TIOL-DDT 2112 · 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 2112</font><br> 24.05.2013 <br> Friday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Duty Free Shops at Airports to Sell Indigenous Goods - duty free </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YOU</strong> must have seen those fabulous Duty Free Shops in the International airports, stocked with all kinds of attractive foreign goods, especially liquor. A passenger going abroad or coming from a foreign country can buy these goodies without customs duty and the incoming passenger can clear those goods without duty within his available limits as per the baggage rules. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But why can't these shops sell Indian goods too? It seems the Government has received representations requesting to permit excise duty-free sale of goods manufactured in India both on the arrival side as well as the departure side so as to ensure parity with the imported goods and to promote brand INDIA. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And this is exactly what the Government allowed. Now instead of buying a foreign TV from the Duty Free Shop, you can perhaps buy an Indian TV without excise duty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government yesterday issued notifications so as to allow excise duty-free sale of goods manufactured in India to international passengers or members of crew arriving from abroad at the Duty Free Shops (DFSs) located in the arrival halls of international airports and to passengers going out of India at the DFSs located in the departure halls of international airports in the country. Directions have also been issued to specify the procedure for removal of the goods from the factory of production without payment of duty to godowns or retail outlets of DFSs and related matters. Details are: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. <strong>Notification No. 145/1989-Central Excise, dated the 19th May, 1989 rescinded:</strong> Even at present, certain electronic goods are allowed to be cleared without payment of excise duty to duty free shops at airports. As the benefit is extended to all goods, this notification is no more valid and is thoughtfully rescinded. - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2013/etariff13_18.htm" target="_blank">Notification No. 18/2013-CE, Dated: May 23, 2013</a></strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2013/etariff13_18.htm">. </a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. <strong>Excisable Goods cleared to Duty Free Shops at airports exempted:</strong> Government has exempted all excisable goods (indigenous goods) when brought into duty free shops located in the arrival halls at the International Customs Airports from the factories of their manufacture situated in India for sale to passengers or members of crew arriving from abroad , from the whole of the duty of excise leviable thereon, subject to certain conditions and following certain procedures. - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2013/etariff13_19.htm" target="_blank">Notification No. 19/2013-CE, Dated: May 23, 2013</a></strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2013/etariff13_19.htm">. </a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <strong>Duty Free Shop treated as an export warehouse:</strong> Government has extended the facility of removal without payment of duty to all excisable goods intended for storage in a godown or retail outlet of a Duty Free Shop in the Departure Hall or the Arrival Hall, of International Airport, appointed or licensed as "warehouse” under Section 57 or 58 of the Customs Act, and for sale therefrom, against foreign exchange to passengers going out of India or to the passengers or members of crew arriving from abroad, subject to limitations, conditions and safeguards as may be specified by the Central Board of Excise and Customs. - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2013/exnt13_07.htm" target="_blank">Notification No. 07/2013-CE NT, Dated: May 23, 2013.</a></strong> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Officers of Customs in DFS appointed as CE Officers : Government has appointed Officers of Customs under whose jurisdiction the godowns and retail outlets of Duty Free Shops at the International Airport are located, to be Central Excise Officers. – <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2013/exnt13_08.htm" target="_blank">Notification No. 08/2013-CE NT, Dated: May 23, 2013</a>.</strong> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. <strong>No Need of registration of the warehouse:</strong> where a godown or retail outlet of a Duty Free Shop is appointed or licensed under the provisions of sections 57 or 58 of the Customs Act, such godown or retail outlet shall be deemed to be registered as warehouse under rule 9 of the Central Excise Rules, 2002. – <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2013/exnt13_09.htm" target="_blank">Notification No. 09/2013-CE NT, Dated: May 23, 2013</a>.</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. <strong> Procedure governing the movement of excisable indigenous goods to the Warehouses or retail outlets of Duty Free Shops:</strong> CBEC has given detailed procedure on Registration, removal from factory, invoice, examination, Demand etc,.. The procedure is so cumbersome and complicated that no manufacturer or Duty Free Shop owner will follow it. ‘Brand India' cannot reach the airports this way - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2013/excircular970.htm" target="_blank">CBEC Circular No. 970/04/2013-CX , Dated: May 23, 2013</a>.