TIOL-DDT 2243 · 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"><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"><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"><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" color="#006600"><strong><strong><strong><strong><strong><strong><strong><strong><strong><img width="115" height="125" border="0" align="right" src="image/ddt/10yearsDDT.jpg" alt="" /></strong></strong></strong></strong></strong></strong></strong></strong></strong></font></strong></font></strong></font></strong></font></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#006600"><strong><strong><strong><strong><strong><strong><strong><strong><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=17063"><img width="175" hspace="5" height="120" border="0" align="right" src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2013.jpg" alt="DDT in Limca Book of Records" /></a></strong></strong></strong></strong></strong></strong></strong></strong></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="3" color="#663399">TIOL-DDT 2243 </font><br /> </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>03.12.2013<br /> Tuesday</strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>VCES, 2013 - Payment of 'tax dues' through CENVAT Credit before ST VCER, 2013 were notified </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Service Tax VCES, 2013 came into effect on 10.05.2013 and the Service Tax Voluntary Compliance Encouragement Rules, 2013 came into force w.e.f 13.05.2013 by Notification 10/2013-ST.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rule 6 of the Rules reads -</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em><font color="#FF0000">6. Payment of tax dues.-</font></em></strong></font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#FF0000"><em>(1) The tax dues payable under the Scheme along with interest, if any, under section 107 of the Act shall be paid to the credit of the Central Government in the manner prescribed for the payment of service tax under the Service Tax Rules, 1994. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#FF0000"><em>(2) <strong>The CENVAT credit shall not be utilised for payment of tax dues under the Scheme.</strong></em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As the aforesaid condition of “non-utilisation of CENVAT credit” for payment of tax dues under the Scheme was formulated only on 13.05.2013, in case a declarant has paid “such tax dues” by utilizing CENVAT credit during the period 10.05.2013 to 12.05.2013, what should he do? Take a re-credit in his CENVAT account and pay afresh in cash? Re-credit, the department will not allow by citing the LB decision in BDH Industries <font size="1"><strong>[<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2008/2008-TIOL-1211-CESTAT-MUM-LB.htm" target="_blank">2008-TIOL-1211-CESTAT-MUM-LB</a>]</strong></font>. So, what is the solution? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#FF0000">Will the CBEC please clarify? </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#006600"><strong>Alpha Numeric codes for orders passed by the department -Is anyone following? </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>April 2013, Board had decided to amend the forms for filing appeals in CESTAT and the new forms were notified vide Notification Nos 6/2013 CE(NT), 37/2013 Cus(NT) and 5/2013 Service Tax, all dated 10.04.2013. The new forms were to come into effect for all the appeals to be filed on or after 01.06.2013, but old forms were allowed for three more months. So, from 01.09.2013, all the appeals should be filed in the new forms only. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the new forms, one important feature is the 21 alphanumerical code for the order appealed against.All the 140 existing Commissionerates have been assigned pre-figured series and serial numbers have to be filled in for the orders passed by the Commissioner or Commissioner (Appeal) or Commissioner (Adjudication), as the case may be. <strong> </strong>An example of t he alpha-numeric series is as below- </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"AHM-CUSTM-000-COM-034-12-13 DT 02-09-2012. This would mean Order-in-Original No.34 for the year 12-13 passed by Commissioner of Customs, Ahmedabad."</font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board had also explained this in Circular No.969/03/2013-CX dated 11.04.2013. But, many of the Commissioners and the Commissioners (Appeals) are still following their own way of numbering the Orders-in-Original and Orders-in-Appeals, making it difficult for the appellants before the Tribunal to fill the 21 alpha numeric code of the orders. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps Board should issue another Circular to the field formations to <strong>strictly </strong> follow the alphanumeric code for numbering. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Also, to determine the fee payable for filing the appeal, one has to know the amount of duty/tax, interest and penalty imposed. Perhaps to check this, the new forms have specific column for “Amount of interest involved up to the date of the order appealed against”. However, many adjudication orders do not quantify the interest and they simply say, “I also confirm interest at the appropriate rates on the amount of duty/tax demanded”. Now, who will quantify the interest? Is it the appellant's job? Is it not reasonable and justified if the adjudicating authority who confirmed the demand also quantifies the interest payable till the date of the order? </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#006600"><strong>FTP - Policy for import of Human Embryo </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HUMAN</strong> Embryo is classified under ITC (HS) Code 0511 99 99 of Chapter 5 of ITC (HS) 2012, Schedule 1 (Import Policy). The Central Government has amended the Import policy in this regard inasmuch as Import of Human Embryo will now be ‘free' subject to a ‘No Objection Certificate' from Indian Council of Medical Research (ICMR). </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2013/dgft13not052.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Notification NO. 52/(RE -2013)/2009-2014, Dated: December 02, 2013 </strong></font></a></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#006600"><strong>FTP - Minimum price for import of Cashew Kernel </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT </strong>has amended Chapter 8 of ITC (HS) 2012, Schedule 1 (Import Policy) to stipulate that the minimum price for import of Cashew Kernel (brokens) and Cashew Kernel (wholes) will be Rs. 288/-per Kg. and Rs 400/-per Kg. respectively. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2013/dgft13not053.htm"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Notification No. 53/(RE -2013)/2009-2014, Dated: December 02, 2013 </strong></font></a></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#006600"><strong>FTP - SION A-2439, quantity of import item Beta Picoline </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has notified modification of SION A-2439, in respect of the export product 3-Cyanopyridine - Under SION A-2439, quantity of import item Beta Picoline has been reduced from 1.21 Kg to 1.05 Kg for every Kg of export product. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2013/dgft13pn040.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Public Notice No.40/(RE -2013)/2009-2014, Dated: December 02, 2013 </strong></font></a></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#006600"><strong>FTP - SION A-315, quantity of import item Beta Picoline </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT </strong>has notified modification of SION A-315, in respect of the export product Niacin/ Nicotinic Acid/ Pyridine -3- Carboxylic Acid IP/BP/USP/EP - Under SION A-315, quantity of import item Beta Picoline has been reduced from 1.2 Kg to 0.9 Kg for every Kg of export product. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2013/dgft13pn041.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Public Notice No.41/(RE -2013)/2009-2014, Dated: December 02, 2013 </strong></font></a></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Will Ramesh Nair be allowed to join CESTAT? </font></strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#006600"><strong>CESTAT Members discharged during probation entitled to practice -High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FORMER</strong> Members of CESTAT are not allowed to practice before the CESTAT. Does this bar apply to a Member who is not confirmed, but discharged during probation? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If an advocate practicing in CESTAT is appointed as a Member at the age of 45 and if he is not confirmed within two years but discharged -at the age of 47, is he permanently barred from practicing in the CESTAT for the sin of being a Member under probation for two years? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ramesh Nair was appointed as a Member (Judicial) in CESTAT (Please see<a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTU5MjU=" target="_blank"> <strong>DDT 1947 -21.09.2012</strong></a>) vide Office Memo F.No.A-12026/ 1/20 11-Ad.IC (CESTAT) dated 13.09.2012. The OM was modified on 19.9.2012 to the extent that instead of a term of 5 years from the date of entry upon the office, the offer was made for appointment until the age of superannuation, i.e. 62 years. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He sought a clarification "whether a member is entitled to practice and appear in CESTAT after he is discharged from service for any reason given by either side during the period of probation." He was informed that the words "on ceasing to hold office", is applicable to all types of cessation-whether it is retirement or resignation or discharge during probation or by any other way. He filed an application in the CAT challenging this communication and sought a direction to the Ministry to appoint him as Member in CESTAT without being subjected to embargo of Section 129 (6) of Customs Act, 1962 and Central Excise Act, 1944 in the event of his ceasing to hold office as Member before the expiry of period of probation. While the issue was pending in the CAT, the Government withdrew the offer of appointment. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CAT in February 2013 held that a member of the Tribunal discharged from service during probation period may not be debarred from practicing before it and the provision of Section 129 (6) of Customs Act, 1962 would be applicable only to such Members who cease to hold office only after their confirmation. The phrase "on ceasing to hold office as Member" used in Section 129 (6) would not include discharge of probation and only a Member who is confirmed to hold office in such capacity can be said to have ceased to hold the same. Since a probationer does not acquire any lien on the post of Member before its confirmation, there is no question of his ceasing to hold the same. <strong>[See <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTcyNjY=" target="_blank">DDT 2066 -15.03.2013</a>]</strong> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the Government does not keep quiet in such circumstances -it took the matter in writ before the Delhi High Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Delhi High Court yesterday held that the decision of the CAT is a plausible one and even if another view is possible, the High Court would not like to interfere with the impugned order and so the writ petitions were dismissed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now will the Government allow Ramesh Nair to join the CESTAT or continue the litigation with an appeal to the Supreme Court? </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTA5NTM=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Click here for the High Court Order </font></strong></a></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#006600"><strong>Is seafood an animal? - Testing of seafood by visual examination -whether liable to ST under Technical testing and Analysis service -CESTAT orders pre-deposit. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> applicants had got themselves registered as a service tax assessee under the category of ‘<em>Technical Inspection and Certification Service</em>' and paid service tax. Subsequently, they filed a refund claim on the ground that ‘ <em>Technical testing and analysis service </em>' in relation to human beings or animals is exempted. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The adjudicating authority sanctioned the refund. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This order was reviewed by the Revenue and the Commissioner (Appeals) allowed the Revenue appeal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the meantime, a SCN was also issued for recovery of the refund sanctioned. This demand was confirmed by the adjudicating authority and the Commissioner(A) upheld this order. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the applicant is before the CESTAT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is submitted that the ‘Technical testing and analysis service' is in relation to animals, namely seafood, and since the definition excludes any testing or analysis service provided in relation to human beings or animals, they are not liable to pay any service tax. It is further submitted that the seafood regarding which the applicants are providing the service is exported and the applicants are receiving fee in American Dollars. In these circumstances, the demand is not sustainable. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue representative submitted that the applicants were only undertaking visual examination of the seafood and were not providing any certification in respect of the testing etc. It is further submitted that the technical testing and analysis service is exempted in respect of live animals for detection and cure of disease and the same is not applicable in respect of seafood. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bench observed -</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#663399"><em>"5. After taking into account the facts and circumstances of the case, the applicants are not providing any certification in respect of the testing and the testing is done by visual examination. Therefore, prima facie we find that the applicants have not made out a case for total waiver of dues. However, keeping in view the facts and circumstances of the case, the applicants are directed to deposit Rs.75,000/- (Rupees seventy-five thousand only) within a period of eight weeks…."</em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See <font size="1"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTA5NTQ=" target="_blank">2013-TIOL-1801-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 size="5" color="#FF6633">tiol</font><font color="#006600"> - Wednesday's cases</font></strong></font></strong></font></p> <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" color="#663399"><strong><img width="100" hspace="5" height="84" border="0" align="left" alt="Legal Corner Icon" src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" /></strong></font></strong></font></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#663399"><strong>Central Excise </strong></font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#FF6633">Inputs stored outside factory without obtaining prior permission as mandated in Circular 01/05/1996 - instead of recording positive finding that Inputs were used in manufacture and credit was availed after receipt of inputs in factory, Commr (A) while allowing credit made a passing observation for which there is no reference to any material - CESTAT order upheld: High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is engaged in the manufacture of excisable goods falling under Chapter 48 of the CETA 1985. The issue inter alia concerns denial of CENVAT credit of Rs.30,05,054/- in respect of inputs, which were stored outside factory premises without obtaining prior permission of the Commissioner, Central Excise in terms of CBEC Circular dated 1.5.1996. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court dismissed the appeal by the assessee. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#663399">Income Tax </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#FF6633">Whether in case of refund of excess amount, provisions of Sec 132(4)(b) have any application to decide interest liability for pre-assessment period - YES: Supreme Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Revenue conducted a Search & Seizure on the premises of the assessee, an HUF, and seized cash of Rs. 2,35,000/-. On 31.5.1990, an order under Section 132(5) of the Income Tax Act, 1961 came to be passed. The Assessing Officer calculated the tax liability and the cash seized in the search from the assessee's house was appropriated. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issues before the Bench are - Whether in case of refund of excess amount the provisions of Sec 132(4)(b) have any application to decide the interest liability for the pre-assessment period and Whether provisions of Sec 132(4)(b) deal with pre-assessment period and provisions of Ss 240 and 244A deal with post-assessment period. And the verdict goes in favour of the assessee. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#663399">Service Tax </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#FF6633"><strong>ST - Builders/Developers are not liable to pay Service Tax under the category 'Maintenance or Repair services' on the 'One-time maintenance charges' collected from flat buyers: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants are builders/developers of residential flats and various commercial complexes. They sell the residential flats to various customers over a period of time. After sale of all the flats, a Co-operative Housing Society is formed by the owners of the flats; thereafter the title of land etc. is passed on to the Flat Owners Co-operative Housing Society. The appellants are recovering a one-time maintenance deposit from each of the customers to whom they have sold the flats. The said amount is kept in a separate bank account as fixed deposit. From the interest earned on the said deposit, the appellants are expected to pay for various charges such as common electricity bill, water charges, security charges etc. After the flat owners co-operative housing society is formed, whatever balance is left in the said bank account the same is handed over to the Flat Owners Co-operative Housing Society. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CCE, Pune-III was of the view that the appellants are required to pay Service Tax on the deposits made by various purchasers of the flats on the ground that the appellants are providing “Maintenance and Repair” service. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#663399"><strong>See our Columns tomorrow for the judgements </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#FF6666">Until tomorrow with more <strong>DDT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#FF6666"><strong>Have a nice day. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" color="#FF6666">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>