged in the services of repair, renovation, widening of roads and construction of toll sheds, providing electrification of high mast poles at toll sheds etc. to various Government organizations. The department was of the view that the said services come under the category of 'Commercial or Industrial Construction Service' and, accordingly, a demand of service tax of Rs.67,79,026/- was raised and confirmed for the period 10.09.2004 to 31.03.2009. Penalties were also imposed u/s 76, 77 and 78 of the Finance Act, 1994. </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">Income tax - Whether trading undertaken by SEZ Unit for re-export of imported goods is to be construed as service, eligible for Sec 10AA benefits - YES, rules ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the Tribunal are - whether when the word 'services' is not defined either in Sec 10AA or in Sec 2 of I-T Act, it is to be understood as in the common parlance for allowing benefits; Whether trading is a service as per the SEZ Act, and since Sec 51 of the SEZ Act has non-obstante clause, it prevails over the I-T Act to allow Sec 10AA benefits and whether trading undertaken for re-export of imported goods is to be construed as service eligible for Sec 10AA benefits. And the verdict goes in favour of the assessee.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Detention of imported goods - Demurrage Charges - Since petitioner had failed to take delivery of consignment even after order of High Court ordering release of goods on PD Bond, Custom authorities cannot be directed to pay demurrage or container charges: HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Writ Petition filed by the petitioner was disposed by the High Court with the direction that the samples should be drawn afresh and goods be released on furnishing P.D. Bonds and by also granting Detention certificate to the petitioner. The petitioner claimed that they had executed provisional duty bonds but the goods were not released for want of detention charges. The stand of the customs authorities was that they accepted the provisional duty bonds and the goods were cleared for home consumption. Detention certificates were issued by the Commissioner of Customs for the period 22nd March, 1991 to 29th May, 1991. </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> <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> </body> </html>