TIOL-DDT 2081 · 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 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 2081</font><br> 09.04.2013 <br> Tuesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Cats and Dogs - Import of two pets allowed as baggage </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> has re-examined the present policy of import of two pets by passengers. It has been decided to allow import of two pet animals as baggage only to persons transferring their residence to India after two years of continuous stay abroad in terms of Baggage Rules 1998 subject to production of the required health certificate from the country of origin and examination of said pets by the <strong>concerned</strong> Quarantine Officer at this end. This new dispensation shall come into force with effect from 15th April 2013. Import of animals (pets) in general would continue to be governed by DGFT policy. </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_2081.jpg" alt="" width="200" height="114" hspace="5" border="0" align="left"></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board's Circular No. 94/2002 - Customs dated 23.12.2002 stands modified. That circular mentioned only cat and dog. The present circular does not mention the animals. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Last week, the German Customs seized a pet monkey from Canadian teen pop sensation Justin Bieber. The pet landed along with Justin at Munich airport on a private jet and is under Customs custody. Justin has to produce the relevant papers within four weeks or lose the monkey and some money in fines. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2013/cuscir13_015.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 15/2013-Cus., Dated: April 08, 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Import of seconds/secondary/defective/offcut Hot Dipped Galvanized Steel sheets/coils - CBEC Instructions </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ONE</strong> of the prime objectives of the Steel and Steel Products Quality Control Order is to restrict/prohibit production/sale/import of substandard material. Therefore, import of any substandard product (Second/secondary/defective/offcut etc.) in respect of any of the product covered in the Indian Standard covered under the Quality Control Order is not permitted. Accordingly, import of seconds/secondary/defective/offcut Hot Dipped Galvanized Steel sheets/coils is not permitted as per the Quality Control Order. It is mainly because though the material is similar to IS:277 in description, it fails to meet the technical requirement prescribed in the standard. Further storage, sale, distribution of such substandard product whether produced domestically or imported is prohibited in domestic market. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants the field formations to comply with the above clarification. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2013/cuscir13_014.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 14/2013-Cus., Dated: April 05, 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">No GFR 33 for Chief Commissioners on short absence</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GFR-33</strong> is the form for handing over and taking over of charge of Gazetted Government officers when they go on leave, transfer etc,. Now CBEC clarifies that when a Chief Commissioner/ Director General vacates a post for a short period of time, handing over and taking over charge in format GFR-33 may not be required. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Any way, handing over and taking over charge in the Department has become a big joke. Nobody really hands over or takes over anything. The process of actually handing over files and furniture stopped long ago. Senior officers complete this formality by fax sitting in different cities! </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/deputation/vacancies_order_22011_13.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F. No.A.22011/12/2012-Ad.II., Dated: April 05, 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">PIL Challenging Appointment of Indirect Taxes Ombudsman - Delhi HC issues Notice </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DELHI</strong> High Court yesterday issued notice to Union of India, on a PIL challenging the appointment of Indirect Tax Ombudsman, Mumbai. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The PIL has been filed by R.K. Jain Whistle blower and Editor of Excise Law Times claiming that since Ombudsman has to hear taxpayers complaints against Revenue officials, he should be a person of eminence, impeccable integrity and upright behaviour but there had been number of vigilance inquiry against the officer, including for wrongly allowing withdrawal of Rs. 56.44 Crores for Escrow A/c and the Selection Committee and the Appointment Committee has ignored these relevant materials inspite of his complaints. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The PIL alleges that he was appointed in spite of Adverse Vigilance Report about his fraudulently obtaining the LL.B. degree from Calcutta University while serving at Delhi whereas in the appointment file a false note has been recorded that allegation of fraudulently obtaining LL.B. degree was found to be incorrect and baseless. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">PIL also alleges that Government <em>mala fidely</em> fixed 29-6-2011 as cut-off date for treating applicants as ‘serving officers' so as to manipulate his appointment who retired on the next day i.e, 30-6-2011. