TIOL-DDT 1936 · 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 1936</font><br>
06.09.2012<br>
Thursday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">E-payment of Customs duty mandatory </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC </strong>has made e-payment of duty mandatory for importers registered under Accredited Clients Programme and importers paying customs duty of one lakh rupees or more per Bill of Entry with effect from 17.09.2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants Chief Commissioners to give wide publicity to enable trade to be ready in case any change in their software or any internal procedure for effecting E-payment is required. As a large number of taxpayers would be required to pay the taxes electronically, Board requests that importers, trade and industry may be provided all assistance so as to help them in adopting the new procedure. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Are the departmental officers equipped for the change? </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2012/cuscir12_024.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 24/2012 - Customs, Dated: September 05, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Shipbreaking - Customs Procedure - Instructions Issued </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AT</strong> present in India, the ship breaking activity is regulated by the directives of the Supreme Court of India. A draft Ship Recycling Code is being formulated by the Ministry of Steel. The proposed Ship Recycling Code is aimed at ensuring that ships, when being recycled after reaching the end of their operational lives do not pose any unnecessary risk to human health and safety or to the environment. However, until the code comes into play, various recommendations of the CTE shall be operative by virtue of the Supreme Court order. As directed by the Supreme Court, the officials of Gujarat Maritime Board along with officials of the Gujarat Pollution Control Board, the Customs Department, National Institute of Occupational Health and Atomic Energy Regulatory Board shall oversee the ship breaking arrangements and implementation of the recommendations of CTE until further orders. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this regard, CBEC has issued instructions for guidance and compliance by the field formations. Board wants all Authorities to ensure strict compliance of the Supreme Court Orders and the procedure laid down in the order dated 06.09.2007, before permitting entry of any vessel into Indian Territorial Waters for breaking purposes. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2012/instruction12_007.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Instruction in F. No. 405/2/2001-Cus.III, Dated: September 04, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income limits for assigning cases to Deputy Commissioners / Assistant Commissioner / ITOs – CBDT calls for Suggestions </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ONE </strong>of the issues raised in the recently held meeting of Chief Commissioner of Income Tax & Director General of Income Tax was re-consideration of income limits for assigning jurisdiction among ITOs&ACsIT/DCsIT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A view was expressed to suitably revise the same so that equitable distribution of workload could be ensured among the Assessment Officers. The FM, during the deliberations, had desired that the field authorities should send their recommendations to CBDT without delay so that the needful could be done. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the CBDT wants the Chief Commissioners to send their proposals for revising the income limits with reference to their regions if considered necessary. The proposals are to reach the CBDT positively by 1.30 P.M. on 07.09.12; that is tomorrow. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2012/letter12_187.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Instruction in F. No. 187/12/2010-ITA-I, Dated: September 05, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs. 86,000 Crore Indirect Tax Revenue Locked up in Litigation </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> amount of Rs.86,000crores indirect tax revenue of Central Board of Excise and Customs has been locked up in litigation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Success rate of departmental litigation in Courts and Tribunal during the last four years are as follows:- </font></p>
<table width="90%" border="0" align="center" cellpadding="3" cellspacing="0">
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<td valign="top"><p align="center"><font color="#FFFFFF"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Year </font></strong></font></p></td>
<td valign="top" bgcolor="#FF9933"><p align="center"><font color="#FFFFFF"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Supreme Court </font></strong></font></p></td>
<td valign="top"><p align="center"><font color="#FFFFFF"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">High Court </font></strong></font></p></td>
<td valign="top"><p align="center"><font color="#FFFFFF"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CESTAT </font></strong></font></p></td>
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<td valign="top" bgcolor="#FF9933"><p align="center"><font color="#FFFFFF"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2008-09 </font></strong></font></p></td>
<td valign="top" bgcolor="#E0E0E0"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9.81%</font></p></td>
<td valign="top" bgcolor="#E0E0E0"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">29.6% </font></p></td>
<td valign="top" bgcolor="#E0E0E0"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10.0% </font></p></td>
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<td valign="top" bgcolor="#FF9933"><p align="center"><font color="#FFFFFF"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2009-10 </font></strong></font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.85%</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">35.10% </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">18.2% </font></p></td>
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<td valign="top" bgcolor="#FF9933"><p align="center"><font color="#FFFFFF"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2010-11 </font></strong></font></p></td>
<td valign="top" bgcolor="#E0E0E0"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.5%</font></p></td>
<td valign="top" bgcolor="#E0E0E0"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">27.8% </font></p></td>
<td valign="top" bgcolor="#E0E0E0"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">17.2% </font></p></td>
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<td valign="top" bgcolor="#FF9933"><p align="center"><font color="#FFFFFF"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2011-12 </font></strong></font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10.64%</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">29.85% </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">19.7% </font></p></td>
