TIOL-DDT 2246 · 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><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><font 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></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></font><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><font 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></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong><font color="#663399" size="3">TIOL-DDT 2246 </font><br> </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>06.12.2013<br> Friday</strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Domestic Clearances under SFIS scheme - Galore of confusion </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE </strong>received this from a Netizen:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Foreign Trade Policy was amended on 18th April, 2013 in order to permit clearances of domestically manufactured goods against the debit in the duty credit scrip like Served from India Scheme (SFIS) etc. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In order to encourage export of services, especially in the tourism sector, the government has allowed use of SFIS scrip for import or domestic procurement of motor cars, SUVs, all purpose vehicles for hotel, travel agents, tour operators, companies owning/operating golf resorts for tourist purposes. However, users will be required to submit proof of registration for tourism purposes within 6 months and these vehicles will not be allowed to be imported under EPCG scheme. The vehicles procured under this scheme should not be sold for a period of 3 years. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC was kind enough to issue an amendment by Notification No.15/2013-CE dt.18.04.2013 to the notification No.34/2006-CE dt.14.06.2006 which details the procedure for exemption from Central Excise duty when manufactured goods are cleared against the SFIS scrip, to incorporate these changes made in the FTP by way of annual supplement. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However no attempt was made to effect parallel changes in the monthly return in ER-1 format to reflect these clearances by the manufacturers. The situation continues even today and assesses have resorted to declaring such clearances under the remarks column in order to get over the draconian provision of ‘suppression of facts'. The ACES help desk is also clueless about it as it is the experience of this netizen when contacted the help desk that he was directed to contact his jurisdictional range officer. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Once the clearances were made under the above said scheme, the range officers have issued demand notices for payment of 6% on the value of clearances treating these clearances as exempted clearances in the hands of the manufacturers. The reason being cited by the jurisdictional authorities is that the Circular No.973/07/2013-CX dt.04.09.2013 does not include the notification No.34/2006-CE dt.14.06.2006 as amended. When the duty is fully collected by the Government in the form of debit in the duty credit scrip of the end user and the balance from the manufacturer, there is no way the clearance can be treated as exempted clearances. However since there is a possibility for misunderstanding at the field level, the trade made a representation to the Board to issue the necessary clarification. Accordingly, this Circular is issued in response to trade representation exempting the reversal under Rule 6(3) of CCR, 2004 for all the schemes notified under Chapter 3 of the Foreign Trade Policy 2009-14 except SFIS. Is this omission intentional or accidental is not going to be interpreted by the jurisdictional authorities and hence it is the turn of the hapless assessee to fight his case all the way to Supreme Court to get a solution. Can the CBEC come out with a clarification to settle the issue or do they want to watch the turn of events at all legal forums to issue clarification once the dust is settled down. Is it not time for CBEC to emulate the good practice of adding the intention behind the notification/circular/instruction in the form of foot note as is being practiced by RBI or DGFT? </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs - New Exchange Rates from Today </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has notified new exchange rates for Imported Goods and for Export Goods with effect from 6th December 2013. The US Dollar is 62.30 rupees for imports and 61.30 for exports. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Exchange rates were last notified on 21 November 2013. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2013/cnt13_117.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 117/2013-Cus (NT), Dated: December 05, 2013 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Direct Taxes - Good Collections </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> CBDT Press release informs that the Gross direct tax collection during April-November of the F.Y. 2013-14 is up by 13.18 percent at Rs.3,68,655crore as against Rs.3,25,736crore in the same period last year. While gross collection of Corporate taxes has shown an increase of 9.66 percent (Rs.2,25,124crore as against Rs. 2,05,291 crore last year), gross collection of Personal income tax is up by 19.60 percent (Rs.1,39,763crore as against Rs. 1,16,862 crore last year). Net direct tax collection is up by 14.60 percent and stands at Rs. 3,10,317 crore, as compared to Rs. 2, 70,771 crore in the same period in the last fiscal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The collection of Securities Transaction Tax (STT) stands at Rs. 3,053 Crore showing the growth of 4.73 percent. The Wealth Tax has posted a growth of 13.38 percent (Rs. 712 crore against Rs. 628 crore last year). </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Renewal of Customs Broker Licence - Submit your Service Tax Returns! </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Customs Brokers Licensing Regulations, 2013 have been notified by Notification 65/2013-Cus.