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise Duty Evasion Case Booked by Directorate General of CE Intelligence (DGCEI) against M/s. Sai Steel Traders and M/s. Sai Multimetals, Mandi Gobindgarh; </font></strong></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>DIRECTORATE</em></strong><em> General of Central Excise Intelligence (DGCEI) Hqrs., New Delhi, detected a major case of central excise duty evasion and booked a case of misuse of Cenvat credit by the dealers viz. M/s. Sai Steel Traders and M/s. Sai Multimetals, Mandi Gobindgarh for issuing cenvatable invoices fraudulently to furnace units of Mandi Gobindgarh etc. without actually supplying the goods. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The search operation resulted in recovery of large number of incriminating documents. Preliminary scrutiny of seized documents indicated that these cenvatable invoices have been generated against the goods and duty paid invoices of old and used plates received from the ship breakers of Bhavnagar, Gujarat. Even though the goods were actually supplied to re-rolling mills of Mandi Gobindgarh / Khanna on cash basis without bills, the invoices were supplied to the furnace units of Mandi Gobindgarh etc. on cheque basis. The cash received from the re-rolling mills was paid to the furnace units. Vital evidences gathered indicate that the dealer-manufacturer nexus was in play which goods were sent to Rolling Mills and invoices were issued to the furnace units. In this manner, a huge amount of inadmissible CENVAT Credit was passed fraudulently to these furnace units without supplying the goods. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The search operation conducted by the DGCEI (Hqrs.) indicates massive and rampant misuse of cenvatable invoices. The fraudulent availment of Cenvat credit and consequent loss of revenue is estimated to be in the range of Rs.100 crore. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The above case booked by DGCEI (Hqrs.), New Delhi is another case of evasion of Central Excise duty by way of mere paper transactions without actual supply of goods thereby causing a huge loss to the country's revenue. </font></em></p> </blockquote> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">What you read above is a Press Release by the DG, CEI. </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">But can they publish the names of the alleged offenders at the investigation stage? The names can be published only by the Government and not the DG. The Board has given elaborate instructions in Circular No.849/07/2007-CX, dated 19.04.2007 on the procedure for publication of names. Why is the Board's investigating Agency flouting the Board instructions? </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Prayer of Appellant to recover the ST in instalments turned down by adjudicating authority - since order has not been passed u/s 73 of FA, 1994, appeal not maintainable before CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>VIDE</strong> an order-in-original V/ST/HQ/AE/Inq/Gr.X/79/M-II/2012 dated 27.02.2013, the Commissioner of Service Tax, Mumbai II inter alia held thus:- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#FF0000">“10. Collecting service tax but not depositing the same to the Government is an intentional act of evasion of Service Tax and causes not only loss of revenue to the government but also a serious offence. M/s Spanco BPO Service Ltd. defaulted payment of service tax of Rs.26.90 crore for the period April 2011 to January, 2013 not filed periodical ST-3 returns and suppressed the material facts. The assessee is required to pay the service tax along with interest and also penalty. Persons responsible for committing the offence are also liable for prosecution under section 89 of the Finance Act, 1994. </font></em></font></p> <p align="justify"><font color="#FF0000"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. Considering the facts and circumstances of the case and the material evidences of record, I am unable to consider favourably the requests of M/s Spanco BPO Service Ltd., Navi Mumbai to allow them to pay the amount of Rs.26.90 crore due in 36 equal monthly installments and to withdraw the recovery proceedings initiated under section 87. The assessee is advised to pay the service tax due along with applicable rate of interest forthwith.” </font></em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant is in appeal before the CESTAT against this order. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue representative raised a preliminary objection regarding the maintainability of the appeal inasmuch as it is submitted that since the impugned order has been passed u/s 87 of the Finance Act, 1994, therefore, the appeal does not lie before the Tribunal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant drew the attention of the Bench to paragraph 10 and submitted that the appeal is maintainable as this type of order can only be passed under section 73 of the Finance Act, 1994 and proceedings under section 87 can be initiated only under section 73 of the Act. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">More arguments were made justifying their appeal by narrating the facts involved and which were that the appellant was issued a letter on 19.02.2013 pursuant to the audit conducted on their ST-3 returns asking them to deposit the short payment of service tax along with interest and on receipt of which they made a request to provide a facility of paying the said amount in installments as per Board's Circular no. 289/50/97-CX.9 dated 17.11.1997 and in response to which the impugned order was passed by the Commissioner. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue representative submitted that the appellant had not preferred an appeal against the letter dated 19.02.2013. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bench after extracting the provisions of sections 73 and 86 of the FA, 1994 observed - </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#663399">"10. We have perused the impugned orders. In the impugned order there is no dispute about the confirmation of service tax demand. The only dispute is regarding the recovery proceedings of the amount demanded by the learned Commissioner and the grievance of the appellant only is that he has not considered their applications for payment in installments due to financial hardships. The appellant's prayer to recover the proceedings in installments has been turned down by the adjudicating authority. </font></em></font></p> <p align="justify"><font color="#663399"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. In these situation, we observe that the impugned order has not passed under Section 73 ibid. Therefore, the appeal is not maintainable before this Tribunal. The appellant is at liberty to recourse their action before the learned Commissioner for appropriate action."</font></em></font></p> </blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appeal as well the stay application was disposed of. </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODc2NzY=" target="_blank"><font size="1">2013-TIOL-569-CESTAT-MUM </font></a></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Government Declares a Holiday on Sunday - April 14 </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has declared Sunday, 14 April, 2013 as a holiday on account of the birthday of Dr. B.R. Ambedkar, for all Central Government Offices including Industrial Establishments throughout India.</font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Should SUNDAY be declared as a Holiday? </font></p> <p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/office_memorandum_holiday_12_2013.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DOPT F. No. F. No.12/4/2013-JCA-2., Dated: April 08, 2013 </font></strong></a></p> <p align="center"><strong><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></strong></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">Since the underwriter service is to be subjected to tax under Section 66A of FA, 1994 and since in this case it was done outside India, there is no reason seen to tax impugned service - appeal allowed: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant are manufacturers of chemicals and pharmaceuticals products chargeable to central excise duty. During 2004-2005, 2005-2006 and 2006-2007, they issued Foreign Currency Convertible Bond (FCCB) to the extent of USD 35 Million, USD 75 Million and USD 200 Million through ABN AMRO Rothschild (hereinafter referred to as ABN) and JP Morgan Securities Ltd., USA (hereinafter referred to as JP Morgan), who had acted as the lead manager to the issue and to whom payments of Rs.5,23,62,658/-, Rs.7,93,42,445/- and Rs.12,34,37,000/- respectively had been made during those years. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The department was of the view that the services of lead managers to the issue and underwritings and other banking & financial services had been received by the Appellant from offshore services provider - ABN and JP Morgan and, therefore, the appellants being service recipients are liable to pay service tax in respect of the same. </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"><font size="2"><strong><font color="#FF6633" face="Verdana, Arial, Helvetica, sans-serif">I-T - </font></strong></font><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether when assessee fails to e-file TDS return for lack of verified PAN numbers although TDS deducted was deposited in time, such delay warrants penalty u/s 272(2)(k) - NO: ITAT</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issue before the bench is - Whether when assessee fails to e-file TDS return for lack of verified PAN numbers although TDS deducted was deposited in time, such delay warrants penalty u/s 272(2)(k). And the verdict goes in favour of assessee.</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">Penalty under Rule 25 only on (a) producer; (b) manufacturer; (c) registered person of a warehouse; or (d) a registered dealer - Revenue Appeal Dismissed: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is pertinent to note that Rule 25(1) specifically mentions four categories of persons:- (a) producer; (b) manufacturer; (c) registered person of a warehouse; or (d) a registered dealer. These four categories of persons are also mentioned at the end of Rule 25, where the liability of penalty has been spelt out. It is, therefore, clear that the penalty can be imposed on such persons only. The respondents are neither producers nor manufacturers of the said Prabhat Zarda nor are they the registered persons of a warehouse in which the said zarda had been stored. The respondents are also not the registered dealers. That being the case, no penalty can be imposed on the said respondents. </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"><strong><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p> </body> </html>