TIOL-DDT 2000 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!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 2000</font><br> 11.12.2012 <br> Tuesday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT 2000 - An Unimaginable Miracle </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>I </strong>don't know if there is any other column which has been written non-stop for 2000 days. It took a little more than eight years to reach this milestone and every night had been a nightmare - as to how the next day's DDT was going to come out. And every day I was sure, the next DDT will not come out - but it did - without fail for 2000 days!</font></p> <p align="center"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_inside_2000.jpg" alt="DDT 2000 - An Unimaginable Miracle " width="600" height="400" hspace="5" border="0" align="center"></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When I finished the 100th DDT on 25.04.2005, I was physically and mentally exhausted and I realised that I had embarked on a project far beyond my capabilities and this cannot continue for long. I suggested to my Managing Editor that we would rest the DDT idea for a few weeks and revive it later. But he said that DDT has already become a daily habit with many of our Netizens and we have no right to disappoint them. In normal English, it meant, "you better continue or else……." I got the message and today we are on DDT 2000! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT was started with the purpose of giving a daily capsule on the important happenings in the tax field, especially to explain the law in the notifications, circulars and various other forms by which countless laws are inflicted on the hapless taxpayers, with boring regularity. The idea was - spend fifteen minutes with DDT every day and your tax knowledge is updated. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I realised very early as the Supreme Court observed in <em>Oswal Agro Mills Limited and Others Vs Collector of Central Excise and Others</em> - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2002/2002-TIOL-465-SC-CX.htm" target="_blank"><font size="1">2002-TIOL-465-SC-CX</font></a></strong>, "<em>language is at best an imperfect instrument for the expression of actual human thoughts. It is also idle to expect that the draftsman drafted with divine prescience and perfect and unequivocal clarity</em>" . </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Understanding and explaining this imperfect instrument coupled with absolute callousness and lack of clarity, became very difficult and often DDT had to resort to hard criticism which though not well taken in the beginning, came to be accepted as fair as we went along. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I am grateful to my Managing Editor Shailendra who was a solid source of support and inspiration. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I am deeply obliged to my two senior editors Sunil Achuthan and Raghavendra Rao, whose job every morning is to tear DDT to pieces and find out mistakes to the last comma. With absolutely no respect or regard for me, they do a perfect job of quality control. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I am grateful to Dr. Rishi whose cartoons have added immense value to DDT. I am deeply indebted to Dr. VS Gopal, a senior retired IAS officer (who calls me his friend) whose cartoons enlivened this column sometime back. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And 2000 editions of DDT were possible only because of the support from the Government and the patronage of our Netizens. </font></p> <p align="center"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_2000.jpg" alt="DDT 2000 - An Unimaginable Miracle " width="405" height="444" hspace="5" border="0" align="center"></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Big Thank You! </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And DDT goes on…………………………………………….. </font></p> <p align="center"><font color="#006600"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> Customs - Functional control of Special Valuation Branches </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AT</strong> present Special Valuation Branches (SVB)are located in the Customs Commissionerates of Mumbai, New Delhi, Chennai, Kolkata and Bangalore and are functioning under the administrative control of the respective Commissioners of Customs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now CBEC has decided to vest the Directorate General of Valuation (DGOV) with functional control over the SVBs. Consequently, the present existing SVB sections with their existing staff will henceforth function under the supervisory control of the DGOV. The Board has also decided that the officers posted in SVBs shall not be given any additional responsibilities and they shall exclusively handle work relating to SVB investigations and related issues. The office of the DGOV shall closely monitor the pendency of the SVBs, approve the initiation of SVB inquiries, and supervise the investigations. Furthermore, the Board has desired that the DGOV continuously edeavour for qualitative improvement of SVB investigations/orders. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is envisaged that on completion of investigation in a case, the proper officer in SVB will issue an order for determination of value under Section 14 of the Customs Act, 1962. The order will be sent to the importer concerned and the Custom House that had referred the case and to DGOV. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This Scheme is to take effect from 01.01.2013 </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2012/cuscir12_029.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 29/2012-Cus, Dated: December 7, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Disclose your True Income - Revenue Secretary </font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REVENUE</strong> Secretary in a Statement made to the media said that: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- 16,00,746 persons made payments of Rs.2 lakhs or more against their credit cards; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- 11,91,037 persons decided to purchase or sell house property worth Rs. 30 lakhs or more; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- 52,42,114 persons acquired mutual funds of Rs. 2 lakh or more; bonds or debentures of Rs. 5 lakhs or more; shares issued by a company of Rs.1 lakh or more; bonds issued by RBI of Rs. 5 lakh or more; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- 33,83,276 persons made cash deposits aggregating Rs. 10 lakh or more in the savings bank account. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But in the year 2011-12, only 14,62,488 assessees (salaried persons, HUF, professionals, firms, companies and transporters & retainers) have filed their returns disclosing a taxable income of over Rs. 10 lakhs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Any fair-minded person", he says, "will agree that this is a gross under-statement". </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">December 15 is an important day on the calendar of the Central Board of Direct Taxes (CBDT). It is the date on which the third instalment of advance tax for corporates and the second instalment for all other assesses (including individuals, HUF etc) is due. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He urged all assessees to disclose their true income. There is no advantage in suppressing the true income or avoiding paying income tax that is due because, <strong>sooner than later, the information available with the Income Tax Department will lead the department to the doors of such persons</strong>. For assesses who have not yet paid the correct advance tax, there is an opportunity to rectify the mistake and pay the advance tax by December 15, 2012. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government seeks the cooperation of all citizens in this regard. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Or else ………… </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">YOU ARE GOING TO BE IN TROUBLE!