(N.T.) Dated: June 21, 2013. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">From the day the announcement was made in the Union Budget 2013 that the new generation Customs Broker has arrived, we have covered this in DDT <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTcxNDI=" target="_blank">2056</a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTgwNTk=" target="_blank">2134</a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTgyNzI=" target="_blank">2156</a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTg3NjM=" target="_blank">2203</a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTg4Nzg=" target="_blank">2213</a> &<a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=18932" target="_blank"> 2219</a></strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We were and are eager to know whether the new generation Customs Brokers have really come into being but drew a blank. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTgyNzI=" target="_blank">DDT 2156</a></strong>, we remarked -<font color="#FF0000"> By the way, we understand that no Custom House has licenced the brokers - the old CHAs are continuing - illegally! </font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTg3NjM=" target="_blank">DDT 2203</a> </strong>we said - </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span"><strong>Do we have Customs House Agents or Brokers or None Now? </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span"><strong>AS </strong>per the Finance Act 2013, after 10th May 2013, there are no Customs House Agents - there will be only Customs Brokers. The Customs Brokers Licensing Regulations, 2013 have just been notified and there is no Customs Broker licenced yet under the new Regulations. It is not clarified as to what would happen to the old Custom House Agents. Do they automatically become Customs Brokers or should they get new licences? But as of now, we have neither Custom House Agents nor Customs Brokers. The transactions by CHAs from 21.6.2013 seem to be illegal! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Then in <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTg4Nzg=" target="_blank">DDT 2213</a> </strong>we said -<font color="#006600"> <strong>Customs Broker's Licence Exam Notified</strong></font><strong> - </strong><em>This is fine, but what about the Custom House Agents who existed prior to the coming in to force of the Customs Brokers regime. Are they converted into Customs Brokers or are they illegally functioning in the Custom Houses? </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Be that as it may, we came across a Public Notice <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2013/Customs_Broker.htm" target="_blank">122/2013</a> </strong>dated 25/11/2013 issued by the Commissioner of Customs (General), NCH, Mumbai with the following subject line - <font color="#FF0000">"<strong><em>Fast Track procedure for renewal of Customs Broker Licence-reg</em></strong></font>.". </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As mentioned in the opening, this Customs Broker terminology came in to being this Union Budget, 2013 only. And as per Regulation 9(1) (Period of validity of licence), a licence granted is valid for a period of ten years. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the subject line to the Public Notice is a <em>misnomer </em>. Probably, what is suggested is that a CHA can convert himself into a Customs Broker by following the “fast track procedure” contained in the Public Notice. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" >The Public Notice also requires the application for renewal to be accompanied by </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">Service Tax returns for the past 3 financial years. </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Are these officers not exceeding their brief by seeking the Service Tax returns? And what are they going to do? Book cases against these CHAs for not paying ST or allege undervaluation or question the CENVAT credit availed? </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">The Public Notice also seeks from the CHA the Original Customs Broker Licence along with Xerox Copy of the same. It seems they wanted to refer to the original CHA licence. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We desist ourselves from commenting further on the Public Notice but let Netizens enjoy reading this line - " <em>The payment receipt (TR 6 Challan (?) copy duly endorsed by the Cash Department) should be submitted <strong>to the Customs Broker Section </strong> which in turn will make the endorsement of renewal <strong>on the Customs Broker Section</strong>." [<font color="#FF0000">Is it ‘on the Customs Broker licence'?</font>] </em></font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2013/Customs_Broker.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Public Notice 122/2013 dated 25.11.2013 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>International Customs Day, 2014 theme is 'Communication' </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ON </strong>26th January every year the Customs administrations of Member States of the World Customs Organization organize various national events to celebrate the first session of the Customs Co-operation Council. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For the International Customs Day falling on 26th January, 2014, WCO has chosen the theme "Communication" and which goes with the slogan "<font color="#663399">Communication: sharing information for better cooperation."</font> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On this occasion, the CBEC has decided to award "WCO Certificate of Merit" to Customs officers and representatives of the private sector who have demonstrated their commitment to the Customs Communication theme.