TIOL-DDT 2188 · 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 2188</font><br>
12.09.2013<br>
Thursday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Duty Credit Scrips used to Pay Excise Duty on Domestic Procurement - Is Rule 6(3) of the CCR Applicable? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has issued notifications No. 29/2012-CE, 30/2012-CE, 31/2012-CE, 32/2012-CE and 33/2012-CE all dated 9.7.2012 to <strong>exempt</strong> certain manufactured goods when cleared against the specified duty credit scrip issued to an exporter. The holder of the said scrip, to whom the goods are cleared, is entitled to avail <em>CENVAT credit</em> of duties of excise, against the amount debited in the said scrip as per one of the conditions of the notification. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, are these exempted goods or duty paid goods? While reporting the above exemption notifications, <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTU0MjM=" target="_blank">DDT 1898- 11.7.2012</a> </strong>had stated, "<em>When they are allowing credit, obviously they consider them duty paid. They should have amended the CENVAT Credit Rules also to clear the position that these goods will not be considered as exempted."</em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Representations have been received from the trade that such clearances are being treated as clearances of exempted goods and payment of amount under rule 6(3), as applicable, of the CENVAT Credit Rules, 2004 is being demanded. Trade has requested that a clarification be issued that these goods be treated as equivalent of duty paid goods so that such payment of amount under rule 6(3) is not required to be made. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
CBEC observes, “One of the conditions for availing of these exemptions is
that duties leviable, but for these exemptions, shall be debited in or on
the reverse of said scrip. The scrip holder is also permitted to avail of
CENVAT credit of the duties debited in the scrip. In view of these provisions
it has been <strong>decided</strong> that such debit of duty in these scrips
shall be <strong>treated as</strong> payment of duty for the purpose of determining
the applicability of rule 6 of the CENVAT Credit Rules, 2004." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And so Board clarifies that in respect of goods cleared availing the benefit of any of notifications no. 29/2012-CE, 30/2012-CE, 31/2012-CE, 32/2012-CE and 33/2012-CE all dated 9th July, 2012, payment of amount under rule 6(3) of the CENVAT Credit Rules, 2004 is not applicable. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now can the Board <strong>decide</strong> that debit in the scrip shall be <strong>treated</strong> as duty payment? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Any way the Good Board has decided and let us hope the field officers will follow the Board decision! </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please also see <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTU0MjM=" target="_blank">DDT 1898- 11.7.2012</a></font></strong></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2013/excircular973.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No.973/07/2013-CX., Dated: September 4, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - 'National Skill Development Corporation' - Exempted </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FROM</strong> 1.7.2012, 'education as a part of an <strong>approved vocational education course'</strong> was under the Negative List and so was not taxable. Section 65B(11)(iii) defined <strong>approved vocational education course</strong> asa course run by an institute <strong>affiliated</strong> to the <strong>National Skill Development Corporation</strong> set up by the Government of India; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the 2013 Finance Act, this clause (iii) was deleted. Why? The Memorandum to the Finance Bill 2013 explains - "Definition of 'approved vocational education course' provided in section 65B (11) is being amended: firstly, the words, 'or State Council of Vocational Training' (SCVT) is being inserted in (i), and secondly, entry at item serial number (iii) is being omitted, for <strong>NSDC is not an affiliating body.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Government has exempted any service provided by </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>1. the National Skill Development Corporation set up by the Government of India; </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. a Sector Skill Council approved by the National Skill Development Corporation; </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation; </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. a training partner approved by the National Skill Development Corporation or the Sector Skill Council </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, was the above service taxable all these days? </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2013/stnot13_013.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 13/2013 - ST., Dated: September 10, 2013</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">I-T - Provisions of Section 245 to be strictly adhered to before making any adjustment of refund - CBDT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DELHI High Court vide its judgement in case of Court On Its<em> Own Motion Vs. UOI and Others in W.P.(C) 2659/2012 dated 14.03.2013 - </em><strong><font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2013/2013-TIOL-207-HC-DEL-IT.htm" target="_blank">(2013-TIOL-207-HC-DEL-IT)</a></font></strong> has issued directions for necessary action by the Income Tax Department. