TIOL-DDT 1938 · 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 1938 </font><br> 10.09.2012 <br> Monday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Disobedience Doesn't Pay - ADG, Commissioner and DC sentenced by High Court for Contempt </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>USUALLY</strong>, the bureaucrats - especially the Revenue babus - have no respect for the judiciary - they rather have undiluted contempt for the judges. Many of the bureaucrats believe that they are the repositories of all wisdom and knowledge and the judiciary is at best an unavoidable nuisance. Quite often, we find junior and middle level officers of the department disobeying the orders of the superior judicial fora including High Courts and some even have the audacity to sit in judgement over the correctness of the orders passed by High Courts. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today we bring you two cases where the Patna High Court found that it had no option but to hold certain officers guilty of contempt and punished them with simple imprisonment of three months and a fine each of Rs. 2,000/-. The officers were, an ADG of DRI, a Commissioner of Customs and a Deputy Commissioner of Customs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A truck of betel nuts was seized on 30.05.2011 alleging that the same were smuggled goods. The order of detention and seizure was quashed by the Patna HC on 14.11.2011 and the authorities were directed to release the truck and betel nuts loaded thereon immediately. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Instead of releasing the goods, the department issued show cause notice on 18.11.2011 under section 124 of the Customs Act, 1962 initiating confiscation proceeding. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A contempt petition came to be filed on 13.12.2011. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the meantime, on challenge, the SCN dated 18.11.2011 was stayed by an interim order dated 08.02.2012 of the High Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Later on 14.06.2012, the department sent a letter to the petitioner asking him to take the truck/ goods on depositing 100% cash security plus a Bond for the 100% value of the said articles. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By its order dated 06.09.2012, the Patna HC admonished the department for their vengeful attitude in the following words - </font></p> <blockquote> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">+ there is no scope for continuance of the investigation after the seizure and detention of the goods had been quashed by the court of law after considering the merits or otherwise of the claim of the respective parties based on their pleadings and materials. </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">+ It is also apparent from the claim of the opposite parties that they had tried to justify their action and simultaneously they had tendered unqualified apology. This double faced stance of the opposite parties is against the settled principle of law in such matters. </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">+ The Assistant/Deputy Commissioner has orchestrated the things and misconstrued the provisions of law to the detriment of the petitioner merely with the purpose to overreach the order of this Court. </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">+ Being a senior officer he should have known his limits and jurisdiction and crossing those limits and jurisdiction in such a manner knowing full well the facts of this case as well as the specific order/direction of this Court and its repercussions, is clearly a gross contempt, which he has committed as has been proved beyond any semblance of doubt.</font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"> + The Court has no option but to hold the above named contemner guilty of contempt and punish him with simple imprisonment of three months with fine of Rs.2,000.00, which must be paid within 30 days failing which, imprisonment of the contemner shall be extended by one month more.</font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">+ The contemner must surrender before the Police within 30 days. </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">+ The order is to be placed before the CBEC for considering the proprieties of prosecuting the contemner under the provisions of the relevant Statute as the said act may also come within the purview of corrupt practices.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a similar case booked by DRI, the Patna HC by its order dated 19.05.2011 had held that the seizure is illegal and the Department was directed to forthwith release the consignment and the vehicle. However, the authority did not release the said articles but continued with the investigation and vide order dated 07.06.2011 extended the period of investigation till 08.12.2011 under the provision of section 110(2) of the Customs Act, 1962. This order was also challenged and the High Court vide its order dated 12.08.2011 quashed the same. Since the goods were not released a contempt petition came to be filed and the High Court passed an order on 06.09.2012 similar to the one mentioned above. But this time, the officers are the Additional Director General, Directorate of Revenue Intelligence, Zonal Unit, Lucknow and the Commissioner of Customs, Central Revenue Building, Patna. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(See <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=51&filename=legal/hc/2012/2012-TIOL-716-HC-PATNA-MISC.htm" target="_blank">2012 - TIOL-716-HC-PATNA-MISC</a>. & <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=51&filename=legal/hc/2012/2012-TIOL-715-HC-PATNA-MISC.htm" target="_blank">2012-TIOL-715-HC-PATNA-MISC</a>.) </font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">And Perseverance pays - Huge Win for Bangalore Customs - Bharti Airtel directed to deposit 218 Crores by Supreme Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Bangalore Customs officers were in a jubilant mood on Friday when the Supreme Court directed Bharti Airtel to deposit Rs. 218 Crores. The Bangalore Customs after their huge win in the Tribunal in a protracted legal battle did not rest on their laurels and closely pursued the matter in the Supreme Court when the party's appeal came up for hearing. The Solicitor General of India was present for the Revenue and officers from Bangalore Customs camped in New Delhi to assist the Counsels. They were successful in getting a deposit of over Rs. 200 Crores - that is the whole of the duty demanded. The excitement of the officers knew no bounds and they could be seen jumping with joy. It is very rarely that one sees such commitment in the officers.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CESTAT had upheld the Commissioner's order confirming the duty demand of over Rs. 200 Crores on the value of software imported with telecom equipment. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=28&filename=legal/cestat/2012/2012-TIOL-746-CESTAT-BANG.htm" target="_blank"><font size="1">(2012-TIOL-746-CESTAT-BANG)</font></a></strong>. The party was in appeal before the Supreme Court against this Tribunal order. </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Supreme Court Order - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=26&filename=legal/sc/2012/2012-TIOL-64-SC-CUS.htm" target="_blank">2012-TIOL-64-SC-CUS</a></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">No Work for Existing CBEC Ombudsmen - Three More to be appointed </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> is well known, the three Ombudsmen of CBEC at Delhi, Bangalore and Lucknow have practically no work. The CBEC doesn't provide them proper infrastructure and does not publicise their existence. No institution can survive without public confidence and an institution like the ombudsman should not be allowed to be withered away because it is a nuisance for the administration. Now they have called for applications for the post of Ombudsmen in Ahmedabad, Kolkata and Chennai. They had called for applications for these posts in February 2012, but it seems only one application was received and selection could not be made. The willing officers are to apply before 30 September 2012. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Can't they strengthen the existing ombudsmen before appointing new ones? </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Former DRI ADG Seeks Compensation </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is learnt that the former ADG, DRI Chennai who was arrested on corruption charges by CBI, now on bail has filed a writ in the Madras High Court claiming that the case had been foisted on him to stop him from investigating duty evasion of Crores of rupees and he was told to withdraw certain notices. He has sought a compensation of Rs. 50 lakhs and stay of proceedings against him. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>India's Milkman is No More</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_milkman.jpeg" alt="Legal Corner Icon" width="261" height="193" hspace="5" border="0" align="left"></font>MORE</strong> than seven years ago, I just called up Verghese Kurien, the man who flooded India with milk, and asked for an article for <strong>TIOL</strong>. He readily obliged and today we are again carrying that article in our Guest Column - an inspiring article indeed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After the 2006 Budget, again, I was tempted to call up the great man for his comments, but I thought it would be too cruel to disturb him. So, I sent a mail and called up his secretary. Again, promptly came the <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=3369" target="_blank"><strong>article</strong></a>. Just a day after the budget, he had thoroughly read the budget and wrote for us,<em> "I compliment the Finance Minister for exempting condensed milk and ice-cream from excise duty. This will indirectly help the vast mass of small milk producers across the country. In this connection, I would like to suggest that the Finance Minister may consider exempting the income of all cooperatives from tax who are engaged in multi-tier functions of procurement, processing and marketing of agricultural and dairy products. Dairy cooperatives that operate on Anand pattern, envisage provision of support services from the National Federation to the State Federations, from the State Federations to the District Unions and from the District Unions to the village cooperative societies. As such, these cooperatives should appropriately be exempted from the levy of the Service Tax." </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Getting two articles for TIOL from Kurien is something that I will unabashedly boast about with absolute immodesty. I am proud that Kurien wrote for us! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They called him mad, but today millions of people madly love him for providing them food. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Alexy Kosygin, the Russian Prime Minister visited Anand in the seventies and told him, <em>"Anyone who has been here, anyone who has seen what you have done, anyone who has gone above all to the villages looked into the eyes of your people, knows what you are doing. You are bringing about a revolution of great significance. Good. But you took 30 years to do it in milk, a whole lifetime. And you say you are going to do it in vegetable oil, another 30 years. Then you must do it in fruit and vegetables, another 30 years. May you be given a long life! Such significant and social and economic changes should not be brought about out in this leisurely fashion. It must be done in all direction all at once. But if you do, you will be shot down like a dog and you will have no defence. No, you should bring all these changes in all directions, all at once by a revolution. Come to my country. Be my guest. I will explain to you how this is done. I will teach you how this is done."</em> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, off he went to Russia and observed, <em>"The cows are all owned collectively which means no one owns them, which also means no one takes care of them. The State takes care of them. The dairies are owned by the State. People are all paid by the State. They are not answerable to anyone. The whole thing was a mess. So, I didn't like what I saw in those days in the USSR. So, we didn't follow that path. I still feel that we should do these things gradually, slowly. If it takes time, let it take time. But it will be more permanent, if it is done slowly." </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It was a sheer accident of life that took Kurien to Anand, but that changed life - his and the poor farmers'. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Also, please see Today's<strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15840" target="_blank">Editorial </a></strong></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><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">Customs</font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Export under DEPB - Good exported and consideration realized - Unreasonable and unfair to insist on continuation of bank guarantee: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> this case, the goods were neither detained, nor were subject to proceedings which culminated in any assessment order. In the circumstances, the insistence that the petitioner continue to maintain a bank guarantee for Rs. 2 crore is unwarranted. The customs authorities did not show how this condition, in addition to the bond insisted in the case of the shipment, was essential; the samples necessary for the investigation and issuance of show cause notice, if any, had been drawn. The goods were exported and the consideration was received in respect of the earlier shipments covered by the three bills; bank realization certificate towards export proceeds in respect of the said shipping bills were received on 06.07.2011. </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 clause (2) of Explanation 5 to Sec 271(1)(c) prescribes any time limit within which assessee is required to deposit tax with interest - NO: SC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FOR</strong> the accounting year ending 31.3.87, assessee was required to file his return of income under Section 139(1) on or before 31st July1987. Such return of income was not filed. It is important to note that although on August 1, 1987 the Karta made a statement under Section 132(4) surrendering an amount of Rs. 42,32,000/-, the assessee chose not to file its return of income on due date, i.e., 31st July, 1987. Failure to file such return of income on 31st July, 1987 and failure to pay tax thereon was the main reason relied upon by the Department to deny to the assessee the benefit of immunity under clause (2) of Explanation 5 to Section 271(1)(c). The Karta also later on retracted his statement dated August 1, 1987. However, according to the Department, the assessee had complied with all the conditions of clause (2) of Explanation 5 except payment of tax in time. </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">Penalty - Whether Commissioner (A) order in favour of assessee means no penalty; matter referred to Third Member: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MEMBER (J):</strong> The complexity of the Notification which has already resulted in passing of a favourable order by Commissioner (Appeals), cannot be understood by a common person not very well conversant with the legal interpretations. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Member (T):</strong> the question is whether an error made by the Commissioner (Appeal) will result in damage to the rights of the government. The matter has to be decided with reference to the appellant's actions and not with reference to the actions of the Commissioner (Appeal).</font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Referred to Third Member</font></strong></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrowfor 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 align="justify"><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> </body> </html>