TIOL-DDT 1989 · 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 1989</font><br>
23.11.2012<br>
Friday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Goods cleared at 2% duty - can rebate be claimed? </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">"Sir, I am a manufacturer of Sanitary napkins classifiable under Tariff Item 9619 of the CETA, 1985. These goods are entitled for concessional rate of basic duty of 2% in terms of notification 1/2011-CE as amended (Sr. No. 131) and are valued on RSP basis in terms of notification 49/2008-CE(NT), Sr. No. 144 and there is an abatement prescribed of 35%. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Obviously, these are not "Inputs" for any of my consignees and there is no question of their taking CENVAT Credit of the duty being paid by me. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But, when a merchant exporter purchased these goods from me and sought to export it under a claim of rebate, he was told by the jurisdictional Excise authorities that the rebate claim might not be sanctioned for the following reason - </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ Goods cleared under 2% rate of duty are considered as "exempted goods" in terms of Rule 2(d) of the CENVAT Credit Rules, 2004 which reads - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) "exempted goods" means excisable goods which are exempt from the whole of the duty of excise leviable thereon, and includes goods which are chargeable to "Nil" rate of duty and goods in respect of which the benefit of an exemption under Notification No. 1/2011-CE, dated the 1st March, 2011 or under entries at serial numbers 67 and 128 of Notification No. 12/2012-CE, dated the 17th March, 2012 is availed; </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ Proviso appearing in Rule 3(1)(i) of the CENVAT Credit Rules, 2004 reads - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"Provided that <u>CENVAT credit of such duty of excise shall not be allowed to be taken</u> when paid on any goods - </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) in respect of which the benefit of an exemption under notification No.1/2011-CE, dated the 1 st March, 2011 is availed; or </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) specified in serial numbers 67 and 128 in respect of which the benefit of an exemption under Notification No. 12/2012-CE,dated the 17th March, 2012 is availed." </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ In view of the above, since the 2% duty paid goods are considered "exempted" and CENVAT credit is not being allowed on such goods, there is no question of allowing any Rebate. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I could not see any connection between the CENVAT Credit Rules, 2004 and Rule 18 of the CER, 2002 and when I tried to reason with them, the authorities say that I cannot read and understand the law. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, I may advise the merchant exporter to try to go for the B-1 bond and CT-1 procedure but don't think even that may work out. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will
the kind CBEC clarify OR should <font color="#000000">I tell</font> the
merchant exporter to purchase these "duty" paid materials and export
them just like that?"</font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT requests the Board to clarify. </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs Duty on Milk Food - Enhanced to 15% </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CUSTOMS</strong> duty on Skimmed Milk, Milk Food for babies etc, (upto fifty thousand metric tonnes in a financial year) which was nil has been enhanced to 15% (upto ten thousand metric tonnes in a financial year). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is a condition - "<em>The rate of duty shall apply to such quantity of imports for which an importer holds a Tariff Rate Quota Allocation Certificate issued by the EXIM Facilitation Committee in the Directorate General Of Foreign Trade in accordance with the procedure as may be specified by the EXIM Facilitation Committee in the Directorate General Of Foreign Trade from time to time through a Public Notice.</em>" </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2012/ctariff12_059.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No.59/2012-Cus., Dated: November 21, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Promoting
Cost Efficiency of Imports - CBEC Clarification</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TRADE</strong> has represented that with the growing container traffic in India, allowing the importers to transfer the goods from foreign containers to domestic shipping containers under Customs supervision in respect of imported goods lying uncleared for more than five days in a Customs area (CFSs/ICDs), can prove beneficial in reducing outflow on account of foreign exchange payments for foreign shipping containers and help Indian trade and industry to become more cost effective. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board clarifies:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Section 49 of the Customs Act, 1962 provides facility of storing goods in warehouses pending clearance in case where goods cannot be cleared within a reasonable time. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. An importer may de-stuff and release a foreign container immediately on arrival in the CFS/ICD. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Generally, this option is not utilized by importers who have preference to clear goods at their premises to avoid additional handling charges incurred on account of de-stuffing of the containers. It is also possible that some importers may not be aware of this option. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board reiterates that importers have the option to avail of the facility under Section 49 of the Customs Act, 1962. Further, importer may exercise the option to de-stuff goods from foreign containers and keep the same in the CFS/ICD including in empty domestic containers therein, under Customs supervision, for subsequent clearance as per law.