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nominations along with justification/proposal (along with the vigilance clearance certificate in case of customs officers) are required to be sent to the Joint Secretary (Customs), CBEC before 31 st December, 2013. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The nominations are to be sent on email ids, one of which is a gmail account. <font color="#FF0000">When will they understand that using private email ids for official matters is a risky affair?</font></font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/circular_wco_certificate_merit.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC F.No. 21000/91/2013 - IC (ICD) dated 5.12.2013</strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>The VCES laddoo </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Finance Minister P. Chidambaram in his seminars has asked those in trade and industry to seize the VCES offer, even as he made it clear that tax evaders would eventually be "reached". </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What are all you service tax evaders waiting for? The Pune Zone got its prized catch recently. See our <font color="#FF0000">Mixed </font><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=19183" target="_blank"><strong>Buzz</strong> </a>story. So, get that <em>VCES laddoo </em> quickly. Else you would be hunted and instead of<font color="#FF0000"> <em>you seizing the offer, your records would be seized and you would cease to exist! </em></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> There are only 26 days to go for the scheme to come to an end. And out of these, there are only 18 working days unless, of course, the CBEC instructs the Central Excise & Service Tax Commissionerates to keep their offices open on <em>Saturdays </em>& <em>Sundays </em>! </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Nelson Mandela - No more...</strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#006600"><img width="335" height="296" border="0" align="center" src="http://www.taxindiaonline.com/RC2/image/stories/Nelson_Mandela.jpg" alt="" /></font></font></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></font></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"><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#006600"><img width="428" height="498" border="0" align="center" src="http://www.taxindiaonline.com/RC2/image/stories/ddt_car_2246.jpg" alt="" /></font></font></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></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"> - Monday's cases</font></strong></font></strong></font></p> <p align="justify"><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">Commercial Training & Coaching Service - Courses are academic in nature and covers broad spectrum of subjects as diverse as Micro Economic, Business Communication, Psychology & Organizational Behaviour, Commercial Laws etc. - benefit of Notification No. 24/04-ST dated 10.9.2004 not available: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants are conducting a two year course in Post Graduate Diploma in Management (PGDM) at their Sadhana Centre for Management & Leadership Development (SCMLD), Pune. Appellants are registered as a provider of service under Commercial Training & Coaching and accordingly paid Service Tax relating to the said course during 2004-05. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Later, they filed a refund claim of Rs.8,56,522/- on the grounds that they were not liable to pay the service tax for period other than 1.7.2004 to 9.9.2004. The said claim was on the grounds that they are entitled to exemption under Notification No. 24/04-ST dated 10.9.2004, their course being Vocational Training. </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 investment made by bank to comply with SLR requirement would constitute stock in trade and depreciation in value of same is allowable deduction - YES: ITAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issues before the Bench are - Whether investment made by the bank to comply with the SLR requirement would constitute their stock in trade and depreciation in value of the same is an allowable deduction; Whether the broken period interest included in the purchase price of Government securities held by the banking company to comply with SLR requirement is entitled to deduction; Whether no disallowance can be made u/s 14A applying rule 8D prior to AY 2008-09; Whether provision made in the accounts of the assessee bank and debited to the provision for bad and doubtful debts account made under that clause 36(1)(viia) is only allowable as expenditure & Whether in view of the specific provisions of sub-clause (f) to Section 43B the claim of the assessee for deduction towards provisions for leave encashment cannot be allowed. And the verdict partly favours 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">Affixing labels and MRPs on packages in Customs area before they were marketed in Domestic Tariff Area (DTA) - as goods have been cleared on payment of CVD on MRP basis and no further activities were undertaken after clearance by customs demand of duty of Rs.42 Crores is unsustainable in law: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> Excise duty demand of Rs.53.47 Crores has been confirmed against the applicant by the Commissioner of Central Excise, Raigad along with imposition of penalties and interest. The demand is for the period February 2009 to September 2011. A penalty of Rs.20 lakhs has also been imposed on the officer-in-charge of legal affairs of the appellant firm. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The applicant is before the CESTAT.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our Columns Monday for the judgements </strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice weekend. </font></p> <p 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"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p> </body> </html>