TIOL-DDT 2130 · 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 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></strong></font></strong></font></strong></font></strong></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"></font></strong></font><font color="#663399" size="3">TIOL-DDT 2130</font><br> 19.06.2013<br> Wednesday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CESTAT Summons CE Superintendent - Tables Turned - Costs of Rs 10,000/- imposed on assessee </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>KAKINADA</strong> is a port city in Andhra Pradesh located 465 kilometres east of the state capital, Hyderabad. To cover the distance of 962 kms from Kakinada to Bangalore, the daily run Sheshadri Express train takes almost 19 hrs.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The story begins here.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An assessee filed an appeal before the CESTAT along with stay application. Against the recovery proceedings initiated by the Superintendent, they made a mention before the CESTAT and got an ad interim stay against the recovery. The assessee communicated the same to the Superintendent with a marginal remark "the Tribunal was pleased to grant ad interim stay till the stay application is disposed" and supposedly enclosed a copy of the order. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, the Superintendent issued another letter to the assessee mentioning that the marginal remarks cannot be taken as stay by the CESTAT and asked the assessee to pay the duty within three days, failing which recovery proceedings would be initiated. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee again approached the CESTAT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Superintendent of Central Excise & Customs, Kakinada was summoned by the CESTAT, Bangalore for the reason that his reply dt. 11/03/2013 addressed to the applicant contained the following observations: "<em>On perusal of the Appendix XXVI dt. 06/03/2013 enclosed to your letter dt. 08/03/2013, referred to above, it is observed that there are certain marginal remarks as 'ad interim stay granted' as stated by you. However,</em> <font color="#FF0000"><em><strong>these remarks shall not be considered as ad interim stay order granted by the Hon'ble Tribunal</strong></em></font>." </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bench was apparently peeved with the contents of the Superintendent's letter for it appeared to the Bench that a copy of their <em>ad interim</em> stay order recorded on the margin of the application was furnished to the Superintendent by the appellant but the <strong>Superintendent had refused to acknowledge the same</strong>.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Therefore, in exercise of the power conferred by Rule 40 of the CESTAT (Procedure) Rules, 1982, the Bench required the Superintendent to appear before it on <strong> 20/03/2013</strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Probably, the AR must have sent a SOS to the officer <strong><em>concerned </em></strong> and asked him to pack his bags and leave office immediately so that he reached the CESTAT at the appointed day and time. After all, as mentioned, it takes 19 hours to reach by train. So, the Superintendent must have probably prayed and prayed, received Best of Luck smses and after undertaking the arduous journey reached Bangalore a day before and appeared before the Bench in his livery at the appointed date and time. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And this is what happened on 20/03/2013 in the CESTAT as noted in the CESTAT Order - </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#663399">"…The Superintendent, Shri Naga Rajeswara Rao, is present in the Court. He has also produced copies of a communication sent to him by the appellant. These papers include copies of the appellant's letter dt. 08/03/2013 received by the Superintendent on the same day as also copies of Appendix XXVI. On the left-hand side margin of the Appendix, there is a manuscript reading "Ad interim stay granted". The Commissioner (AR) has clarified the factual situation in answer to relevant queries from the Bench. </font></em></font></p> <p align="justify"><font color="#663399"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. When confronted with the facts stated by the Superintendent and the Commissioner (AR), the counsel for the appellant admits that, instead of any certified copy of the ad interim stay order dt. 07/03/2013, what was supplied to the Superintendent on 08/03/2013 was Appendix XXVI with the words "Ad interim stay granted" scribbled by the appellant on its left-hand side margin. The learned counsel also apologizes on behalf of his client. </font></em></font></p> <p align="justify"><font color="#663399"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. When the matter was mentioned by the counsel before us on 18/03/2013, the manner in which our ad interim stay order was communicated to the Department was not correctly disclosed. Had it been correctly stated by the counsel for the appellant on the said date, we would not have summoned the Superintendent. The Superintendent of Central Excise and Customs, Kakinada came all the way to Bangalore and stayed in the city overnight in order to answer our summons. He is present before us in his official uniform and has been introduced to us by the Commissioner (AR). He has been constrained to keep away from his official duties for two days on account of the reprehensible conduct of the appellant. From the submissions made before us, we are satisfied that the Superintendent's presence in the Court today was not warranted in the correct facts and circumstances of this case. It has been occasioned by the misfeasance of the appellant. This apart, as already noted, a material fact was suppressed before us on behalf of the appellant on 18/03/2013. In such circumstances, the appellant has got to pay costs of the respondent. Accordingly, we direct the appellant to deposit a sum of Rs.10,000/- (Rupees ten thousand only) with the Government under the appropriate head, within seven days from today and report compliance…. The witness is discharged." </font></em></font></p> </blockquote> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See <font size="1"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODg3MzQ=" target="_blank">2013-TIOL-927-CESTAT-BANG</a></font></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC wants a Joint Secretary TRU </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> was only yesterday that DDT reported that the Board is looking for a new Joint Secretary in the Tax Research Unit (TRU). Yesterday the Government called for applications from willing officers for appointment as JS, TRU in the Board. Commissioner level officers are eligible to apply. Applications should reach the Board latest by 02.07.2013 </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/deputation/vacancies_cbec_letter_35017.