TIOL-DDT 1944 · 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 1944 </font><br>
18.09.2012 <br>
Tuesday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>E-payment of Customs duty mandatory </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_033.htm"><strong>Circular No. 33/2011-Cus dated 29.07.2011</strong></a>, CBEC had informed that <em>in order to reduce the transaction cost of the importers and expedite the time taken for customs clearance, the Board has decided to make e-payment of duty mandatory for the importers paying an amount of Rupees one lakh or more per transaction. Additionally, for Accredited Clients under the Customs Accredited Client Programme irrespective of any amount of duty, the Customs duty will have to be paid through E- payment mode only. The date from which the E- payment will be made mandatory will be notified separately</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Finance Act 2012 amended Section 47 (2) of the Customs Act to stipulate that, <em>"Provided that the Central Government may, by notification in the Official Gazette, specify the class or classes of importers who shall pay such duty electronically" </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Circular No. 24/2012 dated 05 09 2012 [<strong>Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15812" target="_blank">DDT 1936 dated 06 09 2012</a></strong>], Board had informed that it had 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. But obviously at that time, they forgot to issue a notification as required under Section 47(2) - first proviso. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But they have realised this well in time and issued the notification yesterday. The Notification stipulates that the following classes of importers shall pay customs duty electronically, namely:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Importers registered under Accredited Clients Programme. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Importers paying customs duty of one lakh rupees or more per bill of entry. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is to reduce your transaction cost; please pay the duty electronically. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_083.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 83/2012 -Cus (NT), Dated: September 17, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CESTAT Members' Retirement Age - Rolled Back? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> LESS </strong>than a week ago, on 12.09.2012, <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15857"><strong>DDT 1940 </strong></a>reported that the retirement age of the President of CESTAT has been increased to 68 and that of the Members to 65. Now, we understand that this notification is being withdrawn. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT had raised certain doubts on the notification and hoped that, we would get answers soon, but now no answers; the notification itself is scrapped. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Law Commission's View:</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> The Law Commission of India in its Report No. 232, in August 2009, observed, “<em>enhanced age of retirement is prescribed in the higher echelons of the administrative and judicial services because the professional experience gained by those working in them needs to be fully tapped for the good of the society. It may be pointed out that the Government incurs a lot of expenditure on orientation-training of its employees, especially, at the senior level, and, therefore, their enriched professional experience in running the affairs of the government could be utilized for the good of the common man. In the present liberalized economic era, the experience gained by government employees after their retirement is being fruitfully tapped by many multinational companies. These private enterprises pay hefty salaries to the retired government employees because their valuable professional experience gained during their service in the government is put to profitable use. In such a scenario, the government should utilize the services of their retired employees to the fullest extent possible</em>". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the Law Commission recommended that the "<em>age of retirement of Chairpersons should be uniformly fixed <strong>at 70 years for all the Tribunals</strong>. Likewise, the age of retirement of Members of all the Tribunals should be fixed uniformly at <strong>65 years</strong>"</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Last month, the Solicitor General informed the Supreme Court that a new law was in the pipeline to have uniformity in the service conditions, including the retirement age, for these tribunals. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Recently the Kerala Government enhanced the retirement age of a single Member, by name, of the Sales Tax Appellate Tribunal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And very recently, the Central Government withdrew a Bill, which sought to raise the retirement age of Members of the SEBI Tribunal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And then came the notification from the Finance Ministry enhancing the retirement age of Members and President of the CESTAT and now it is mysteriously withdrawn! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Strange are the ways of the State! </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI Reduces CRR </strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ON</strong> the basis of an assessment of the current macroeconomic situation, RBI has decided to: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> ++ reduce the cash reserve ratio (CRR) of scheduled banks by 25 basis points from 4.75 per cent to 4.50 per cent of their net demand and time liabilities (NDTL) effective the fortnight beginning September 22, 2012. Consequently, around Rs. 170 billion of primary liquidity will be injected into the banking system; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.0 per cent. Consequently, the reverse repo rate under the LAF will remain unchanged at 7.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 9.0 per cent </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The state of the economy is far from rosy. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Economic activity picked up modestly in Q1 of 2012-13 in relation to the preceding quarter; but the sluggish momentum of value added in Q1 was evident across all sectors of the economy, and particularly in industry. Lead indicators point to slack activity in Q2 as well. Industrial production rose by just 0.1 per cent in July. In August, the manufacturing PMI fell to its lowest level during 2012 so far, as a result of output disruptions due to power shortages and declining export orders. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Headline WPI inflation (y-o-y) has remained sticky at around 7.5 per cent throughout the current financial year so far. At the disaggregated level, within primary food articles, the easing of vegetable prices in July-August was to a large extent offset by the surge in prices of cereals and pulses. Demand-supply imbalances in respect of protein-rich items persist. Fuel price inflation picked up in August, largely reflecting the upward revision in electricity prices. As welcome as the recent hike in diesel prices/rationalisation of LPG subsidy has been, the pass-through to administered prices remains incomplete. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Money supply (M 3), bank credit and deposits have moderated in relation to their indicative trajectories, reflecting the slowing down of economic activity. Against this backdrop, liquidity conditions have remained comfortable since the FQR (First Quarter Review). However, going forward, the wedge between deposit growth and credit growth could widen on the back of the seasonal pick-up in credit demand in the second half of the year. This, combined with outflows on account of advance tax payments and the onset of festival-related currency demand, could accentuate pressures on liquidity over the next few weeks. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ While the trade deficit narrowed in the first five months of 2012-13, the relatively large fall of exports in July-August is indicative of risks to the current account from the worsening global outlook. As regards external financing, the moderation in FDI inflows was partly compensated by a surge in non-resident deposits and a renewal of FIIs flows in recent months. Consequently, the rupee has been trading in a narrow range since the FQR. Looking ahead, a moderation in the trade deficit combined with increased inflows in response to domestic policy developments could ease pressures on the balance of payments. </font></p>
