TIOL-DDT 2231 · 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 2231</font><br>
14.11.2013 <br>
Thursday</strong> </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">VCES and CENVAT Credit </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>the Mysore Central Excise RAC meeting, a Member asked a question: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">A Trade Association registered as a Public Charitable Trust conducts conferences, seminars every year and collects entry fee/sponsorship. The association though registered with service tax, not collected and paid service tax on this activity. The said association now wants to avail the benefits extended by the Service Tax Amnesty scheme and intends to make a declaration and pay the service tax dues. The point raised is "<strong>Can the association avail the Cenvat credit</strong>?"</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department replied, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">In terms of Rule 6(2) of the Service Tax Voluntary Compliance Encouragement Rules, 2013 which is framed under the Service Tax Voluntary Compliance Encouragement Scheme 2013, “the Cenvat credit shall not be utilized for payment of tax dues under the Scheme.” Hence, it is clear that the service tax liability under the Scheme has to <a></a>be paid in cash and no Cenvat credit can be utilized. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">Further, no provision is made either in the Service Tax Voluntary Compliance Encouragement Rules, 2013 or in the Service Tax Voluntary Compliance Encouragement Scheme 2013 for taking Cenvat credit on the inputs or input services. As per the provisions of Section 112 of Chapter VI of the Finance Act, 2013, no other benefit is available to them, other than the immunity from penalty, interest as provided in Section 108 of the said Act. <strong>Hence, no Cenvat credit benefit is available to the declarant under Service Tax Voluntary Compliance Encouragement Scheme 2013.</strong> The members were also informed that, to avail the benefit of the scheme, 50% of the dues are to be paid on or before 31/12/2013 and the remaining 50% dues are to be paid on or before 30/06/2014. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC in Circular No. 170/5 /2013 - Service Tax, dated 08.08.2013, clarified as follows: </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">17 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether the CENVAT credit is admissible on the inputs/input services used for provision of output service in respect of which declaration has been made under VCES for payment of any tax liability outside the VCES? </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The VCES Rules 2013 prescribe that CENVAT credit cannot be utilized for payment of “tax dues” under the Scheme. Accordingly the “tax dues” under the Scheme shall be paid in cash. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The admissibility of CENVAT credit on any inputs and input services used for provision of output service in respect of which declaration has been made shall continue to be governed by the provisions of the Cenvat Credit Rules, 2004. </font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">18 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a)Whether the tax dues amount paid under VCES would be eligible as CENVAT credit to the recipient of service under a supplementary invoice? </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) Whether cenvat credit would be admissible to the person who pays tax dues under VCES as service recipient under reverse charge mechanism? </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rule 6(2) of the Service Tax Voluntary Compliance Encouragement Rules, 2013, prescribes that CENVAT credit cannot be utilized for payment of “tax dues” under the Scheme. Except this condition, all issues relating to admissibility of CENVAT credit are to be determined in terms of the provisions of the Cenvat Credit Rules. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As regards admissibility of CENVAT credit in situations covered under part (a) and (b), attention is invited to rule 9(1)(bb) and 9(1)(e) respectively of the Cenvat Credit Rules. </font></p></td>
</tr>
</table>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Of course the RAC meeting took place about forty days before the Board Circular.</font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Pre-deposit order after<em> prima facie</em> case in favour of assessee - High Court allows appeal by assessee </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> yesterday's <strong>DDT</strong>, we reported an interim order of the Tribunal ordering pre-deposit of service tax with interest, in spite of recording a finding that there is a prima facie case against the demand. The assessee filed an appeal against the order of the CESTAT in the High Court of Delhi and the High Court held: </font></p>
<table width="90%" border="0" align="center" cellpadding="3" cellspacing="0">
<tr>
<td bgcolor="#FFFF97"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is clear (from the findings) that the tribunal has observed that they were persuaded to follow the interim order passed in the case of<em> Kaveri Agri Care Pvt. Ltd</em> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2011/2011-TIOL-378-CESTAT-BANG.htm"><strong><font size="1">2011-TIOL-378-CESTAT-BANG</font></strong> </a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In spite of the said observations and findings, the tribunal in the last paragraph i.e. paragraph 12 has stated as under:</font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"On the aforesaid analyses, we grant waiver of pre-deposit and stay all further proceedings pursuant to the adjudication orders impugned in these two appeals; on condition that the petitioner remits Rs.2,83,04,550/- plus proportionate interest on this amount in ST Appeal No.57100/2013; and the petitioner in ST Appeal No.57667/2013 shall remit Rs.66,77,289/- along with proportionate interest therein, within six weeks from today and report compliance by 5.11.2013. In default, the appeals shall stand dismissed for failure of pre-deposits ." </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of the findings recorded by the tribunal reproduced above, we feel that the appellant is entitled to complete waiver of pre-deposit. The question of law is accordingly answered. </font></p></td>
