TIOL-DDT 1969 · the untouched capture
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<p align="justify"><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 1969 </font><br>
25.10.2012<br>
Thursday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Payment in Foreign Exchange for Services from SEZ to DTA RBI - Instructions </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
<strong>UNITS</strong> in the Domestic Tariff Areas (DTAs) have been permitted to purchase foreign exchange from Authorised Dealers (Ads) for making payment towards goods supplied to them by units in the Special Economic Zones (SEZs), by a Circular issued in 2003. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI has reviewed the matter and has decided to allow ADs to sell foreign exchange to a unit in the DTA for making payment in foreign exchange to a unit in the SEZ for the services rendered by it (i.e. a unit in SEZ) to a DTA unit. It may, however, be ensured that there is an enabling provision of supplying these goods/services by the SEZ unit to the DTA unit and for payment in foreign exchange for such goods/ services to the SEZ unit, in the Letter of Approval (LoA) issued to the SEZ unit by the Development Commissioner (DC) of the SEZ. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2012/rbi12cir046.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI AP (DIR Series) Circular No. 46, Dated: October 23 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Export of Goods and Services - Simplification of Softex Procedure </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Foreign Exchange Management (Export of Goods and Services) Regulations, 2000, designated officials of the Ministry of Information Technology, Government of India at the Software Technology Parks of India (STPIs) or at Free Trade Zones (FTZs) or Export Processing Zones (EPZs) or Special Economic Zones (SEZs), had been authorized to certify exports declared through SOFTEX Forms. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Considering the spurt in the volume of software exports from India in recent times, the complexity of work contracts involved, the voluminous nature of contract agreements and the duration involved in execution of each contract as well as the time-consuming process involved in the certification of SOFTEX forms, simplified and revised Softex procedure was introduced initially at Bangalore, Hyderabad, Chennai, Pune and Mumbai with effect from April 01, 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, this procedure is extended to all STPIs in India with immediate effect. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2012/rbi12cir047.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI AP (DIR Series) Circular No. 47, Dated: October 23 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CESTAT recalls its order passed in Air India Limited case </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15940" target="_blank">DDT-1948</a></strong> we had reported that the CESTAT had dismissed the Stay application filed by <em>Air India Limited</em> and ordered the applicant to pre-deposit the adjudicated amount as the notice issued to the applicant was received back with the postal remark ‘<strong>incomplete address</strong>' and the applicant had neither appeared for hearing nor requested an adjournment and moreover had refused to accept the notice. This order is dated 02.08.2012 <strong>[See <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2012/2012-TIOL-1283-CESTAT-MUM.htm" target="_blank"><font size="1">2012-TIOL-1283-CESTAT-Mum</font></a>]</strong> and the applicant was directed to make the pre-deposit within eight weeks. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anyway, either through the <strong>DDT</strong> or for that matter the taxman from CST, Mumbai-I must have knocked the doors of the airline that they came to know about the CESTAT order and rushed to the CESTAT with a Miscellaneous Application for restoration of their Stay application that was decided ex-parte . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The matter was heard on the 8th October 2012 and the following order was passed - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#663399">"2. Perused the records. On perusal of the records, we find that the notice of hearing for 02.08.2012 was received back unserved with remarks ‘REFUSED'. Thereafter, stay application was disposed of ex-parte. Considering the fact the stay application has been disposed of ex-parte, we recall our order dated 02.08.2012 and restore the stay application to its original number. </font></em></font></p>
