TIOL-DDT 2006 · 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 2006</font><br>
19.12.2012<br>
Wednesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue by Recovery - Illegal and Arbitrary - CBEC Should Rein in Field Officers </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> Excise
Officers in the field are on the rampage - with revenue targets nowhere near
reachable horizon, they want to collect arrears - which are not really arrears.
Adjudicating officers are on an order-manufacturing spree, confirming demands
left right and centre, not having even the slightest respect for the LAW,
Supreme Court and other Higher Judicial Fora and CBEC's own instructions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Immediately after an outrageous order is passed demanding astronomical amounts of duty, penalty and interest, the officers pounce upon the assessees even before the appeal time expires. As many of the Tribunal Benches are not functioning regularly especially in Chennai and Bangalore, Stay petitions are piling up. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the Departmental officers strongly believe that the assessee has colluded with somebody to ensure that vacancies in Tribunal are not filled up and so if there is no stay, they are not bothered. "It is not our problem that CESTAT is not functioning, either you get a stay or pay up", is the cool demand of some of the field officers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Assessees are threatened with attachment and sale of goods and all kinds of armour the Department possesses to harass the assessees into closing down their business. If a tough assessee manages to stay afloat, the department is determined to kill him with the weapon of attachment. Senior officers of the factories are not breaking their heads on production or sales but running round Central Excise Offices to beg them not to initiate killer action against them. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It appears that these threats are not the actions of a few overzealous lower level officers, but are done with the tacit support and directions of the Chief Commissioners. So, virtually the assessees have no place to go and explain their woes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rebates and refunds due to the assessees are not being paid and appropriated against atrocious demands against which appeals are pending in Tribunal or even in cases where Tribunal had granted stay against the demands. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the last two days, we carried two such cases. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
one case, the Tribunal noted that in a similar case, a High Court had imposed
an exemplary cost of Rs. 1 Lakh on an Assistant Commissioner and directed
that a copy of the order may be sent to Chairman, CBEC for appropriate action. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2012/2012-TIOL-1871-CESTAT-MUM.htm" target="_blank"><font size="1">(2012-TIOL-1871-CESTAT-MUM)</font></a> </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In another case, the Tribunal referred to decisions by several High Courts and held that <em>the appropriation of the amounts when the appellant's stay application was pending before the Tribunal is not sustainable in law</em>. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2012/2012-TIOL-1868-CESTAT-MUM.htm" target="_blank"><font size="1"><strong>(2012-TIOL-1868-CESTAT-MUM</strong></font></a><font size="1"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2012/2012-TIOL-1868-CESTAT-MUM.htm">) </a></strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board had also instructed long ago that no coercive action should be taken to realise dues till the disposal of the stay application. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why is it that the field has no respect for the directions of the Board, Tribunals, High Courts and the Supreme Court? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is collection of a small amount of revenue (that is not really yours by law) that important - just to meet your stupid targets? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Finance Minister should realise that his officers are doing a great damage to Revenue, Industry and above all the faith of the citizen in Government being fair and law abiding and not just a collector like Robin Hood! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
CBEC Chairman should instruct her officers to collect revenue
by means fair and legal and not by unleashing a reign of terror on those
assessees who work hard to ensure that you are paid fat salaries and even
given a whip to thrash them. Don't kill that goose and it is possible that
Atlas may shrug. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs: Is First Secretary, Indian High Commission, a competent authority to furnish authentic trade information?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHAT</strong> they imported was betel nuts from Indonesia/Thailand and the demand was around ten Crores, on charges of under valuation. The appellants before the Tribunal assailed the reliance placed on the report of the First Secretary (Commerce) High Commission of India, Singapore. While the Tribunal remanded the matter to the Adjudicating Authority, it gave its findings on this issue by observing: </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Their objections that First Secretary (Commerce) stationed in Singapore is not empowered to gather information and to assist investigation is clearly overlooking the jurisdiction given to the said First Secretary. As rightly pointed out by the learned Spl. Counsel, the First secretary (Commerce) is a competent authority to furnish authentic trade information from ASEAN countries". </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This part of the Tribunal Order was challenged in the Supreme Court by the importers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed, "<em>In our considered opinion, since the Tribunal has remanded the matter for de-novo adjudication before the Adjudicating Authority, even the issue as to whether the First Secretary (Commerce) is a competent authority to furnish authentic trade information from ASEAN countries could have been kept open, so that the parties could have agitated this issue as well. Since that has not been done, we set aside that portion of the conclusion reached by the Tribunal and now direct the Adjudicating Authority to permit the Appellant to raise the aforesaid issue and after adjudication, pass a speaking order on the same</em>".</font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=26&filename=legal/sc/2012/2012-TIOL-120-SC-CUS.htm" target="_blank">2012-TIOL-120-SC-CUS </a></font></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Pre Shipment Inspection Agencies (PSIA) </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended Appendix 5 of the Handbook of Procedures (Vol. I). 6 new Pre Shipment Inspection Agencies (PSIA) have been notified. Area of operation of 5 existing PSIA's has been widened. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn038.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 38 (RE 2012)/2009-2014., Dated: December 18, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Wanted - An Indirect Tax Ombudsman in Chennai </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has written to all Chief Commissioners inviting applications for the post of an Indirect Tax Ombudsman in Chennai. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Applications should reach the Board latest by 26th December 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Once appointed, the Ombudsman can continue for three years - with absolute non-cooperation from the Board assured. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/deputation/Vacancy_CBEC_Ombudman.