TIOL-DDT 1968 · 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 1968</font><br> 23.10.2012<br> Tuesday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Modified ST-3 Return Ready for Uploading - File your Returns Now</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> MODIFIED</strong> version of the Service Tax Return (ST-3) for the quarter April-June 2012 is now available for uploading to ACES. It is available in 'DOWNLOADS' section in offline version only and not online version. In view of the implementation of the Negative List concept in Service Tax with effect from 1st July, 2012, the return filing cycle of six months (April-September, 2012) has been spilt. This new ST-3 Return will be only for the period April-June 2012, when Negative List was not introduced. This return is available in offline utility only with view and print facility in online mode. The last date of filing the ST-3 return for the quarter April-June 2012 has been extended by CBEC up to 25th November, 2012 vide Order No. 3/2012 dated 15th October, 2012. </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Regarding filing of return for the period from July-September, 2012, further announcements will be made in due course. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. ST-3 returns for the past half-yearly return filing periods up to March 2012 can also be filed now both through offline and online versions. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ACES wants the assessees not to wait until the last moment and file the return now to avoid congestion and inconvenience. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please go the ACES website and try to file your return. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is surprising that CBEC has not yet issued any circular informing that returns for the Quarter ending June 2012 can now be filed. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Transfer of Unutilised Credit - ACES Now Responding</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=16043" target="_blank">DDT 1957 - 08 10 2012</a></strong> <strong>reported,</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A harried assessee informs us:</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"In the Budget 2012-13, the CENVAT Credit Rules was amended to transfer the un-utilized Additional duty credit from one unit to another unit which are registered with a common PAN vide notification 18/2012 C.E.(N.T.) and the corresponding notification for changes in the ER-1 was also made vide notification 12/2012 C.E. (N.T.) </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But till date the ER-1 returns format in ACES does not have this change done and we want to transfer some credit lying un-utilized. We wrote a mail to ACES helpdesk; they gave us call ticket number and there is no reply from them for past one month." </font></em></p> <p align="justify"><strong><em><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Will somebody in ACES help? </font></em></strong></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the ACES site clarifies:</font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rows 9A and 16A have been inserted in the ER-1 return form introduced as per Notification No. 12/2012-CE(NT). This enables entry of transfer of credit of additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act from one registered premises to another. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The row 9A enables entry of credit taken from another unit of the same registrant while row 16A enables entry of credit utilized by transfer to another unit of the same registrant. The entry can be made only in corresponding column no.6 of the table no. 8 Details of credit taken and utilized. Row 9A reads as follows; Row 9A : Credit taken from inter-unit transfer of credit under Rule 10A of CENVAT Credit Rules, 2004" Row 16A reads as follows: Row 16A credit utilized towards inter-unit of credit under Rule 10A of CENVAT Credit Rules,2004. Column 6 reads as follows: Additional duty of Customs under Section 3(5) of the customs Tariff Act, 1975. </font></em></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Case for Commissioner(A) to be given Power for Restoration of Appeal </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CESTAT is clothed with express powers under rule 41 of the CESTAT (Procedure) Rules, 1982 to restore appeals that were dismissed inter alia on ground of non-appearance or on account of non-compliance of the order of pre-deposit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The said rule 41 is reproduced below - </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"<strong>RULE 41. Orders and directions in certain cases.</strong> - The Tribunal may make such orders or give such directions as may be necessary or expedient to give effect or in relation to its orders or to prevent abuse of its process or to secure the ends of justice." </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, the Commissioner(Appeals) does not have this power and hence if an appeal is dismissed by the lower appellate authority on the aforesaid grounds, an appellant has to file an appeal before the CESTAT and wait for a decision. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the present case, the appellant complied with the Stay order passed by the Commissioner(A) inasmuch as he paid the pre-deposit amount as ordered but the same was not communicated to the Commissioner (Appeals). Resultantly, the lower appellate authority dismissed their appeal. An application moved for restoration of the appeal was also dismissed citing that <font color="#FF0000">there were no powers available to the Commissioner(A)</font>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Before the CESTAT, the appellant cited the previously mentioned facts and the Bench set aside the order of the Commissioner(A) dismissing the appeal. However, considering the submission made by the appellant, the matter was remanded to the adjudicating authority for causing verification of the records and passing of an order. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If only the Commissioner (A) had the power to restore the appeal, this circuitous remedy could have been avoided. </font></strong></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2012/2012-TIOL-1473-CESTAT-MUM.htm" target="_blank">2012-TIOL-1473-CESTAT-Mum</a>.</font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Arrears recovery - Coercive Action when Appeal Admitted by SC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> received this mail - </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"All the Board Circulars issued till date on the subject of recovery of arrears when the appeal is pending pertain to appeals before the Commissioner (A) or the CESTAT and not the High Court or Supreme Court [Board Circulars<strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/1998/excircular396.htm" target="_blank">396/29/1998-CX</a></strong> dt.02.06.1998 & <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2004/excircular788.htm" target="_blank">788/21/2004-CX</a></strong> dated 25.05.2004 or the Supplementary Manual Chapter 18, Part III refers]. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this scenario, whether coercive action can be initiated for recovery when the appeal filed by the assessee is admitted by the Supreme Court is not known. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, since the appeal has been admitted by the Apex Court, one cannot but wait for the appeal to be heard in due course and the department may file Miscellaneous Application for early hearing. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board in its Circular no. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2003/excircular746.htm" target="_blank">746/62/2003-CX</a></strong> dated 22.09.2003 has mentioned the following - </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"6. The Directorate should also play an important role in getting the old cases listed for hearing in Supreme Court, in co-ordination with the concerned Commissionerates. In order to get interim stay orders vacated from the Supreme Court, the DLA should tie-up with the Commissionerates for filing of Misc. <a>Application for early hearing . </a>Necessary co-ordination in this respect may be ensured." </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yet, in some Commissionerates, the Revenue authorities are initiating coercive steps for recovery of the adjudged dues. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While there is no clear-cut instruction allowing this action, it needs to be understood that such an action may be termed as improper in the eyes of the law. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The following decision of the Supreme Court in the case of <em>UOI vs. West Coast Paper Mills Ltd.</em> <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=37&filename=legal/sc/2004/2004-TIOL-14-SC-LMT.htm" target="_blank">(2004-TIOL-14-SC-Limitation)</a></strong> throws light on the aspect that once an appeal is admitted by the Supreme Court, the judgment of the Tribunal is in jeopardy (and obviously one cannot enforce the said Tribunal judgment). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The relevant paragraphs of this decision are reproduced under - </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"<strong>14</strong>. Article 136 of the Constitution of India confers a special power upon this Court in terms whereof an appeal shall lie against any order passed by a Court or Tribunal. <u>Once a Special Leave is granted and the <a>appeal </a>is admitted the correctness or otherwise of the judgment of the Tribunal becomes wide open</u>. In such an appeal, the court is entitled to go into both questions of fact as well as law. In such an event the correctness of the judgment is in jeopardy. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>15</strong>. Even in relation to a civil dispute, an appeal is considered to be a continuation of the suit and a decree becomes executable only when the same is finally disposed of by the Court of Appeal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>38</strong>. In the aforementioned cases, this Court failed to take into consideration that once an appeal is filed before this Court and the same is entertained, the judgment of the High Court or the Tribunal is in jeopardy. <u>The subject matter of the lis unless determined by the last Court, cannot be said to have attained finality. Grant of stay of operation of the judgment may not be of much relevance once this Court grants special leave and decides to hear the matter on merit</u>. " </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is, therefore, felt that the Board issues instructions on the subject matter so that the dilettante jurisdictional range authorities do not land into trouble by way of a contempt petition or get a rap from the apex Court." </font></p> <p align="justify"><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT requests the CBEC to look into the matter. </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"> - Thursday'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">Refund - Export of Services by SEZ Unit - unutilized credit of ST paid on input service claimed as refund u/r 5 of CCR, 2004 rejected by Commissioner (A) on ground that SEZ being under administrative control of Development Commissioner, CCR, 2004 and notification issued there under are not applicable - Order set aside and Matter remanded: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is a unit in the Special Economic Zone and is registered as a service provider under the category of "Business Auxiliary Services". They exported taxable output service under the Export of Service Rules, 2005 without payment of service tax. This resulted in accumulation of unutilized credit of service tax availed on input service for which they filed a refund claim for Rs.5,63,332/- for the period October to December, 2010 in terms of Rule 5 of the CCR, 2004 r/w Notf. No. 5/2006-CE(N.T). The lower adjudicating authority opined that the input service procured by the appellant from the Domestic Tariff Area were exempted unconditionally vide Notification no. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2009/stnot09_009.htm" target="_blank">9/2009-ST</a></strong> dated 03.03.2009 and, therefore, the appellant <strong>should not have paid any duty</strong>. Holding that seeking refund of input service tax credit for the activities undertaken within the SEZs is not consistent with the scheme of refund under rule 5 of the CENVAT Credit Rules, 2004, the refund claim was rejected. </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 before invoking provisions of Sec 179 against Director of a Pvt Company it is necessary for Revenue to establish that tax due cannot be recovered from company - YES: Gujarat HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the Bench are - Whether in order to invoke the provisions of section 179 against a director of a private limited company, the Department must first establish that tax dues from the company cannot be recovered; Whether under section 179 of the Act, the Department could only recover tax due from the director of a private limited company and not interest or penalty and Whether on the facts and in the circumstances of the case, the Department is not justified in seeking recovery of the dues against the petitioner on the ground that there was no gross negligence on part of the petitioner to which non recovery can be attributed. And the verdict goes in favour of the assessee. </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">Valuation - Sale of Digital Loop Carriers (DLC) Equipment and related Operation Software on Separate Invoices - There is no justification for including value of such software in value of DLC equipments: CESTAT. </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is engaged in the manufacturing of LED Display Boards, Line Telephony Equipment and related software, etc. In the year 2002, orders were placed by M/s Bharat Electronics Ltd., (BEL) on the appellant for manufacture and supply of Digital Loop Carriers (DLC). The orders were placed for supply of Hardware and also the operating software and spare parts. BEL, in turn delivered the goods to M/s. MTNL for their ultimate use. The invoice raised for supply of the goods to BEL, indicates the value of Hardware and Software separately. The Hardware was cleared on payment of applicable rate of duty, whereas software was cleared at NIL rate of duty. It appears that there was correspondence in February 2003 regarding the supply of software by the appellant and the department. Further, the audit of the appellant's factory was conducted during December 2003. A SCN dated 05.07.2007 demanding an amount of Rs.2,12,23,061/- was issued alleging that the software supplied along with DLC was not a software of its own but an integral part of the DLC; that the software was not distinct and separate product from the equipment; that the value of software should be included in the value of hardware cleared and supplied to BEL. The Commissioner confirmed the total duty as proposed in the SCN along with interest and imposed penalties. </font></p> <p align="justify"><em><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> Sarasvati namastubhyam varade kamarupini Vidyarambham karishyami siddhirbhavatu me sada.</strong></font></em></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/VijayaDasami.jpg" alt="Legal Corner Icon" width="498" height="487" hspace="5" border="0" align="center"><br> </font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tomorrow is a Holiday - Vijaya Dasami </font></strong></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Thursday 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> </body> </html>