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</table>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The steps taken to ensure speedy recovery are as follows: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Legal action under statutory provisions to recover arrears of revenue from defaulters. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Bunching of all cases involving same issue for expediting decision. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Filing of early hearing applications in all such cases. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) Continuous monitoring of recovery of tax arrears by the Board. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This information was given by the Minister of State for Finance, Mr.S.S. Palanimanickam in a written reply to a question in Lok Sabha yesterday. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Is Revenue really locked up in litigation?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SO,</strong> now it is out – the Department never had a success rate of more than 10% in the Supreme Court and 20% in the CESTAT, though there is a baffling 30% success rate in the High Courts. In the last four years, the Revenue lost more than 80% of its cases in the CESTAT and this means 80% of the so called revenue locked up in litigation is simply not there. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Then why do we bother about all this litigation? Why can't we simply close all these cases? Whatever you do, you are not going to get more than 8000 Crores out of the 86000 Crores. Maybe we can have another Kar Vivad Samadhan Scheme – ask the assesses to pay 10% of the duty demanded in cases pending before the various authorities and let us clean the system. Let adjudicating and appellate authorities be taught that their job is not to protect Revenue interests, but they have to be impartial and if they lean, it should be towards the assessees. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax Overseas Units </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INCOME</strong>-tax Overseas Units (ITOUs) manned by tax officers at the level of First Secretary have been established in Mauritius and Singapore. Further, posting orders in respect of officers to be posted to newly created ITOUs in Indian missions at Cyprus, France, Germany, Japan, Netherlands, UAE, UK and USA have been issued. The relieving of these 8 officers to join their respective ITOU is pending for finalization of terms & conditions of their posting by Ministry of External Affairs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ITOUs in Mauritius and Singapore facilitate and expedite the exchange of information process under Double Taxation Avoidance Agreements (DTAA) with these countries. However, the information received cannot be disclosed as it is governed by the confidentiality clause of the respective DTAA with these countries. <br>
<br>
Inter-departmental consultations are going on to examine the need for setting up more such units in other countries. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This information was given by the Minister of State for Finance, S.S. Palaniman<a></a>ickam in a written reply to a question in Lok Sabha yesterday. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Kaushik Basu Appointed Chief Economist of World Bank </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Kaushik_Basu.jpg" alt="Kaushik Basu " width="236" height="220" hspace="5" border="0" align="left"><strong>WORLD</strong> Bank has announced the appointment of Kaushik Basu as its new Chief Economist and Senior Vice President. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Basu was till recently Chief Economic Adviser to the Government of India, Ministry of Finance, while on leave from his position as Professor of Economics at Cornell University. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">World Bank President Jim Yong Kim said,<em> "Kaushik brings first-hand experience from a developing country and will be a terrific asset to the institution. Having worked in a Ministry of Finance, in addition to his impressive academic achievements, Kaushik is uniquely suited to help us offer evidence-based solutions and advice to client countries and provide innovative excellence in leading our development research." </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Basu, who holds a PhD from the London School of Economics, founded the Centre for Development Economics at the Delhi School of Economics in 1992 and is a founding member of the Madras School of Economics. He has held visiting professorial positions at Harvard University, the Institute for Advanced Study, Princeton University, the London School of Economics, and M.I.T. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Basu begins his job at the World Bank on October 1 2012. </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"> – Friday'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">Customs </font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Argument that term ‘refrigerator' used in customs tariff should be interpreted not in technical terms but according to commercial parlance is fallacious as customs duty applies to import and export transactions in commodity trade and tariff takes into account commercial parlance while classifying products: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant filed bills of entry during May and June 2009 declaring the goods under importation as Hitachi brand refrigerator originating from Thailand and classifying the goods under CTHNo.84182100 and claiming the benefit of notification No. 85/04-Cus dated 31-8-2004. The assessing officer classified the goods under CTH 84181090 on the ground that the goods under importation were combined refrigerators-freezers, fitted with separate external doors and therefore, not eligible for the aforesaid exemption. </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 issue of certificate for no TDS or lower rate u/s 197(1) is mandatory or discretionary when assessee fulfills conditions laid down under rule - Mandatory, rules HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the High Court are - Whether the issue of certificate for no TDS or lower rate u/s 197(1) is mandatory or discretionary when the assessee fulfills the conditions laid down under the rule; Whether AO is under obligation to furnish reasons if he rejects such applications and Whether when an order is challenged and found patently illegal, the petition would lie to the High Court. And the verdict goes against the Revenue. </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">Since assessee is selling electricity, for billing consumer for electricity consumed it is essential to install electricity meter - as such, any activity or service like erection, commissioning and installation of meters as also technical testing and analysis can easily be termed as service relating to transmission and distribution of electricity - benefit of s. 11 Cnotification <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_045.htm">45/2010-ST </a>available - CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant M/s PURVANCHALVIDYUTVITRAN NIGAM LTD is engaged in the purchase of electricity from Uttar Pradesh Power Corporation Ltd. and transmitting it to various consumers within its jurisdiction. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Pursuant to an intelligence received, the department learnt that apart from transmission of electricity the appellant assessee was also engaged in the business of "erection, commissioning and installation" as also "technical testing and analysis" which, according to the department, were leviable to service tax. </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">Demand raised for recovery of Cenvat Credit and also for recovery u/s 11D of the CEA, 1944 totaling Rs.6 crores - as applicant paid more duty than credit availed prima facie applicant has made a strong case for waiver of pre-deposit - Stay petition allowed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> case concerns an assessee who has availed Cenvat Credit on inputs claiming that the activity engaged in by them amounts to manufacture under the Central Excise Act, 1944 but the Revenue is of the view that the activity is not "manufacture". Saying so, the department wants to recover the Cenvat Credit so wrongly availed and further alleges that the purported "duty" paid is a deposit and since the same is recovered from the consignee as Central Excise duty, the same is also recoverable from the assessee in terms of section 11D of the CEA, 1944. </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><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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