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC. F. No. A.35017/08/2012-Ad.II, Dated: December 18, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Forbesganj Customs Preventive Division Seizes Rhino Horn </font></strong></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/rhino_horn.jpg" alt="" width="227" height="324" hspace="5" border="0" align="middle"></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>a dramatic run and chase on Indo Nepal Border, acting on a specific intelligence, Forbesganj Customs Preventive Division made a seizure of a Rhino Horn of approximately 2 kgs which is valued around One Lakh US Dollars in the International Market. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Two persons are being searched for in the border area who were trying to smuggle the horn out of India and managed to evade the customs officers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A motorcycle used by the smugglers to carry the contraband was also seized. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Forbesganj is a remote Customs Division, headed by a young Assistant Commissioner. This Division has been seizing contraband with rather routine regularity. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Early Hearing application for an appeal already disposed of </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>this column, we had recently reported the CESTAT decision in <em>J. Square Steels</em> <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2012/2012-TIOL-1738-CESTAT-MUM.htm" target="_blank"><font size="1">(2012-TIOL-1738-CESTAT-Mum)</font></a></strong> wherein the Bench dismissed the early hearing application filed by the Revenue on the ground that the appeal itself had been dismissed almost three months ago in the presence of the AR. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT discussed this curious phenomenon of filing Early Hearing applications in respect of dismissed/disposed of appeals with an officer in the Headquarters of a Commissionerate. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And this is what the officer quipped - </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"In the monthly meetings with the <em>Chief Commissioner, we are required to provide our Commissioner with data on anything and everything - right from the number of new assessees to the number of registrations surrendered. Recovery of arrears statement has lost its sheen and the in-thing is pending show-cause notices and pending appeals. If there is an appeal pending with the Commissioner(A), our Commissioner calls him up to enquire whether he intends to dispose it this winter or will it be the coming summer! However, in the matter of appeals pending before the CESTAT, phone calls do not work because of ‘network problems' and hence "early hearing" applications are filed. It is rarely that the status of the <strong>pending </strong>appeals is updated in our reports - it is not an easy task and, therefore, anything shown in our reports as pending gets the same treatment viz. an application for Early Hearing is filed before the CESTAT. And it is no surprise that the CESTAT mocks us for filing such Early Hearing applications for the simple reason that the appeals in question have been already disposed of or dismissed. We take it in a sporting spirit for the simple reason that we have got an answer for the supposedly pending appeal - that it has already been disposed of/dismissed...whatever! - as they say straight from the horse's mouth!" </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And who pays for this mockery? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And we come across another such case wherein the Tribunal observed; "the application for early hearing of the appeal is filed in usual manner without verifying the records". </font></p>
<p><em><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">In this case, the CCE, Pune-III shares the honours! </font></em></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(See <font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2012/2012-TIOL-1889-CESTAT-MUM.htm" target="_blank">2012-TIOL-1889-CESTAT-MUM</a></font>) </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">Management, Maintenance or repair of roads - Retrospective exemption by Finance Act, 2012 - Prima facie, runways at airports are species of genus "road" - CESTAT directed to hear appeal without pre-deposit: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant is registered as Service Tax Provider and carries on the business of maintenance and repairs of roads including runways at different airports. The Service Tax demanded was Rs.10.25crores for the period 2005-06 to 2009-10. CESTAT directed a pre-deposit of Rs. 3 crores. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue for consideration before the Tribunal on merits would be whether the word "roads" would include within it "runways" at airports. Prima facie, it appears that runways at the airports are species of the genus "road". Therefore, the runways should also normally receive the same treatment as roads for service tax purpose. </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 there is nothing on record that assessee has claimed TDS credit for deduction made against advance received from customers, any addition is warranted - NO: ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AO</strong> made an addition on account of TDS claimed on advance against running contracts observing that assessee itself had admitted that the TDS claim had been made in respect of advances receipts also. As per the provisions of Rule 37BA read with Sec. 199, ‘credit for tax deducted at source and paid to the Central government, shall be given in assessment year in which such income is assessable.' Since TDS credit had been claimed during the year, the corresponding advance receipts had also to be taken in the income related to AY 2008-09. Assessee contended that AO had understood advance against running contracts appearing in the liability side and concluded that the said amount of advance money received from various customers is after deduction of TDS and consequently surmises the amount as income of the assessee which was factually wrong. The said amount was not advance received by the assessee from the customers but was the balance resulting upon working as per the method of revenue recognition prescribed by Accounting Standard 7. </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">Territorial Jurisdiction - Customs - DEPB Licences - Release of TRA for DEPB licences - No part of cause of action had arisen within jurisdiction of the High Court of Gujarat - The petition is required to be rejected only on this ground: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> DEPB licences were issued at Varanasi. The port of export was shown at Varanasi. The licences were issued by Director General of Foreign Trade, New Delhi. Such licences were transferred in favour of the petitioners also by the same authority. On the basis of purchase of such licences the petitioners imported goods which landed at Mumbai. The customs authorities at Mumbai refused to permit imports thereof on the basis of the DEPB licences so purchased by the petitioners. Clearly, no part of the cause of action can be stated to have arisen within the local limits of this court. The ultimate order that the Joint Director of Foreign Trade passed was also at New Delhi. The ultimate order cancelling the licences which the petitioners have challenged in the petition subsequently, was also passed by the authority at New Delhi. Merely because the officer of DRI issued a summons to the petitioners during the course of investigation, would not give any jurisdiction to the High Court to entertain this petition. </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"><strong> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p>
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