TIOL-DDT 2262 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font 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></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font><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><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></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></font><font color="#663399" size="3">TIOL-DDT 2262 </font><br> </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>31.12.2013<br> Tuesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption from Special Additional Duty of Customs (SAD) on goods cleared from SEZ/FTWZ into the DTA - CBEC Clarifies</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION </STRONG>No. 45/2005-Customs, dated 16.05.2005 exempts from SAD, goods cleared from SEZ / FTWZ and brought into DTA. The notification clearly states that the exemption shall not be available if such goods, when sold in DTA, are <strong>exempt</strong> from payment of sales tax / VAT. Prior to the issue of notification, it was brought to the notice of the Ministry that in some States sales tax is exempted in respect of DTA clearances by SEZ units. Further, in certain cases, such as stock transfer of goods from an SEZ unit to its unit in the DTA, no sales tax is levied. Hence, a condition was imposed that the exemption from SAD would be available only if such goods, when sold in the DTA, are not exempted from VAT/ sales tax. The intention was to avoid double taxation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has been brought to the notice of the Board that varying practices are being followed by the field formations regarding exemption from SAD on goods cleared from SEZs / Free Trade Warehousing Zones (FTWZ) into the DTA under notification No.45/2005-Customs, dated 16.05.2005. The issue raised is whether the benefit of exemption from SAD under this notification would be available when a DTA unit imports goods and routes it through SEZ / FTWZ for self-consumption i.e. in the nature of stock transfer from SEZ / FTWZ. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board notes:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>In the case of clearances which are in the nature of stock transfer from SEZ/FTWZ unit to the DTA unit for self-consumption i.e. otherwise than for sale as such, no sales tax / VAT is leviable on such a transaction. As no sales tax / VAT is <strong>leviable </strong> on the said transaction, SAD is payable.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board Clarifies: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The benefit of SAD exemption on goods cleared from the SEZ/FTWZ unit into DTA unit on stock transfer basis for self-consumption i.e. otherwise than for sale as such, is not available under notification No.45/2005-Customs, dated 16.05.2005. In such cases, SAD would be leviable. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board seems to have forgotten the fact that the goods cleared on stock transfer are not exempted from Sales Tax/VAT, but there is no Sales Tax/VAT, because there is no <strong>sale.</strong>The bar in the notification is only when there is exemption from VAT. When an SEZ unit transfers goods to its own DTA unit especially for manufacture, it pays VAT on the final product on a value added price. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, now the departmental officers are going to storm the assessees with demand notices by invoking the extended period for denying the benefit of the SAD exemption. Interestingly, the notification in question is 45/2005-Cus dated 16.06.2005 and in case the Circular is given a retrospective effect the department has already lost a lot of revenue for the period from 2005 to 2008. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By the way, will this interpretation that SAD exemption is not available when goods are cleared into DTA unit on stock transfer basis apply all across the board - meaning there are some more notifications, some dead and some alive, which provide SAD exemption on a similar terms when goods are cleared from an EOU/EHTP/STP to a DTA? The CBEC may like to take a look at the notifications 20/2006-Cus, dated 01.03.2006 and 23/2003-CE, dated 31.03.2003 in this regard. </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Netizens may also await our Jurisprudentiol case being reported tomorrow. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2013/cuscir13_044.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Circular No. 44/2013-Cus, Dated: December 30, 2013 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Adieu VCES</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Service Tax Voluntary Compliance Encouragement Scheme ends today. The Finance Secretary informs that VCES offices will remain open till midnight today; maybe they should offer a midnight New Year dinner to those who file their declarations around midnight. The Service Tax offices are open till midnight, but banks are not. So how to pay the VCES after closure of bank? The Finance Secretary says that Commissioners have been instructed to accept demand drafts/ pay orders - but these are also issued by banks only during working hours. He should have directed them to accept cheques also on the last day. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even e-payments made after 8 pm are accounted as next working day's receipt by banks. So, how can one meet the deadline of 31.12.2013? And as per rule 3 of the ST VCER, 2013 any person who wishes to make a declaration should get himself registered under rule 4 of STR, 1994. Can an evader wishing to file VCES Form-1 today go through this registration formality with consummate ease? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is no possibility of extending the Scheme, as the last date in VCES is a part of the Finance Act passed by Parliament and only Parliament can change the date. Of course, the President could have issued an ordinance, but that is too complicated and politically incorrect. But perhaps they could have used Section 113 (Power to remove difficulties) to issue an order extending the Scheme. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anyway the Government has collected about Rs. 5500 Crores and some more will come today - not big money, but certainly not bad - it doesn't hurt to get a little extra revenue. It could have been much higher if there was a little more planning and if the staff understood the spirit of the Scheme and worked for its success. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We in TIOL are proud that we have been able to contribute to the success of the Scheme by extensive coverage and effective support. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We need another amnesty scheme for all those mountains of pending cases - well that should be left to the new Finance Minister. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Well, you still have a few hours left - rush to the Service Tax offices and file those declarations - from tomorrow, the Department is going to be hyperactive - at least that is what they threaten.