TIOL-DDT 2218 · the untouched capture
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<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 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 2218</font><br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>28.10.2013<br>
Monday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A trivial adjournment, an overzealous revenue department, compelled apparently by year ending revenue collection targets = unnecessary litigation </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is how the High Court started its judgement in a writ petition filed by the Income Tax Department. "<em>A trivial adjournment, an overzealous revenue department, compelled apparently by year ending revenue collection targets, has led to this unnecessary litigation. </em> The bone of contention between parties is whether in view of adjournment of the appeal, by the Tribunal on 16.01.2013, the conditional stay order, passed by the Tribunal on 13.12.2012, stands vacated. The revenue strenuously asserts that the stay order stands vacated and, therefore, the revenue has appropriated Rs.208 crores from the account of the assessee, whereas the assessee urges to the contrary. The Tribunal has ordered the revenue to refund this amount."</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DCIT Circle-II, Gurgaon, raised a demand of Rs.210.57 Crores under Section 143(3), read with Section 144 C of the Income Tax Act for the assessment year 2008-09, pursuant to an order passed by the Dispute Resolution Panel. The assessee filed an appeal before the Income Tax Appellate Tribunal, New Delhi, accompanied by an application for stay of the demand. Vide order dated 13.12.2012, a stay of the demand for a period of 180 days or disposal of the appeal or of the MAP application, whichever is earlier was granted. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The conditional order dated 13.12.2012 reads as follows: "<em>In consideration of the application of the assessee in the light of rival submissions and material on record, we grant of stay of recovery, subject to condition that assessee shall deposit Rs.2.50 crores on or before 21.12.2012 and shall furnish bank guarantee for the amount involved for which MAP application has been filed, on or before 31.12.2012, for a period of 180 days or disposal of the appeal/MAP application, whichever is earlier. However, assessee shall not seek any adjournment and get finalised the appeal fixed for hearing on 13.01.2013 or any subsequent date. In case assessee seeks adjournment or commits default in making payment or furnish bank guarantee within the stipulated time, the accommodation herein granted shall stand automatically cancelled and entire outstanding demand would be recoverable as per law.</em>"</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee, admittedly, complied with these conditions and it is not denied that MAP proceedings are pending. The appeal came up for hearing on 16.01.2013, and the following order was passed:- </font></p>
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<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Ld. Counsel for the assessee contends that the appeal involved AMP issue on which the Special Bench order in the case of the LG Electronics is awaited. Adjourned to 16.04.2013."</font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The revenue, however, proceeded to appropriate the amount of tax due from the assessee by serving a notice on Standard Chartered Bank. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee filed an application under Section 151 of the Code of Civil Procedure, before the Income Tax Appellate Tribunal, for refund of the amount recovered by the revenue. The revenue raised a plea that as the stay order stood vacated, in view of adjournment, dated 16.01.2013, the Income Tax Appellate Tribunal has no jurisdiction to order refund. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Income Tax Appellate Tribunal held that adjournment was granted by the Tribunal in conformity with judicial discipline and judicial propriety as the appeal could not be decided in view of pendency of another appeal, before a Special Bench and, therefore, the appeal had been adjourned, <em>suomoto.</em>The Income Tax Appellate Tribunal also held, on the basis of certain judgment and by relying upon Section 151 of the CPC, that it is empowered to pass an order of refund of an amount illegally appropriated by the revenue and, thus, proceeded to pass an order directing the revenue to refund the amount collected in violation of the stay order dated 13.12.2012 on or before 18.04.2013. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court observed, "<em>The vacillating stand of the revenue clearly indicates a confused state of mind, apparently compelled by the need to achieve targets fixed by superiors of the department. We, therefore, find no reason to differ with the opinion recorded by the Tribunal that as counsel for the assessee did not pray for an adjournment, the stay order did not stand vacated. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The power to ensure that its orders are not violated during pendency of a lis are inherent in any Court or Tribunal. In fact <strong>it is the bounden duty of the Tribunal to ensure where its order is violated that the violation is adequately redressed and money appropriated, is restituted.</strong> If such a power is held not to be available to the Tribunal, its interim orders would be flouted with impunity. If, the revenue was of the opinion that the stay order has been violated by the assessee or has been vacated, it should have approached the Tribunal for clarification by way of an appropriate application but instead proceeded in a ham-handed manner, to appropriate this amount. The order passed by the Tribunal, in our considered opinion, does not suffer from any error of jurisdiction or of law and must, therefore, be affirmed. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>In view of what has been stated hereinabove, the writ petition is dismissed.</em>"</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And here comes the twist in the tale.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court <strong>did </strong> not order <font color="#FF0000">refund of the amount attached by Revenue but ordered that <em>refund of the amount shall await decision of the appeal, which shall be decided by the Tribunal, within one month from receipt of a certified copy of this order.