TIOL-DDT 2186 · 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 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="3">TIOL-DDT 2186</font><br>
10.09.2013<br>
Tuesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Recall the Call Book - CAG tells CBEC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CASES</strong> which have reached a stage where no action can or need be taken to expedite their disposal for at least 6 months may be transferred to the call book with the approval of the competent authority. Cases in which the department has gone in appeal, cases where injunction has been issued by Supreme Court/High Court/Tribunal etc., cases where audit objections are contested and cases where the Board has specifically ordered the same to be kept pending may be entered into the call book. Further extant instructions to the Commissionerates require monthly review of pending call book items. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG found that in a Commissionerate, a Show Cause Notice demanding interest on differential duty paid voluntarily by the assessee on account of price revision, was kept in the Call Book on the grounds that the decision pertaining to liability of interest and penalty when the duty was paid before issue of SCN, was pending before the Apex Court. However, Audit observed that the question of payment of interest under Section 11AB on differential duty had already been decided by the Apex court in the case of <em>Commissioner vs. SKF India Ltd. - </em><strong><font size="1">(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2009/2009-TIOL-82-SC-CX.htm">2009 TIOL-82-SC-CX</a>)</font></strong>, in July 2009. Similarly, the court had decided the question of quantum of penalty to be levied when duty was paid before issue of <em>SCN in Union of India vs. Dharmendra Textile Processors</em> - <strong><font size="1">(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=37&filename=legal/sc/2008/2008-TIOL-192-SC-CX-LB.htm" target="_blank">2008-TIOL-192-SC-CX-LB</a>)</font> </strong>in August 2008 (<em><font color="#660033">actually September 2008</font></em>). Retention of SCN dated 20 September 2006 in the call book indicates inadequacies in the mechanism for review of call book items. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Audit observes that monitoring in respect of call book cases was inadequate as </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) transfer to call book was incorrect,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) if a system of monthly review of call book items as envisaged in instructions was being complied with, the item would have been removed from the call book at least two years earlier. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What is a Call Book</strong>? Please see <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTAwODE=" target="_blank">DDT 1257-14.12.2009</a></strong></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">[From CAG's Report No.17 of 2013 - Indirect Taxes]</font></em></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on Sodium Perchlorate </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has imposed anti dumping duty on Sodium Perchlorate falling under tariff item 28299010 originating in, or exported from, the People's Republic of China. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The anti dumping duty is effective for a period of five years from 6.9.2013 unless revoked, amended or superseded earlier. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2013/ctariffadd13_020.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 20/2013-Customs (ADD), Dated: September 6, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on Zinc Oxide </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has imposed anti dumping duty on Zinc Oxide falling under tariff items 2817 0010 or 3812 3030 originating in, or exported from, the Peoples Republic of China. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=NTQ0NQ==" target="_blank">DDT-609 - 09.05.2007</a></strong> had commented,</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The anti-dumping duty on Zinc Oxide originating in, or exported from, the Peoples Republic of China, was first imposed by notification No. 115/2001 dated the 2 nd November, 2001, which was further extended till <strong>8.4.2007</strong> by Notification No. 51/2006 -Customs dated the 29th May, 2006 </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Designated Authority, on review, has recommended continued imposition of the anti-dumping duty against the subject goods, originating in, or exported from, the Peoples Republic of China in order to remove injury to the domestic industry and so the Government has now re-imposed anti dumping duty on the product for another five years from 7.5.2007. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But what happens to the imports during the period, 9.4.2007 to 6.5.2007, when there was no anti dumping duty on the product?. The Designated Authority had recommended continuation of the anti dumping duty, not its re- imposition. This should have been done before 8.4.2007, but somebody was sleeping for a month and just woke up and issued the notification after a month! </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, this dead notification was given a fresh lease of life by Notification No. 64/2007 dated 7.5.2012. This extended Notification also lapsed on 6.5.2012. Twelve days after the second death, this notification was resurrected on 18.5.2012 by Notification No. 27/2012, to be alive till 6.5.2013. So it had no effect from 7.5.2013. And as usual they forgot all about it in May 2013. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now there is a third resurrection - but by issue of a new notification. The new Notification says that this anti dumping duty shall be effective for a period of five years from 6.9.2013. But was there an anti dumping duty during the period from 7.5.2013 to 5.9.2013?</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2013/ctariffadd13_021.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 21/2013-Customs (ADD), Dated: September 6, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - GTA - How to prove CENVAT Credit was not taken?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> following is an extract from<strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTUzNjI=" target="_blank"> DDT 1893 - 04 07 2012</a> </strong></font></p>