</font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2012/instruction12_010.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F No.450/95/2012-Cus.IV., Dated: November 20, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Prohibition on Export of Milk, Milk Foods Lifted </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has made the export of <em>Milk and Cream, concentrated or containing added sugar or other sweetening matter including Whole Milk Powder, Dairy Whitener and Infant Milk Foods</em><strong> free</strong>. This was earlier prohibited. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2012/dgft12not025.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 25 (RE - 2012)/2009-2014., Dated: November 22, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Reduction in Fiscal Deficit by increased Tax Collection </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> following steps are being taken by the Ministry to mobilize resources to increase tax collection in order to reduce fiscal deficit:- </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Direct Taxes:</font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Monitoring of Advance Tax payment especially by top taxpayers; Emphasis is also given to monitor Advance tax payers that have to pay Alternate Minimum Tax applicable from the Financial Year; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Conducting surveys for detection of concealment of income and for compliance of TDS provisions. Detection of new areas of violation/avoidance of the provisions of TDS and taking action for proper deduction and deposit of TDS; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Organizing training programs for senior management as well as for DDOs (particularly of Government departments and PSUs) to spreading awareness about TDS &TCS provisions; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) Emphasis on collection out of arrear demand and monitoring of high default cases; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) Detailed strategy for making quality assessment has also been devised; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vi) Cross-verification of data collected through Annual Information Return with the return of income and issuance of notices in suitable cases. Using the data collected through Transaction statements for better quality assessments as well as recovery of demand; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vii) Multi-media campaign to encourage voluntary compliance of tax laws. </font></p>
</blockquote>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Indirect Taxes:</font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) To broaden the tax base and limit exemptions, negative list based comprehensive approach to service tax has been introduced with effect from the 1st July, 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) From 1st of October, 2012, service tax on transport of goods and passengers (in air-conditioned class and first class) by rail has been brought into effect. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) In addition, other steps including monitoring of revenue, strengthening of anti-evasion and audit mechanism, conduct of targeted audits and search operations, adjudication of pending show cause cum demand notices, realization of arrears, steps to curb under valuation of import, disposal of confiscated bullion and precious stones, administrative steps like redeployment of human power to service tax field formations which have more potential for augmentation of revenue. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was stated by the Minister of State for Finance, Namo Narain Meena in written reply to a question in the Rajya Sabha yesterday. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Direct
Tax Collections of Rs 2,65,417 Crore - till 15th November </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DIRECT</strong> Tax Collections of Rs.2,65,417crore have been made till 15th November,2012 during the current Financial Year 2012-13.The details of Direct Tax Collections (net) for the last 4 years as well as for the current year (up to 15th November, 2012) is as given below: </font></p>
<p align="center"> </p>
<table width="90%" border="0" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"> </td>
<td valign="top"><blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(Rs. in crores) </font></p>
</blockquote></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Financial Year </font></strong></p></td>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Total Direct Tax Collection (Net) </font></strong></p></td>
</tr>
<tr bgcolor="#ECE0ED">
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2008-09 </font></strong></p></td>
<td valign="top" bgcolor="#ECE0ED"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">333818 </font></p></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2009-10 </font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">378063 </font></p></td>
</tr>
<tr bgcolor="#ECE0ED">
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2010-11 </font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">446935 </font></p></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2011-12 </font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">494799 </font></p></td>
</tr>
<tr bgcolor="#ECE0ED">
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2012-13 </font></strong></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (upto 15.11.2012) </font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">265417</font></p></td>
</tr>