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">One mandamus was: </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"(The Department) shall in future follow the procedure prescribed under section 245 before making any adjustment of refund payable by the CPC at Bengaluru. The assessees must be given an opportunity to file response or reply and the reply will be considered and examined by the Assessing Officer before any direction for adjustment is made. The process of issue of prior intimation and service thereof on the assessee will be as per the law. The assessees will be entitled to file their response before the Assessing Officer mentioned in the prior intimation. The Assessing Officer will thereafter examine the reply and communicate his finding, to the CPC, Bengaluru, who will then process the refund and adjust the demand, if any payable. CBDT can fix a time limit for communication of findings by the Assessing Officer. The final adjustment will also be communicated to the assessees." </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 245 mandates: </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"245. Where under any of the provisions of this Act, a refund is found to be due to any person, the Assessing Officer, Deputy Commissioner (Appeals), Commissioner (Appeals) or Chief Commissioner or Commissioner, as the case may be, may, in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against the sum, if any, remaining payable under this Act by the person to whom the refund is due, after giving an intimation in writing to such person of the action proposed to be taken under this section". </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of this, CBDT has instructed field officers that<em> the provisions of section 245 of the IT Act be strictly adhered to before making any adjustment of refund. The Assessing Officer, in this regard, should respond to CPC within 45 days from the date of communication of issuance of notice u/s 245 by the CPC to the Assessing Officer</em>. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2013/instruct1312.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Instruction No. 12/2013 [F.NO. 312/55/2013-OT]., Dated: September 9, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Medical Treatment Abroad - IAS/IPS Officers get benefit that was available to other services</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CAN</strong> you believe it - there are certain facilities available to officers of the Central Civil Services like IRS which are not available to the officers of All India Services? All India Services are IAS, IPS and IFoS. Many in the Central Services believe that IAS is the premier service and those officers get all the privileges that the Welfare State cannot afford. But strange as it may sound, the IAS officers are not eligible for medical treatment abroad to which their lesser cousins in other Central Services are eligible. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A recent letter from DOPT addressed to all Chief Secretaries of the States, proclaims that it has been decided that certain concessions which are admissible to the Central Government servants under the Central Services (Medical Attendance) Rules, 1944, should be extended to members of the All India Services under AIS (Medical Attendance) Rules, 1954 serving in connection with the affairs of the Union. The State Governments may extend these concessions to members of the All India Service serving in connection with the affairs of the State also under AIS (MA) Rules, 1954. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Concessions are: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Travelling Allowance for obtaining appropriate medical attendance or treatment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Airlifting/ outside the state in emergent cases</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Conveyance Charges</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Ambulance charges </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. T.A. for attendant/ escort</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. T.A for donor of kidney</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. <strong>Medical Treatment abroad:</strong> A member of Service shall be eligible to obtain medical treatment outside India or, as the case maybe, to claim reimbursement of the cost of medical treatment obtained inside or outside India. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the IAS officers can at least claim parity with their better placed counterparts in services like IRS, IPoS, ITS etc. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/Letter_dated_02.09.2013_-_Instructions__guidelines_regarding_concessions_for_treatment_of_members_of_Service_under_AIS_Medical_Attendance_Rules_1954.pdf"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DOPT Letter No.11058/03/2012-AIS-III , Dated: September 2 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Cadre Review in Income Tax - Dissatisfied ITOs meet FM </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Income Tax Officers Association had a 40 minute meeting with the Finance Minister to apprise him of the injustice in the CRC-2013 to career prospects of ITOs. Earlier they had enlisted the support of about 50 MPs and 10 Union Ministers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The FM told them that Direct Recruitment Quota cannot be diverted to Promotion quota as this will lead to plethora of litigations which will be never ending. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Association in a Circular has brought out certain interesting facts: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. It is unlikely that 204 posts at the level of Commissioners of Income-tax are filled up at one go due to the fact that supporting staff will not be available immediately. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Even if, 204 posts of CIT are filled at one go, the consequential vacancies at the level of Addl/JCIT including 322 new posts of CRC, totalling to 527 will not be filled up as eligible number of Deputy Commissioners with minimum 8 years of service are not available. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. At present there are already about 300 regular vacancies of Addl./JCIT due to non availability of eligible officers. </font></p>