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Letter F.No. A.35017/32/2013-Ad.II, Dated: June 18, 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Export of coconut oil permitted through all Land Custom Stations </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EXPORT</strong> of edible oils was initially prohibited for a period of one year with effect from 17.03.2008 vide Notification No. 85 dated 17.03.2008 which was extended from time to time. Vide Notification No. 24(RE-2012)/2009-14 dated 19th October 2012, prohibition on export of edible oil has been extended till further orders.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Following exemptions are permitted from the prohibition on export of edible oils: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) Castor oil </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b)<strong> Coconut oil from all EDI Ports and through all Land Custom Stations(LCS) on Indo-Nepal, Indo-Bangladesh, Indo-Bhutan and Indo-Pakistan borders. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) Deemed export of edible oils(as input raw material) from DTA to 100% EOUs for production of non-edible goods to be exported </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) Edible oils from Domestic Tariff Area (DTA) to Special Economic Zones (SEZs) to be consumed by SEZ units for manufacture of processed food products, subject to applicable value addition norms </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(e) Edible oils produced out of minor forest produce, ITC(HS) Code 15159010, 15159020, 15159030, 15159040, 15179010 and 15219020. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(f) 10,000 MTs of Organic edible oils per annum. The conditions notified in Notification No. 50 dated 03.06.2011 for export of organic edible oils will continue to apply. </font></p> </blockquote> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2013/dgft13not022.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 22/(RE - 2013)/2009-2014, Dated: June 18, 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Prohibition on import of milk and milk products from China</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>prohibition on import of milk and milk products (including chocolates and chocolate products and candies/confectionary/food preparations with milk or milk solids as an ingredient) from China is effective till 23/06/13 as per the Notification No. 4 (RE-2012)/2009-2014 dated 02/07/2012. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The matter has been reviewed and the prohibition on the same from China is extended for one more year, i.e., till 23.6.2014 or until further orders, whichever is earlier. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2013/dgft13not023.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 23/(RE - 2013)/2009-2014, Dated: June 18, 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Review of Orders passed by Commissioner(A) - Strange Ways? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> have come across a Departmental appeal against an order passed by a Commissioner (Appeals). The Order had been reviewed by two Commissioners. The Commissioner (Appeals) who passed the order is now Chief Commissioner in the same city and the two Commissioners who reviewed (audaciously) her orders are junior to her and are now working under her charge as Commissioners. Quite often senior Commissioners who are not in the good books of the Board are posted as Appellate Commissioners and the jurisdictional Commissioners who review the orders of these senior Appellate Commissioners are junior to them and as in the present case may have to work under them later. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When orders passed by jurisdictional Commissioners are reviewed by a Committee of two Chief Commissioners, what is the logic in review of orders of appellate Commissioners by a Committee of two Commissioners who might be junior to the Appellate Commissioner? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In any case, the whole system of review by Committee of Commissioners and Chief Commissioners has thoroughly failed - rather the Commissioners and Chief Commissioners ensured that the system failed. Today it's a big farce. A Superintendent in the Review Section decides that the order has to be reviewed and two Commissioners/Chief Commissioners without even discussing the issue approve the Superintendent's proposal. Should we continue this farce? </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Bear paws confiscated</font></strong></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_2013_1.jpg" alt="Legal Corner Icon" width="436" height="309" hspace="5" border="0" align="center"></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A total of 213 smuggled bear paws were confiscated by China's Customs officials recently. The bear paws were smuggled from Russia and discovered in a Russian passenger van trying to enter China. In Russia, a kilogram of bear paws is worth about 2,000 rubles, about 400 yuan, but the price in China is usually over 5,000 yuan per kg.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What for are they used, you may wonder -<font color="#FF0000"><em> Bear's paw is a delicacy in Chinese cuisine and also used to treat rheumatism in traditional Chinese medicine.