</table>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Measures undertaken by Government of India to Revive Economy </font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. <strong> BETTER</strong> access to finance for manufacturing sector, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Fast tracking of large investment projects in the areas of power, petroleum and gas, roads, coal etc, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Use of buffer stocks to moderate food inflation, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Strengthening of financial and banking sector, reducing the volatility of exchange rate etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Enhancing the level of investment for agriculture sector including irrigation projects, promoting Micro Small and Medium Enterprises (MSME) sector by way of higher allocation of funds, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Enhancing investment in the infrastructure sector focusing on Public Private Partnerships, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. Expedite the passage of Direct Tax Code Bill </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. Evolving a consensus among stake holders in implementation of goods and services tax. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. Reduction in the subsidy on diesel, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. Announcement of disinvestment in certain PSUs, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. Measures to strengthen the investment climate (opening of FDI in multi-brand retail, aviation, broadcasting). </font></p>
</blockquote>
<p align="right"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Finance MOS in a written reply in the Rajya Sabha yesterday </font></em></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Ranjit
Sinha is New CBI Director </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Ranjit_Sinha.jpg" alt="Legal Corner Icon" width="100" height="120" hspace="5" border="0" align="left"><strong>THE</strong> 1974 batch Bihar cadre IPS officer, Ranjit Sinha is the new CBI Director. He is the senior-most IPS officer in the country. The competent authority has appointed Ranjit Sinha, as Director, Central Bureau of Investigation (CBI) for a period of two years with effect from the date of assumption of charge. He will succeed A.P. Singh, on his retirement on 30th November 2012.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He
had earlier worked in CBI as DIG, CBI, Patna, as Joint Director (Anti-corruption),
Delhi and Joint Director (Admn) in CBI, HQ. At present, he is DG, ITBP. A
Committee headed by the CVC had recommended three names to the Cabinet and
the ACC has chosen Sinha. Delhi Police Commissioner Neeraj Kumar was one
of the strong hopefuls for the coveted post, but his name did not figure
in the list selected by CVC Committee. Neeraj Kumar has moved the CAT against
his non-inclusion and the application is to be heard by CAT today. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT Cartoon </font></strong></p>
<p align="center"><img src="http://www.taxindiaonline.com/RC2/image/stories/Cartoon.jpg" alt="Legal Corner Icon" width="400" height="451" hspace="5" border="0" align="center"></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">Central Excise</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">CENVAT - Retrospective amendment of Rule 6 of CCR, 2004 - Common input services used for dutiable and exempted final products - since appellant did not reverse proportionate CENVAT credit within six months of enactment of Finance Act, 2010, they cannot claim benefit of retrospective legislation: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> Tribunal being a creation of the statute cannot over look or condone the time limits specified in the statute. Inasmuch as the time limit expired in November 2010 itself and the appellant herein did not comply with the conditions stipulated therein, held that the order passed by the lower authorities cannot be faulted. The only relief that can be given to the appellant is with regard to the penalties imposed.</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 receives shares as corpus donation and sells same to realise funds, it loses entitlement to exemption u/s 11 because shares were sold without prior permission of DIT (Exemption) - NO: ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> is a notified trust u/s 80G and is registered u/s 12A. AO observed that the assessee had received shares of ‘M' and ‘S' through ‘E' Trust and transferred to corpus fund. Total market value of the shares was Rs. 8.47 crores. Assessee sold part of the shares and the amount received was credited to balance sheet as corpus fund. AO asked assessee to explain why the market value of shares on the date of donation should not be considered as taxable u/s 2(24) as income in view of violation of section 11 and 13(1)(d) of the Act after receiving shares from a charitable trust. The issue before the Bench is - Whether when assessee receives shares as corpus donation and sells the same to realise the funds, it loses entitlement to exemption u/s 11 because shares were sold without prior permission of DIT (Exemption). NO is the Tribunal's answer. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">CHALR, 2004 - Stamp paper purchased by CHA in his name for execution of High Sea Sales agreement - allegation that since as per Stamp Act, stamp paper ought to have been purchased in the name of parties to the contract and hence they are fabricated and, therefore, this act is in violation of CHALR, 2004 is misplaced: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> High Sea Sales agreement at the time of clearance was examined by the officers who cleared the goods and there is no allegation that the said agreement is fabricated one entered by the parties to the contract. Further, the High Sea Sales agreement have been executed prior to imports, therefore, proceedings under CHALR 2004 cannot be initiated for this act of the appellant. </font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements </font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p>
<p><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>
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