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<td bordercolor="#FFFF00" bgcolor="#FFFF00"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ONE</strong> of the most litigated services was the service of goods transport agency in relation to transport of goods. The tax was and is required to be paid in most cases by the service recipient. There is and was an abatement of 75%. But things are not that simple. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There was a condition that the abatement is subject to the condition that no CENVAT Credit was taken. There was a lot of litigation on who should not take the credit - the GTA or the service recipient who pays the tax? Finally, by Notification No. 13/2008, Government had granted an unconditional abatement for GTA. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now under the negative regime, it is back with the condition that <em>CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004</em>. (See Notification No. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_026.htm" target="_blank">26/2012-ST</a></strong> dated 20.06.2012)</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, what are the inputs, capital goods and input services on which a transporter can take credit, especially when he pays no Service Tax at all? Trucks, Diesel, Tyres, phones? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But how does a recipient prove that the provider had not availed CENVAT credit? In the earlier regime, it was instructed that the recipient should take a declaration from the GTA that he has not availed CENVAT Credit. Maybe we should get back to that system again. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whenever you pay Service Tax on goods transport, be sure to take a certificate from the truck operator that he has not availed CENVAT Credit - otherwise you will be asked to pay Service Tax on the total freight instead of on 25% of the value. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is this intentional or a copy and paste mistake? If it is the latter, Board should not stand on false prestige and delete this unwanted condition which is bound to produce litigation in abundance. The past litigation on this issue should be an education guide to the Board. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further to add a little confusion, as per Notification No. 30/2012- S.T dated 20.06.2012, (Sl. No.2 of the Table), Percentage of Service Tax payable by the person receiving the service, in case of services by a GTA in respect of transportation of goods by road, is 100% . Already a few Departmental officers asked <strong>DDT</strong> whether abatement was not available and <strong>100%</strong> tax had to be paid by the recipient. This is exactly the confusion that the DGST created in 2005 by issuing a circular that 25% tax is only applicable if the GTA pays the tax and not when the consignee or consignor pays it. That issue snowballed into a major crisis with hundreds of Show Cause Notices and Audit objections flying around and consultants made tons of money! <strong>(Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5158" target="_blank">DDT 571 - 13 03 2007</a>) </strong></font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, we are informed that litigation has started exactly as we predicted. An Audit Objection was raised in a Commissionerate - "<em>Short payment of service tax under noti.26/2012-ST</em>". Audit says that in the absence of proof of non-availment of credit, the recipient has to pay 100 percent tax and not 25 percent and in any case, by virtue of Notification No. 30/2012, the recipient is required to pay 100 percent. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board should step in before this spreads like a wild fire across the country and consultants are showered with hundreds of cases. Maybe they should issue another notification identical to <strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MzA0Mw==" target="_blank">13/2008-ST</a></strong>. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Write Full Name of His Lordship </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOMBAY</strong> High Court Registrar in a Circular informs,</font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is observed by the Hon'ble Shri justice Anoop V. Mohta that the Office is not taking care to put/write the Full name of His Lordship and they are still writing His Lordship's name as 'A. V. Mohta' instead of 'Anoop V. Mohta' and directed this Registry to issue immediate directions to all concerned. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of the said directions, Advocates and parties appearing-in-person are hereby directed that they should write His Lordship's name as 'Anoop V. Mohta' instead of "A.V.Mohta", failing which the Registry will not accept any proceedings, including praecipe if the name of His Lordship is not shown as above . </font></em></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/bombay_HC.pdf"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Bombay High Court Registry Circular No. G/Cir/13662; Dated: September 4, 2013</font></strong></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Praecipe?</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WEBSTER'S</strong> dictionary defines praecipe as - (1) any of various legal writs commanding a person to do something or to appear and show cause why he or she should not, (2) a written order requesting a clerk or prothonotary of a court to issue a writ and specifying the contents of the writ. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rule 933 of the Bombay High Court Rules reads as: </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>933. Withdrawal of Caveat - </strong>A caveat may be withdrawn by the party on whose behalf it has been entered, but the <strong>praecipe</strong> to withdraw the caveat shall, unless otherwise permitted by the Prothonotary and Senior Master, be signed by the person who signed the<strong> praecipe</strong> for entering the caveat. </font></em></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Who should pay? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>X</strong> went to Y's house and forgot his bag which contained 1 kg sweets. Y's children consumed the sweets. Decide the liability of Y. </font></p>
<blockquote> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">(A) Y is bound to pay the price of sweets to X </font>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(B) Y is not bound to pay anything </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(C) Y is bound to pay half the price of sweets. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(D) Y would not have to pay anything because X loves Y's children. </font></p>
</blockquote><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was one of the questions asked in the Common Law Admission Test (CLAT), 2012 conducted for the purpose of admission to various national law schools / universities. This question - rather its correct answer was a matter of dispute in a High Court. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What do you think? </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"> - 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">Customs</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Where Baggage Declaration Form is not filed, jurisdiction under Section 127B(1) of Customs Act cannot be exercised by Settlement Commission - application rightly rejected - WP dismissed: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Settlement Commission dismissed the application on the ground that the petitioner did not satisfy the condition precedent for entertaining the settlement application as provided under the proviso (a) to Section 127 (B)(1) of the said Act. Inasmuch as the Baggage Declaration Form required to be filed under Section 77 was not filed by the applicant. </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 warrant is issued against address of assessee but without name, invocation of provisions of Sec 158BC instead of Sec 158BD will be illegal - YES: 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 when a warrant is issued against the address of the assessee but without a name, invocation the provisions of Sec 158BC instead of Sec 158BD will be illegal; Whether even without a search warrant u/s 132 of the Act against the assessee, the block assessment u/s 158BC can be said to be valid and sustainable without invoking section 158BD; Whether the failure to issue notice u/s 158BD of the Act to the assessee is only an irregularity in the assessment and not a nullity of the block assessment; Whether the provisions of Section 292B of the Act can be invoked to cure the defect in not issuing notice to the assessee u/s 158BD of the Act and hence the block assessment on the assessee u/s 158BC can be said to be legal and valid in law and Whether the addition u/s 68 of the Act in respect of the cash credits can be made in the block assessment made under Chapter XIVB of the Act. 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">Service Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Appellant located in SEZ area discharging ST liability u/s 66A of FA, 1994 and claiming refund - If Board is of view that S. 66A is not charging section by itself and charging section remains 66, taking holistic approach, denial of refund claim to appellant only on hyper technicalities, seems to be incorrect - Stay granted: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Appellant paid Service Tax as mandated by s. 66A of the FA, 1994 on the Commission paid to the agents who are staying abroad.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since they are located in SEZ area, they claimed the refund of the ST paid in terms of Notification No.9/2009-ST dated 03.03.2009, which was allowed by the adjudicating authority.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On an appeal filed by the Revenue, the first appellate authority, concluded that the said Notification No.9/2009-ST grants refund of the amount of service tax utilised in SEZ area, if the same is paid under Section 66 of the Finance Act, 1994, while the appellant herein has paid the service tax under Section 66A of the Finance Act, 1994.</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"> <strong><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p>
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