</blockquote>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs Manual 2013 </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has released the Customs Manual 2013. The First Page of the Manual prominently declares that it is "<strong>For Departmental use only</strong>", but the Preface by Member (Customs) says, “<em>The Customs Manual 2013 contains various instructions, orders circulars on Customs matters compiled meticulously to guide departmental officers in effectively rendering their duties as <strong>well to provide information to trade and industry</strong> in dealing with Customs.</em>" </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And finally she hopes that “<em>Customs Manual 2013 would be helpful in the correct application of legal provisions and procedures by the Departmental officials as well as trade.”</em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, it is not really "<strong>For Departmental use only</strong>".</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Custom House Agents Continue</strong>? The Manual in Chapter 29 deals with Custom House Agents and Custom House Agents Licensing Regulations (CHALR), 2004. The Manual seems to be unaware that the Customs Agents' regime has ended and we have the Customs Brokers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please See <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTgwNTk=" target="_blank">DDT 2134 - 25.06.2013</a></strong></font></p>
<p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/cus_manual_2013.pdf"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Customs Manual 2013 </font></strong></a></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"> - Friday'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">MODVAT/CENVAT Credit on capital goods - Amendment vide Notification No 25/1996 CE(NT) dated 31.08.1996 is only clarificatory and has retrospective application - CESTAT order denying credit on goods falling under CETH 84.74 is set aside: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue involved in the appeal is admissibility of MODVAT credit on goods falling under CETH 84.74 for the period from 23.7.1996 to 31.8.1996. For the period prior to 23.7.1996, there is no dispute on admissibility. However, with effect from 23.7.1996, after the insertion of new definition of capital goods under Rule 57Q, goods falling under CETH 84.74 were specifically excluded from the eligibility in sub-clause (a) of Rule 57Q(1). Also with effect from 31.8.1996, vide Notification No 25/1996 CE(NT), the definition of capital goods was amended again and goods falling under CETH 84.74 became eligible for credit. So this dispute is limited to the period from 23.07.1996 to 31.8.1996. </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 CIT has not disposed off application of assessee under section 12AA within period of six months, registration would be deemed as granted to trust - Issue goes to Larger Bench of HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> was created by an enactment of UP urban planning and development Act for the objects of planning, Development and Improvement of cities, towns and villages for general public utility. Assessee applied for registration u/s 12A but the same was not disposed of within the time prescribed under Section 12AA(2). Assessee claimed exemption u/s 11 & 12 and exercised the option under clause (2) of Explanation to section 22(1) for the receipts / income remained unutilized during the previous year. The only issue before the Bench is - whether when the CIT is yet to decide the application filed u/s 12AA, the registration would be deemed as granted to the trust. And the issue goes to the Larger Bench. </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 collecting development and maintenance fees from flat buyers to discharge payments towards local taxes, water and electricity charges - appellant was acting as pure agent and was performing custodial functions - demand of ST under 'Management, maintenance or repair services' not sustainable - Stay granted: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant is also engaged in construction of residential flats on which they discharged service tax liability. However, they collected maintenance charges/deposits from the flat buyers which are used for payment of property tax, electricity charges, water charges, security charges and other maintenance expenses till such time the flats are actually handed over to the Housing Co-operative Society found by the buyers of the flats. The department was of the view that such charges/deposits recovered from the flat buyers are taxable under the category of ‘Management, Maintenance or Repair Service' and accordingly, demanded service tax amounting to Rs.1,21,54,570/- during the period 16/06/2005 to 30/09/2007. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements </font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">UntilTomorrowwith more<strong> DDT</strong></font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></p>
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