TIOL-DDT 1920 · the untouched capture
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<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 1920 </font><br>
13.08.2012 <br>
Monday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tribute to a Legendary Customs Officer </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> chilling
SMS reached me yesterday morning,<em> "Daya Shankar Sir has bid us farewell
forever this morning at 0740 Australian time"</em> Mr Daya Shankar needs
no introduction and nobody thought the conclusion would come so soon. Born
on 21.02.1952, he joined IRS in 1978. An exceptional Customs officer, who
successfully tackled the terror of notorious smugglers who used to smuggle
gold, silver and electronic goods alongthe Coast in dhows (small boats).It
is rare to find an officer with such honesty and integrity who would put
the country first and everything else behind. In those days, it is said that
the duty chart of this officer used to be circulated among the smugglers
so that they can avoid attempts to smuggle when this officer is on duty.
In an interview to the Illustrated Weekly, Dawood Ibrahim reportedly expressed
his wish to work with this legendary officer. Unfortunately for a man who
handled the smugglers adeptly, and who could win the hearts of his enemies
also, the Bureaucracy was very rude and his request for voluntary retirement
in 2005 had to wait for nearly six years because the department had initiated
disciplinary proceedings for unauthorised absence from the department! (when
he went back to Australia to continue his Ph.D). Mr.Daya Shankar was teaching
international business and business strategy at Deakin University, Australia.
He expired on Sunday in Australia. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Was he happy leaving Customs and working as a professor? Not really. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
a mail to our Managing Editor Shailendra, in response to our <strong>Cob(Web)</strong> story
on him Daya Shankar said,<font color="#FF6633"><strong> <em>"I didn't
want to leave the job. Apart from losing virtually every retirement benefits,
I have a sense of loss of breaking rules ... We are talking about corruption
in customs. You have to see corruption in academia. It was a wrong choice." </em></strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He is perhaps the only officer in the Department who had refused to accept the cash rewards given by the Department. And it is not as if he was rolling in money. A senior officer told me that long ago Daya came to his house and asked for a small loan for taking his child to the hospital. "How much", asked the senior officer. "Three", said Daya This other officer was also an honest one and he said, "I wouldn't have three thousand at home, but let me see …". Daya said, "not three thousands, but I need three hundreds!" And this when lakhs were languishing in his reward account and just a smile or a squint eye from him would have brought him Crores. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What can be avoided /whose end is purposed by the mighty gods? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Cowards die many times before their deaths, <br>
</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The valiant never taste of death but once."</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please
see '<strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15634" target="_blank">TIOL Editorial</a></strong>' today.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please also read: <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=13030" target="_blank">Finally, Justice is Done to Legendary Custom Officer</a> </strong> <strong>and <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=6995" target="_blank">Grit That Defied Odds – A tale of courageous Customs officers and money-making politicos! </a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">SION Norms amended for Flexible Intermediate Bulk Containers </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended entry No 97 for the Product Group "Plastic Products", for the item "Flexible Intermediate Bulk Containers", incorporating additional raw materials in existing SION at H-97. Additional Import Items namely PP Granules, LLDPE Granules, PP Granules for lamination/coating, PE Liner, Thread, Filler Cord/Rope, Packing Materials have been allowed consequent to the amendment. </font></p>
<p align="left"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn014.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Public Notice No 14/(RE-2012)/2009-2014, Dated: 09.08.2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Common Adjudicating Authority appointed </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD </strong>has appointed common adjudicating authorities for a number of customs cases in exercise of powers conferred under Section 4 and 5 of the Customs Act, 1962. </font></p>
<p align="left"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_069.htm" target="_blank">Customs NT Notifications No 69</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_070.htm" target="_blank">70</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_071.htm" target="_blank">71</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_072.htm" target="_blank">72</a>, and <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_073.htm" target="_blank">73, Dated 09.08.2012</a></font></strong></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Board grants a favour to assessee </font></strong><font color="#006600"><strong>But Tribunal says, ‘NO' </strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is by now, as they say, well settled law that Board's instructions are binding on the field staff and the revenue cannot question the correctness of the Board Circular or challenge it in an appellate forum, as maintained by the Apex Court in Ranadey Micronutirients, Paper Products etc. I am never tired of repeating the historic words of the Supreme Court, <strong><em>"Consistency
and discipline are of greater importance than winning or losing a court
