TIOL-DDT 1937 · 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 1937 </font><br> 07.09.2012 <br> Friday</strong> </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - EPCG - Address Verification - Board Instructions </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> its Audit Report No. 22 of 2011-12, the CAG pointed out that the Customs Department had not initiated any address verification in most of the locations in respect of the EPCG Scheme. The CAG recommended,<em> "as authentication of the licencee premises is an important check to verify at any time that the imported capital goods were installed and operated at the declared location, Board may examine alternate methods similar to the ones followed by Credit Card Companies/Banks etc. such as periodically calling for copies of utility bills containing the address of the licencees." </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Board has prescribed that <em>when address verifications or Installation Certificate verifications are requested by the Customs authorities in respect of EPCG authorizations, the Central Excise authorities should include, in their verification, a check of the periodical utility bills (containing the address) as one of the means enabling verification of installation/ operation/ licencee premises</em>. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2012/cuscir12_025.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 25/2012 - Customs, Dated: September 06, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exchange Rates Notified </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has notified the Exchange Rates for imported goods and export goods with effect from 07 09 2012. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_080.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Notification No. 80/2012-Cus.,(N.T.), Dated: September 06, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">IT Platform to Integrate Central and State indirect Taxes Regime </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> government has approved creation of a Special Purpose Vehicle to be called <strong>Goods and Services Tax Network</strong> (GSTNSPV) which would primarily be responsible for implementation and sustenance of the GST IT Infrastructure. The GSTNSPV would, inter alia, host a portal that could be shared by all the States and the Centre and which will act as an IT platform to integrate Central and State indirect tax regime. The necessary documents for the incorporation of the GSTNSPV (Articles of Association and Memorandum of Association) are being finalized. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The integration of Central and State indirect tax regime would benefit the taxpayers by providing them standard and uniform interface. It would also assist in creating a national level ‘Unique and Shared" Tax Payer registration database. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was stated by the Minister of State for Finance, S.S. Palanimanickam in a written reply to a question in the Rajya Sabha yesterday. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Already some retired officers of the CBEC are lobbying for posts in the SPV. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Assessment of Black Money Parked Abroad - Government Initiative </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MINISTER</strong> of State for Finance, S.S. Palanimanickam in a written reply to a question in the Rajya Sabha yesterday said that in order to find out the quantum of black money parked by Indians in the country and abroad and to recommend ways to deal with the problem of black money, Government had entrusted this work to three institutions in March, 2011. The study is likely to be completed by December 2012. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let's wait for the great revelations from the worthy institutions. But who is really interested in unearthing black money? The politicians who roll in black money? Or the Babus or the businessmen or tax evaders who are no less custodians of black money? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You want a seat in a school or college, you have to pay a donation in black; you want to buy a flat - at least 40% of the price is paid in black - even honest people with no black money have to convert their white money into black to pay for property in India; you want to win an election, you spend crores of rupees in black - nobody wins an election with the permitted amount - our babas and swamys are safe custodians of black money and even our Gods get a lot of black money as offerings. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And this is not a closely guarded national secret - everybody knows it; maybe occasionally we have to make some noises about unearthing black money! </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">A Remote Customs Division - Remarkable Performance </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FORBESGANJ </strong>Customs Preventive Division (FCPD) plays an important role in securing the Indian borders in North and East. Situated next to the crucial chicken's neck part of country, which joins two huge landmasses of the Indian territory, this Customs (P) Division has a mandate to act as guardian of economic frontier by combating the illicit traffic across the border. Manning 260 kms of Indo-Nepal border across Bihar, this Division matches up to the huge challenge of effectively resisting trafficking and general economic offences on the international boundary which is a hard task given the open nature of this particular border. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Last week, the officers of Customs (P) Division Forbesganj have affected a seizure of 2.49 Kgs (Net) of Heroin (a narcotics drug), recovered from the general compartment of train No.12487Seemanchal Express. Mrityunjay Kumar, Inspector and Rakesh Ranjan, Superintendent displayed a high level of alacrity and efficiency in performing this operation successfully by covertly operating in a jam-packed train compartment. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">During the last four months, this Division seized 963 kgs of Ganja, 6.32 kgs of Heroin, 2.7 kgs of Charas and 0.975 kg of heroin in four different cases, with a seizure a month. The value of the seizures is well over ten crores of rupees. Apart from this, the Division played a major role in exposing a network of PDS grains diverters by bringing to light a case of smuggling of BPL quota grains to Nepal. The follow-up by civil authorities has led to the uncovering of huge racket. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Division is headed by a fresh IRS Recruit Jyotiraditya and has about a hundred employees from Sepoy to Superintendent and comes under the Patna Customs Preventive Commissionerate headed by Kishori Lal as Commissioner. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They are so far away from everywhere that it is very difficult to contact them, but beyond the realms of news, here is a Division, which is doing great work - unheard, unnoticed, but with zeal to perform. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - TDS and Refund Problems -Delhi High Court Comes to Rescue of Hapless Taxpayers </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PLEASE</strong> recall <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15045"><strong>DDT 1861 - 21 05 2012</strong> </a>- under the caption, <strong>Missing TDS Credits and Elusive PAN - CBDT has to answer a lot of questions from Delhi High Court</strong>. The Delhi High Court had in<em><strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2012/2012-TIOL-384-HC-DEL-IT.htm" target="_blank"><font size="1">2012-TIOL-384-HC-DEL-IT</font></a> </strong></em>asked the Government to file an affidavit answering several questions raised. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now after examining the affidavit filed by the Income Tax Department, the Delhi High Court observed, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. In the counter affidavit, it has been acknowledged and accepted that the taxpayers are facing difficulties in receiving credit of Tax Deducted at Source (TDS for short). It is also accepted that taxpayers are facing difficulties in getting refunds on account of adjustment towards arrears. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. the problems faced by the tax payers can be broadly classified into two categories. Firstly, failure and difficulties in getting credit of TDS paid. The said amount is deducted from the income earned by the assessee but even for several reasons not attributable to the taxpayers, they are denied credit. The second category consists of adjustment of past demands or arrears of the tax from the refund payable. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Section 245 of the Income Tax Act, 1961 envisages prior intimation to the assessee so that he can respond before any adjustment of refund is made towards a "demand" relating to any other assessment year. Thus opportunity of response/reply is given and after considering the stand and plea of the assesse, an order/direction for adjustment when justified and proper is made. The section postulates and mandates a two stage action. Prior intimation, and then a subsequent action when warranted and necessary of adjustment, of the refund towards arrears. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Most of the assessees have a grievance that in spite of writing letters to the deductors to rectify and correct the TDS details, the deductors fail and neglect to do so, as the failure does not entail any adverse consequence or action against them. The deductee being the tax payer is out of pocket and is harassed, but the deductor does not suffer, when the deductee does not get benefit of the tax paid. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Court has directed the Revenue to file further affidavit and the case is posted for 2nd November 2012. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court gave interim directions as: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. We issue interim direction to the respondents that they shall in future follow the procedure prescribed under Section 245 before making any adjustment of refund payable by the CPU at Bengaluru. The assessees must be given an opportunity to file response or reply and the reply will be considered and examined by the Assessing Officer before any direction for adjustment is made. The process of issue of prior intimation and service thereof on the assessee will be as per the law. The assessees will be entitled to file their response before the Assessing Officer mentioned in the prior intimation. The Assessing Officer will thereafter examine the reply and communicate his findings to the CPC, Bengaluru, who will then process the refund and adjust the demand, if any payable. CBDT can fix a time limit for communication of findings by the Assessing Officer. The final adjustment will also be communicated to the assessees. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. If the Assessing Officer feels that benefit of TDS reflected in AS26 should not be given, he should issue notice to the assessee to revise or correct the mistake and only if the necessary rectification or correction is not made, an order under Section 143(1) should be passed and the demand should be raised. We issue an interim direction to this effect. </font></p> </blockquote> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <font size="1"><em>(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2012/2012-TIOL-708-HC-DEL-IT.htm" target="_blank">2012-TIOL-708-HC-DEL-IT</a>)</em></font></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - Demand Management Fortnight </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE CBDT Member (Revenue), SC Jaini, in a letter to Chief Commissioners and DGs states, <em>"The issue of demand management continues to remain an area of grave concern. It has been found that in most of the cases demand uploaded is incorrect and incomplete. Such demands have been uploaded by A.Os without due diligence and verification. Adjustment of such demands against refunds is leading to public grievances. It is therefore imperative to correct the demand data base and quickly rectify cases, where wrong adjustments have taken place."