TIOL-DDT 2094 · 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 2094 </font><br> 30.04.2013<br> Tuesday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Utilizing Refunded SAD for Duty Payment (DEPB) - Extended Again </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> Circular No 27/2010-Customs, dated 13.08.2010, provided the facility of manual filing of Bill of Entry for utilizing the amount of re-credited 4%CVD (SAD) refunds for payment of duty in case of re-credited DEPB / Reward Scheme scrips upto 30.12.2010. However several representations have been received from trade and industry to extend the time up to 30th June, 2011 for using re-credited 4% CVD(SAD) amount in DEPB as they have not been able to utilize the re-credited DEPB / Reward Scheme scrips within the stipulated time. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Circular No.11/2011-Customs, dated 24.02.2011, Government had extended this time till 30.06.2011. Still there were representations that the trade could not use this facility within the stipulated time. So, a benign Government had extended it till 15.09.2011 by Circular No. 30/2011-Cus dated 19.07.2011, with a rider that <strong>no further extension shall be given</strong>. Then by Circular No. 2/2012 dated 16.01.2012, they further extended it till 31.03.2012, with a rider that "<strong>No further extension shall be given under any circumstances</strong>". Circular No. 10/2012-Customs dated 29.03.2012 further extended the time upto 30.06.2012 utilizing the amount of re-credited 4% SAD refunds for payment of duty in case of re-credited DEPB/ Reward Scheme scrips. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC, in consultation with DGFT, has now decided to extend this date till 30.09.2013. Of course, it is emphasized that this is the final extension of time limit for reusing re-credited DEPB Scrips/Reward Scheme Scrips.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGFT had recently issued a similar <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2013/dgft13pn006.htm" target="_blank">Public Notice No. 06/(RE-2013)/2009-2014</a></strong>, covered in<strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=17569" target="_blank">DDT 2090 23.04.2013</a></strong>. Please also see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=14386"><strong>DDT 1805 - 29.02.2012</strong> </a>and <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=14674"><strong>DDT 1827 - 30 03 2012</strong></a></font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2013/cuscir13_018.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 18/2013 -Cus, Dated: April 29, 2013</font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tax collection is neither a simple nor popular task - President</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADDRESSING</strong> the outgoing probationers in the National Academy of Direct Taxes (NADT) at Nagpur yesterday, the President Pranab Mukherjee told the probationers, "<em>Tax collection is neither a simple nor popular task. Tax collectors should be conscious of the rights and duties of citizens. The taxpayer should be seen as an important partner in generating revenue for all our national endeavours. It is the tax they provide which funds welfare schemes, helps maintain law and order, protect our borders etc. Many empires have collapsed in the past because Governments did not have money to pay their soldiers</em>." </font></p> <p align="center"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><img src="http://www.taxindiaonline.com/RC2/image/stories/President_ddt.jpg" alt="Legal Corner Icon" width="400" height="240" hspace="5" border="0" align="center"></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Recalling his association with NADT, the President said, "<em>I have had decades of association with the department from my days as MOS in Finance Ministry in the 70`s. I have visited National Academy of Direct taxes (NADT), on a number of occasions. I am therefore witness to the evolution and growth of this premier academy</em>." </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The former Finance Minister told the probationers, "<em>You will find it interesting to know that the collection of direct taxes in 1860-61 was just Rs. 30 lakhs. In contrast, the revised target for 2012-13 was Rs. 5,65,835 crores. As per the budget estimates for the direct taxes for the year 2013-14, the direct tax collection is likely to be around Rs. 6 lakh 68 thousand crore, which is around 54 percent of the gross tax revenue receipts of the Central Government. Not only has there been a quantum increase in the collection of direct taxes, but it now accounts for the majority of tax collections. Direct taxes are anti inflationary compared to indirect taxes. They are still below the target we want to reach but the rise to over 50 percent of revenue is a positive feature</em>." </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He finally told the probationers, <strong>The Government depends on you to collect taxes from the people in an efficient manner. </strong></font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">The probationers must have been textually abused and harassed in the Academy and now they face the real bad world of taxation.</font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Settlement Commission - The interregnum </font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN</strong> Settlement Commission, Customs & Central Excise came into being in August, 1998 and the Benches started functioning in New Delhi, Mumbai and Chennai, in July, 1999, what was required on priority basis was ‘applicants'. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Without applicants, there was no way the Benches would function. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the provisions were made inviting for an applicant. The application fees were Rs.1000/- and the "additional amount of duty required to be accepted by the applicant in his application was anything in excess of two lakh rupees". </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As time passed, the Bench started doling out benefits to the applicants in the form of immunity from prosecution, waiver of penalty and interest or imposing a nominal rate of interest of 5% whereas the statute rate was almost four times. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since the orders passed by the Bench were final and the High Courts' too had upheld such orders, the Revenue formations started getting the jitters. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When the word spread that benefits galore were being disbursed by the Settlement Commission if one made a full and true disclosure of the additional amount of duty liability, the applicants started queuing up before the Commission Registry and the Commissioners started squirming in their seats thinking of ways and means to thwart this exodus. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">New ideas began to take birth amongst the ‘applicants' and the Commissionerates. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The applicants knew that once they made an application for settlement in respect of a pending ‘case', the adjudication process was stopped dead in its tracks. So, when the case was posted for hearing, the applicant used to inform that they are ‘contemplating filing an application for settlement/have already filed an application' and that the Commissioner should wait. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Letters began pouring into the Settlement Commission registry from the department enquiring whether the applicant had ‘really' filed an application! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In some cases, the Commissioner used to ask the ‘applicant' to submit proof and he would be informed that he is not supposed to supply a copy of the application to the Commissioner for these are ‘in-camera' proceedings.In the result, he began asking them to produce a copy of the challan evidencing payment of application fees of Rs.1000/-. This, the applicant could not avoid so he supplied a photocopy of the TR-6 challan. In some cases, he would make a deposit of Rs.1000/- as settlement application fee but the application would be filed after a couple of months. There were also instances when no application was filed at all. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs.1000/- was a minuscule amount but had the power to restrain the Commissioner from adjudicating their case and this, the applicant realized. For had the case been adjudicated, the next stage of appeal would be the Appellate Tribunal and any ‘case' pending in Tribunal was barred from entering the palatial Settlement Commission. The insertion of section 32PA by the FA, 2000 [ Certain persons who have filed appeals to the Appellate Tribunal entitled to make applications to the Settlement Commission] applied only to appeals pending as on 29.02.2000 in the Tribunal, but that is a different story to be told on some other occasion. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Coming back to our case study, the Commissioner too had few aces up his sleeve. He noticed that the provisions of section 32I(2) of the CEA, 1944 read - </font></p> <p align="justify"><em><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">"(2) Where an application made under section 32E has been allowed to be proceeded with under section 32F, the Settlement Commission shall, until an order is passed under sub-section (7) of section 32F, have, subject to the provisions of sub-section (6) of that section, exclusive jurisdiction to exercise the powers and perform the functions of any Central Excise Officer, under this Act in relation to the case." </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, he concluded that since the Settlement Commission assumes jurisdiction only after the application has been allowed to be proceeded under section 32F, for the <em>interregnum </em>period, the jurisdiction of the ‘case' still lies with him. And, therefore, he could very well adjudicate the case. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He did so but such orders were held to be non est by the Settlement Commission. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, a similar issue came to be decided by the Bombay High Court because the Majority Bench of the Settlement Commission held that the settlement application, which was filed on 14 January 2011, was not maintainable since the Commissioner had already adjudicated upon the notice to show cause on 13 January 2011. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We report this order today. See<strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=17628" target="_blank">Breaking News</a></strong>. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti-dumping duty imposed </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has imposed Anti-dumping duty on import of Carbon Black [Tariff Item 2803 0010] (used in rubber applications) originating in, or exported from the People's Republic of China, Thailand, Russia and Australia. This duty would be valid up to 29th July, 2014. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2013/ctariffadd13_009.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification 9/2013-Cus (ADD), dated 26th April, 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Airlines can charge for preferred seats </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a move that would raise the cost of air travel, the government today said it has allowed airlines to charge passengers for preferred seats on a flight, check-in baggage and meals, among other things.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Civil Aviation Minister Ajit Singh has decided to permit scheduled airlines to unbundle certain services and to charge fees for these services separately," an official release said. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The services for which the airlines would be free to charge passengers include preferential seating, meals, snacks, drinks (barring drinking water), check-in baggage, use of airline lounges, carriage of sports equipment and musical instruments and valuable baggage which have higher carrier liability. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The practice was launched in 2008 by some US carriers which were facing financial crunch. Their decision to charge for even the first checked baggage had then received flak from air travellers, but the practice still continues with the airlines generating revenue worth millions of dollars. </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT overheard that the Service Tax authorities were mighty impressed with this Union Government largesse to private scheduled airlines. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Video shoot of company manufacturing facility - ST paid by Event Management Company is an Input Service </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> applicant set up a new plant for manufacturing ‘Catalysts'. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They were of the opinion that for promoting their company and its products, they needed a <em><strong>catalyst</strong></em>. So, they availed the services of an Event Management Company to video shoot their manufacturing facility viz. the machinery and equipments, their QC laboratory, their production and dispatch system. In short, a walk-through of their factory sprinkled with a few words from their company management. Quite likely, they also uploaded this video shoot on their company website! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anyways, service tax paid by the Event Management Agency of Rs.3.36 lakhs was availed as "Input Service Credit" by the applicant but this was objected to by the department leading to issuance of a SCN and confirmation of the same with an equivalent penalty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since the Commissioner(A) rejected their appeal, the applicant is before the CESTAT and submits that the services availed were used for promoting the business of their company and hence they are entitled for CENVAT credit more so as in the case of<em> Hindustan Coca Cola Beverages Pvt. Ltd.</em> <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2009/2009-TIOL-2304-CESTAT-DEL.htm" target="_blank"><font size="1"><em>(2009-TIOL-2304-CESTAT-DEL)</em></font></a> </strong>involving similar facts and circumstances, unconditional stay was granted. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Holding that the applicant had made out a prima facie case in favour, the Bench waived pre-deposit and granted stay. </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODc5NDA=" target="_blank">2013-TIOL-666-CESTAT-MUM</a></font></strong></p> <p align="center"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><img src="http://www.taxindiaonline.com/RC2/image/stories/rti_applications.jpg" alt="Legal Corner Icon" width="376" height="388" hspace="5" border="0" align="center"></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> </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><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"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ex parte and non-speaking Pre-Deposit cum Appeal Order set aside - Pre-Deposit order passed without giving opportunity of hearing and that too without giving sufficient reasons for pre-deposit of 50% for hearing appeal - Order of Single Judge set aside and Commissioner (Appeals) directed to hear appellant and pass fresh orders. : HC </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AFTER</strong> the draconian Circular dated 01.01.2013, the department initiated recovery proceedings wherever Stay was not granted even where matters were pending for reasons beyond the control of the assessee. Simultaneously, Commissioner (Appeals) called for hearing of Stay Petitions alone and proposed to dispose of (with a direction to make pre-deposit) the same. Several Pre-deposit Orders were passed in a great haste whereby partial pre-deposit was ordered without considering the merits of the case. </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 a charitable trust would lose exemption if it passes on a part of own funds to another Trust to be utilised for charitable purpose - NO: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> is a Trust. It had claimed that it was governed by a Constitution dated 28.8.1948 and was dedicated to business of manufacture of sale of unani medicines for the purpose of charity. It had stated that vide declaration of the founder Wakif Mutawalli dated 10.10.1985, the original deed in respect of "khandani" or family "income" was irrevocably abolished and no "khandani" income had ever been distributed or paid. The issue before the Bench is - Whether a charitable trust would lose exemption granted if it passes some amount of its funds to another trust to be utilised for charitable purpose. And the HC verdict is NO. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">NDPS </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Contraband was recovered from the ‘baggage' of accused persons and not from their person -under such circumstances, no notice was required to be served or given to accused persons - In absence of prior animosity or ill-will, DRI officials were not expected to fabricate confessional statements of accused - conviction and sentence maintained: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CONTRADICTIONS</strong>, discrepancies and improvements highlighted by counsel do not affect the core issue of recovery of contraband from the conscious possession of the accused. These do not go to the root of the case to throw away the otherwise unimpeachable testimony of official witnesses. All the contentions raised by the appellants have been dealt with in the impugned judgment and no interference is called for. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Wednesday for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Wednesday with more <strong>DDT </strong></font></p> <p align="justify"><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>