TIOL-DDT 1809 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><font color="#663399"><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></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1809 </font><br>
06.03.2012 <br>
Tuesday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Export of Cotton prohibited again</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> entries against Sl. No. 161 A [ITC (HS) Classification] are substituted as follows: </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Chapter 52 </strong></font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td width="0" valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>S. No. </strong></font></p></td>
<td width="0" valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Item Tariff Code </strong></font></p></td>
<td width="0" valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Unit </strong></font></p></td>
<td width="0" valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Item Description </strong></font></p></td>
<td width="0" valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> Export Policy </strong></font></p></td>
<td width="0" valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Nature of Restriction </strong></font></p></td>
</tr>
<tr>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">161 A </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5201 </font></p></td>
<td width="0" valign="top"> </td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Cotton, not carded nor combed </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Prohibited </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Not permitted to be exported. </font></p></td>
</tr>
<tr>
<td width="0" valign="top"> </td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5203 </font></p></td>
<td width="0" valign="top"> </td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Cotton, carded or combed </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Prohibited </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Not permitted to be exported. </font></p></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As a result of the above amendments, export of cotton (specified in above table) is prohibited until further orders. Also, transitional arrangements under Para 1.5 of Foreign Trade Policy, 2009-14 will not be applicable for export of cotton. Further, export against registration certificates already issued will also not be allowed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ministry of Textiles has been monitoring the raw cotton production, its domestic consumption and import-export through the Cotton Advisory Board (CAB) from time to time. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Higher exports than anticipated in cotton season 2010-11 reduced the expected carryover of stock for the current cotton season 2011-12, from 48.30 lac bales estimated by the CAB to about 33 lac bales. Crop size estimated at 345 lac bales by CAB on 24th January, 2012 has been further adjusted on the basis of projections made by the Department of Agriculture and reduced to 340 lac bales. Production, this season is virtually the same as last year's, and total supply marginally lower. Expecting a slowdown in domestic demand, export surplus was pegged at 84 lac bales. Being higher than exports in the last 2-3 years, it was placed on OGL with requirement of registration for purposes of monitoring. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A review of export data showed that the limit was breached on 20th February, 2012 and exports of 91 lakh bales made by 29th February, 2012. At this rate, it is expected that exports would reach 100 lakh bales by mid-March 2012. This is clearly reflected by the registration of exports which reached 120 lakh bales. Significantly, there was a rush for registration after the figure of 84 lakh bales was reached and in some cases L/Cs have been registered where the name of exporting and importing party is same. This is indicative of a tendency of hoarding in bonded warehouses abroad. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The decision to ban further exports took into account the trend of domestic consumption and depletion of domestic availability. Availability has reduced to less than the production levels of 2009-10, and also reduced the carry forward figure below the advisable inventory level. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not102.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Notification No. 102 (RE-2010)/2009-14, Dated: March 5, 2012 </strong></font></a></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong><font color="#006600"><strong>Subject of DGFT Notn No. 99 (RE-2010)/2009-14 changed </strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> Notification No. 99 (RE-2010)/2009-14 dated 23.02.2012, the "Subject" heading at the top was mentioned as "Permission for export of wheat 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. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To avoid any chance of mis-interpretation, it is decided to amend the "Subject" to read as <strong>"Re-notification of Sl. No. 46 A of Chapter 10 of ITC (HS) Classification of export & import items" </strong>for export of wheat. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not103.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Notification No. 103/(RE-2010)/2009-2014, Dated: March 5, 2012 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Exemption of Bhutan from the application of export bans by India on export of certain products </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> terms of Notification No. 87(RE-2010)/2009-14 dated 05.12.2011, export of following items to Bhutan was exempted from any export ban with the annual limits indicated against each: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Milk powder: 1,600 Metric Tonnes </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Wheat: 24,000 Metric Tonnes </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Edible oil: 2,400 Metric Tonnes </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) Pulses: 1,200 Metric Tonnes </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) Non-basmati rice: 21,200 Metric Tonnes </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But, the notification did not elaborate whether the "annual limit" will be counted Financial Year wise (and if so whether it will be Financial Year of India or of Bhutan) or Calendar Year wise. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To bring clarity on this issue, DGFT notifies that "annual" will refer to Calendar Year. Thus the limit would be for the period 1st January to 31st December of every year. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not104.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Notification No. 104 (RE-2010)/2009-14, Dated: March 5, 2012 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Grant
