TIOL-DDT 2053 · 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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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=17063"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2013.jpg" alt="DDT in Limca Book of Records" width="175" height="120" hspace="5" border="0" align="right"></a></font></strong></font></strong></font></strong></font></strong></font><font color="#663399" size="3">TIOL-DDT 2053 </font><br>
26.02.2013 <br>
Tuesday</strong> </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Finally new ST 3 under Negative list Notified - With some glitches</font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> wait is over. Finally, the Government has notified new ST-3 form to be filed for the period from July 2012 onwards. A proviso has been inserted in sub-rule (2) of Rule 7 of the Service Tax Rules, 1994 to specify the last date for filing the ST 3 return for the period between 1st July 2012 to 30th September 2012 as 25th March 2013. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The new ST 3 form has a long list of details to be furnished by service provider/ service receiver/ partial reverse charge/ etc and looks prima facie complicated. The practical difficulties will be known only when the assessees start filling up the details and file the returns.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As of now, the following issues need attention: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In item No A5, period of ST 3 return is mentioned as April to September and October to March - But the return to be filed before 25th March 2013 is only for the quarter from 1st July 2012 to 30th September 2012. We hope the proforma in ACES stipulates the period correctly. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Item No A 10.6 asks the return filer to mention the percentage of service tax payable under partial reverse charge as receiver of the service. This cannot be a single rate as many assessee may be paying service tax under partial reverse charge on different services like works contract, manpower supply, rent-a-cab, which have different percentage of reverse charge liability. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Item No B1.2 reads "Amount received in advance for services for which bills/invoices/challans or any other documents have not been issued" (obviously this includes advances received towards exports of services). But when it comes to deductions under B1.8, it is only "Amount <strong>charged</strong> against export of service provided or to be provided". It should have been "Amount charged / received in advance against export of service provided or to be provided" </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Item B 1.6 reads "Amount on which service tax is payable under partial reverse charge" - It is not clear whether the full taxable value on the invoice has to be declared here or the value to the extent of partial reverse charge (say, 75% for supply of manpower service). If full invoice value has to be shown, can the remaining 25% value be shown as "abatement" under B 1.11? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Notification reads "Return under section 70 of the Finance Act, 1994 read with rule 7 of Service Tax Rules, 1994", but ST 3 return is a combined return to be filed under Service Tax Rules, 1994 and CENVAT Credit Rules, 2004. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2013/stnot13_001.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 01/2013-Service Tax, Dated: February 22, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Draconian
Circular - Recovery of demands - Decision in L&T case to apply to all - HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> <em>Larsen & Toubro Limited Vs. Union of India</em> - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=51&filename=legal/hc/2013/2013-TIOL-99-HC-MUM-CX.htm" target="_blank"><font size="1">2013-TIOL-99-HC-MUM-CX</font></a></strong>, the Bombay High Court held, </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"17. For these reasons, we have come to the conclusion that the provisions contained in the impugned circular dated 1 January 2013 mandating the initiation of recovery proceedings thirty days after the filing of an appeal, if no stay is granted, cannot be applied to an assessee who has filed an application for stay, which has remained pending for reasons beyond the control of the assessee. Where however, an application for stay has remained pending for more than a reasonable period, for reasons having a bearing on the default or the improper conduct of an assessee, recovery proceedings can well be initiated as explained in the earlier part of the judgment." </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Despite this emphatic ruling, the Central Excise and Service Tax authorities in Mumbai hold a view that this judgement is applicable only to the petitioners and all other assesses who want the benefit of this judgement have to hire lawyers and approach the High Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In one particular case, even while the stay petition was pending, Revenue attached the bank accounts of an assesse. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bombay High Court last week held that, "<em>The law laid by the Court on the interpretation of the circular of the Central Board of Central Excise and Customs would bind all authorities who are subject to the jurisdiction of this Court</em>." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court found that there was absolutely no reason or justification on the part of the appellate authority to keep the stay application pending and take recourse to coercive remedies under the law. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court directed that<em> henceforth the controlling authority shall issue a circular to all the authorities within his jurisdiction that the directions contained in the judgment of this Court in Larsen & Toubro Limited shall be duly observed.</em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However the High Court declined to order return of the money attached from bank by Revenue.</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=43&filename=legal/hc/2013/2013-TIOL-150-HC-MUM-ST.htm" target="_blank">2013-TIOL-150-HC-MUM-ST</a></font></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise Day - Focus on Revenue Targets </font></strong></p>