</em></font></font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Please see <a href="http://www.taxindiainternational.com/case_lawDesc.php?qwer43fcxzt=MzY2Nw==" target="_blank"><font size="1">2013-TII-40-HC-P&H-INTL </font></a></font></strong></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong></font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FTP - Procedure for closure of cases of default in Export Obligation - DGFT Clarifies</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2013/dgft13pn022.htm" target="_blank">Public Notice No.22, dated 12.08.2013</a></strong>, provides an option for redemption/ regularisation of old cases of default in export obligation under (a) Duty exemption; and (b) EPCG Scheme.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, DGFT has prescribed the procedure as follows:</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) An applicant intending to regularize the case has to pay custom duty and interest to the <strong> concerned </strong> Custom Authority and submit evidence in this regard to the <strong>concerned </strong>RA. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Based on the evidence of such payment and other relevant documents, as required under HBP vol.1, <strong> concerned </strong> RA may close the case and issue a closure letter. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Para (b) of <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2013/dgft13pn022.htm">Public Notice No. 22 (RE-2013)/2009-2014 dated 12.08.13</a></strong> is applicable to all pending cases of EO default. Hence, even cases which have already been adjudicated (or pending adjudication), either originally or in appeal, can also be regularized under this Public Notice. The procedure for regularization of such cases would be as under: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) In respect of cases which have already been adjudicated (or pending adjudication) and where appeal has not been filed, firms will produce a copy of this closure letter from the <strong>concerned </strong> RA, to the Adjudicating Authority. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) In case an appeal has been filed, then this closure letter will have to be submitted to the Appellate Authority. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On submission of such closure letter Adjudicating Authority/Appellate Authority will decide on closure of such case/appeal and will inform the same to the firm and to the concerned RA. </font></p>
</blockquote>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Facility under Public Notice No.22, dated 12.08.2013, is available only till 31.03.2014. This facility shall not be extended further</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">. Hence, exporters may make use of this facility for closure of all pending cases. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RAs will send a monthly report on the cases closed under this Public Notice to DGFT Headquarters by the 5th of succeeding month. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please also see: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>1. <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTg0MTI=" target="_blank">DDT-2168 13.08.2013 </a></strong></font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTg3MzM=" target="_blank">DDT-2200 30.09.2013</a></font></strong></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTg4MDc=" target="_blank">DDT-2207 10.10.2013</a> </font></strong></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2013/ctariff13_046.htm" target="_blank">Notification No. 46/2013-Cus dated: 26.09.2013 </a></font></strong></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2013/cuscir13_040.htm" target="_blank">CBEC Circular No. 40/2013-Cus dated: 09.10.2013 </a></font></strong></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2013/dgft13cir008.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Policy Circular No.8/2009-2014 (RE 2013)., Dated: October 25, 2013</strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Uploading of information on website irsofficersonline.gov.in - CBDT Instructions </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Database Cell (DBC) of CBDT is uploading information/letters/circulars/ orders/documents etc. received from the Board, attached Directorates as well as field formations and other sections of the Department on the website irsofficersonline.gov.in on a regular basis. In addition the various CCsIT(CCA)/DGsIT are also equipped to upload information in respect of their Regions/Directorates on the website through CCIT/DGIT Annexe available on the Home page of the website. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has come to notice that the Sections <strong><em>concerned </em></strong> marks the document to DBC for uploading in a routine manner and without much application of mind at appropriate level and without taking a conscious decision that such document is required to be uploaded. Sometimes this results in uploading of documents on the website which contain factual errors and as such are not desired to be uploaded. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Chairperson has directed that <em>to avoid uploading of erroneous information/ documents, henceforth, the section of the Department which wants to get some information/document uploaded on the website is required to take approval from the JS/CIT level officer with the concurrence of the <strong>concerned </strong> Member in the case of Board, CCIT(CCA) in the case of field formations, <strong>concerned </strong> DGIT in the case of Directorates as the case may be. After obtaining such approval, the said document to be uploaded should be sent to the Database Cell explicitly stating that the approval of the <strong>concerned </strong> competent authority as stated above has been obtained.