</font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Running an Industry in India is Real Challenge </font></strong></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AFTER </strong>11, 12 months, your temptation is to migrate to USA or elsewhere in the world...it is a legitimate desire...Indian human resources will find opportunities all over the world...seize these opportunities...spend few years...but please remember that there is no other place in the world which can challenge you (students) like India. Spend a few years wherever you feel whether in USA, Europe, Latin America, East Asia or Africa, but please remember it is only India and no other place that can challenge you (students). The greatest challenge is to build India . </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is a piece of advice by the Finance Minister Chidambaram to young talent from India while speaking at the Indian School of Business at Mohali. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Netizen has reacted sharply and sent us this mail. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">"Yes Sir!You are correct, running an Industry in India is a real challenge. The laws of this country are made complicated day by day in the name of simplification! The simplification of laws had led to strange interpretations by the departmental officers and Industry has to look for solace in the Courts of law. Piling up of cases in various Tribunals and Courts is the standing testimony for this. The tax administration in the country is in deep slumber having no empathy with the travails of Industry. There is no officer in the Tax Administration to clarify industry on technical issues and when it comes to decision making, the administration is always happy to err on the right side unmindful of the harm they are causing to the Indian industry. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">A simple matter of interpretation raised by a lower level officer (an inspector) would end up in a Show Cause Notice and confirmation of demand by the adjudicating officers, all in the name of erring on the right side to save their souls.. The departmental adjudication mechanism has totally failed to deliver the goods and lost faith of the industry. Industry is spending huge money on avoidable litigation created by departmental officers who failed to apply their minds. No attempt has been made to check this malady and there is no mechanism to punish the officers erring on the right side without applying their minds that had killed many an industry. They get their promotions for the disservice they do to industry. Many officers in the department have a mistaken notion that the industry is established just to pay taxes or to evade taxes. This contrived notion has led all departmental agencies targeting the Industry and the assessees are in for receiving huge demands even on matters where law is not clear. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">It is not surprising to know that there are issues where periodical notices are being issued for decades, just because AG audit has not closed the objection. For the department, a notice means a piece of paper, which can be pushed in to call book without deciding the matter for years, whereas for the industry it creates a liability pushing down his credit worthiness and may create working capital problems. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">An inadvertent short payment of few hundreds of rupees of duty may result in clamping huge demands on an assessee because the Rule 8 (3A) of Central Excise Rules is interpreted to make no distinction between short payment and default. An entrepreneur has to run from pillar to post to save his property from threats of attachment, even though there is no merit in the demands confirmed against him. On top of it, there are draconian provisions for provisional attachments and provisions to recover dues even from the bank accounts, insurance policies etc. against the demands confirmed by officers blindly without applying their minds. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">The mediocrity in the tax administration fails to appreciate the struggle an entrepreneur faces in running an industry. Though tax administrator is expected to be a facilitator for growth of Industry in the country, this never happens in reality. He is a troublemaker rather than a trouble-shooter. There is no mechanism in place to resolve the issues without taking recourse to adjudication process and endless litigation that is straining the limited resources of Industry. The knowledge (?) and experience of officers holding high positions in the hierarchy did not aid in any decision making process to help the Industry, justifying the positions they held and the fat salaries received by them from taxpayers' money. It is a miracle that Indian Industry is performing against all these odds and despite all forces working against them. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">Dear Finance Minister, first create a healthy tax administration in the Country before exhorting young talent to come to India. Let them be happy wherever they are. This country is for politicians who face challenges only once in five years and not for industry for whom every day is a challenge to deal with tax administration." </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(Please see the Central Excise and Customs Case Laws below) </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"> – Wednesday'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 - Rule 6 of CCR, 2004 - Since applicant has not taken CENVAT credit on input services attributable to trading activity, they are covered under rule 6(1) of the CCR, 2004 and not rule 6(2) of CCR, 2004 and hence are not liable to pay 10%/5% of value of traded goods - Pre-deposit of Rs.298 Crores & equivalent penalty waived & Stay granted: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> demand of Rs.297,77,33,460/- (no mistake here) was confirmed by the CCE, Thane-I against the appellant along with equivalent penalty and interest on the premise that the applicants are not maintaining separate accounts for input services which have been used by them for their manufacturing and trading activities. The genesis of this order is a show-cause notice dated 07.10.2011 issued for the period September, 2006 to August, 2010. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ALMOST</strong> all the Central Excise officers have a fetish for numbers. They revel in issuing mind boggling demand notices and confirm them with aplomb. And imposing equivalent penalties is their forte. There was this officer working in the range who used to mention in his resume the figures to the last digit of the demand notices he had issued and which included those based on CERA and Audit objections and was proud to also mention that his bosses had confirmed the same with penalties and interest - no questions asked. This, he felt, boosted his grading and <em><strong>sure it did! </strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Unfortunately, never did the officer's resume of the subsequent year mention that these ‘Godzilla' demands were thrown into the dust bin by the CESTAT! </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="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether when assessee lets out building with furniture and fixtures and their maintenance, composite rent received is to be treated as 'income from other sources' - YES: HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issue before the Bench is - Whether when the assessee lets out building with furniture and fixtures and their maintenance, the composite rent received is to be treated as 'income from other sources'. And the answer goes against the assessee. </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">Commissioner of Customs (Export Promotion), Mumbai is subordinate to CESTAT in judicial matters - what Commissioner has done is to reconsider an issue which has already been settled in favour of appellant in previous proceedings and which is not permissible - Order not sustainable in law hence set aside and appeal allowed: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHAT</strong> the Commissioner has done is to re-consider an issue which has already been settled in favour of the appellant in the previous proceedings by this Tribunal, which is not permissible as the Commissioner, is subordinate to this Tribunal in judicial matters. Therefore, the impugned order is not sustainable in law. </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 align="justify"><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> </body> </html>