</em></font></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_2013_2.jpg" alt="Legal Corner Icon" width="448" height="412" hspace="5" border="0" align="center"></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Alliance for Fair Trade with India to Protect U.S. Economy and Jobs </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> new alliance representing major sectors of the U.S. economy was launched yesterday in support of increased action to resolve discriminatory trade practices, including the erosion of intellectual property (IP) rights in India. The Alliance for Fair Trade with India (AFTI) is co-chaired by the National Association of Manufacturers and the U.S. Chamber of Commerce's Global Intellectual Property Center. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Press Release by the Alliance states, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Over the last year, the Government of India has systematically discriminated against a wide range of U.S. innovative products and exports in order to benefit India's business and industrial community at the expense of American jobs. These actions constitute a disturbing trend that puts at risk a growing bilateral trade relationship worth over $60 billion in 2012 alone. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">India's unfair trade practices against U.S. manufactured exports is putting jobs at risk and harming American manufacturing workers. The Obama Administration must engage the Indian government in high-level discussions to put an end to these practices to protect manufacturers' competitiveness and jobs. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In recent months, India has systematically failed to respect global intellectual property standards, causing an impact to its investment potential. From unprecedented patent revocations and denials to insufficient copyright enforcement, India has established itself as an outlier in the global economy. If this is truly to be India's ‘Decade of Innovation,' the government must promote robust IP policies that incubate both home-grown and international innovators. </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the coming weeks, AFTI will work with the Administration and members of Congress to pursue public policy options that help create a level playing field for U.S. exporters operating in India. Additionally, AFTI will outline the consequences of inaction, specifically as they relate to job creation, economic growth and continued innovation.</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"> - Thursday'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">CENVAT Credit - Interest on irregular credit - Karnataka HC Judgement <em>per incuriam</em> - SC Judgement in Ind-Swift applicable: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before CESTAT was the demand of interest on <em>CENVAT Credit</em> taken but not utilised and reversed before issue of Show Cause Notice. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court in <em>UOI Vs. Ind-Swift Laboratories Ltd </em>- <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2011/2011-TIOL-21-SC-CX.htm" target="_blank"><font size="1">2011-TIOL-21-SC-CX</font></a></strong> had held that interest is payable from the date of taking credit and not utilisation. The Karnataka High Court had in <em>Commissioner, LTU Bangalore Vs. Bill Forge Pvt. Ltd. Bangalore</em> - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2011/2011-TIOL-799-HC-KAR-CX.htm" target="_blank"><font size="1">2011-TIOL-799-HC-KAR-CX</font></a></strong> distinguished the Apex Court judgement and held that interest being compensatory cannot be demanded when the credit was not utilised. The assessee relied on this judgement while the Department relied on the Supreme Court judgement and argued that the Karnataka High Court judgement was <em>per incuriam </em>and the Tribunal need not follow it. The Tribunal found great force in the argument of the Department.</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 assessee-EoU is entitled to Sec 10B benefits on receipts from training activities when it has not received any foreign exchange in this respect - NO: Madras HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the Bench are - Whether the benefit available u/s 10B is an exemption or a deduction; Whether the benefit u/s 10B can be allowed only in case an assessee is indulged in activities as pre-determined under the statute; Whether u/s 10B, which is a clear exemption provision, unless the assessee is in a position to show any ambiguity in the provisions of the Act, there can be any liberal interpretation given to the provisions of the Act, for the purpose of granting relief to the assessee and Whether an assessee is entitled for exemption u/s 10B with respect to receipts from training activity, when no foreign inward remittance has taken place. And the verdict goes against the assessee. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">IT enabled services i.e. software consultancy service exported during impugned period was classifiable as an ‘exempted service' under Rule 2(e) of CCR, 2004 and even if an exempted service is exported the benefit of CENVAT Credit and Rules thereof shall be allowed to exporter of exempted service - Appeal allowed: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> department was of the view that the services exported by the appellant were software development and software consultancy services falling under the taxable service category of ‘Consulting Engineer' and during the impugned period they had not obtained service tax registration in respect of the said service. It was also noted that the appellant had not maintained any separate accounts for the inventory of ‘input services' meant for use in providing taxable output service and quantity of input service which is intended for use in the exempted services as required under Rule 6 of the CCR, 2004. </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 align="justify"><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"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p> </body> </html>