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span"><font color="#FF0000" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2">Stop Press </font></strong><font size="2">: Soon after we hosted the DDT, we were informed by the Commissioner (Service Tax) in the CBEC that e-payment facility has been extended till midnight; that suitable instructions have been issued by the RBI</font></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">.</font></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs - safeguard investigation concerning import of 'Seamless Pipes, Tubes and Hollow profiles of iron or non-alloy steel' - Date Extended </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> a notice dated 22.04.2013, the DG, Safeguards initiated an investigation concerning Imports of “Seamless pipes, Tubes and Hollow profiles of iron or non-alloy steel” into India. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Domestic Industry had requested in their application for immediate imposition of Safeguard duty on imports of Seamless pipes and tubes into India for a period of four years. They have also requested for imposition of provisional Safeguard duty in view of the steep deterioration in performance of the domestic industry due to serious injury and threat to serious injury as a result of increased imports of the product under consideration. The last public hearing was held on 12.12.2013. The proposed Safeguard duty had led to protests from EU, Russia and USA before the WTO. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Government has extended the period up to 21st March 2014 for submission of final findings on safeguard investigation concerning import of <em>"Seamless Pipes, Tubes and Hollow profiles of iron or non-alloy steel".</em></font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2013/cnt13_132.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 132/2013-Cus.,(N.T.), Dated: December 27, 2013 </font></strong></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CESTAT in Noida? </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHILE</STRONG> computers have eased the work of typing and correcting to a great extent, careless use of technology is playing havoc. While going through this CESTAT order, first, we thought it was a mistake by our typist and we called for the hard copy. Our typist was a little upset as we suspected his accuracy and told us he typed the text as it appeared in the original order received from the Tribunal and showed us the hard copy. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The order started with:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Arising Out of the Order-in-Appeal No.12/ST/APPL/Noida/2013 Dated: 28.2.2013 <br> Passed by the Commissioner of Central Excise (Appeals), <strong><font color="#FF0000">Customs, Central Excise & Service Tax Appellate Tribunal, Noida </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The case title reads: </font></p> <p align="justify"><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">CCE, C,CE & ST , Noida Vs Pyramid Colonizer Pvt Ltd </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The opening lines read: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This appeal has been filed by Revenue against the Order-in-Appeal No.12/ST/APPL/NOIDA/2013 dated 28.2.2013 passed by <strong><font color="#FF0000">CCE (Appeals), Customs, Central Excise & Service Tax Appellate Tribunal, Noida.</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps some proof reading needs to be implemented before the orders are issued. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see <font size="1"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTEzNTQ=" target="_blank">2013-TIOL-1935-CESTAT-DEL</a></font></strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> - Wednesday's cases</font></strong></font></strong></font></p> <p align="justify"><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">Central Excise</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Stock Transfers made by EOU to its other units do not attract Sales Tax/VAT - it cannot be said that Sales Tax/VAT is “exempted” so as to deny benefit of exemption from SAD: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Central Government by Notification No. 23/2003-CE dated 31.03.2003, has exempted the goods manufactured and produced in an EOU and cleared to DTA from levy of SAD subject to the condition that the said goods cleared to DTA are not exempted by the State Government from payment of Sales tax/VAT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue issued show-cause notices to the appellant under the belief that non-payment of Sales Tax/VAT on stock transfer made by the appellant EOU to its other unit's amounts to exemption of Sales Tax/VAT. </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 Section 54F benefits can be denied on ground that house purchased by assessee was not fit for residence as it had no doors nor windows - NO: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Tribunal was of the view that the material on record showed that the assessee purchased a house with a site, subsequently, he had demolished it. He was in the process of putting up a construction. Before the High Court, the Revenue's counsel contended that the photographs produced by the assessee himself did not show that the construction put up therein was not fit for residence which had no facilities like electricity, water and toilet. It had no windows, no doors and therefore, the Tribunal committed a serious error in interfering with the concurrent finding of fact. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issues before the High Court are - Whether Section 54F benefits can be denied on the ground that the house purchased by the assessee was not fit for residence as it had no doors nor windows and Whether the report of an Inspector is the sole criteria of allowing exemption u/s 54F - Whether in case it is proved that prior to sale, the vendor lived in the house and the same was sold along with the residential construction, exemption u/s 54F can't be denied. And the verdict goes against the Revenue. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">When abatement is claimed, it should be from value inclusive of all materials used for providing the service: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> applicant is engaged in construction of commercial and residential complexes. While executing such projects, applicant was receiving steel and cement from their customers. The applicant was receiving only the value of services undertaken by them. They claimed abatement under notification 15/04-ST and 1/06-ST and paid service tax on 33% of consideration received. Revenue was of the view that such abatement is available only if value of the entire materials used is included in the gross amount.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our Columns Tomorrow <font color="#FF0000">(in the New Year) </font>for the judgements</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6666">Until Tomorrow with more DDT </font></strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Have a nice day. </strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com</strong></a></font></p> </body> </html>