</tr>
</table>
<div align="center"></div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Interim orders directing to pre-deposit will have far reaching consequences as the adjudication by the department has become a religious confirmation of demands, many a time influenced by the amount of duty/tax involved. And the Tribunal is considered as the first forum where one can expect justice - this should not be shifted to the High Courts. </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see -<font size="1"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTA3MTE="> 2013-TIOL-892-HC-DEL-ST</a></font></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - All India Roll Out of RMS for Export </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/RMS.jpg" alt="Legal Corner Icon" width="260" height="189" hspace="5" border="0" align="left"><strong>FINANCE</strong> Minister Chidambaram yesterday inaugurated the All India rollout of an IT based Risk Management System (RMS) for the Customs clearance of export goods in the presence of representatives from the trade and industry at New Delhi. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Finance Minister said that RMS is a trust based IT system that expects the trade to make correct declarations to Customs. It is a trade facilitation measure, which on implementation would reduce dwell time from few days to few hours. In view of its obvious advantages, RMS is also being endorsed globally at all forums including WTO. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The FM also emphasized that success of any trade facilitation measure depends on compliance of legal requirements by trade. He urged the trade to comply with the legal provisions so that Customs can ensure speedy clearance of the import and export goods. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The launch of RMS in exports covers 11 Customs stations at Bangalore, Chennai, Delhi, Hyderabad, Mumbai, Pune and Tuticorin. It would be extended to all EDI Customs stations by year-end. Benefits are expected to accrue to the trade in terms of faster clearances and reduced transaction costs thereby enhancing the global competitiveness of export goods. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on Cable Ties - Extended after demise! </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Anti Dumping Duty on Cable Ties falling under the sub-heading 3926 90, originating in, or exported from, the People's Republic of China and Taiwan was imposed by Notification No.44/2009-Cus dated 30.4.2009 with effect from 31.10.2008 and would have been in force till 30.10.2013. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Designated Authority had recommended modification of the existing anti-dumping duty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the Government had superseded Notification No. 44/2009 and had imposed fresh anti dumping duty on the product with effect from 14.12.2012 by Notification No. 56/2012-Customs (ADD); but this was to remain valid only till the validity of the original notification that is 30.10.2013. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Designated Authority recently requested for extension of anti-dumping duty up to 30th October 2014. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Honestly, this notification expired on 30th October 2013 - but now the Government has extended it till 30th October 2014 - 13 days after its death!!! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will they ever wake up before the expiry of these notifications? </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2013/ctariffadd13_028.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 28/2013-Customs (ADD), Dated: November 12, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti-dumping duty on ‘Phenol' imported from South Africa continued - Again after demise </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ANTI </strong>Dumping duty on Phenol, falling under chapter 27 or 29 of the First Schedule, originating in, or exported from, South Africa was imposed vide Notification No. 10/2013-Customs, dated the 3rd May, 2013 to be valid up to 30th October, 2013. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, this notification expired on 30th October 2013. But the CBEC is now an expert in resurrection - they have just amended Notification No. 10/2013 to extend its validity till 30th day of October, 2014 - a good 13 days after it died a natural death. </font></p>
<p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Punarapi Jananam Punarapi Maranam </font></em></p>
<blockquote>
<blockquote>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">- Again and again one is born; And again and again one dies,</font></p>
</blockquote>
</blockquote>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2013/ctariffadd13_029.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 29/2013-Customs (ADD), Dated: November 12, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">I-T- Fishing and Roving Enquiry - Permissible? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Supreme Court recently delivered a very important judgement on the ITO's power to conduct roving enquiries. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Assessee is a Co-operative Rural Bank. The Income Tax Officer (ITO)(CIB), Calicut issued a notice to the assessee u/s 133(6) calling for general information regarding details of all persons (whether resident or non- resident) who have made (a) cash transactions (remittance, transfer, etc.) of Rs. 1,00,000/- and above in any account and/or (b) time deposits (FDs, RDs, TDs, etc.) of Rs. 1,00,000/- or above for the period of three years between 01.04.2005 and 31.03.2008, dated 02.02.2009. It was expressly stated that the failure to furnish the aforesaid information would attract penal consequences. The assessee objected to the said notice on grounds that such a notice seeking information which was unrelated to any existing or pending proceeding against the assessee could not be issued under the provisions of the Act and requested for withdrawal of the said notice by its letter-in-reply, dated 26.02.2009. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The AO rejected the objections and the case reached the Supreme Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE issues before the Supreme Court are - Whether provisions of Sec 133(6) vest powers in Assessing Officers to indulge in fishing information of general nature and there is no need for assessee to cooperate only if there is any assessment proceeding pending; Whether power to gather information u/s 133(6) applies to specific areas only; Whether issue of notice for collecting information u/s 133(6), without the approval of Commissioner is valid and Whether enquiry of general nature can also be made by issuing such a notice. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the verdict favours the Revenue. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this judgement today. Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=19044" target="_blank">Breaking News</a>.</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">I-T - Unpaid Self-assessment tax - SOP Issued </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>PAN wise data for assessees who have not paid self-assessment tax on the day of filing their e-returns was placed on the net. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of the confusion regarding issue of notice u/ 139(9) and follow up a detailed Standard Operating Procedure (SOP) for handling such E-filed Returns where self assessment tax is not paid has been approved by CBDT.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Assessing Officers are directed to follow the SOP.</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=36&filename=notification/cbdt/2013/cbdt_letter_sop.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DIT (Systems) F.No.DIT(S)-11/CPC/2013-14/Unpaid-Self-Assessment-Tax/13798, Dated: November 13, 2013</font></strong></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT Cartoon </strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/hidden_benefits.jpg" alt="Legal Corner Icon" width="400" height="451" hspace="5" border="0" align="center"></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><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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</strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Once the Commissioner (Appeals) has come to finding for non-imposition of penalty by invoking s.80 of FA, 1994, then same cause is also to be factored in to conclude that extended period of limitation cannot be invoked - <em>Prima facie</em>, appeal should be heard by Tribunal without requiring any pre-deposit of Service Tax: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> condition for invocation of the extended period of limitation as provided under Section 73 of the Act and the condition precedent for imposing penalty under Section 78 of the Act are identical viz: there should be either, fraud, collusion or willful misstatement or suppression of facts or contravention with intent to evade payment of service tax. Once the Commissioner (Appeals) has come to a finding that for the relevant period, there was genuine cause for confusion regarding the correct legal position and also scope for doubt about the service tax liability on GTA as the 'Commercial concern' for non-imposition of penalty then the same cause is also to be factored in to conclude that extended period of limitation cannot be invoked even if the finding that there was sufficient cause for non-payment of service tax was rendered in the context of Section 80 of the Act (as it stood at the relevant time). This finding will also apply to determine whether there was any intent to evade payment of service tax.</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 Sec 54EC benefits are available to assessee if it invests short-term capital gains on transfer of long-term depreciable assets - YES: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> had sold a property with superstructure, plant and machinery for the total sale consideration of Rs.24,99,000/-. Yet another Plot was also sold along with the same for sale consideration of Rs.4,93,104/-. Assessee had purchased REC bond of Rs.41,70,000/- to claim deduction u/s 54EC. The issues before the Bench are - Whether Sec 54EC benefits are available to the assessee if it invests short-term capital gains on transfer of long-term depreciable assets and Whether such benefit is available to the assessee in case computation of capital gains is done either under Sections 48 and 49 or under Section 50. 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">Whether Aluminium Dross & Skimmings can be considered as 'manufactured goods' and hence excisable for period post 10/05/2008 - in view of conflicting decisions, matter placed before Larger Bench: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant manufactures various aluminium products and during the process of manufacture, aluminium dross and skimmings arise, which they cleared without payment of duty. The department was of the view that aluminium dross and skimming are classifiable under CETH 26204010 of the CETA, 1985 and the appellant is liable to discharge the duty liability thereon for the period after 10.05.2008 and accordingly, the demands were confirmed vide the aforesaid orders along with interest thereon and equivalent amount of penalties were also imposed on the appellant. The Bench observed that in view of the conflicting decisions of the two Benches the matter should be placed before a larger Bench for resolution of the conflicting views. </font></p>
<p><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tomorrow is a holiday on account of Muharram.</font></strong></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Monday for the judgements </font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice (extended) Weekend.</font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p>
</body>
</html>