TIOL-DDT 2042 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 2042</font><font color="#663399"><br>
</font>11.02.2013<br>
Monday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Recovery during pendency of Stay Application - Yet another HC stays recovery </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IF</strong> you are a Central Excise/Service Tax assessee, it is almost sure that there would be an appeal filed by you along with a stay petition pending before the Commissioner (Appeals) or the CESTAT and chances are that after 1st January 2013, you must have got a letter/notice entreating you to pay up and threatening you with coercive action if you don't. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the olden days, the kings used to have a bell, which an aggrieved citizen could go and ring and the benign king would redress the grievance. Our modern democratic kings are despotic, especially towards taxpayers who do not constitute a significant vote bank and they don't have any bell for the aggrieved Citizen, who most often is the victim of their despicable arrogance. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, the Constitution has retained the Bell - not with the King but with the High Courts - in the form of writ petition. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When there is a provision in the Law for appeals against the atrocious orders passed by the taxmen and any decent administration would wait till the stay application is disposed of to initiate their recovery proceedings, it is sad to see the CBEC issuing the draconian circular on 1st January 2013. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The unfortunate assessee has no option but to use the BELL in the High Court. Hundreds of assessees are ringing those bells in various High Courts and the High Courts are justly granting stay of recovery. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Unfortunately, the loud clanking sound of the Bell is not heard in the North Block. The one monstrous piece of paper that could generate Himalayan Litigation and humungous expenditure without a rupee coming to the treasury is the draconian Circular No. 967 of 1st January 2013. Can't the Board withdraw this Frankenstein before further damage? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today we bring you an order from the Karnataka High Court staying recovery. </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see
</font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2013/2013-TIOL-111-HC-KAR-ST.htm" target="_blank">2013-TIOL-111-HC-KAR-ST </a></font> </strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - SION - Textile Product - HOP Amended </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended the Handbook of Procedures, Vol.II (SION Book). In SION No.J-44 of Textile Product, the description of export item is revised to read as <strong>'Flax dyed fabric/Linen dyed fabric</strong>' in place of '<strong>Flax Fabrics Dyed</strong>'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Description of export product has been expanded to include Linen. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn047.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 47/(RE-2012)/ 2009-14, Dated: February 08, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Amendment in Para 5.23 of HBPv1 (EPCG Scheme) </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT </strong>has amended para 5.23 the Handbook of Procedures v1 as follows: </font></p>
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<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">sub-para of para 5.23 </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Existing </font></strong></p></td>
<td valign="top"><p align="center"><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Amended </font></strong></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">f </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(f) The computation of freely transferable duty credit scrip(s) will be based on duty paid amount (not cenvated), instead of duty saved amount. </font></p></td>
<td valign="top"><p><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">(f) The computation of freely transferable Duty Credit Scrip(s) will be based on basic customs duty amount paid. </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">g </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(g) (i) Bill of Entry indicates the duty paid on the import made. Subsequently, Cenvat Credit, if availed, shall not be taken into account for grant of duty credit scrip. In the absence of a certificate from the jurisdictional Central Excise Authority stating that ‘Cenvat Credit on this Bill of Entry(ies) has not been availed and will not be availed in future' no duty credit scrip would be granted on the CVD component. In all cases where CVD portion is considered for grant of duty credit scrip, RA shall endorse the Bill of Entry(ies) to this effect, mentioning that CVD Portion shall not be Cenvatable and send a communication to the same jurisdictional Central Excise Authority informing the details along with relevant list of Bill of Entry(ies). </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Such certificate from Central Excise shall, however, not be required in case (a) the unit is not registered with Central Excise, or (b) the unit has opted out of Central Excise net or (c) the end product is not subject to Central Excise duty. </font></p></td>
<td valign="top"><p><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">(g) Where the exporter has obtained EPCG authorisation under Para 5.23 (c) of HBPv1, declaring that he shall not avail CENVAT Credit, the Export Obligation shall be fixed with reference to the basic customs duty paid. In such cases Duty Credit Scrip will be issued based on the certificate from Central Excise regarding non-availment of CENVAT credit. Such certificate from central excise regarding non-availing of CENVAT credit will not be required where the unit is not registered with central excise. </font></p></td>
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<td colspan="3" valign="top"><p align="center"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">New sub-paras added </font></p></td>
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<td colspan="3" valign="top"><p><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">i) The CG imported under para 5.11 of FTP shall not be disposed of till the date of last export for offsetting EO against such CG. </font></p>
<p><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">(j) In case of re-export of CG found defective or unfit for use as per the provisions of para 5.16 of HBPv1 if the exporter claims drawback on such re-export there would be no remission of duty under para 5.11 of FTP. </font></p></td>
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<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn048.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 48/(RE-2012)/ 2009-14, Dated: February 08, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Amendment in FTP - Post Export EPCG Scheme </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended Sub-Para (b) of Para 5.11of Foreign Trade Policy, 2009-2014 (RE 2012). </font></p>