</strong> </font></p> </blockquote> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Government notifies <em>Narcotic Drugs and Psychotropic Substances (Regulation of Controlled Substances) Order, 2013</em></font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has notified the <em>Narcotic Drugs and Psychotropic Substances (Regulation of Controlled Substances) Order, 2013 and repealed the Narcotic Drugs and Psychotropic Substances (Regulation Of Controlled Substances) Order, 1993. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under the new Order: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The Central Government may, by notification in the Official Gazette, include any controlled substance in one or more Schedules. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ No person shall manufacture, distribute, sell, purchase, possess, store, or consume any controlled substance included in Schedule-A without a unique registration number in Form-A issued by the Zonal Director of Narcotics Control Bureau: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ No consignment of controlled substance in Schedule-A shall be moved from one place to another place within India, except when it is accompanied by a consignment Note in Form-G. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ No person shall export any controlled substance in Schedule-B except in accordance with the conditions of the No Objection Certificate issued by the Narcotics Commissioner. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ No person shall import any controlled substance in Schedule-C except in accordance with the conditions of the No Objection Certificate issued by the Narcotics Commissioner. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Every container or vessel containing a controlled substance in a consignment for export or in a consignment, which is imported, shall be labelled prominently giving details of the name and quantity of the controlled substance, name and address of the exporter and importer and the consignee if any. </font></p> </blockquote> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/cs-regu-ctrled-substances.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MoF DoR Notification, Dated: March 26, 2013. </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">And the Government Notifies Controlled Substances </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> government, having regard to the available information as to the possible use of the following substances in the production or manufacture of various narcotic drugs and psychotropic substances, and also to implement the provisions of the United Nations Convention Against Illicit Traffic in Narcotic Drugs and psychotropic Substances,1988, decided to declare them as controlled substances: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Ergometrine and its salts 2. Ergotamine and its salts 3. Lsosafrole 4. Lysergic acid and its salts 5. 3,4-methylenedioxyphenyl-2-propanone 6. Methyl ethyl ketone 7. Norephedrine (Phenylpropanolamine), its saltsand preparations thereof 8. l-phenyl-2 propanone9. Phenylacetic acid and its salts10. Piperonal 11. Potassium permanganate12. Safrole and any essential oil containing 4% or more safrole13. Preparations of Ephedrine14. Preparations of Pseudoephedrine</font></p> <p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/cs-regu-ctrled-substances-list.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MoF DoR Notification S.O. 834(E), Dated: March 26, 2013.</font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Sending order-in-original through Speed Post is not proper service </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Commissioner (A) dismissed the appeal filed on the ground of limitation inasmuch as the appeal had been filed with a delay of one year and 11 months and 5 days. He had<em> inter alia</em> held that the order was despatched and communicated to the appellant through Speed Post. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant says that as per the information obtained by them under the RTI Act, 2005, they have come to know that the O-in-O had been sent by Speed Post, the address was incomplete and even the Pin code number was wrong. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CESTAT observed – </font></p> <blockquote> <p align="justify"><em><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">"4. It is admitted fact in the impugned order itself that the address was incomplete and pin code was also wrong and moreover, service of order through speed post is not the proper service. Therefore, we hold that the Order-in-Original was not served on the appellant as found by the first appellate authority in the impugned order. Accordingly, we hold that appeal filed by the appellant is within time before the Commissioner (Appeals). Therefore, we set aside the impugned order and allow the appeal by way of remand to the first appellate authority to hear the appellant afresh on merits.” </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF0000">DDT adds </font></strong>- Incidentally, by the Finance Act, 2013, amendments have been made in section 37C of the CEA, 1944 so as to incorporate the words <font color="#FF0000">"speed post with proof of delivery"</font>. But the case under discussion is a Customs case and in section 153 of the Customs Act, 1962 no such amendment has been made. </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=ODgzMzE=" target="_blank">2013-TIOL-782 -CESTAT-MUM </a></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Ombudsman at Ahmedabad </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DEPARTMENT </strong>of Revenue has called for applications for appointment of Ombudsman at Ahmedabad. Chief Commissioners and above are eligible. Last date of receipt of applications is 10.06.2013. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/it-ombudman-ahm.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DOR F. No. A.12026/18/2011-Ad.I, Dated: May 17, 2013. </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> New CAG Takes Over - Appointment Challenged </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/Shashi_Kant_Sharma.jpg" alt="Legal Corner Icon" width="512" height="400" hspace="5" border="0" align="center"></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SHASHI</strong> Kant Sharma, a 1976 batch IAS officer has taken over as the new Comptroller and Auditor General (CAG) of India, succeeding the controversial Vinod Rai. Rai had taken the CAG's office into dizzy heights of prominence with a couple of ministerial heads rolling down into Tihar supposedly because of his reports. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CAG is an over rated institution believed to have constitutional powers and was in existence since 1860. He is the chief accountant and auditor for the Government and is unfortunately not subject to any accountability or audit checks.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After the CAG became politically important, there is now a demand for transparency, independence etc,. Already Sharma's appointment is challenged before the Supreme Court, which will hear the matter in July. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CAG and his offices cost the nation 2707 crores of rupees in 2013-14, about 90% of which would go for salaries of the auditors. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The constitution does not prescribe any qualifications for the post of CAG and normally IAS officers with absolutely no idea about accounts or audit are appointed as CAGs. The CAG is not under anybody's control and is not accountable for any blunders in the reports he makes. If there is too much clamour for an independent CAG, one day the Government may appoint one of its unemployed politicians to <a></a>the job! </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT Cartoon </strong></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/ddt_cartoon2112.jpg" alt="Legal Corner Icon" width="400" height="451" hspace="5" border="0" align="center"></strong></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"> – Monday'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"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Brand owner is not required to pay any ST under the category of "Franchise Service" as clarified by Board-Appeals allowed: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants are owners of different brands of Indian Made Foreign Liquor (IMFL) and engaged in getting the said branded alcoholic beverages manufactured from different contract bottling units (CBUs) on contract basis. The arrangement was made with CBUs through contract agreements. The arrangements provided for manufacture of branded alcoholic beverages by the CBUs with the condition that the same were supplied on sale to the specified distributors of the applicants. The agreement also provided for control of the bank account maintained in the name of the CBUs by the applicants and it was the responsibility of the applicants to provide the funds, know-how, details of raw materials and packaging materials etc. The surplus arising in the operating account of manufacture and sale which represents the profit in the business would go to the brand owner i.e. applicants. </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 when assessee receives a gift from a relative in HUF capacity, exemption u/s 56(2)(v) cannot be denied as term 'relative' is very much covered by provisions of Sec 56 - YES: ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the Bench is - Whether when assessee receives a gift from a relative in HUF capacity, exemption u/s 56(2)(v) cannot be denied as the term 'relative' is very much covered by the provisions of Sec 56. And the answer goes in favour of the assessee. </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">Valuation - basis for re-determination of assessable value adopted by Commissioner is RSP at which automobile parts of well-known brands are sold by various authorized service centres- Order set aside: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant is an importer of automobile parts. Acting on intelligence that there is ‘heavy' undervaluation of automobile parts imported, a bill of Entry dated 17/06/2010 filed by the appellant was taken up for investigation by the Special Investigation and Intelligence Branch (Export), Mumbai. A panchnama was drawn and it was observed that the consignment contained several automobile parts, most of which were unbranded and of Chinese origin and a few parts were branded and were of Korean, German and Japanese and Poland origin. It was also observed that the CIF value as well as the Retail Sale Price (RSP) declared were very low. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Monday for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Weekend.</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>