TIOL-DDT 2114 · 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 2114 </font><br> 28.05.2013 <br> Tuesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Crew Members barred from purchasing indigenous goods at DFS while travelling abroad </font></strong></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE </strong>received this interesting mail - </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"Apart from the ambience, bars, electronic shops and the well maintained toilets, International Airports in our country have added attraction in the form of duty free shops (DFS). </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Government issued a press release on the 23 rd May, 2013 informing that the Government has held discussions with the different stake-holders and decided to permit excise <font color="#FF0000"><u>duty-free sale of indigenous goods to passengers or members of crew arriving from abroad</u></font> within the overall permissible baggage allowance under the Baggage Rules, 1998 and to permit excise duty-free sale of indigenous goods to <u><font color="#FF0000">passengers going abroad</font></u>." </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To give effect to this BRAND India overdrive, the government issued five notifications on the Central Excise side and a Board Circular. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The notification which I would like to refer to is 7/2013-CE(NT) and the operative portion reads - </font></em></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"…the Central Government hereby extends the facility of removal of all excisable goods … from the factory of production, intended for storage in a godown or retail outlet of a Duty Free Shop in the Departure Hall or the Arrival Hall, as the case may be, of International Airport,... and for sale there from, <font color="#FF0000"><u>against foreign exchange to passengers going out of India or to the passengers or members of crew arriving from abroad </u></font>, subject to limitations, conditions and safeguards as may be specified by the Central Board of Excise and Customs in terms of sub-rule (2) of rule 20 of Central Excise Rules, 2002." </font></em></p> </blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">One may notice that whereas the benefit of purchasing these indigenous goods from these duty free shops against foreign exchange is available to the passengers or members of crew arriving from abroad and to the passengers going out of India <u>the same is not available for the members of crew who are going out of India. </u></font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What is the rationale for prohibiting the "crew members" from purchasing these indigenous goods duty free while going abroad is not understandable. Obviously, a crew member arriving from abroad would be purchasing these ‘indigenous goods' for self-consumption or otherwise just like the passenger who arrives from abroad. And if this be so, should not a similar opportunity be allowed to them when they travel abroad. Of course, even if they purchase these goods duty free and dispose them in the foreign country, it would still amount to promoting <strong>Brand India,</strong> in any which way it is understood! </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>And will this anomaly be borne in mind by the staff at the DFS at the International Airports while selling his wares</strong>. In case, it is not scrupulously followed will the manufacturer of the indigenous goods be penalised and duty be collected from him? <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTc4MzU=" target="_blank">DDT 2112</a></strong> has already commented that the procedure prescribed in the Board Circular 970 is a cumbersome one and not many manufacturers would be keen to follow. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With this added and silent liability will any manufacturer attempt to clear goods to the DFS?" </font></em></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Transhipment of goods/containers from a Gateway Port to a CFS of another Customs Station</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> Circular 18/2009-Cus disallows direct movement of consignments from Gateway Port to CFS of another Customs Station. However, in exceptional circumstances the jurisdictional Commissioners are empowered to allow such movement subject to certain conditions.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Representations have been received highlighting that insisting that the goods should be received first in an ICD before being taken to one of its attached CFSs increases the dwell time and transaction cost for the importers.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, after examining the grievance and explaining the rationale that led to imposing the ‘restriction' in the first place, the Board has taken the view that suitable modification in ICES "may" be carried out to implement the direct movement of goods from a Gateway Port to a CFS and vice versa and till such time the electronic system is made operational the following procedure/interim methodology is prescribed for direct movement of containers from Gateway Port to a CFS:- </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(i) At the Gateway Port, Customs shall prepare a consolidated list of all SMTP generated CFS-wise for consignments bound for an ICD. This list should be transmitted electronically by the gateway port to the receiving Customs station/(ICD). </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) The goods will move from the gateway port direct to the CFS under cover of a bond accepted by the Customs at the Gateway Port. The carrier will also carry the relevant SMTP in duplicate and hand over the same to the custodian at the CFS. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) On arrival of the goods at the CFS attached to ICD, the custodian of the CFS shall prepare:</font></em></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) A list of goods/container arrival, on daily basis. This list shall inter alia cover the detail of SMTP generated at the gateway port, a hard copy whereof is received along with the goods/containers. This list shall be signed by the custodians and shall be endorsed by Customs Officer in charge of the CFS. The custodian of the CFS shall forward the list of goods/container arrival, to ICD on daily basis. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) A Landing Certificate (LC) on the lines of a Container Arrival list signed by custodian. </font></em></p> </blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) The Custodian of CFS shall forward a copy of Landing Certificate duly endorsed by Customs at receiving end to the Customs at the Gateway Port for re-crediting the bond executed with Customs. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) On arrival of the goods/container inside the CFS, the Custodian along with the surveyor, if any, in presence of the Customs Officer shall verify the correctness of details of consignments and will make an endorsement in the SMTP. The endorsed SMTP shall be forwarded to concerned ICD. With receipt of endorsed SMTP and approval of Customs officer in charge at the ICD, local IGM shall be permitted to be filed at Service Center in case of LCL Cargo </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vi) The B/E will be filed at the ICD as usual and the goods will be examined and cleared at the CFS." </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board further informs that this facility shall be extended to that CFS that is at a <font color="#FF0000"><em><strong>considerable distance </strong></em></font>from the ICD, or en route to an ICD. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It would have been <font color="#FF0000"><em><strong>considerate </strong></em></font>of the Board had the term "considerable distance" also been defined in the Circular itself. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In effect, the Board Circular No 18/2009-Cus dated 08.06.2009 stands modified to the above extent. </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">What is the difference between ICD and CFS? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=OTE0Mw==" target="_blank">DDT 1128 09.06.2009 </a></strong></font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2013/cuscir13_022.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 22/2013 - Cus., Dated: May 24, 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Lending against Gold - RBI Clarifies </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS </strong>per existing instructions, banks should not grant any advance against gold bullion. Monetary Policy Statement 2013-14 announced on May 3, 2013, proposed to restrict the facility of advances against the security of gold coins per customer to gold coins <strong>weighing up to 50 gms</strong>. Banks are currently permitted to grant advances against gold ornaments and jewellery subject to Board approved policies in terms of RBI circular dated November 22, 1994. Since specially minted gold coins sold by banks may not be in the nature of "bullion" or "primary gold", it was indicated in the clarification dated April 5, 2011 that there would be no objection to the bank granting loans against these coins. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, as pointed out in the monetary policy statement, there is a risk that some of these coins would be weighing much more, thereby circumventing the Reserve Bank's guidelines regarding restriction on grant of advance against gold bullion. Accordingly, it is advised that while granting advance against the security of specially minted gold coins sold by them, banks should ensure that the weight of the coin(s) does not exceed 50 grams per customer and the amount of loan to any customer against gold ornaments, gold jewellery and gold coins (weighing up to 50 grams) should be within the Board approved limit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI has also clarified the doubt whether advance against units of gold Exchange Traded Funds (ETF) and gold Mutual Funds is permitted. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=347&filename=notification/rbi/2013/rbi013noti014.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI/2012-13/509 - DBOD. No. Dir. BC. 96 /13.03.00/ 2012-13 ., Dated: May 27, 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">NBFCs finance for Purchase of Gold </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per the existing guidelines, no advances should be granted by NBFCs against bullion / primary gold and gold coins. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Reserve bank of India, now clarifies that no advances should be granted by NBFCs for purchase of gold in any form, including primary gold, gold bullion, gold jewellery, gold coins, units of gold Exchange Traded Funds (ETF) and units of gold Mutual Funds. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=347&filename=notification/rbi/2013/rbi013noti013.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI/2012-13/510 - DNBS.CC.PD.No.326/03.10.01/2012-13., Dated: May 27, 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Amount is too small - revenue appeal dismissed </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AGAINST</strong> an Order-in-Appeal dated June 2003, the Revenue had filed an appeal before the CESTAT and waited patiently. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And after a wait of almost TEN years, the Division Bench heard the appeal and DISMISSED it by holding that the amount is "SMALL". </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The facts - the Commissioner(A) reduced the penalty imposed on the appellant from Rs.17,500/- to Rs.3,000/- for delay in filing the returns and this is what Revenue was aggrieved with. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As mentioned, the story is over for the Revenue as the CESTAT upheld the order of the lower appellate authority. </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See <font size="1"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODgzNzM=" target="_blank">2013-TIOL-796-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><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">Appellant had received income on account of transmission of music clippings in between running of programmes but had not included same in taxable value of ‘Broadcasting services' rendered: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants are registered providers of taxable service of "Broadcasting Services". Audit of the records of the appellant for the period from July 2001 to September 2003 and October 2003 to November 2004 revealed that the appellant had received income on account of transmission of music clippings in between running of the programmes but had not included the same in the taxable value of the services rendered. </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 search assessment can be made even when no incriminating material or evidence is seized at time of search - NO: ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the Bench are - Whether assessment can be made u/s 153A even when no incriminating material or evidence was found or seized at the time of search and there is no reference to the same in the AO's order; Whether merely because the payment for investment in property was made through the bank account, it can be presumed that the source is explained and verified and hence no addition on account of unexplained investment can be made and Whether in case of search in the absence of any incriminating material found during search, no addition can be made on the basis of Report of the DVO. </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">Cement remaining in bulker - consignee purportedly issuing challans evidencing short supply - appellant taking credit of duty paid on such quantity which was received back - since no documents produced by appellant to justify availment, not a case for total waiver - Pre-deposit ordered of Rs.10 lakhs: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YOU </strong>may have heard of the consignee being denied CENVAT credit on the short supply of inputs received by them. One always wondered as to what happened to the inputs that went missing on the way…pilfered, evaporated or vanished into thin air! On occasions where the variation in weight occurs due to weighment at various weighbridges and also because of evaporation during transportation, the Tribunal has been allowing the credit of the duty paid on the entire quantity more so since there is no proof that the inputs were diverted. </font></p> <p align="justify"><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>