<p align="justify"><font color="#663399"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. As the revenue involved is more than <strong>Rs.211 crores</strong>, therefore, we direct the applicant to appear for disposal of the stay application on 16th October, 2012." </font></em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are yet to get the order passed on the Stay application. Incidentally, the above order was issued on the 15th.</font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(See <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2012/2012-TIOL-1484-CESTAT-MUM.htm" target="_blank"><font size="1">2012-TIOL-1484-CESTAT-Mum</font></a>)</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Time to bar appeals falling below a mandatory amount of Revenue </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> Netizen writes in:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With a view to reduce Government litigation, the CBEC has vide Instruction <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2011/cxinstruct03.htm" target="_blank">F.No. 390/Misc./163/2010-JC</a></strong>, dated 17-8-2011 [issued in continuation of earlier Instruction dated 20.10.2010] prescribed monetary limits for filing appeals by the Department before CESTAT and High Courts. According to the same, it is advised that appeals in the Tribunal shall not be filed where the duty involved is Rs. 5 Lakh and below. As usual, there are riders to this advice too! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The earlier Instruction F. No. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2010/cxinstruct05.htm" target="_blank">390/Misc./163/2010-JC</a></strong>, dated 20-10-2010 also mentions - </font></p>
<blockquote>
<p align="justify"><em><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">"7. It may also be noted that, wherever it is decided not to file appeal in pursuance of these instructions, which are aimed solely at reducing Government litigation, <strong>such cases shall not have any precedent value... </strong>Further, in such cases, there will be no presumption that the Department has acquiesced in the decision on the disputed issues in the case of same assessee or in case of any other assessees, if the amount involved exceeds the monetary limits..." </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, the assessee can always appeal for even a<strong> rupee</strong> notwithstanding that the second proviso to section 35B(1) of the CEA, 1944 gives the Appellate Tribunal discretion to refuse to admit an appeal where the amount of duty/fine/penalty does not exceed <strong>fifty thousand </strong>rupees. In fact, this amount of Rs.50,000/- was last revised on 13.05.1993 by the Finance Act, 1993 and certainly needs a hike! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There are more than sixteen thousand appeals pending with the CESTAT, WZB and the matters being heard are for the period 2003-2004 is what the Bench observed in the case of <em>Ambika Waste Management Pvt. Ltd. </em><strong>[<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2011/2011-TIOL-1063-CESTAT-MUM.htm" target="_blank"><font size="1">2011-TIOL-1063-CESTAT-Mum</font></a>]</strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In such a scenario, isn't it time to take note of the anomaly and make suitable amendments in the Act itself? Inasmuch as both the assessee and the Department should be restricted from filing appeal in cases which involve Revenue below a particular quantum. It should also be laid down in the statute that non-filing of appeals on account of the ‘monetary restriction' should not used against the assessee or for that matter, the department, in subsequent proceedings. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The moot point is - Un-necessary litigation drains the resources of the assessee as well as the exchequer. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a recent case, the CESTAT, WZB <strong>[<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2012/2012-TIOL-1485-CESTAT-MUM.htm" target="_blank"><font size="1">2012-TIOL-1485-CESTAT-Mum</font></a>]</strong> admitted an appeal involving a duty amount of Rs.771/-. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Money Does Not Grow On Trees (except apple trees in HP) </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADDRESSING</strong> the Nation, on 21 September 2012, the Prime Minister solemnly declared, Money does not grow on trees. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But in Himachal Pradesh, apparently this does not apply. A leading politician in Himachal Pradesh is said to have filed a revised Income Tax Return showing an income of Rs. 6.15 Crores from his apple orchards, which was earlier shown as Rs. 51 Lakhs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe a few more apple orchards in Himachal Pradesh should answer all our economic problems. The Prime Minister is reported to be planning a cabinet expansion - maybe he should consider some bright politicians who can grow money on trees and young enterprisers who can ensure the growth of their wealth in geometric proportions. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">It's iPhone instead of BlackBerry for US Customs </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> BlackBerry, used by FBI agents, Congress staff, and even President Obama, in US of A has been replaced by Apple's iPhone in the U.S. Immigration and Customs Enforcement (ICE). Over 17000 US Immigration and Customs Enforcement employees will now use the iPhone instead of BlackBerry. The US Government release says, "<em>ICE is procuring iOS services from various cellular carriers via Apple iPhone devices bundled into monthly plans for cellular phone service, Internet access for domestic and international coverage, and text messaging capabilities. The devices provide critical, mission support services for ICE personnel and provide modern communication and personal computing services. Examples are: call waiting, call forwarding, three way calling, caller ID, voice mail messaging, geospatial services, and picture/video capabilities. The iOS services will be used by a variety of agency personnel, including, but not limited to, Homeland Security Investigations, Enforcement and Removal Operations, and Office of the Principal Legal Advisor employees. The iPhone services will allow these individuals to leverage reliable, mobile technology on a secure and manageable platform in furtherance of the agency's mission.