of export benefits to export proceeds realized even in Indian rupees -
Exports to Iran</strong></font> </p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PARA </strong>2.40 of the Foreign Trade Policy, 2009-14 is amended to incorporate the following sub-para: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Para 2.40 A: Export proceeds against specific exports to Iran realized in Indian rupees are permitted to avail exports benefits/ incentives under the Foreign Trade Policy, 2009-14, at par with export proceeds realized in freely convertible currency. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By virtue of this amendment, in respect of exports to Iran, export proceeds realized even in Indian rupees will be eligible to avail export benefits and incentives. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not105.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Notification No. 105 (RE-2010)/2009-14, Dated: March 5, 2012 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>How to reduce litigation - Some suggestions </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YESTERDAY DDT </strong> carried a letter from CBEC seeking suggestions on reducing the litigation. <strong>DDT </strong> has some suggestions: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Provide an amnesty scheme to treat all the pending disputes at various levels as closed subject to certain conditions like giving an option to pay certain percentage of the demand. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Make the Committee of Chief Commissioners or the Commissioners to sit together and deliberate the issues during the review proceedings and record the minutes of such meeting while reviewing the orders. This should be mandatory. Appeal filed without the minutes of the Committee should be treated as null and void. The present practice of only "files" flying between the Chief Commissioners' offices is nothing but a mockery of the statutory provisions. The objective of reducing frivolous appeals by making the Committee to review the orders has been successfully defeated by merely two officers signing the files instead of sitting together and deliberating the issues. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ When the Orders-in-original and orders of the Commissioner (Appeals) are to be reviewed by the Committee of Chief Commissioners and the Commissioners respectively, the orders passed by the CESTAT and the High Courts are reviewed only by the Commissioners. Does this mean the orders of CESTAT and High Court are of less importance than those of the Commissioner (Appeals) and the Commissioners? To improve the quality of review, the orders of High Court and the CESTAT should also be reviewed by a Committee. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The system of adjudication by the quasi judicial authority has become a farce. No officer who signed the Show Cause Notice is prepared to drop the same and even a child knows this. This system has lost the public faith and every assessee today has a feeling that instead of Show Cause Notice and the tamasha of personal hearing and adjudication, a direct order of demand would save them more time and money. It is suggested that adjudication should be a separate process. The person who issued the Show Cause Notice should not adjudicate the same. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Stop directions that a Show Cause Notice should be issued on CAG objection. Sometimes, the CAG even questions the policy like extending abatement on MRP assessments. It looks silly when a Show Cause Notice is issued by the officers demanding duty by denying the abatement given by the statute. </font></p>
</blockquote>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> - Wednesday's cases</font></strong></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/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left">Service Tax </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Appellant paying VAT to the State Government on sale of SIM cards and under bona fide belief Service Tax was also paid under the same challans - later, amount transferred to Central Government account - matter remanded for verification: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> facts of the case are that the appellant are engaged in the activity of selling of SIM cards and registered with the service tax department. They are paying service tax regularly but not on proper challans of the Central Government, but they are depositing the same to the State Government and not filing their regular returns. Therefore, a show cause notice was issued for demand of service tax which was adjudicated ex-parte as the appellant did not respond to the show-cause notice as well as to the notice of hearing. </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>Income tax - Whether assessment orders passed on wrong assumption of facts, on incorrect application of law and without due application of mind are not beyond scope of Section 263 - YES, rules HC Larger Bench </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE </strong> is assessed for the assessment year 2002-03 by the Assessing Officer (AO) giving benefit of exemption under Section 54F of the Income Tax Act, 1961 for long term capital gains from sale of shares. The shares were purchased on 21.4.2000 for Rs.19,536/- and sold on 2.5.2001 for Rs.6,36,640/- i.e. on the increased price of more than 30 times in one year. The Commissioner of Income Tax (CIT) held the order to be erroneous and prejudicial to the interest of revenue and exercised <em>suo motu </em> revisionary jurisdiction under Section 263 of the Act. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Merely because the Ready Mix Concrete has been transported by using dumpers from the Batching Plant installed at the site to various places in the site, it does not mean that the goods are not produced at the construction site - Notfn. 4/97-CE does not prescribe any spatial dimensions/restrictions for the site - prima facie benefit of notification available - Pre-deposit waived and recovery stayed: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant availed benefit of Notification No. 4/97-CE dated 1.3.1997 which granted exemption to concrete mix manufactured at the site and used in the site. Since the site area is large, Batching Plant was set up in one part of the site and the concrete mix manufactured is transported to the other parts of the site for construction of civil structures. The department was of the view that the exemption is not available and accordingly issued and confirmed a demand notice of Rs.10.72 lakhs and imposed penalties and interest. </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 DDT </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day. </font></p>
<p 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></p>
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