</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He wants the Chief Commissioners to take the following measures: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Create a Single window clearance cell to receive, acknowledge and monitor grievance petition pertaining to demand adjustment at each CCIT(CCA)/CCIT location for all grievances relating to incorrect arrear demand communicated/adjusted. <em>(A nodal officer of the rank of JC/T or above to be created as single point of contact for taxpayers with due publicity of contact details with caution that taxpayers not be asked to directly approach the Assessing Officers)</em>. Going forward, this cell will also take proactive actions based on the communication received from CPC, so that in-house re-verification is mandatorily carried out in cases of refunds being processed in CPC, without contacting the taxpayer. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. All arrear demand grievances to be resolved within 30 days by the nodal officer. CCsIT to personally supervise and monitor progress of these cases. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He impresses upon the Chief Commissioners to ensure that concerted efforts are made by officers to clean up the demand databases. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/demand_grievance_CBDT.pdf"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT DIT(S)-III/DMFortnight/2012-13,Dated: September 03, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT CARTOON </font></strong></p> <p align="center"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_sep07.jpg" alt="DDT CARTOON " width="510" height="576" hspace="5" border="0" align="absbottom"></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"> - Monday'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">Exim Policy - Sale to foreign tourists - deemed exports - covered under scheme of Advance Licence: HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> petitioner has sought the quashing of the order dated 14th May, 1986 passed by Respondent No.2, the Chief Controller of Imports and Exports, New Delhi and a declaration that 'deemed exports' as defined in the Government notifications covers the cases of advance licenses in the same manner as they cover the case of duty replenishment licenses in the facts and circumstances of the petitioner. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The main issue in the present matter is whether or not deemed exports by sale of goods to foreign tourists will be covered under the scheme of Advance License especially in the present facts and circumstances of the petitioners. </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 multiple units eligible for Sec 10A benefits, losses of some units can be set off against profits of others before final deduction is computed - NO: ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the Bench are - Whether for the purpose of computation of deduction u/s.10A, each industrial unit should be treated as an independent assessee; Whether for the purpose of computing deduction u/s 10A, loss of an Industrial unit can be set off with that of another profit making unit; Whether for the purpose of section 10A the profit derived did not cover the profit from any sources beyond the profits derived from the eligible business; Whether in case the immediate source of the transaction is not the export of articles or things or computer software but the bank deposits etc, the profits arising out of the same can be considered as profits from eligible business and Whether deduction u/s.10A is allowable in respect of other income. And the verdict partly goes in favour of the assessee. </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">Refund claim submitted after 07.07.2009 for exports prior to this date rejected on ground that same has not been filed within 6 months as required under notfn. 41/2007-ST- Board has clarified that Notf. 17/2009-ST does not bar its applicability to exports that have taken place prior to its issuance - claim has to be considered under notfn. 17/2009-ST only - matter remanded: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> refund claim filed by the appellant in respect of service tax paid on terminal handling charges has been rejected on the ground that terminal handling charges was not one of the services mentioned in Notification No. 41/2007-ST. Another ground taken for rejecting the claim is that it has been fixed beyond the six months period prescribed under the impugned notification. </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">Assessee is entitled to avail CENVAT credit in respect of inputs and input services used in manufacture of Tractors exported under Bond/UT-1 - Order confirming demand of Rs.27.38 Crores set aside - CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is engaged in the manufacture of Tractors, IC engines and transmission assembly. The tractors are cleared either for home consumption or for export out of India under Bond/Letter of Undertaking in Form UT-1. The tractors are exempted from payment of duty vide Sr. No. 40 of the Notification No.6/2006-CE dated 1.3.2006. The assessee also clears IC engines and transmission assembly and parts of tractor for captive consumption for manufacture of tractors and also clears the same for home consumption and for export. These are also fully exempted from payment of excise duty when they are captively used in terms of Sr. No. 92 of Notification No.6/2006-CE dated 1.3.2006.</font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements</font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Weekend.</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> </body> </html>