TIOL-DDT 2009 · 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 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 2009 </font><br> </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>24.12.2012 <br> Monday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs - Supreme Court Orders Provisional Release of Goods Detained in 2001 </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> assessee had been regularly importing ‘copper concentrate' as raw material for its manufacture of copper cathodes, copper sulphate etc. But in early 2001, the DRI felt that the goods are not concentrates of copper and they were hazardous. The Commissioner promptly confiscated the goods and imposed the ‘regulation penalties and interest'. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On appeal, the Tribunal set aside the orders of the Commissioner and held that the goods are not proved as hazardous and ordered their release treating them as copper concentrate.<strong><font size="1">[<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=28&filename=legal/cestat/2005/2005-TIOL-1694-CESTAT-BANG.htm" target="_blank">2005-TIOL-1694- CESTAT-BANG </a>] </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue does not keep quiet in such cases. It took the matter to the Supreme Court. After several adjournments, the case came up on 10.12.2012, on an IA by the respondent assesse. When the IA was taken up for consideration, the Senior Counsel for Revenue brought to the notice of the Court certain provisions of the Customs Manual, which in fact, provide for release and clearance of goods. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the guidelines for expeditious clearance/provisional release, paragraph 2.2. has been brought to our notice, of which sub-paragraph (c) is relevant for our purpose. The same is, accordingly, extracted hereinbelow:- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"2.2.(c) But for certain exceptional categories, in any dispute case pending investigation wherever importer or exporter is willing, he should be allowed provisional clearance of the goods by furnishing a bond for full value of the goods supported by adequate bank guarantee as may be determined by the proper officer. The value of bank guarantee shall not exceed twice the amount of duty. The provisional clearance should be allowed as a rule and not as an exception. Provisional release may not be restored to in the cases mentioned below but here too option for storage in warehouses under Section 49 of the Customs Act, 1962 should be provided to the importers (goods can be allowed entry into the country only after the laid down quality standards etc. are satisfied): </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) <em>Goods prohibited for import/export; </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) <em>Imports for complying with the specifications/conditions/requirements of various Orders/Acts (e.g. Livestock Importation Act, 1898, Prevention of Food Adulteration Act, 1954, etc.); and </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) <em>Where gross fraudulent practices are noticed and release of the goods may seriously jeopardize further investigations as also interests of the revenue </em>." </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The said provision provides for provisional release of the goods detained. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court directed the Customs Authorities, to release the goods in question to the respondents, subject to compliance with the provisions of Chapter 15 of the Customs Manual, 2011. The representatives of the respondents will be at liberty to appear before the Commissioner of Customs, on 22nd December, 2012, at 10.30 A.M., for working out this order. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There may be two problems: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Now they have a Customs Manual 2012. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. 22nd December 2012 was a holiday being Saturday. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The goods were detained in 2001. Tribunal ordered release in 2005. Now, provisional release is ordered after more than seven years. Where are/were the goods for the last 11 years? Who pays for the storage? And will the goods be still useful after all these years? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(See </strong></font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=26&filename=legal/sc/2012/2012-TIOL-121-SC-CUS.htm">2012-TIOL-121-SC-CUS</a></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>)</strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Safeguard Duty on Electrical insulators </strong></font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">GOVERNMENT</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> has imposed safeguard duty on Electrical insulators imported into India from the People's Republic of China at the rate of 35% in the first year and 25% in the second year. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=338&filename=notification/custom/2012/ctariffsg12_005.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 5/2012-Cus.,(SG), Dated: December 20, 2012 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Wanted - SEZs Need Development Commissioners and others </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Department of Commerce wants to fill up vacancies of 3 Development Commissioners, 4 Joint Development Commissioners and 7 Deputy Development Commissioners in various SEZs like Chennai, Vizag, Kandla etc. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Officers of Central and State Governments/PSUs/autonomous bodies are eligible to apply. Applications should reach the Department of Commerce latest by 28th February 2013. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/Vacancy_Circular_sez.pdf" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DOC Circular in No.A.4/6/2012-SEZ, Dated: December 20, 2012 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Revenue is unable to appoint a Special Counsel; so seeks adjournment </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>STRANGE</strong> things seem to happen in the department nowadays, all in the name of Revenue mobilisation. They book a case, issue a show cause notice with myriad allegations and even adjudicate it pretty quickly. But when they are taken to the CESTAT by the aggrieved appellant or for that matter they themselves are in appeal courtesy a Review order by the learned Committee of Chief Commissioners, they develop cold feet and are unable to argue the case themselves. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, to put up a brave front, they hire the services of a Special Counsel, who almost always is a retired Revenue officer - <strong><em>for they can afford to pay him only! </em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sometimes, they find difficulty in getting him too for reasons best known to them. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the present case, in the matter of an O-in-O passed by the <em>CCE, Pune-I </em>, the Revenue had filed an Early Hearing application probably because the amount involved was in excess of One crore rupees. The CESTAT had heard their application on 06.06.2012 and an early hearing was granted. The matter was listed for final hearing on 13.08.2012. Nothing happened on that date and the matter was listed again on 21.08.2012 and on 10.10.2012 and on both the occasions, an adjournment was sought by the Revenue! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>As if the urgency had vanished by that date. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Again, when the matter was listed on 20.12.2012, the Commissioner (AR) representing the Revenue once again sought an adjournment on the ground that the Revenue wants to engage a Special Counsel. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bench noted that in the interest of justice, the adjournment request is accepted. However, the Bench directed that on the next date of hearing if the Revenue is unable to argue the matter, the matter would be decided on the merits. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the matter is listed for hearing on <strong>20.02.2013</strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Hopefully, by this date the Special Counsel is found and appointed... </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(See<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2012/2012-TIOL-1924-CESTAT-MUM.htm"> 2012-TIOL-1924-CESTAT-MUM</a>) </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>One Flew Over the Cuckoo's Nest</strong> </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Cuckoo.jpg" alt="Legal Corner Icon" width="148" height="187" hspace="5" border="0" align="center"></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> US Customs officers are experts in nabbing smugglers, detecting drugs and even seizing containers with bugs, but they could not prevent a pet dog escaping from their custody. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A family drove into an American Customs post in a car with their pet dog. While the Customs officers were examining the persons and the car, the pet dog was put in the Customs cage. By the time the family came out of the Customs examination room, the dog bolted. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The US Customs is determined to find the dog and hand it over to the heart broken family. It seems two patrol cars of the Customs are on hot pursuit. </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"> – Wednesday's cases</font></strong></font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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"></font><font color="#663399">Customs </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> Delayed payment of Refund - Department bound to pay Interest - High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EVEN </strong>though the claim of the petitioner for the payment of interest on the belated payment of the refund amount may not arise, based on Section 27A of the Customs Act, 1962, the petitioner would be entitled to the same, as per the decision of the Supreme Court, in <em>Sandvik Asia Ltd. Vs. Commissioner of Income Tax and others</em>, - <strong><em><font size="1">(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=37&filename=legal/sc/2006/2006-TIOL-07-SC-IT.htm">2006-TIOL-07-SC-IT</a>)</font></em></strong><font size="1">. </font></font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether when assessee leases out plant and machinery, installation costs incurred to bring assets into working conditions can be claimed as revenue expenditure - NO: High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>ASSESSEE</strong> engages itself in the promotion and establishing telecom services and allied activities, including mobile and cellular services. Pursuant to its main object it leased to M/s. BhartiTelenet certain plant and machinery. BhartiTelenet had obtained licence for the purpose of providing cellular services in Himachal Pradesh. The lease arrangement entered into between the assessee and BhartiTelenet was scrutinized. The assessing officer noticed that the cost of plant and machinery given on lease by the assessee was Rs. 10,57,25,094/- which was reflected in the balance sheet of the assessee under the head “plant and machinery given on lease”. That apart the assessee had incurred an expenditure to the tune of Rs. 1,35,05,869/- towards installation of these plant and machinery; in addition to it had incurred a sum of Rs. 2,69,35,669/- towards software expenses. The assessee claimed the installation expenses as a deduction, debiting it to the profit and loss account. The software expenses on the other hand were treated in the accounts as deferred revenue expenditure and a sum of Rs. 15,05,446/- was written off in the previous order. In the computation of income accompanying the return the software expenses of Rs. 2,69,35,669/- were claimed as a deduction. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessing officer disallowed both these amounts. The assessee carried the matter unsuccessfully in appeal. As far as the first issue i.e. installation expenses were concerned, the CIT (Appeals) confirmed the assessing officer's order holding that the expenditure fell properly in the capital field. The Tribunal confirmed the same. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Wilful disobedience of directions of CESTAT, WZB, Mumbai - Dy. Commissioner directed to show cause as to why contempt proceedings should not be initiated against him for non-compliance of CESTAT order:CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Dy</strong>. Commissioner (Review), Central Excise, Raigad stating that they have not received a certified copy of the order till date and a photo copy of the above order was received by them as enclosure to the letter from the Commissioner (AR) office dated 19.11.2012 and the same is under process for acceptance by the Commissioner of Central Excise, Raigad and the order is to be implemented only after acceptance by the Commissioner of Central Excise, Raigad and prayed for four weeks time. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is wilful disobedience of the directions of this Tribunal. Accordingly, the Dy. Commissioner, Service Tax Division, Raigad Commissionerate is hereby directed to show cause as to why contempt proceedings shall not be initiated against him for non-compliance of the direction of this Tribunal. </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_christmas.jpg" width="500" height="500" hspace="5" border="0" align="center"></font></strong></font></p> <p align="center"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Blessed is the Day, which engages the whole world in a conspiracy - of LOVE Merry Christmas </strong></font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Wednesday for the judgements </strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Wednesdaywith more DDT </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> </body> </html>