TIOL-DDT 2148 · 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 align="justify"><font size="2"><strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font 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" face="Verdana, Arial, Helvetica, sans-serif"></font></strong></font></strong><font color="#663399" size="3">TIOL-DDT 2148 </font><br> </font></strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong>15.07.2013 <br> Monday </strong></font></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Extended Period of Limitation - Knowledge of Department is not Relevant: CESTAT LB </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> Union Quality Plastics Vs CCE, Vapi -<font size="1"> <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2009/2009-TIOL-326-CESTAT-AHM.htm" target="_blank">2009-TIOL-326-CESTAT-AHM</a></strong></font>, the CESTAT referred the following issue to the Larger Bench. </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"<em>Whether the show cause notice issued after a period of six months from the date of visit of the officer or from the date of completion of investigations, as reflected in the show cause notice, is barred by limitation in terms of Section 11A of Central Excise Act, or the notice can be issued within extended period of five years from the date of visit?" </em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Larger Bench of the Tribunal recently decided the case. The LB noted, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The issue is no longer res-integra in view of the decision of the jurisdictional, High Court of Gujarat in Commissioner of Central Excise, Surat-I Vs. Neminath Fabrics Pvt Ltd reported in <strong><font size="1">(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2011/2011-TIOL-10-HC-AHM-CX.htm" target="_blank">2011-TIOL-10-HC-AHM-CX </a>)</font>.</strong> The High Court ruled that whenever there is non-levy or short levy of duty with an intention to evade payment of duty, or any of the circumstances enumerated in the Proviso to Section 11A(i) of the Central Excise Act, 1944; such suppression or willful omission is either admitted or demonstrated, invocation of the extended period of limitation would be justified; and that the proviso cannot interpreted to mean that since Revenue has knowledge of suppression, the extended period of limitation cannot be legitimately invoked. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>In the aforesaid circumstances, the reference becomes infructuous since the issue is governed by the ratio propounded in Neminath Fabrics Pvt Ltd. It is so declared. The appeals will now be placed before the appropriate Bench for adjudication on merits </em>. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see <font size="1"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODkwODI=" target="_blank">2013-TIOL-1072-CESTAT-AHM-LB</a></font></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Beware! - Dogs attack Excise Sleuths </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL EXCISE </STRONG>Sleuths going for a raid beware - there may be dogs in the premises that may have a special enmity towards sleuths raiding their owners. It is reported that officers of the DGCEI, recently conducted raids in the factory and residential premises of certain steel casting units in Muzaffarnagar, Uttar Pradesh and were attacked by two dogs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems the Police have registered a case under Sections 289 (Negligent conduct with respect to animal), 353 (Assault or criminal force to deter public servant from discharge of his duty), 333 (Voluntarily causing grievous hurt to deter public servant from his duty) and 326 (Voluntarily causing grievous hurt by dangerous weapons or means) of the Indian Penal Code. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Also see our report : <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=18139" target="_blank">The Tale of Tax Evasion, Anti-Evasion, and a good use of Canine Teeth </a> </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Applicability of the 'Pneumatic Tyres and Tubes for Automotive Vehicles (Quality Control) Order, 2009' for used tyres - Clarification </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> informs that it has received a reference regarding applicability of the ‘Pneumatic Tyres and Tubes for Automotive Vehicles (Quality Control) Order, 2009' in case of <strong>old and used </strong> pneumatic tyres and tubes for automotive vehicles, requirement of consent from the Ministry of Environment and Forest, and the date of applicability of the said Quality Order for <strong>imported </strong> goods. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After examination of the issue by the Board in consultation with the Department of Industry & Policy & Promotion (DIPP), and Directorate General of Foreign Trade, Ministry of Commerce & Industry it is communicated that the afore cited Order <strong>is applicable to newly manufactured </strong> tyres and tubes and old and used tyres are <strong>NOT </strong> covered under this order. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, with the implementation of the Quality (Control) Order, 2009 for Pneumatic Tyres and Tubes for Automotive Vehicles with effect from13.05.2011, no such tyres can be imported in the country without BIS marking (except certain exemptions provided in the Order). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Doubts have also been raised whether the Delhi High Court order in a matter pertaining to Automobile Tyre Manufacturers Association (ATMA) (W.P. (C) 4098/2011 dated 06.07.2011) regarding no-BIS marked tyres manufactured prior to 13.05.2011will apply to imports or not, it is clarified that the observations made by Delhi High Court would be applicable only to domestic manufacturers and tyre dealers in respect of such stock of tyres manufactured prior to 13.05.2011, and <strong>not to imports </strong> of tyres. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, as per Foreign Trade Policy, re-treaded or used Pneumatic Tyres under ITC (HS) codes 40121100, 40121200, 40121300, 40121910, 40121990, 40122010, 40122020 is "Restricted". These imports are subject to Policy Condition 1 of Chapter 40 of ITC (HS), 2012 Schedule I (Imports). However, import of used rubber tyres with one cut bead wire is free under ITC (HS) code 40040000. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board, therefore, concludes by clarifying that imports of re-treaded or used tyres are allowed subject to compliance of the provisions of the Foreign Trade Policy, and the requirement of consent / permission from the Ministry of Environment and Forest as stipulated in the Hazardous Wastes (Management, Handling and Trans-boundary Movement) Rules 2008. </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">We began where we started…well, almost! </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2013/instruction13_004.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Instruction F.No. 528/109/2011-STO (TU) dated July, 12, 2013</font></strong></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs - Courier operations from Trichy allowed </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Regulation 2(a) of the Courier Imports and Exports (Clearance) Regulations, 1998,courier exports and imports are allowed from the airports at Mumbai, Delhi, Chennai, Calcutta, Bangalore, Hyderabad, Ahmedabad, Jaipur, Trivandrum, Cochin, Coimbatore, Calicut and land custom stations at Gojadanga and Petrapole in West Bengal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, Trichirappalli airport is added to the list. This is heartily welcomed by the stakeholders who have been lobbying for this notification since 2009. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2013/cnt13_074.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 74/2013 - Cus., (N.T.), Dated: July 12, 2013 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC appoints Common Adjudicating Authorities for DRI cases </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has appointed common adjudicating authorities for two specified DRI cases. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2013/cnt13_072.htm" target="_blank">Notification No. 72/2013 - Cus., (N.T.), Dated: July 12, 2013</a> and <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2013/cnt13_073.htm">Notification No. 73/2013 - Cus., (N.T.), Dated: July 12, 2013 </a></font></strong></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IRCTC included as authorized agent for booking air tickets on Government account </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS </strong>per existing procedure, Government officials/offices can book the air tickets directly from Airlines (at Booking counters/Website of Airlines) and if needed, by utilizing the services of authorized agents, viz, M/s Balmer Lawrie & Company Limited (BLCL) and M/s Ashok Travels & Tours (ATT). Air tickets for travel on LTC, to a limited extent, can also be got booked through Indian Railway Catering & Tourism Corporation(IRCTC). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has now been decided to include IRCTC as an authorized agent for the purpose of booking air tickets on Government account. Accordingly, if the services of a travel agent for booking air tickets on Government account are to be availed of, in addition to BLCL and ATT, the services of IRCTC can also be availed of. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/oms/office_memorandum_air_travel.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MoF, Dept of Expenditure OM. No. 19024/1/2012-E.IV, Dated: July 09, 2013 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Government keen to Provide Mechanism for Resolution of Tax Disputes between Tax Department and Foreign Companies in India - MoS (R) </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MR</strong> Jesudasu Seelam, Minister of State (Revenue), Ministry of Finance said that the Government of India is keen to provide a suitable mechanism for resolution of tax disputes between the tax department and foreign companies operating in India. </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Tax_Disputes.jpg" alt="" width="502" height="307" hspace="5" border="0" align="center"></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Minister was inaugurating a training programme for the officers of Directorates of International Taxation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dr.Sudha Sharma, Chairperson, CBDT, Mr N.C. Joshi, Director General of Income Tax (International Taxation) and other senior Officers of the Department were present on the occasion. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A detailed report in our Breaking News -</strong> <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=18187" target="_blank">Govt keen to resolve tax disputes involving foreign companies in India: MoS(R) </a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Department's case is built only on basis of visual examination report - It does not appeal to common sense or logic that any prudent man would pay price of prime metal for procuring seconds/defective material - Benefit of Notfn. 21/2002-Cus allowed </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant filed a bill of entry for the import of 317.20 MTs of ‘Non - alloy Hot-rolled Cut Steel Sheets' valued at Rs.1,42,03,390/- @ USD 1020/MT and claimed the benefit of notification No.21/2002-Cus dated 01/03/2002 which prescribes ‘nil' basic customs duty on such goods <strong><em>other than </em></strong> seconds and defectives. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The goods were examined by the Docks Staff in the presence of the importer and it was observed that out of 41 bundles ((244) pieces) non-alloy hot rolled steel sheets, only 6-7 bundles were found pasted with removable paper labels bearing the details like description, steel grade specification, coil no., weight, size, dated, etc. and the paper labels did not mention the Heat No. The Steel sheets were found heavily rusted, which was other than atmospheric rust. On visual inspection and the light of the above observation, the goods appeared to be secondary and not of prime quality. The importer requested for provisional release of the goods which was allowed on execution of bond and bank guarantee. The statement of the importer was recorded wherein he agreed that the goods were rusted and the importer also paid the differential duty of Rs. 17,40,863/-. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A show cause notice was issued to the appellant proposing to deny the benefit of notification No. 21/2002-Cus and demand differential duty of Rs. 17,40,863/- and also proposing to confiscate the goods and impose penalties. The adjudicating authority observed that the appellant had submitted manufacturer's Mill Test Certificates for the goods under import as per which the goods were of prime quality. The appellant had also declared a value of USD 1020 per MT for the goods and the contemporaneous imports value of similar goods ranged from USD 1020 to USD 1030 and no prudent person would import seconds/defective by paying a higher price applicable to prime metals. Other than the visual examination report, there was no other evidence led by the Revenue to prove that the goods were of seconds/defective quality. Accordingly, he dropped the proceedings. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue succeeded in appeal before Commissioner (Appeals) and, therefore, the appellant is before the CESTAT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bench observed - </font></p> <blockquote> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“5.1 We have perused the import documents such as invoice, packing list, Mill Test Certificate issued by the manufacture of the goods. From these documents, it is seen that the goods under import tally in size, no. and weight of coils, no. of pieces, etc as given in the Mill Test Certificate. We also raised a query with the ld. DR as to whether the details given in the paper labels found on some of the coils matched with those given in the Mill Test Certificate pertained to the goods under import and as per the said certificate, the goods are of prime quality. The department's case is built only on the basis of visual examination report of the departmental officers. No sample of the goods under import were drawn and sent for testing by an independent testing agency to ascertain whether the goods under import were different from those indicated in the Mill Test Certificate or not. Further, it is on record that the price declared for the goods under import match with those for prime material. It does not appeal to common sense or logic that any prudent man would pay the price of prime metal for procuring seconds/defective material. Accordingly, we are of the considered view that the department has not proved the case of mis-declaration with any degree of reliability or acceptability.” </em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The order of the lower authority was set aside and the appeals allowed with consequential relief. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please See <font size="1"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODkwNzc=" target="_blank">2013-TIOL-1070-CESTAT-MUM</a></font></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>The Department's AR in Tribunal </strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/department_ar.jpg" alt="" width="400" height="335" hspace="5" border="0" align="center"></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> – Tuesday's cases</font></strong></strong></font></font></p> <p align="justify"><font 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"></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Finalisation of Provisional Assessment - Bank guarantee encashed even before order of finalisation despatched to importer - Department directed to remit amounts to importer's bank accounts within seven days: High Court </strong></font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE </font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Department's urge to collect what they think is revenue by means fair or foul, knows no limits of decency or law, as this case would reveal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An order finalising provisional assessment was passed on 20.05.2013. A copy of this order was despatched to the importer at 12.53pm on 21.5.2013, while the bank guarantee was invoked at 11.37 am on 21.5.2013. So, once an order is passed, the Revenue immediately rushes to the bank to recover the duty demanded, even before the order is delivered to the importer, thereby preventing the importer from availing the appellate remedies the law has provided him with. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Capital gains - Whether for purpose of computing relief, assessee is required to first take recourse to Sec 70(3) and then only look at Sec 54EC - 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 for the purpose of computing relief, the assessee is required to first take recourse to Sec 70(3) and then only look at Sec 54EC and Whether provisions of Sec 54EC specify any particular nature of transfer of long-term capital asset. And the verdict goes against the Revenue. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tour Operator Service - Appellant entering into agreements with various companies for providing services of transport of company employees from residence to office and back - benefit of notfn. 20/2009-ST not available as the notification excludes from its scope hire services - Pre-deposit ordered: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong> appellant entered into agreements with various corporates in Nashik such as Glaxo Smithkline Ltd., Siemens Ltd., VIP Industries Ltd., and VTC Ltd. for transport of the company employees from their residences to their offices and back and collected service charges during the period 10/09/04 to 31/03/2007. The department was of the view that the said service is taxable under the category of '<strong>tour operators </strong>' service and accordingly issued a notice dated 05/10/07 inter alia demanding service tax of Rs. 4,50,425/-.The <em>Asst. Commissioner of Service Tax, Nashik dropped the proceedings. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In revisionary proceedings, the Commissioner set aside this order and confirmed the service tax along with interest thereon and also by imposing equivalent amount of penalty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">See our Columns Tuesday for the judgements </font></strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tuesday with more <strong>DDT </strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Have a nice day. </strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments t</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">o <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p> </body> </html>