TIOL-DDT 1824 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!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 1824 </font><br>
27.03.2012 <br>
Tuesday</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Budget 2012 - Corrigenda Galore </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> errors in the Budget Notifications are being corrected - some officially through corrigenda and some through backdoor smuggling by simply correcting the mistakes without telling anyone. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Four corrigenda have been issued for one single Notification No.12/2012-Customs, dated the 17th March 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">JS TRU, Service Tax has changed his law to save paper. But here we find so many corrigenda and corrections after the budget. Even we are finding it difficult to update our CD. What will happen to thousands of copies of Printed tariff? If you see some of the printed tariffs, you may believe that the publishers have made mistakes, when the mistake is actually that of the CBEC. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anyway, corrections, at any stage are always welcome. It would have been nice if they had been a little more careful while drafting these notifications. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2012/corrigendum_12_012_III.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>3rd Corrigendum dated 22-03-2012 to Notification No. 12/2012-Cus </strong></font></a></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2012/corrigendum_12_012_IV.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4th Corrigendum dated 23-03-2012 to Notification No. 12/2012-Cus </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Incorrect Notifications - Effect </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IF </strong>in an exemption Notification, the tariff heading is incorrect, but the description of goods is correct, can the exemption be denied? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No, said the Board, more than 16 years ago. In <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/1996/cuscir09.htm" target="_blank">Circular No. 9/96- Cus dated 13.02.1996</a></strong>, Board clarified, </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption notifications where Tariff references and the description of goods may not entirely match, can broadly be grouped into two categories, namely:- </font></em></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(i) Notifications in which the goods described are such as can never fall under the corresponding Tariff references specified therein. This may happen not only in those cases where the exempted articles are classifiable under a single Chapter / Heading / Sub-heading, but also in those cases where the goods are classifiable under more than one heading (like in cases where goods are described as a broad class - "parts of gas discharge tube"). </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Notification which cover goods classifiable under more than one Chapter/ Heading / Sub-heading and only one or some and not all the tariff references have been mentioned. For example, parts of 'gas discharged tube', depending on its nature, are classifiable under Chapter 70,73, or 85. However, in terms of Sr. No. 24 of List A, annexed to notification 64/95 Cus, dated 16.3.95., only such parts which are falling under chapter 85 have been exempted. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>2. In respect of the notifications discussed under category (i) above, if the goods are squarely covered by the description but not by the chapter/ heading Nos. and the specified tariff references could never be linked to goods as they are described, then it could only be case of mention of incorrect Chapter No. / Heading No./or Sub-heading No. and may be due to inadvertence and therefore should not be a basis of the denial of exemption. xxx </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. This clarification is equally applicable in all such cases and it is reiterated that the benefit of exemption will be available to these goods even though the articles mentioned in the notification are not covered by the Chapters/ headings Nos./ Sub-heading Nos. mentioned in the notifications. </font></em></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption
to Corrugated Paper Board Boxes – Incorrect entry – Board Clarifies </font></strong></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">SL. No. 96E of the Table to Notification No. 4/2006-CE dated 01.03.2006 read as: </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">S. No. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chapter or heading or sub-heading or tariff item of the First Schedule </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Description of excisable goods </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rate </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Condition No. </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">96E </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4819 10 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Cartons, boxes and cases, of corrugated paper or paperboard whether or not pasted with duplex sheets on the outer surface </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5% </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">12 </font></p></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Representations have been received in the Board that some field formations have raised the issue of non eligibility of concessional Excise Duty on Corrugated Board Boxes manufactured using Corrugated Board made of Kraft Paper & Duplex Paper Board on the ground that the product cannot be classified under Tariff Heading 4819 as Duplex Board has been used & that Kraft Paper is not predominant in the total quantum of Paper & Board used. Therefore, demand for Duty of 10% has been raised on such clearances. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board now takes the help of its 1996 Circular explained above and clarifies that the <u><strong>benefit of exemption will be available to goods where the goods are squarely covered by the description even though the goods mentioned in the notification, are not covered by the Chapter/Heading Nos. /Sub-heading Nos. mentioned in the notification or if the heading no. indicated against the description is "'incorrect"</strong></u>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board makes it clear that the benefit of concessional rate of excise duty in the instant case is available to cartons, boxes and cases, of corrugated paper/paperboard whether or not pasted with duplex sheets on the outer surface, subject to Condition No. 12 of Notification No. 4/2006-CE dated 01.03.2006. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This important clarification, which is bound to be beneficial to several manufacturers, is contained in a letter from TRU to Chief Commissioners. It is beyond comprehension as to why the Board is extremely shy of making its beneficial <strong>legislation</strong> public? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants the Chief Commissioners to inform the field formations so that pending disputes are settled. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And if there was such confusion, why couldn't the Board correct this in this Budget? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 4/2006-CE is superseded by Notification No. 12/2012 dated 17.03.2012 and this entry is almost identical. </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">S. No. </font></p></td>
<td valign="top"><p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chapter or heading or sub-heading or tariff item of the First Schedule </font></p></td>
<td valign="top"><p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Description of excisable goods </font></p></td>
<td valign="top"><p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rate </font></p></td>
<td valign="top"><p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Condition No. </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">171 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4819 10 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Cartons, boxes and cases, of corrugated paper or paperboard whether or not pasted with duplex sheets on the outer surface </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6% </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">13 </font></p></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anyway, it is laudable that the Board does not want to punish the assesses for the mistakes of the Board! </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2012/tru_letter12_002.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F No. 354/342 /2011-TRU, Dated: February 17, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Budget