case" </em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC in Circular in F.No. 137/3/2006-CX.4 dated 02.02.2006, clarified that <strong><font color="#FF6633"><em>"in
case of depot sales of goods, the credit of service tax paid on the transportation
of goods up to such depot would be eligible, irrespective of the fact,
whether the goods were chargeable to excise duty at specific rates or
ad valorem rates on the basis of valuation under section 4 or 4A of the
Central Excise Act.</em></font></strong>" </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But recently in a Stay Order, the CESTAT did not allow this and observed, <em>"Though in terms of Board's Circular No. 137/3/06-CX dated 2/2/06, when the goods cleared from the factory are sold from the depot and for the purpose of determining the assessable value of the goods under Section 4, it is the depot which is the 'place of removal' and for this reason, the assessable value includes the cost of transportation of the goods from the factory gate to the Depot, the Cenvat credit of service tax paid on the transportation upto Depot would be admissible even if the goods attract duty at a specific rate,</em> <font color="#FF6633"><strong><em>the correctness of this circular is doubtful".</em></strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Are the Board Circulars binding on the Department? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If they are so, and when an assesse relies on a Circular, can its correctness be doubted and benefit be denied even by the Apex Court? </font></p>
<p align="justify"><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Look out for this judgment tomorrow</font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax Valuation - What is Gross amount and What is Total amount? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Rule 2A(ii) of the Service Tax Valuation Rules, 2006, if the value has not been determined under Rule 2A(i), the service provider is required to pay service tax on the "Total amount" with the permissible abatement. Rule 2A(ii)(b) defines the total amount as:</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) "total amount" means the <font color="#FF0000"><strong>sum total</strong></font> of the <strong><font color="#FF0000">gross amount</font></strong> charged for the works contract and the <strong><font color="#FF0000">fair market value of all goods and services</font></strong> supplied in or in relation to the execution of the works contract, whether or not supplied under the same contract or any other contract, after deducting- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the amount charged for <strong><font color="#FF0000">such goods or services</font></strong>, if any; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the value added tax or sales tax, if any, levied thereon: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided that the fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Netizen asked us, If the total amount is the sum total of gross amount and the fair market value of all the goods and services, then why again deduct the amount charged for such goods and services under b(i) and b(ii)? Are they both different? If so, can someone explain? </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"> – Tuesday'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">Service Tax</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Short payment of ST by govt. telecom company - Amounts paid by customers inclusive of service tax were always in Government account and this is just a matter of adjustment of money from one account of GOI to another account of GOI - there is no need to collect any interest in case of delay in deposit of service tax – Penalty also correctly waived – Revenue Appeals rejected: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Commissioner (Appeal) set aside the order of the adjudicating authority on the ground that the assessments were provisional and there were excess payments by the respondent for the subsequent period which had not been finalized. He also held that since the appellant was a Department of Government of India (GOI), during the relevant period interest and penalties are not maintainable. </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 provisions of Sec 14A are applicable to expenditure incurred for earning dividend income from investments in foreign companies - NO: 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 assessee receives dividend both from foreign and domestic companies, interest expenditure incurred can be averaged and disallowed in terms of section 14A to the proportion of dividend income received from domestic companies, even though investment in shares were out of substantial free reserves and not from borrowings and Whether provisions of Sec 14A are not applicable to expenditure incurred to earn dividend income from investments in foreign companies. </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">Service Tax on outward transportation of clinker cleared from Sonadih plant at specific rate of duty to depot at Nipania railway siding from where it is transported by rail to appellants cement factory at Jojobera - Definition of "place of removal" in s. 4(3)(c) of CEA, 1944 is relevant only when goods are chargeable at ad valorem rate - correctness of Board letter 137/3/06-CX dated 2/2/06 allowing such credit is doubtful - Prima facie credit not allowable – Pre-deposit ordered of disputed Cenvat Credit: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant manufactures cement clinker and cement in their factory at Sonadih and avail Cenvat Credit. The clinker manufactured at Sonadih plant is stock transferred on payment of duty by road to depot at Nipania railway siding from where it is transported to the appellant company's Jojobera cement factory by rail. The cement manufactured at Sonadih plant is cleared on payment of duty to their cement depot from where the same is sold. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tuesday 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><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day</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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