</blockquote>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Allocation of Rough Marble for import for Financial Year 2012-13</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT </strong>has noticed some deficiencies in respect of four firms in Rajasthan. RA will not issue import licenses to these firms until clearance from DGFT (Hqrs). These firms would need to comply with the deficiencies to DGFT (Hqrs) within a period of one week from the date of issue of this Trade Notice, before their cases can be considered for grant of import license. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=329&filename=notification/dgft/2012/dgft_trade_notice_05_2012.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Trade Notice No. 05/2012, Dated: September 17, 2012 </strong></font></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">China files dispute against US Anti-Dumping Measures </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ON </strong>17 September 2012, China notified the WTO Secretariat of a request for consultations with the United States on countervailing and anti-dumping measures applied to a wide range of products exported by China to the US. Among the products cited by China, affected by the measures, are paper, steel, tyres, magnets, chemicals, kitchen appliances, wood flooring, and wind towers. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Establishment of Liaison Office (LO) / Branch Office (BO) / Project Office (PO) in India by Foreign Entities - RBI Clarification</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per "Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations, 2000, a person resident outside India requires prior approval of the Reserve Bank for establishing LO / BO in India. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">General permission is granted to a foreign company to open project office in India provided it has secured from an Indian company, a contract to execute a project in India, and subject to satisfying certain other criteria. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI clarifies that permission to establish offices, in India by foreign Non-Government Organisations/Non-Profit Organisations/Foreign Government Bodies/Departments, by whatever name called, are under the Government Route. Accordingly, such entities are required to apply to the Reserve Bank for prior permission to establish an office in India, whether Project Office or otherwise. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2012/rbi12cir031.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI A. P. (DIR Series) Circular No. 31., Dated: September 17, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CITs challenge Transfer Orders - CAT wants Board to Consider Representation</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TRANSFER </strong>is
the most harrowing experience for a babu and somehow the Administration ensures
that by and large officers are not posted to their choice places. Almost
everybody has a grouse that their genuine requests are not considered by
the Big babus who also faced similar problems in their younger days. On 4th
September, the CBDT transferred 295 Commissioners after an extensive homework
by the Full Board. On 5th September, FOUR Commissioners sent in their representations
against their transfers and immediately approached the Central Administrative
Tribunal (CAT). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In one case, the Commissioner pleaded that he had not completed he mandatory period of 14 years of stay at a stretch in Delhi and, therefore, he is not due for transfer out of Delhi as provided in the transfer policy of Indian Revenue Services. The CAT directed the Placement Committee to consider his application and pass a reasoned order and till such time the transfer order shall not be given effect to. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In another case, a Commissioner represented against the transfer on the grounds that he is due for retirement in the year 2013, his son is studying in Class - 10th and also on the medical ground that he is undergoing treatment for a considerable period. He submits that as per Para 3.5 of "Transfer/Placement Guidelines for Officers of the Indian Revenue Service, Central Board of direct Taxes 2010" officers who have 3 years or less service left shall be posted to the station/region of their choice to the extent possible. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CAT passed a similar order in his case also.</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 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"><font color="#663399">Service Tax</font></font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular <em> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2008/sercir98.htm">No.98/2008 </a> ST</em> dated 4.1.2008 does not help revenue - CESTAT holds construction service is input service for service of renting of immovable property.</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CREDIT</strong> of duty paid on inputs is available when the inputs are used for providing an 'output service'. Therefore, there is a need to say that the inputs have been used for providing an 'output service'. In the case of 'input service', the definition includes input services used by a provider of taxable service for providing an output service. Therefore, the definition of input and input service are parimateria as far as the service providers are concerned. In this case, <em><strong>without utilizing the service, mall could not have been constructed and therefore the renting of immovable property would not have been possible. </strong></em></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 business can be said to have been set up from date when one of categories of business activities among various commences and it is not necessary that all categories of activities must commence simultaneously - NO: ITAT Special Bench</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the Special Bench are - Whether business can be said to have been set up from the date when one of the categories of business activities among various activities is started and it is not necessary that all the categories of its business activities must start either simultaneously or that the last stage must start before it can be said that the business was set up; Whether flow of revenue is a condition precedent for coming to a conclusion that business of the Assessee has been set up and Whether it is open to the Revenue to challenge the constitution of Special Bench. And the verdict goes against the Revenue. </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">It is settled law that when a principal manufacturer gets his goods manufactured from job worker on job work basis and transaction between them are on principal to principal basis, it is job worker who would be liable to pay duty and not principal manufacturer - Prima facie case in favour - Pre-deposit of Rs.31 Crores duty waived and Stay granted: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IMPORTED</strong> Gambier sent by appellant to job worker for processing - gambier extract processed by job worker and returned to appellant - same is blended with Katha which is cleared at nil rate of duty - Duty demand on gambier extract raised on appellant - It is settled law that when a principal manufacturer gets his goods manufactured from a job worker on job work basis and the transaction between them are on principal to principal basis, it is the job worker who would be liable to pay duty and not the principal manufacturer - Prima facie case in favour - Pre-deposit of Rs.31 Crores duty waived and Stay granted </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>
<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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