2012 - Pre-1991 Mindset? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHILE</strong> participating in the general discussion on Budget 2012 in the Rajya Sabha yesterday, Leader of the Opposition, Arun Jaitley said, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The General Budget and the Finance Bill, has really dampened the economic sentiment in the country while our economy needed a boost. Even though different Governments were in power, there were a lot in common with regard to the policy direction and that is how this Economy was seen as more positive. It is a Budget prepared with a pre-1991 mindset. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The approach, which has culminated in this Budget, is to tax people wherever we can tax them. You have now decided to tax people for what they spend. You raise the excise duties. The manufacturing cost goes up. Consumers are going to buy what they get cheaper. You make products costlier. There is a negative list, and that is going to create a huge inflationary impact. For an earning person, the entire tax burden, taken directly or indirectly, could be anything between 50-60 per cent to what he earns. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The coverage of service tax goes up. Last year, the FDI had declined. This year, it has marginally increased. These are not helping us to create additional employment because the industries were already there. You have an infrastructural slowdown. You have high interest rates. The cost of capital has gone up, and, therefore, borrowings have become costly. There is a reverse flight of capital. It is this environment, which had to be corrected, and, I regret, this Budget has failed to correct this environment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tax certainty is essential for any taxation planning. When investors come in, they must know how much tax they are going to pay if they earn money. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As regards service tax, the Finance Minister has formulated a principle that all services are going to be taxed this time except those, which are on the negative list. Don't look at the Budget only as a revenue-raising exercise. You have brought in all services. The Finance Minister should seriously reconsider it. This will have an inflationary burden. The services, which are otherwise within the domain of the States, are now being taxed by the Centre for service tax. When you are taxing the services of the States, are you going to compensate the States accordingly? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You have amended the Customs Act. In the Customs Act, you have amended Section 104. Custom offences beyond three years have been made non-bailable. There might be a dispute of value addition. There might be a genuine case of evasion. But then the proportionality of the offences and the manner in which the law deals with them - there must be some nexus between the two. You have brought in a disproportionate provision. So, reconsider some of your provisions so that we can really help the economy in moving faster. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Budget 2012 - CBEC Interactive Session - A Netizen's Comment </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CBEC open house was a poorly organized function. Most of the seats were occupied by departmental officers while trade and industry members [like me] were standing for the entire 2 hours, as the hall was minuscule when compared to the number of invitees. Of course, I could see some TRU officers also standing. While the Chairman apologised and additional chairs were brought in; even those were occupied by departmental officers only. Request by the coordinator to the departmental officers to vacate the seats for trade fell on deaf ears. [Which officer will leave his seat by the way?] At the end of the programme, we came out drained with the only highlight being VK Garg's presentation skills and slides. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The quality of queries was sub standard and the tough queries were admitted to be tough by VKG, but no satisfactory answers. </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"> – Wednesday'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">Fraudulent re-import of goods at inflated value - Value for demanding customs duties is value at which goods were originally exported: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> facts of the case are interesting. One popular financing company and a popular Bank have separately financed certain importers under lease agreements entered with them. The goods were imported under exemption under EOU scheme by availing benefit of exemption under Notification Nos 13/81 dated 9.2.81 and 53/97-Cus. Dated 3.6.97. The declared value of the goods was Rs 30 crores and 25 crores respectively in the two cases. On investigation by DRI, it was found that the goods were originally exported from India at much lesser value and the goods were actually not capable of being used in the EOU as declared. Hence demand of customs duty was confirmed on the ground of mis-declaration, jointly and severally on the financing company / Bank and the importing parties. In addition to confiscation of the goods, penalties were also imposed. </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">Whether when assessee has a complicated case and demand is not yet quantified, even then powers u/s 281B can be invoked for attaching property to safeguard Revenue's interests: NO: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSMENT</strong> was made by the AO u/s 143(3) r.w.s 153A making additions in the returned income against which writ was filed and the High Court directed the CIT (A) to decide the appeal expeditiously and till then no coercive action be taken against the assessee. However, the appeals were disposed of as the post of the CIT (A) was lying vacant since long and the CIT (A) had not taken the charge. In the regular assessments, the returned income was accepted and assessed. However, in the search proceedings, the additions were made based on certain incriminating documents found during search. Assessee contended that the Department did not proceed to determine the liability, which should had been done only within 21 months from the date of getting the incriminating documents under the search and seizure operation in the financial year when the search was conducted u/s 132. Since the department did not take any steps to determine the liability and when the period of limitation was about to expire, Section 142(2A) was invoked, just 4 days before expiry of the limitation period for completion of the assessment. </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">Earlier better principle should be adopted for classifying service - since ‘Manpower Recruitment or Supply Agency Service' came into Service Tax net before ‘Ship Management Service', prima facie , appellants are liable to discharge Service Tax liability under category of ‘Manpower Recruitment or Supply Agency Service': CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FROM</strong> the activity undertaken by the appellant, it is clear that they have supplied Master, officers and crew on board the vessels for their clients and the person so supplied have the required qualification for undertaking the work. It is also clear that the manpower so supplied remained employees of the appellant and the appellant received consideration for the services so rendered, both by way of emoluments of the employees and also consideration for the services rendered. Thus, even during the period prior to 1.5.2006, the activity undertaken by the appellant is squarely covered under the definition of ‘Manpower Recruitment and Supply Agency Services'. </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><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></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"><strong> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font>
</body>
</html>