</em></font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/11025201344905.pdf"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT Letter in F.No. DBC/CMS/19/2013-14/74, Dated: October 25, 2013 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Vigilance Awareness Week from Today </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> letter from the Central Vigilance Commission states,</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Countrywide observance of Vigilance Awareness Week in the last week of October every year is promoted by the Central Vigilance Commission of India, to reaffirm our commitment to promote vigilance concepts and to rededicate ourselves to the cause of fighting corruption. Corruption cannot significantly come down unless all stakeholders participate in vigilance work. Government, Ministries, Departments and other Agencies, PSUs and Banks, the Private Sector and the Civil Society at large are required to get involved in the whole gamut of vigilance processes. The theme chosen for the week every year helps to draw attention of the stakeholders to a specific concept at one time that needs to be focussed during the year to make vigilance a management function that will help make continual improvement in the country's anti-corruption efforts. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>For this year, the Commission has chosen "Promoting Good Governance" as its central theme for the Vigilance Awareness Week. Promoting good governance is the need of the hour whether in Public Sector or Private Sector. Vigilance plays a proactive and positive role in good governance, which helps in preventing corruption, both in Public and Private Sectors as well as in Central and State Governments. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>During the Vigilance Awareness Week and thereafter, the principles of good governance would need to be propagated among employees and other stakeholders. Commission hopes and expects increased transparency, fair play and equity in decision making processes by all concerned. Best practices evolved should be shared and knowledge and skills upgraded to bring about measurable improvement in the quality of governance and delivery of services to the Public.</em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today in all Government offices across the country, the officers would take a pledge that they would not indulge in corruption and promote good governance. This kind of empty rituals do not mean anything - rather it is a joke to see the most corrupt people taking a pledge that they will not be corrupt and in some places, even the expenses for this farce function is met by corrupt means! </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"> - Tuesday'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>Appellant manufacturing Industrial gases & also supplying vacuum insulated storage tanks to customers for fixed term by charging Rs.27,500/- per month - appellant not banking company or financial institution or commercial concern in relation to banking & other financial services: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellants are supplying industrial gases to their various customers. At the request of certain customers, the appellants are also supplying vacuum insulated storage tanks on lease basis. The appellants entered into contracts with their customers in respect of the storage tanks. According to the terms and conditions of the agreement, the appellants are charging a fixed amount per month as a consideration amount for lease of the equipments for three years. The Revenue issued show cause notices demanding service tax on the ground that the appellants are providing banking and other financial services. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As the appellants are not a banking company or a financial institution including a non-banking financial company or any other body corporate or commercial concern in relation to banking and other financial services, therefore, demand is set aside. </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 if assessee or its representative is not present at time of hearing, Tribunal has authority to dismiss case for default - NO: Bombay HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> Court in the matter of <em>Chemipol vs. Union of India - </em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/hc/2009/2009-TIOL-676-HC-MUM-CESTAT.htm"><strong><font size="1">(2009-TIOL-676-HC-MUM-CESTAT)</font> </strong></a> while dealing with the powers of Customs Excise and Service Tax Appellate Tribunal to dismiss an appeal for default has observed that though every Court or Tribunal has an inherent power to dismiss the proceeding for non prosecution yet this inherent power is lost where the statute requires the Court or the Tribunal to hear the appeal on merits. In this case Rule 24 of the Tribunal Rules mandates the Tribunal to decide the appeal on merits even in absence of the appellant after hearing the respondents. In view of the above, held that the Tribunal did commit an error in passing the order dated 6 December 2007 in dismissing the appeal on the ground of want of prosecution. </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">Valuation - Duty paid on inter-unit transfer of finished goods under Rule 8 by adopting CAS 4 - Demand of duty by including Inter Divisional Service Charges accounted for as per Accounting Standard 17 is <em>prima facie</em> not sustainable - Stay granted: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>assessee is engaged in manufacture of Printed Cartons and other packing materials and is receiving paper and paper board from their Bhadrachalam Unit. The assessee is clearing the printed cartons and other packing material to their other units for captive consumption. Thus, the duty is paid by the Bhadrachalam unit under Rule 8 by adopting CAS 4 and the assessee is also paying duty under Rule 8. The dispute is regarding the valuation of Printed Cartons. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has been observed that there is no sale involved in the transfer of goods to other division of ITC, the valuation would be under Rule 8 of the Valuation Rules, by adopting 115% of cost of production. So, the amount of Debit Notes would not be included while determining assessable value at Bhadrachalam Unit. Then, it is difficult to accept that the said amount of Debit Notes would be included in the assessable value of the applicant herein.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our Columns Tomorrow for the judgements</strong></font></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"><strong> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></strong></font></p>
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