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<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Existing para 5.11(b) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Amended para 5.11(b) </font></strong></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Duty paid on capital goods (excluding portion CENVATed/ Rebated) shall be remitted in the form of freely transferable duty credit scrip(s) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Basic Customs duty paid on Capital Goods shall be remitted in the form of freely transferable duty credit scrip(s), similar to those issued under Chapter 3 of FTP </font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is clarified that duty credit scrips issued under Post Export EPCG Scheme will be issued only in respect of basic customs duty and will have the same features as Chapter 3 scrips.</font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2012/dgft12not033.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 33/(RE - 2012)/2009-2014, Dated: February 08, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Export of Stone Aggregate to Maldives - Stopped </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION </strong>No. 54(RE-2010)/2009-2014 dated 07.06.2011 had permitted export of specified quantities of Stone Aggregates to Maldives for the years 2011-12, 2012-13 and 2013-14. With immediate effect, export of Stone Aggregates against the above notification is stopped till further notice. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2012/dgft12not034.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 34/(RE - 2012)/2009-2014, Dated: February 08, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">US files dispute in WTO against India on solar panel products </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> United States, notified the WTO Secretariat of a request for consultations with India on certain measures of India relating to domestic content requirements under the Jawaharlal Nehru National Solar Mission (NSM) for solar cells and solar modules. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The United States claims that India requires solar power developers to buy and use domestic solar cells and solar modules in order to benefit from participating in the Jawaharlal Nehru NSM programme and to enter into contracts under the NSM programme or with the National Power Company. According to the United States, the benefits for solar power developers, contingent on their purchase and use of domestic solar cells and solar modules, would include subsidies through guaranteed, long-term electricity rates. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">United States Trade Representative Ron Kirk said, “Let me be clear: The United States strongly supports the rapid deployment of solar energy around the world, including with India. Unfortunately, India's discriminatory policies in its national solar program detract from that successful cooperation, raise the cost of clean energy and undermine progress toward our shared objective.” </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Agitated Officers and Falling Revenue Collections </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHILE</strong> a worried Government is desperately trying to recover as much revenue as possible, the Revenue officers are an agitated lot and are now physically on the agitation path. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Income Tax Gazetted Officers Associations plans to launch the following: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Protest before Chairman/Member-CBDT on their visits and wearing of Black Badges by all members from 11-2-2013. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Non-cooperation in Recovery work/drive and Non-submission of statistical reports, dossier reports, DO Letters, etc except parliament question, w.e.f 11- 2- 2013. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Lunch Hour Demonstration on 15-2-2013 in front of the office of all CCIT, across the country. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">None of the members will participate in any Search & Survey action including TDS survey/Inspection/ Verification/ Study or by whatever name called and Recovery Surveys w.e.f 20-2-2013. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">None of the members will pass any assessment orders u/s.143(3) or 144 or 147 in the month of February 2013. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The General Secretary of the Central Excise Officers Associations has told his members, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>All the members are again requested not to do any revenue mobilisation work by making extra efforts. We have to follow only "WORK TO RULE" in this regard. Only official duties are to be performed without taking any extra official work. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The authorities may force us for this work. As we all know, that trade is very sensitive and awakened today on account of liberalisation policy of the government. So, kindly don't talk to them in unofficial manner to increase the revenue, don't telephone them without official work and also don't enter their premises without the official written permission duly signed by the authorised authority for this purpose. Otherwise, we all are well aware that anybody from the trade may lodge the complaint against us and none of the authorities would protect us because they are friendly to the trade and believe them only. </font></em></p>
</blockquote>
<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"> - Tuesday'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">Valuation - When applicant is paying duty in terms of rule 10A of Valuation Rules, 2000, it cannot be said that value of scrap retained by them is an additional consideration - Strong prima facie case in favour - pre-deposit waived and Stay granted: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ONE</strong> of the favourite pastimes of the audit parties is raising valuation issues, which more often than not do not survive. But the Range formations, even though they may not agree, not that they do not show their displeasure during the Audit meeting, are strictly bound by departmental diktats and are forced to issue the demand notices, always invoking the extended period. Never is a moment spared to discuss threadbare the details of the objections and whether they would finally stand the test of law. What happens in totality is a long list of SCNs and the resulting orders-in-original and orders-in-appeal all queued up at the CESTAT door awaiting their turn. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the meantime, the threatening recovery notices and attachments start seeing the light of the day. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Rule 10A of the Valuation Rules, 2000 w.e.f 01.04.2007, the valuation now adopted by a job worker is the sale price at which the principal manufacturer sells to an un-related buyer and the price is the sole consideration for sale. Can there be any more value than this on which a job-worker should pay duty? Surely No, but in the present case the Revenue thinks otherwise. </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 facts when share transfer of listed company is concluded within merely four days, and company directly corresponds with shareholder, offers sufficient grounds to question genuineness of such transaction - YES: ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issues before the Bench are - Whether it leads to prima facie evidence against the assessee, when he has failed to provide satisfactory explanation of the source of a particular income; Whether the facts when share transfer of a listed company is concluded within merely four days, and the company directly corresponds with the shareholder, offers sufficient grounds to question the genuineness of such transaction; Whether the mere fact that shares purchased have been sent for dematerialization by the assessee, proves the genuineness of the same, even though they were transacted offline and not on the floors of a stock exchange and Whether the rule of estoppel under the Evidence Act can be invoked, when the assessee has retracted at the time of filing return, from his earlier stand taken during the search and seizure proceedings. And the verdict goes against the assessee. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Appellants are manufacturer of country liquor under brand name "Pahili Dhar", registered in their name and are having agreement with M/s. Talreja Trade (HUF) for marketing this liquor - it cannot be said that appellant are job workers for Talreja Trade as they are the selling agents - they are not liable to pay service tax under "Business Auxiliary Service" - Appeal allowed with consequential relief: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> revenue is of the view that the raw material is being supplied by M/s. Talreja Trade (HUF) to the appellant and the appellants are job workers for Talreja Trade. Therefore, the appellants are liable to pay service tax under the category of "Business Auxiliary Service". </font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements </font></strong></p>
<p><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>
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