<p align="center"><img src="http://www.taxindiaonline.com/RC2/image/stories/cx_day.jpg" alt="Legal Corner Icon" width="480" height="321" hspace="5" border="0" align="center"></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Adviser to the Union Finance Minister, Parthasarathi Shome addressing the "Central Excise Day Celebrations", in New Delhi yesterday. Revenue Secretary Sumit Bose, CBEC Chairman Praveen Mahajan and Members of CBEC and two Inspectors guarding the shore are seen in the picture above. What do those liveried Inspectors do standing on the stage throughout the function? Are they ADCs or security personnel of the SPG? What are they supposed to do other than standing as statues? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With hardly five weeks left in this financial year, the top revenue babus are more worried about revenue targets than anything else. The Revenue Secretary was hopeful that the Revenue Targets would be achieved while the CBEC Chief wanted the field staff to work hard to meet the Revenue targets. Madam, Please ensure that they stop going around attaching properties, which will bring neither revenue nor goodwill to the department, but would only help the lawyers. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Three
orders-in-original decided under compendious order - SCN
by Registry upheld as appellant agreeing to file two addl appeals</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> few days ago, we reported the CESTAT decision <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2013/2013-TIOL-239-CESTAT-MUM.htm" target="_blank"><font size="1">2013-TIOL-239-CESTAT-MUM</font></a></strong> where the Division Bench held thus - </font></p>
<blockquote>
<p align="justify"><em><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">"Rule 6A of CESTAT (Procedure) Rules, 1982 - Only one appeal is required to be filed against one order even though the said order may deal with more than one notice - SCN issued by Registry does not survive and is discharged: CESTAT" </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A similar matter had come up before a different Division Bench. Inasmuch as the Registry had issued a show-cause notice pointing out that there were three orders-in-original whereas the appellant had filed only one appeal and that they should <strong>file two more appeals.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Counsel for the appellant sought one <a></a>week time to file the remaining two appeals and the Bench granted the same. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, the Bench also directed the Revenue not to take any coercive action till final disposal of the stay application. </font></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/2013/2013-TIOL-374-CESTAT-MUM.htm" target="_blank">2013-TIOL-374-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"> - Wednesday's cases</font></strong></font></strong></font></p>
<p><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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">Customs </strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Goods stored in private bonded warehouse destroyed in floods - Remission of Customs duty - provisions of Customs Act cannot be mixed with those of Insurance Act to deny benefit specifically provided under s. 23 of the Customs Act, 1962 - department directed to refund amount received from Insurance company to appellant: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant had set up a private bonded warehouse under section 58 of the Customs Act, 1962 for warehousing of imported bulk drugs. The private bonded warehouse was duly insured with endorsement in favour of Commissioner of Central Excise and Customs. On 26th July, 2005, due to heavy rains and consequent floods, the goods stored in the warehouse which consisted of duty paid goods and as well as goods bonded without payment of duty were damaged. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant sought remission of customs duty on imported goods bonded under section 23 of the Customs Act. </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 principle of consistency fails when certain benefits, not legally available to assessee, were allowed in past - YES: ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee company, a small scale undertaking, had claimed deduction u/s 80IB. The assessment was completed u/s 143(3), allowing the deduction. Subsequently, the CIT observed that the value of plant & machinery of the assessee company was more than Rs onecrore, and the same was not a small scale undertaking u/s 11B of Industries (Development and Regulation) Act, 1951. The CIT observed that us/80IB(14)(g) of the Act the conditions for being small scale undertaking should be satisfied on the last day of the previous year. Thus, invoking powers us/ 263, the CIT directed the AO to reassess the income and allowance of deduction applying ratio laid down us/ 80IB(14)(g) of the Act. Assessee stated that the said conditions were required to be fulfilled only for the first year of claim of deduction. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Valuation - Rule 10A - in terms of agreement, appellant are required to purchase raw materials for manufacture of moulded furniture from persons approved by M/s Neelkamal Limited - it cannot, therefore, be said that raw materials have been supplied by M/s Neelkamal Limited or their authorised persons - <em>prima facie</em> appellant is not covered by definition of 'job worker' under Rule 10A - Pre-deposit waived and Stay granted: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant manufactures plastic moulded furniture for <em>M/s. Neelkamal Limited</em>. In terms of agreement, moulds for manufacture of furniture are supplied by M/s. Neelkamal Limited and the appellant procures raw materials from the manufacturer specified and approved by <em>M/s. Neelkamal Limited</em>. Plastic furniture is supplied by the Appellant to <em>M/s. Neelkamal Limited</em> at the price determined in terms the of pricing formula as specified in the agreement which is based on the cost of raw material including freight plus conversion cost at the rate of Rs.9.50 per kilograms weight of the moulded furniture plus excise duty as applicable. The appellant were discharging duty liability on the plastic moulded furniture manufactured by them and supplied to <em>M/s. Neelkamal Limited</em> on the above mentioned contract price. The department took a view that the valuation has to be arrived at in terms of Rule 10A of Valuation Rules, 2000 inasmuch as the appellant is required to pay duty on the price at which the moulded furniture was sold by <em>M/s. Neelkamal Limited</em>. </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>
</body>
</html>