TIOL-DDT 2215 · 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" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=17063"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2013.jpg" alt="DDT in Limca Book of Records" width="175" height="120" hspace="5" border="0" align="right"></a></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font><font color="#663399" size="3">TIOL-DDT 2215 </font><br> </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>23.10.2013 <br> Wednesday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs - Draft Disposal Manual - Suggestions Invited </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</STRONG> had constituted a Working Group comprising of Commissioner, Directorate of Logistics, Additional Commissioner, Delhi Customs (Preventive) and Additional Director, DGRI, New Delhi with the mandate to put up Draft Disposal Manual. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Draft Disposal Manual has been prepared, which is based on the provisions contained in Customs Act, 1962 and rules made thereunder and instructions issued by the Board from time to time. It has also incorporated some time frames/ procedures for disposal of such goods, though they are not specifically mentioned in the Customs Act. 1962 or the regulations made thereunder or instructions issued by the Board. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Directorate of Logistics has now requested the Commissioners to give comments to improve the manual further. Directorate has sought specific comments in respect of the following: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a. Experience of e-auction and need for any change. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b. Hardship faced by them in disposing of goods under Section 110(1A) of the Customs Act. 1962 and suggestions to overcome the hardship. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c. Expansion and/or deletion of goods mentioned in categories I,II,III and IV. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">d. Problems faced in disposal of unclaimed/undeclared and time expired bonded goods and suggestions to improve disposal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">e.</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Problems encountered in disposal of currencies, narcotics, diamonds, precious and semiprecious stones, gold, silver and other precious metals. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Directorate wants the suggestions by 04.11.2013. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/disposal_manual.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Directorate of Logistics F.No.398/05/DPO(AS)2003-Pt, Dated:October 18, 2013 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Anti Dumping Duty on Methylene Chloride </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</STRONG> has imposed provisional anti dumping duty on Methylene Chloride falling under Chapter 29 originating in, or exported from the European Union, United States of America and Korea RP. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The anti-dumping duty imposed under this notification shall be levied for a period not exceeding six months (unless revoked, amended or superseded earlier). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, this lapses on 20.4.2014 - and the Government is sure to forget that day. What will happen? They will retrospectively extend it. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2013/ctariffadd13_024.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 24/2013-Cus.,(ADD), Dated: October 21, 2013 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>New DG NACEN - Post an Officer having Aptitude and who will stay in Faridabad - IRS Association </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>IRS (Customs and Central Excise) Association has in a letter to the CBEC Chairperson requested her to post as DG, NACEN <strong>an officer having aptitude for training and willing to stay on the Faridabad Campus. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NACEN </strong>is without a DG now after the retirement of RashedaHussain last month. The Board is likely to issue a promotion order appointing nearly 25 new Chief Commissioners, any day now and one of the Chief Commissioners will definitely be posted as DG, NACEN. It is at this juncture that Metta Rama Rao President of the IRS Association has made the request to the CBEC Chairperson. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is nice to see an officers association asking for improving the premier academy of the Department and not for facilities for the officers. </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He rightly says, <em>"apart from number of officers trained, the Quality of training has to be considered important. The quality of training of IRS (C&CE) Probationers at NACEN, Faridabad vis-à-vis other services at CTIs like NPA, LABASNAA, NADT, etc needs to be compared in order to stay ourselves ahead and relevant in changing times. Apart from imparting knowledge, the Probationers should be given training in skills like inter-personal relations, peer relations, relations with superiors, and working as teams. They should be mentored with proper values and attitudes. For this to happen NACEN faculty has to interact with small groups of Probationers throughout the period of training. This cannot happen until all faculty stay within the NACEN Campus. Further Probationers from time to time have been complaining about the facilities in the Hostel and Campus and are dissatisfied with them as they come across better facilities in other CTIs. If faculty stays on the campus, the Probationers/Trainees will get better facilities. The faculty can also nudge them to productively use their time on week-ends</em>."</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He has really hit the nail on the head. NACEN is in Faridabad and right from DG to sepoy, most of the faculty and staff operate from Delhi and usually nobody reaches Faridabad before 1130 am. Perhaps NACEN is the only residential academy in the world having the head and faculty members commuting from another city. What role models are they for the probationers? The first lessons they learn in the academy are that, you need not come to office on time; you don't need to stay in the station where you are posted - and these are the future leaders of the Department! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Association in its letter says that it <em>strongly believes that NACEN should be the most important Institution in our Department as it is here all the young recruits (IRS or others) learn right things and the not-so young crave to go back to unlearn wrong things and relearn right things.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">How right they are! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If an engineer fails, a bridge may collapse; if a doctor fails, a patient may collapse, but if a teacher fails, a whole generation collapses! </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Foreign Service Tax - Pharmexcil seeks clarification </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Pharmaceuticals Export Promotion Council of India (Pharmexcil) has sought clarification from Service Tax department on the applicability of service tax on reverse charge basis on transactions undertaken outside India by non-trading offices (NTO) and subsidiary companies of Indian pharma companies. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They want to know whether the Indian parent company is liable (pre and post July 2012) to pay service tax in India on reverse charge basis on transactions of service undertaken outside India by NTO established outside India. They also want to know whether the Indian parent company is liable (pre and post July 2012) to pay service tax in India on reverse charge basis on payments of marketing fees (for marketing services provided outside India) made to a subsidiary company outside India. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government should first be clear on what is export and what is import of service and then drill into their officers. The amount of litigation this simple issue has generated is mind boggling. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Can Education Cess be paid by debiting from CENVAT Balance? </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SINCE</strong> DDT carried this piece last week <strong>(in DDT <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=18841" target="_blank">2210</a> &<a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=18853" target="_blank"> 2211</a>)</strong>, we have been flooded with mails and calls. Of course the departmental officer has no doubt that DDT and all others are wrong and education cess cannot be paid from the credit of BED. As noted by a Netizen, the ST-3 Return specifically allows it and there is no reason why it should not be allowed for Central excise. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An assessee writes in: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Many industries are facing problem of shortfall in Edu Cess and SHE Cess due to exemption given to it from last year on CVD. Many MNCs are importing more than 50% of raw material. At such time Industry should optimise use of available cenvat credit. I have seen many companies where huge cenvat credit is lying unutilised. Due to less exports they are not able to utilise it. I have been using this option from 2011. I have received many queries from internal and statutory auditors on this. But I have given them the case laws and legal position on this issue. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Regarding ER-1 return, I have not faced in problem while uploading as the total cenvat utilised is matching with duty payable. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Lets hope that CBEC would come with clarification on it. </em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is the Board listening? </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Poor Pilots resort to smuggling </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TWO</strong> Air India pilots were recently arrested by Delhi Air Customs attempting to smuggle 45 kgs of sandalwood to Hong Kong. It seems they told the Customs that they resorted to smuggling to make ends meet as they were not getting salaries for several months and so were under tremendous financial burden. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Which ever angle issue is considered, 331 Revenue appeals are not maintainable before Tribunal - order of Commissioner(A) in matter of rebate claims are not appealable before CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>adjudicating authority had ordered for adjustment of rebate claims amounting to Rs.10,36,20,569/- sanctioned to the respondent against recovery of Rs.15,79,26,612/- towards the allegedly ineligible drawback availed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner (A) set aside these orders and, therefore, the Revenue has filed 331 appeals and an equal number of Stay petitions against Orders-in-appeal passed by the Commissioner (A), Nagpur. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue has also requisitioned the services of a Special Consultant for arguing their case before the CESTAT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The basics came in the way of these boxes of appeals. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bench observed that an order of the Commissioner (Appeals) sanctioning rebate of excise duty on export of goods is not appealable before the Tribunal in terms of clause (b) of the first proviso to sub-section (1) of section 35B of the CEA, 1944 and, <em><font color="#FF0000">therefore, the appeals are not maintainable. </font></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So as not to leave any loose ends, the CESTAT further observed that even if it is assumed that the challenge is to the recovery of dues from the rebate claims sanctioned to the respondent, since the recovery has been made by the adjudicating authority u/s 11 of CEA, 1944/s. 142 of the Customs Act, 1962, <em><font color="#FF0000">such proceedings too are not maintainable before the Tribunal. </font></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In fine, all the 331 appeals filed by the Revenue were dismissed. </font></p> <blockquote> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>What a gargantuan waste of time & stationery in filing these appeals - energetic they are, no question about that! </em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>We reported a similar case <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTAyMzE=" target="_blank"><font size="1">2013-TIOL-1495-CESTAT-MUM</font></a></strong></em></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=OTA0MDU=" target="_blank">2013-TIOL-1569-CESTAT-MUM</a></font></strong></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"> - Thursday's cases</font></strong></font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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"></font><font color="#663399">Service Tax </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Completion and finishing services, repair, alteration or renovation and restoration or similar services provided, whether in respect of a new building or an "old"building would attract service tax liability under Section 65 (25b) - on the question of limitation, difference of opinion - Matter referred to Third Member: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>activity undertaken by the appellant falls under both clauses (c) and (d) of Section 65 (25b). Both these clauses do not specify that they should be undertaken in respect of a new building only and even if they are undertaken in relation to an old building, the provisions of these sections would apply. In fact repair, alteration, renovation or restoration or similar services would be mostly applicable to old buildings only. Therefore, the argument of the appellant that since the activities have been undertaken in respect of an old building and not a new building, service tax liability is not attracted would be ignoring the explicit provisions of law. Question of limitation referred to Third Member. </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 even if assessee does not claim expenditure of interest liable to TDS u/s 194A, it cannot escape the rigour of Sec 40(a)(ia) - YES: ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is a Private Limited company. The AO noticed that the assessee had credited interest to its sister concerns without deducting tax at source u/s 194A. The AO treated the assessee as an ‘assessee in default' and raised demand u/s 201 equal to the amount of tax deductible at source. The AO has also levied interest u/s 201(1A). The CIT(A) dismissed the assessee's Appeal. The issue before the Bench is - Whether even if the assessee does not claim the expenditure of interest liable to tax deduction at source u/s 194A, it cannot escape the rigour of Sec 40(a)(ia). And the answer goes against the assessee. </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">Naphtha cleared under exemption to M/s RCF against International Competitive bidding for manufacture of fertilizers - "actual use" of goods is a post-clearance condition which is required to be fulfilled by the buyer/user and not appellant as they cannot be expected to ensure the precise use of the goods by M/s RCF - Duty demand untenable - Appeals allowed: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant was supplying Naphtha in terms of exemption notification 6/2002-CE, 6/2006-CE to M/s. Rashtriya Chemicals & Fertilizers Ltd. against the International Competitive Bidding for use in the manufacture of fertilizers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The jurisdictional authorities "found" that the Naphtha so supplied to M/s RCF was being burnt in the steam generation plant to generate steam which in turn was consumed by various plants like Urea Plant, Ammonia Plant, Turbo Generators, Chemical Group Plant and Heavy Water Plant. Steam generated is consumed in Turbo Generators for generating electricity and also used in S.M. Header for further distribution to Organic Chemical Plant and Heavy Water Plant. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, it is the Revenue contention that in respect of Naphtha used for purpose other than manufacture of fertilizers, appellants are not entitled to duty free clearance and are required to pay excise duty on the said quantity. </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 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 to </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></font></p> </body> </html>