</em>" </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Till the other day, I was using an iPhone and a lawyer friend insisted that I should shift to the BB, to which some of my colleagues are addicted. I shifted to a Windows Phone, which is not yet popular in India. All these phones have mind-boggling features - only making a call or sending a message is a complicated affair! </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Rajat Gupta Gets Two Years in US Jail - Good Man Who did bad Things </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>63 YEAR</strong> old Rajat Gupta ran the consulting firm McKinsey & Company and advised Bill Gates and Bill Clinton, on their philanthropic efforts was sentenced to two year in prison and a fine of 5 million USD, on charge of insider trading. Rajat Gupta from Kolkata went to US to earn a Management degree and rose to head McKinsey & Company. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday he failed to secure a favourable order from a US judge in spite of hiring a former US Solicitor General as his counsel. The judge remarked, He is a good man, but the history of this country and the history of the world is full of examples of good men who did bad things." During the course of hearing, the judge had remarked that Gupta's philanthropic work will not be allowed to sway the jury. "If Mother Teresa was charged with bank robbery, the jury would still have to determine whether or not she committed a bank robbery." </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 align="justify"><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">Notfn.
97/2004-Cus – Import of ‘catalyst' as consumables – amending
notfn. 72/2007-Cus omitting the term ‘consumables' from the benefit
of exemption – as ‘catalysts' are separately mentioned in addition
to consumables in the EPCG scheme for existing plant and also separately
mentioned in the definition of capital goods under the Foreign Trade Policy,
prima facie merit in contention of applicant on merit as well as time bar – Pre-deposit
of Rs.49 crores waived and stay granted: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> applicant
imported ‘catalysts' and claimed
the benefit of Notification No. 97/2004-Cus as amended. The goods were
cleared by granting the benefit of the Notification as the applicant was
having valid licence under the EPCG scheme issued by the DGFT. </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"><font size="2"><strong><font color="#FF6633" face="Verdana, Arial, Helvetica, sans-serif">Income
tax - Whether once AO changes mind after taking approval for special
audit u/s 142(2A), it needs to invite fresh objections from assessee
if AO wants to propose fresh special audit - YES: Delhi HC</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE i</strong>ssues
before the Bench are - Whether when the AO dropped the opinion originally
formed for special audit u/s 142(2A) and there is nothing on record to show
that there was any fresh development compelling the AO to change his mind
and come to the conclusion that ‘certain complexities have been noted
in the accounts of the assessee’, proposal approved for special audit
is not valid; Whether it is incumbent on the AO to issue another show-cause
notice to the assessee u/s 142 (2A), after he changed his mind and proposed
special audit and invite the assessee's objections and Whether when as per
records, there is no application of mind by the CCIT before granting approval
to the proposal for special audit sent by the AO to him, the approval granted
by the CCIT for special audit is of no effect and is a nullity. 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">Actions
of the adjudicating authority and the appellate authority show a design
to refuse the refund under one pretext or the other - It is obnoxious that
such action has the approval of two adjudicating authorities and two different
officers at the level of Commissioner and speaks volumes about the state
of affairs – Appeal allowed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> some Central Excise formations, harassment
of an assessee takes alarming proportions so much so that the assessee
either complains to the CVC or just shifts his business from one place
to another. The recently appointed <em><strong>Ombudsman</strong></em> mechanism
is what he is probably not aware of...and obviously so because there is
not much publicity in the media and even the department does not seem to
be that interested in letting outsiders know! </font></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 align="justify"><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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