TIOL-DDT 2189 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font 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 2189</font><br> 13.09.2013<br> Friday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Chief Commissioners Conference - Board seeks Action Taken Reports</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has communicated the Minutes of the All-India Conference of Chief Commissioners and Directors General held on 17 - 18th July, 2013, to the Commissioners and Chief Commissioners to submit Action Taken Report by 30.09.2013.</font></p> <p align="justify"><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Important Issues:</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Revenue:</strong> The Finance Minister stated that the Indian currency has devalued around 13% and, therefore, this factor itself should be enough to achieve the revenue target in Customs. He urged the officers to not only achieve but to exceed the Customs Duty collections target. With reference to Central Excise target, he urged the Chief Commissioners and Commissioners to closely monitor the assessees and forge a close relationship with them. He stressed upon the need for senior officers to have regular interaction with the junior officers as well as the trade to have a close watch on the potential evasion of Central Excise Duty. He stated that the Central Excise growth of 11.9% is achievable provided all steps are taken in that direction. The Finance Minister further noted that Service Tax revenue is bound to increase in future as it has shown steady growth so far. He urged the officers to make the Voluntary Compliance Encouragement Scheme of Service Tax a success by increasing the trade awareness through Chambers of Commerce and other associations. FM directed to carryout a massive media campaign by having a logo like VDIS to educate and encourage maximum non-filers/stop filers & wrong filers to avail the Scheme. He emphasised the need for focusing on eight major cities namely Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad, Ahmadabad and Pune to sensitize the trade regarding the scheme. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Undervaluation:</strong> A reference was made about the undervaluation and mis-declaration of the imported goods due to incomplete description and non-standard Unit Quantity Code (UQC). It has been decided to implement mandatory UQC to obviate potential for undervaluation and mis-declaration and thus ensure correct assessment. It was recommended that Directorate General of System should provide additional fields in B/Es allowing importers to give complete information in standard UQC. At present, benchmark pricing has been done for 23 commodities. It was recommended that benchmark pricing may be introduced for sensitive commodities prone to under-valuation by the Directorate General of Valuation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Drawback:</strong> It was pointed out that in the first quarter of the year, drawback refunds have increased by 47% as compared to last year. It was observed that drawback under All Industry Rate is fixed in terms of ‘Indian Currency' and hence, drawback refund outgo will be high despite the decline in the export due to depreciation of Rupee. FM directed that All Industry Rates be re-fixed considering the devaluation of Indian currency and the revised rate should be made effective from 01.04.2013. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Pendency of Adjudication in Service Tax:</strong> It was observed that there is a high level of pendency of adjudication in Service Tax in Mumbai and Delhi Service Tax Commissionerates. It was recommended to post Commissioner (Adjudication) at Mumbai and Delhi to liquidate the said pendencies. Recommendations on administrative side include creation of 4 new Service Tax Zones and 15 new Service Tax Commissionerate and also Audit and Appeal Commissionerate. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Huge Pendency in scrutiny of Returns:</strong> It was noted that at present about 11 lakh returns, thrown up for Review & Correction in the preliminary scrutiny process, are pending for correction. In this regard, FM directed the DG (Systems) to submit a report on the reasons for the large pendency and measures to be taken for reducing the same, by system-driven scrutiny process of returns, thereby having only a small percentage of cases for detailed manual scrutiny, within a week. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/Action_Reports.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Minutes of All India Conference of the Chief Commissioners and Directors General of Customs, Central Excise and Service Tax Held on July 17-18, 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Where to File Appeal? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DRI</strong> booked a case on goods imported at Mumbai. Board notified Chennai Customs Commissioner as adjudicating Authority. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Against the Adjudicating Authority's Order, the Department filed an appeal in CESTAT, Mumbai while the importer filed an appeal in CESTAT, Chennai. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Who is right - Department or importer? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per CESTAT Notification No. 1/2006 dated 3.3.2006, the jurisdiction of the Mumbai Bench consists of the States of Maharashtra and Goa. Now, what is this jurisdiction? Is it jurisdiction over the importer, the port or the adjudicator? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since the cause of action is the import and that took place in Mumbai, the Jurisdictional Bench should be the Mumbai Bench. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">I-T - Extension of date for receipt of ITR-Vs in CPC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE </strong>are many taxpayers who have uploaded their Income Tax Returns electronically (without digital signature Certificate) for A.Y. 2011-12 [filed during F.Y. 2012-13] and for ITRs of A.Y. 2012-13 [filed on or after 1.4.2012], but have either not filed the corresponding ITR-V or have filed it with the local Income-tax office. ITR-V is accepted only at the Centralized Processing Center (CPC) of the Income-tax Department at Bengaluru by ordinary or speed post. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Income Tax Department has given a final opportunity to such taxpayers to regularize their Income-tax returns. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Such taxpayers can now mail the ITR-V, by 31st October, 2013, by ordinary post or speed post at Post Bag No. 1, Electronic City Post Office, Bengaluru -560100 (Karnataka). Taxpayers who have filed their ITR-V with the local Income-tax office may again mail their ITR-V to the CPC by 31st October,2013. Those taxpayers who have earlier mailed their ITR-V, but have not received the acknowledgement e-mail from the CPC, may mail their ITR-V to the CPC again. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ITR-V form should be mailed to the CPC only at the above address by ordinary post or speed post. Taxpayers may note that<strong> no other place or form of delivery will be accepted</strong>. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/ITRV_Notification.pdf"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification for Extension of Date for receipt of ITR-V, Dated: September 12 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue Neutrality? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CAN</strong> there be evasion and undervaluation in case of inter unit transfer of excisable goods, when the duty paid at one unit can be taken as CENVAT credit at the other unit? Why should a unit suppress its value when the entire duty can be availed as credit at the other end? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A CESTAT Member had some interesting observations to make on this issue in a recent order. </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"It has to be noted that even when there was no BSNL and Telecom Department of Government of India used to provide telephone services, all the other departments of Government of India were required to pay telephone bills just like any other customer. This would mean the government was paying for the telephone services to itself. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Secondly if we take the example of postal service even today every Government Department of Central Government is required to affix stamps on envelops and pay for other services just like any other customer. Government of India prints stamps specially for this purpose, postal department collects money for the stamps and releases the same to government departments who affix such stamps and send envelopes. Elaborate accounts of expenditure incurred on stamps and other postal expenses are maintained by all government departments. Even though this results in putting money from one pocket of the same person to another pocket of the same person, government continues to do this. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A government which does not exempt its own department for payment for the services rendered on the ground of revenue neutrality and on the ground that there cannot be payment by the person who is receiving the service to the same person who is providing the service only because they happened to be two parts of the same person, question arises whether we can justify revenue neutrality when payment is made by a person to the government and when other person takes credit and uses it only because situation becomes revenue neutral. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When such is the situation, I am unable to understand why the government should not recover the amount from one unit when goods are cleared to another unit of the same factory when as per law, central excise duty is required to be discharged after payment of duty on the value determined at the time and place of removal. A relief from the statutory liability on the ground that the credit is available to the other unit and the government would be collecting the money and putting it in one pocket and putting the same money in another pocket later does not appear logical. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further we have to take note of the fact that there is no guarantee that the goods which have been cleared would reach the other unit definitely. Once the duty is paid, the appellant would be free to dispose of the goods whatever way he deems fit. There is no rule that goods should be sent to the same person to whom the same is invoiced and a fresh invoice can at any time be prepared and goods diverted so long as there is no violation of any law and in central excise once full duty is paid, the appellant has no obligation whatsoever as regards disposal unless he has availed a conditional exemption notification. Under these circumstances just because credit is available to the other unit, there cannot be a general principle that when credit is available to the other unit and duty paid is more than the credit taken, the situation would be revenue neutral. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is another possibility also. Even after the goods have reached the unit, the goods may be disposed of without utilizing in further manufacture which is permitted as per central excise law. As of now the only requirement is the credit taken has to be reversed. Therefore under the present legal situation, even after receipt of the goods by the second unit, the second unit could dispose of the goods by simply reversing the credit taken. In this case the revenue neutral situation would not be valid."</font></em></p> </blockquote> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Advance Tax - Banks to be Open on Saturday and Sunday </font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> Finance Ministry Press Release states, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“All designated branches of authorized banks have been asked to function on 14th and 15th September, 2013 (Saturday & Sunday) to accept advance tax payments. If any taxpayer fails to pay the advance tax on 14th/15th September, 2013, then he/she can make the payment even on 16th September, 2013. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Payment of Quarterly Advance Tax on or before 15th September, 2013 by the tax payers is a statutory requirement. All such taxpayers who are liable to pay advance tax must make payments in the designated branches of the banks authorized to accept tax payments."</font></em></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_administration.jpg" alt="ddt_administration" width="424" height="479" hspace="5" border="0" align="center"><br> </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">Whether commission/discount earned by acquiring bank from Merchant Establishment is liable to service tax under category of banking and financial services for period prior to 01/05/2006 - Matter referred to Larger Bench: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>banks are engaged in providing banking and other financial services to individuals and offer wholesale banking capabilities to corporate and institutional clients. They also provide credit card services to their customers and charge service charges on which service tax liability is discharged. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The question is whether the commission/discount earned by the acquiring bank from the merchant establishments is liable to service tax under the category of banking and financial services for the period prior to 01/05/2006. </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 EoU Unit acquires whole business of medical transcription and claims deduction u/s 10B, benefit of Sec 10A allowed by higher appellate forums is legally sustainable - YES: Madras HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is an industrial undertaking engaged in Medical Transcription Business. The issues before the Bench are - Whether when an EoU Unit acquires the whole business of medical transcription and claims deduction u/s 10B, the benefit of Sec 10A allowed by higher appellate forums is legally not sustainable; Whether the provisions of Sec 10A(2)(iii) will apply to this case and Whether when the assessee has been allowed the benefit of Sec 10A, any merit can be found in the AO's order to allow benefit of Sec 80HHE. And the verdict goes against the Revenue. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue Neutrality - Goods cleared to appellant's own unit where credit is available - demand for the normal period of limitation without invoking extended period has to be upheld: CESTAT by Majority</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TWO</strong> issues arise for consideration in this case. When the goods are cleared by one of the units of a company to another unit of the same company for utilization in the manufacture of another final product and the duty paid on the first unit is utilized for payment of duty on the final product, whether duty demand on the first unit on the ground that the value had not been arrived at properly can be sustained and if so whether such a demand can be sustained by invoking extending period on the ground of suppression of facts/misdeclaration and if not whether differential duty is liable to be paid within the period of limitation. </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 color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p> </body> </html>