TIOL-DDT 2270 · 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><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></font><font color="#663399" size="3">TIOL-DDT 2270</font><br> 10.01.2014 <br> Friday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Promotion of Group - 'B' Officers to Assistant Commissioners under CBEC - why delay? </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> much awaited approval for cadre restructuring by Union Cabinet appears to have given the officers of CBEC some hope about their future prospects in the department. But is the CBEC really geared up for the mega exercise? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Much before the approval had come, CBEC had proposed to fill up nearly 150 existing vacancies of Assistant Commissioners during July 2013 by promoting the Central Excise Superintendents, Customs Superintendents and Customs Appraisers. It is more than SIX months and the DPC is yet to be conducted by CBEC. Every day TIOL gets several enquiries from anxious Group B officers with deep anguish and disappointment over the delay in completing the DPC by CBEC. When CBEC is not able to complete the process for an <em>adhoc </em> promotion of 150 officers do you think they will ever promote 3000 officers? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">TIOL is informed that all the formalities such as calling ACRs, Vigilance Clearance etc for all those officers in the consideration Zone have been completed and a proposal was sent to the UPSC for conducting DPC. It is noticed that for the last twenty years, all Group A promotions were on <em>ad hoc </em> basis and all the DPCs were held by Board itself. But this time, the task of conducting DPC is handed over to UPSC who had started raising several objections in the last stage. Frustrated officers strongly believe that CBEC top brass has not really shown sufficient interest to resolve the issues. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"She is already the Chairman, why should she bother about promotion of Superintendents?",</em> said an officer in disdain. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are informed that as of now there are more than 500 vacancies of Assistant Commissioners in the Department and this is more than half of the sanctioned strength of the cadre. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The reason for not promoting the Central Excise Superintendents/Customs Superintendents/Customs appraisers is said to be that UPSC has asked for some clarifications from DOPT and DOPT is yet to give it. CBEC is also said to be handicapped with the UPSC's direction banning <em>ad hoc </em>promotions. But that sacred body DOPT itself recently promoted 104 section officers as 'under secretaries' on <em>ad hoc </em> basis. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the past,in several cases, CBEC had promoted its officers even during pending Court cases by stating that <strong>the promotion is subject to outcome of the proceedings pending in Courts </strong>. It is sad to know that several Excise/Customs superintendents have retired from Service in the last few months. And several will in the next few months frustrated and angry with the department that they were denied their rightful promotion, which they richly deserved. It is tragic that officers who have completed 20 years service as Superintendents after being inspectors for 15 years are retiring with just one promotion in their long career - all because their Board does not bother about them - even when vacancies are aplenty! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If you can run your Department without half your sanctioned strength, why can't you abolish those posts? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chairperson is retiring this month-end and nobody expects her to find time to promote these officers, but there is hope - well you have to live on hope! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe the Revenue Secretary and/or the FM should do something - it is not healthy for a Revenue Department to have so many frustrated officers. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs - Classification of 'Human Embryo' - CBEC Clarifies </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> are doubts whether 'human embryo' is classifiable under heading 0511 or 3001. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has examined the issue in consultation with Indian Council of Medical Research (ICMR). ICMR have clarified that 'Human Embryo' is placed under the category of animal embryos. Accordingly 'human embryo' will be classified under CTH 0511 9999. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board further says - <em>"3. Import Policy Norms finalized by DGFT for 'Human Embryos' vide notification No. 52(RE-2013)/2009-2014 dated 2nd December, 2013 as <strong>restricted </strong> and the import will be allowed subject to a NOC from ICMR." </em>Incidentally, the DGFT notification stipulates - </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"<em>Human Embryo has been classified under ITC (HS) Code 0511 99 99. Its import is free subject to NOC from ICMR</em>."</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants pending cases to be finalized accordingly </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2014/cuscir14_001.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Circular No. 01/2014-Cus, Dated: January 09, 2014 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs - Classification of 'Transmission shafts/Power takeoff (PTO) shafts' - CBEC Clarifies </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DOUBTS</strong> have been raised on whether 'Transmission shafts/Power takeoff shafts' would be classifiable under 8433 or 8432 as parts of agricultural machinery. This issue was also discussed in the Conference of Chief Commissioners of Customs and Directors General on Customs Tariff and Allied Matters, held on 05-06 June 2013, at Vishakhapatnam and subsequently examined by the Board. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the conference, there was consensus on classifying such products at issue under heading 8483. In view of the same, the Board desires that such products should be classified under 8483 , subheading 848310, Tariff Item 84831099 by application of General Rules for the Interpretation (GRI) of Import Tariff, Rule 1, Section Note 2(a) to the General Explanatory Note to Section XVI. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2014/cuscir14_002.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Circular No. 02/2014-Cus, Dated: January 09, 2014 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Advance Ruling - Board Clarifies </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per clause (b) of the first proviso to Sub-section (2) of Section 23D of the Central Excise Act, the Authority for Advance Ruling shall not allow the application where the question raised therein is the same as in a matter already decided by the Appellate Tribunal or any Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC now clarifies in an INSTRUCTION that the true import of the above provisions is that the issue/question of law which stands already, decided by the Appellate Tribunal or any Court in the case of <strong><u>any party</u> </strong>will fall outside the purview of the Authority for Advance Rulings under the provisions of </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Clause (b) of the first proviso to Sub-Section (2) of Section 23D of the Central Excise Act, 1944, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Clause (b) of the first proviso to Sub-Section (2) of Section 28I of the Customs Act, 1962, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Clause (b) of the first proviso to Sub-Section (2) of Section 96D of the Finance Act, 1994. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board also informs the Authority - <em>"However, <strong>care may be taken by the Authority </strong> to satisfy itself that the issue/question of law decided by the Tribunal or Court fully and squarely covers the issue/question of law raised by the applicant ." </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the AAR is headed by a former Supreme Court Judge and the Member is a former Member of the CBEC. Is the Board competent to clarify to a Supreme Court Judge as to What the meaning of a sentence in the Customs Act/CEA is and can the Board direct the AAR to take care while deciding an application? Is it not judicial contempt? <strong><font color="#FF0000">In any case, it is injudicious audacity</font>. </strong></font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2013/instruction13_004.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Instruction in F.No.275/83/2012-CX.8A, Dated: November 29, 2013 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GTA Service - it is immaterial who has paid the Service Tax - even if Transporter has paid ST, appellant is eligible to take CENVAT credit </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants are manufacturers of excisable goods and procured inputs. On these inputs, the transporter has paid service tax and on the basis of the invoice issued by the transporter, the appellant availed input service credit of Goods Transport Agency Service. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue is of the view that since in case of GTA the appellants are required to pay service tax and as they have not paid the service tax, therefore, they are not entitled for input service credit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The adjudicating authority confirmed the demand and in appeal the Commissioner (Appeals) directed the appellant to make pre-deposit which the appellant failed to. And so, the appeal was dismissed for non-compliance. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal had remanded the matter to the Commissioner (Appeals) and directed him to decide the issue on merits without insisting on pre-deposit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In remand proceedings, the Commissioner (A) once again confirmed the Adjudication order. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the appellant is once again before the CESTAT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They requested the Bench to decide the matter on merits in the light of the decision of <em>Dhampur Sugar Mills Ltd. </em> <font size="1"><strong>[<a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTEzMzk=" target="_blank">2010-TIOL-1904-CESTAT-DEL</a>]</strong></font>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CESTAT held - </font></p> <blockquote> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"6. On perusal of the records, I find that it is not disputed that on Goods Transport Agency Service which was availed by the appellant, service tax has been paid, and appellant has taken the credit of the service tax paid. It is immaterial who has paid the service tax. Ld. Commissioner (Appeals) has failed to appreciate the fact that the service has suffered service tax and any payment towards duty or service is entitled for input service credit/input credit. Therefore, the finding of the lower authorities that in the case of Goods Transport Agency Service, service tax is required to be paid by the service recipient is not tenable. Accordingly, impugned order deserves no merit, hence set aside. Appeal is allowed." </em></font></p> </blockquote> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTE1MjA=" target="_blank">2014-TIOL-54-CESTAT-MUM</a></font></strong></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC wants a Joint Secretary, Tax Research Unit (TRU) </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> informs that a post of Joint Secretary, Tax Research Unit (TRU) is likely to arise very shortly. IRS officers of Commissioner level are eligible to apply. Board wants the applications latest by 21.01.2014. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is a very prestigious post, but who wants prestigious posts these days? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When the Judges write orders stating, <em>"The legislature in its wisdom…."</em>, what it really means is, <em>"the JS (TRU) in his wisdom…." </em></font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/deputation/vcacancy4_2014.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC F. No.A.35017/32/2013-Ad.II, Dated: January 09, 2014 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax - Satyam Ramalinga Raju's kin convicted </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Special Judge for Economic Offences, Hyderabad yesterday convicted close relatives of Satyam Ramalinga Raju including his wife and two sons, his brothers and their spouses. They were all directors of companies that entered into agreements with MAYTAS Properties and charged with evasion of income tax varying from Rs. 93 lakhs to Rs. 2.3 Crores. The men were sentenced to one year rigorous imprisonment while the women were awarded six months. The Judge stayed the sentence for one month for the convicted to appeal. </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong></font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT Cartoon</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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Cartoon_2270.jpg" alt="" width="400" height="451" hspace="5" border="0" align="center"></font></strong></font></strong></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"> – Monday'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"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"></font></strong></font></strong></font><font color="#663399">Central Excise </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Every time when matter came on board, both sides were on rivalry argument on principles of natural justice - If such argument goes on, reference Bench cannot solve such a problem - Therefore, it would be preferable to hear appeal by agreeing with Member(T) who is of view that amount already deposited should be adequate to hear appeal - Tribunal by Majority</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS </strong>is a case booked by the DGCEI and the allegation is that the appellant has cleared processed fabrics under the guise of processed embroidered fabrics which do not attract Central Excise duty. Statements of 24 buyers were recorded wherein many of them deposed that the grey material sent by them was not actually processed embroidered fabrics but was 'other processed fabrics' though they received the invoices from the appellants reflecting the processed embroidered fabrics. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Income Tax </font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether when pipeline is owned by third party, connectivity charges paid for transportation of gas are to be construed as carriage of goods and are thus covered by provisions of Sec 194C - YES: ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issues before the bench are - Whether acquiring the right of displaying advertisement at hoarding site and making payment to hoarding site owners involve lease, sub-lease or tenancy arrangement; Whether deduction of TDS u/s 194-I is applicable in such case; Whether connectivity charges paid as per the agreement for using of pipeline connection for gas transportation, is in the nature of carriage of goods and covered u/s.194C; Whether it would be considered differently, in case the pipeline was owned by a third party and was opened for service to other clients also; Whether in case, an assessee uses the facility of hiring helicopters for transportation of its employees, deduction of TDS u/s 194I is tenable in law; Whether in case an asset is taken on hire basis and the control lies with the actual owner only, deduction of TDS on payment made can be u/s 194I; Whether in case the services provided by an event Manager were taken for managing a particular event only, deduction of Tax u/s 194J is tenable in law and Whether an assessee can claim expenses from a particular event as its business expense. And the verdict goes against the Revenue. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Service Tax </font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Renting of Immovable property service - vires of levy decided by Delhi HC in 2009 for first time - How could a decision rendered in year 2009 lead to confusion in year 2007 - such a plea is clearly an afterthought - in absence of <em>prima facie</em> case on merits and no financial hardship pleaded, appellant directed to make pre-deposit of balance of ST dues: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DURING</strong> the period June 2007 to December 2011, the appellant rented out immovable property and received consideration by way of rent. However, the appellant did not discharge service tax liability on the activity of renting of immovable property. It is also on record that the appellant had obtained service tax registration on 18/07/2007 under the category of 'Renting of Immovable Property Service'. However, apart from getting registered, they did not follow the statutory procedures nor did they pay any service tax. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accordingly, investigation was carried out and a show cause notice dated 03/09/2012 was issued demanding service tax of Rs.68,84,748/- along with interest thereon and also proposing to impose penalties. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">See our Columns Monday for the judgements</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6666">Until Monday 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 weekend. </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>