TIOL-DDT 2063 · 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><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><font color="#663399" size="3">TIOL-DDT 2063</font><br> 12.03.2013<br> Tuesday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Manufacturers - Install Weigh Bridges in your Factories</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HOW</strong> do you weigh your goods before clearance from your factory if you do not have a weighbridge in your factory? Not many factories can afford either the cash or the space for a weighbridge inside the factory. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board is very kind in such matters. Para 11 of Chapter 4 of the Central Excise Manual of CBEC's Instructions reads as: </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. Weighment of goods outside factory before preparing invoices </font></strong></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11.1 In certain cases, due to non-availability of weighbridges inside the factory, goods have to be loaded in vehicle and weighed outside the factory. The permission may be granted by Deputy/Assistant Commissioner, considering the exceptional nature of goods, for a period of one year at a time. A pre-printed serially numbered Challan may be prescribed, which will be authenticated in advance by the Superintendent or Inspector of the jurisdictional Range Office. The assessee will also maintain a record of such outward and inward movements, indicating date and time. Weighment should be done at the weighbridge nearest to the factory. The challan numbers shall be quoted on invoice. The Superintendent or inspector of the jurisdictional Range office will verify the challans and weighment slips randomly, at least once every month. If nothing adverse comes to notice, the permission may be renewed. <strong>Assessee should, however, be advised to install their own weighbridge inside the factory. </strong></font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So before you clear that lorry you will have to: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Apply to the Assistant Commissioner through your Range Superintendent. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Ensure that the application reaches the Assistant Commissioner with the Superintendent's recommendation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Go round the Assistant Commissioner's office a few times to get the permission. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Get the Superintendent to authenticate the pre-printed challans. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Maintain accounts and submit them for verification on a monthly basis, and </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Don't forget to get a weighbridge installed in your factory. The permission is given for a year and on proven good behaviour, it may be extended. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What era are we living in? Are we still in the licence inspector Raj? </font></p> </blockquote> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Can a Job worker send received goods for further job work?</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RULE</strong> 4(5)(a) of the CENVAT Credit Rules states, </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CENVAT credit shall be allowed even if any inputs or capital goods as such or after being partially processed are sent to a job worker for further processing, testing, repair, re-conditioning, or for the manufacture of intermediate goods necessary for the manufacture of final products or any other purpose, and it is established from the records, challans or memos or any other document produced by the manufacturer or provider of output service taking the CENVAT credit that the goods are received back in the factory within one hundred and eighty days of their being sent to a job worker and if the inputs or the capital goods are not received back within one hundred eighty days, the manufacturer or provider of output service shall pay an amount equivalent to the CENVAT credit attributable to the inputs or capital goods by debiting the CENVAT credit or otherwise, but the manufacturer or provider of output service can take the CENVAT credit again when the inputs or capital goods are received back in his factory or in the premises of the provider of output service. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“<strong>A</strong>” receives goods from “<strong>B</strong>” under Rule 4(5) of CENVAT Credit Rules, 2004 for processing. “<strong>A</strong>” wants to get these goods partly processed from “<strong>C</strong>” . Whether “<strong>A</strong>” can do so without inviting any excise liability?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was a question asked by an assessee in a Regional Advisory Committee (RAC) Meeting recently. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The RAC Members suggested that the earlier provision prescribed for movement of goods from one processor/job worker to another processor/job worker (Annexure - III) under Circular No. 33/33/94-CX.8dtd. 04.05.1994 may be continued. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chief Commissioner promised to refer the matter to the Board with the suggestion of the Members. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board may take a couple of years to issue a clarification. Until then, what to do? Wait. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CESTAT Stay Order to Continue even after six months - Department not to take coercive action - CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Assessee is before the CESTAT with an early hearing petition as the Department, in spite of stay order dated. 11.05.2012 is pressing for recovery. Unconditional stay was granted on 11.05.2012, but Department is pressing for recovery on the ground that in view of the provisions of Sec. 35C (2A) the Stay Order dated 11.05.2012 stands vacated, after six months. The Tribunal did not find this a ground for granting early hearing, but held that since the Tribunal has stayed the recovery and since there is no evidence that delay in disposal of appeal is on account of dilatory tactics adopted by the Appellant, it would not be correct for the Department to initiate coercive action for recovery. Therefore while the application for early hearing was dismissed, the Department was, directed not to take coercive action for recovery. </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-425-CESTAT-DEL.htm" target="_blank">2013-TIOL-425-CESTAT-DEL</a></font></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Chartered Accountant Files Appeal Before Commissioner instead of Commissioner (Appeals) - Delay Not Condoned - HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Appellant is stated to be a reputed Chartered Accountant. The appellant claimed that his staff by mistake filed the appeal in the office of the Commissioner instead of Commissioner (Appeals). The Commissioner denied that any such appeal was filed in his office. The delayed appeal filed before the Commissioner (Appeals) was dismissed. The Tribunal upheld the order of the Commissioner (Appeals) and the High Court has confirmed the Tribunal's order. </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=43&filename=legal/hc/2013/2013-TIOL-189-HC-MAD-ST.htm" target="_blank">2013-TIOL-189 -HC-MAD-ST</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><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">Appellant could not have availed CENVAT credit on HR Coils and paid 8% amount on removal - merely because some waste arose and same was cleared on payment of duty does not mean that both, dutiable and exempted goods were manufactured out of common input: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants were engaged in manufacture of tubes and pipes falling under Chapter 73 and availing benefit of CENVAT credit of duty paid on inputs/capital goods used in the manufacture of final products. Appellants received HR coils/steel plates from M/s. Essar Steel Ltd. on account of Petron Civil Engineering Pvt. Ltd. who had given an order to the appellant for manufacture of MS pipes to be produced on job work basis for supply of the same to Gujarat Water Infrastructure Ltd. for the purpose of supply of drinking water. The said supply to Gujarat Water Infrastructure Ltd. was exempted from excise duty vide Notification No.6/2002-CE dated 1.03.02. The appellant took the CENVAT credit of the entire amount of the excise duty paid on such steel plates by M/s. Essar Steel Ltd. and reversed 8% of the value on the exempted goods i.e. pipes cleared by them to Gujarat Water Infrastructure Ltd. </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 any benefit derived by assessee on account of amalgamation can be construed as an income taxable as per provisions of Sec 28(iv) - NO: ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> is a registered company. The return of income filed by the assessee, which disclosed a loss of Rs 1,26,760, was selected for scrutiny assessment under the Computer Aided Scrutiny Selection (CASS) scheme. In the course of the scrutiny, the Assessing Officer noticed that the company had increased its share capital, and that an amount of Rs 2,06,87,692, which was shown as ‘Capital Reserve (other than profit and loss account)', was shown in the current year's balance sheet, whereas no such amount was reflected in the immediately preceding year's balance sheet. In response to the Assessing Officer's requisition to explain these facts, it was submitted by the assessee that the assessee company was part to an amalgamation scheme, duly approved by Calcutta High Court, wherein one Vidya Vincon Private Limited (VVPL, in short), i.e. amalgamating company, amalgamated in the assessee company with effect from 1st April 2007. It was also explained that the capital reserve of Rs 2,06,87,692 came into existence in the books of the assessee, on account of amalgamation with VVPL. </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">In Customs Act nowhere is it mentioned that arranging for loan or giving amount on lease for payment of duty of imported goods constitute an offence for imposition of penalty: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PENALTY</strong> has been imposed on the ground that the appellant has arranged money for payment of duty of the car. In the Customs Act, nowhere arranging for loan or giving the amount on lease for payment of duty of imported goods constitute an offence for imposition of penalty under Section 112A and 112B of the Customs Act. Therefore, the penalty cannot be imposed. Accordingly, the same is set aside. </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> <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> </body> </html>