TIOL-DDT 2142 · the untouched capture
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<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 2142</font><br>
05.07.2013<br>
Friday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Penalty
under Central Excise<em> 'Zindagi ke saath bhi, Zindagi ke baad bhi'</em></font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>the Chief Commissioners' Conference held in August 2012, a point was raised that the arrears of penalties imposed on individuals, who are no more, may be waived off. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC examined the issue and observed that there are contrary decisions on the issue of recovery of amount of penalty, which has been imposed on an individual during his lifetime, from his legal heir against the personal properties left behind by the defaulters. High Courts of Kerala and Patna have given judgements in favour of the department by ruling that the proceedings can be continued against the personal assets in the hands of the legal heirs. On the other hand, the High Courts at Allahabad and Calcutta have ruled that the penalty imposed in such cases cannot be recovered from the legal representatives of the deceased. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, Board has decided not to issue any instructions and the fileld formations are advised to take action to realise such arrears in accordance with the statutory provisions and legal pronouncements in this regard. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the case of<em> Manjit Sethi vs. Collector of Customs, Chandigarh</em>, the Tribunal had in its Order No. 259/94-A, dated 14-9-1994 observed- </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Generally penalty dies with the deceased. It is settled principle that penalty cannot be imposed after death and even if it was imposed but not recovered during his life time, the same cannot be recovered from the legal heirs. In other words, penalty cannot be imposed after death of the concerned person and if imposed the same cannot be recovered from the legal heir."</font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <em>Bhuban Mohan Mitter Charitable Trust vs ITO</em>, the ITAT held, </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In criminal jurisprudence a crime dies with a man and the legal representative of the deceased offender or criminal cannot be penalised for the offences or crimes committed by the deceased. If this cardinal principle of criminal jurisprudence is also applied to the penalty proceedings under the Income-tax Act which as stated above, are considered as quasi-criminal in nature then we are of the view that quasi-crimes also die along with the deceased and, therefore, it will be highly irrational, harsh and inequitable to penalise or punish the legal representatives in respect of quasi-crimes committed by the deceased. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the Income Tax Act in Section 159 clearly stipulates: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(1) Where a person dies, his legal representative shall be liable to pay <strong>any sum</strong> which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) xxxxxx </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) The legal representative of the deceased shall, for the purpose of this Act, be deemed to be an assessee. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There are no such provisions under the Customs, Excise or Service Tax Laws. Let us take the case of a Service Tax assessee who is an individual, and see these four situations: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. He collects Service Tax from his clients, but dies before paying the tax or filing the return. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. He does not collect the tax but provides service and dies before the tax could be paid to the Government. His heirs may or may not collect the amounts including tax from the clients. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Notice is issued demanding Service Tax and penalty; he dies before replying to the notice. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Adjudication order is passed demanding tax and penalty; he dies before paying or appealing. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In each of the above situations, what is the liability of the legal heirs? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Because of conflicting High Court decisions, the Board does not want to take a decision and leaves it to the field. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An individual assessee has no right to die in peace, at least his legal heirs have no right to live in peace for the taxman's reach is beyond the grave. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11328">Penalty dies with deceased</a></font></strong></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2013/cbec_atr_report.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Letter in F.No.296/110/2012-CX-9, Dated: June 18, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">IT - Processing of brought forward Return as on 01.04.2013 - CBDT Instructions </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per the Central Action Plan document for Financial Year 2013-2014, DCsIT/ACsIT/ITOs (assessment units) are required to process all brought-forward Return as on 01.04.2013 by 31st August, 2013.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board notes with concern that till June, 2013 a large number of Returns which were filed till 31.03.2013 have not yet been processed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants the field officers to complete the work and Chief Commissioners are to send a compliance report to the Board by 05.09.2013 positively. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2013/forward_return.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Letter in F. No. 225/107/2013/ITA.II, Dated: July 4, 2013</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">New Exchange Rates </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has notified new exchange rates effective from 05.07.2013 for export and imported goods. The earlier notification 63/2013-Cus (NT) had a lifespan of exactly two weeks. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2013/cnt13_070.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 70/2013 - Cus.,(N.T.), Dated: July 4, 2013</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti-Dumping duty on Acetone imported from M/s Chang Chun Plastics Co. Ltd., Chinese Taipei </font></strong></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is an interesting Anti-dumping notification crafted exclusively for an exporter from Chinese Taipei. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Based on the final findings of the Designated Authority recommending imposition of anti-dumping duty on imports of Acetone from Chinese Taipei, the Central government had imposed anti-dumping duty vide notification No. 33/2008-Customs, dated the 11th March, 2008. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Based on a request made for review by M/s Chang Chun Plastics Co. Ltd, Chinese Taipei in respect of exports of the subject goods made by them, the designated authority had vide new shipper review notification No. 15/30/2010-DGAD dated the 20th April, 2011 recommended provisional assessment of all exports of the subject goods made by the above stated party till the completion of the review by it. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central government had accordingly issued notification No. 44/2011-Customs, dated the 27th May <a></a>2011 ordering as recommended by the designated authority. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, the designated authority had also initiated review in the matter of continuation of anti-dumping duty on imports of said goods, originating in, or exported from, said country, and had recommended withdrawal of the said anti-dumping duty vide notification No. 15/2/2011-DGAD, dated the 10th April, 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Based on the aforesaid findings the Central Government had withdrawn the anti-dumping duty on imports of said goods from the said country vide notification No. 29/2012-Customs (ADD), dated the 29th May, 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vide its final findings in notification No. 15/30/2010-DGAD, dated 17th April, 2013 the designated authority had recommended to impose anti-dumping duty of USD 201.27 per MT on all imports of subject goods, when exported by M/s Chang Chun Plastics Co., Ltd., Chinese Taipei and imported into India during the period from the date of initiation of the new shipper review investigation recommending provisional assessment namely the 20th April, 2011 to the date of withdrawal of antidumping duty by Department of Revenue vide Notification No.29/2012-Customs (ADD) dated the 29th May, 2012; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the Central Government has now issued a notification ordering final assessment on the payment of anti-dumping duty of USD 201.27 per MT in respect of the Acetone exported by M/s Chang Chun Plastics Co. Ltd, Chinese Taipei. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2013/ctariffadd13_014.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 14/2013-Cus.,(ADD), Dated: July 3, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti-dumping duty on Poly Vinyl Chloride Paste Resin (PVC Emulsion Resin) </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AFTER</strong> conducting Sunset Review, the Designated Authority vide its final findings in notification No.15/27/2008-DGAD, dated the 26th April, 2010 had recommended the continued imposition of definitive anti-dumping duty on all imports of Poly Vinyl Chloride Paste Resin (PVC Emulsion Resin), originating in, or exported from European Union.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Based on the said findings, the Central government had issued Notification No.70/2010-Customs, dated the 25th June, 2010.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However,
the CESTAT had vide its order dated 6th July, 2012 </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><em><strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODg5NjU=" target="_blank">(2012-TIOL-2026-CESTAT-DEL)</a></strong></em></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> set aside the aforesaid final findings of the Designated Authority and the notification 70/2010-Cus and remanded the matter back to the Designated Authority for fresh decision. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The designated authority has in his findings dated 4th April, 2013 again come to the conclusion that the subject goods are dumped into the Indian market and has recommended the continued imposition of definitive anti-dumping duty on all imports of the subject goods, originating in, or exported from the subject country viz. European Union. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the Central Government has issued the requisite notification imposing anti-dumping duty and which is notified to be valid up to and inclusive of 24th June, 2015. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2013/ctariffadd13_015.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 15/2013-Cus.,(ADD), Dated: July 3, 2013</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Is Runway a Road?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> interesting question had come up before the CESTAT, WZB. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Maintenance or repair of roads” was exempted by notification 24/2009-ST dated 27th July, 2009 and the said exemption was given retrospective effect for the period starting from 16/06/2005 onwards till 26th July, 2009 by the Finance Act, 2012 by insertion of a new section 97 in the Finance Act, 1994. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant claimed that they are entitled for the benefit of the exemption and the retrospective benefit granted since they were engaged in the maintenance or repair of runways and that the same is a species of a road. They also relied on the CESTAT decision in <em>Shilpa Constructions Pvt. Ltd. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2010/2010-TIOL-1132-CESTAT-AHM.htm" target="_blank"><font size="1">(2010-TIOL-1132-CESTAT-AHM)</font></a></strong></em> wherein it was held that a ‘driveway to a petrol pump also amounts to construction of road as a driveway facilitates people to drive to the petrol pump for filling the fuel'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CESTAT had asked the appellant to make a pre-deposit of Rs.3crores. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Against this decision the appellant had filed an appeal before the Bombay High Court and while setting aside the order directing the appellant to make a pre-deposit, the High Court directed the Tribunal to hear the appeal without pre-deposit. <strong>See <font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2012/2012-TIOL-1030-HC-MUM-ST.htm" target="_blank">2012-TIOL-1030-HC-MUM-ST</a></font>. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The matter was heard recently and the Bench came to the conclusion that in common understanding road and runways are not one and the same; that they are distinct and different; that while road is a means of travel from one place to another for the purpose of transportation of passengers or goods or animals, the runway is not a means of travel at all; while road is defined as a track suitable for road traffic, a highway, a roadway etc., runway is defined as a firm strip of ground for aircraft to take off from and land on. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this <em>roadworthy</em> decision in <font color="#006600"><strong>Breaking News</strong></font> on Monday.</font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT Cartoon </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 _2142.jpg" alt="" width="424" height="479" hspace="5" border="0" align="center"></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">Roads and runways are not one and same and, therefore, benefit of exemption available to maintenance or repair of roads will not ipso facto apply to runways: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FROM </strong>the above definitions while a road is a path or way between two different places, a runway is a specially prepared surface on an airfield. The purpose for which a road is put to use and a runway is put to use are substantially different. While a road is a means of travel from one place to another for the purpose of transportation of passengers or goods or animals, the runway is not a means of travel at all. Public access is prohibited and it is only a piece of land where the aircrafts can land or take off. It is also not necessary that runways has to be built on land. In the case of aircraft carriers, runways are built on the ship and the aircrafts land or take off from the ship. </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 has not been allowed any deduction u/s 43B in earlier years, provisons of Sec 41(1) will not apply in case of grant of waiver of interest - YES: 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 when the assessee has not been allowed any deduction u/s 43B in earlier years, provisons of Sec 41(1) will not apply in case of grant of waiver of interest to the assessee and Whether when the waiver of interest is a cash benefit, the provisions of Sec 28(iv) do not apply. And the verdict 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">Ground of unjust enrichment cannot be ground for rejecting a refund claim - question of unjust enrichment comes into play only after it is decided whether refund is sanctionable or otherwise - Matter remanded: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOTH</strong> the lower authorities have not given findings whether the refund is sanctionable or otherwise and straightway rejected the refund claim on the ground of unjust enrichment. It is pertinent that after finding whether the refund is sanctionable or not the authorities have to either refund the amount to the appellant or they have to credit the amount to the Fund. </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>
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