TIOL-DDT 2285 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font 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></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 2285 </font><br>
03.02.2014 <br>
Monday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Appeal - Pre-deposit - Pay or Perish? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT</strong> could not resist the temptation of starting this edition with an expression of deep gratitude to Justice Narasimha Reddy of the AP High Court for his recent marvellous order understanding the plight of the taxpayers who are routinely asked to pay pre-deposit of huge amounts for filing appeals.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is common for the Department to issue Show Cause Notices even in cases where no tax/duty is payable and adjudicating authorities with predictable certainty confirm the huge demands made in these Show Cause Notices with penalties under all available sections. While CESTAT had been generally fair and just in waiving whole or part of the pre-deposit required for filing the appeals, on occasions, even the Tribunal is very harsh in ordering pre-deposit of the whole amount with interest and penalty.The High Courts are known to extend some concessions like reducing the pre-deposit amount or giving more time for the appellant to pay the amount or on occasions asking the Tribunal to consider the appeal without insisting for a pre-deposit. Most of the assessees will find it a back breaking exercise to pay such huge amounts of pre-deposit and will have to simply close down business. And when the assessee wins the case, it is almost impossible to get back the pre-deposit unless they prepare themselves for the second round of the battle and justify that there has not been any unjust enrichment. Does the economy really need such an exercise? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is a miracle of Indian psyche that in spite of such impossible and vitally damaging conditions, the Indian businessmen continue to do business and bear with a grin the perpetual harassment in the name of Government, which in the first place came into existence for the welfare of society - a fact that is almost forgotten and today Government is perceived as an unavoidable nuisance and burden, for the existence of which YOU WILL have to pay. How long can the Government continue with its brutal killing of the geese that lay the proverbial golden eggs? Can this last forever?. How long can you make laws full of flaws and then punish the taxpayers for your mistakes while drawing fat salaries and perks from the taxes they pay? Recently some assessees approached the department and wanted a clarification whether they were liable to pay Service Tax. If they were, they wanted to pay up under VCES. The Department gave them a few Board Circulars and extracts from the Act and told them to proceed as per law! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In such a chaotic situation, comes like a whiff of fresh air, the judgement delivered by Justice Reddy. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a service tax appeal, the adjudicating authority had confirmed a demand of about Rs. 33 Crores. The service was in relation to irrigation projects of the Government of Andhra Pradesh. The assessee would have been under the genuine impression that no Service Tax was payable as many identically placed assessees were not paying any tax - Nay, in fact nobody was paying the tax; the department targeted some contractors and issued notices. There was confusion with some parties getting relief at appellate stages and some not getting such benefit. In this case, the CESTAT ordered pre-deposit of about Rs. 30 Crores (of the 33 Crores demand) of tax and also ordered payment of interest in addition. Penalty was mercifully waived. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What does an assessee do when he is hit with such a pre-deposit order? Normally no assessee would have that kind of money to make pre-deposit - it is almost impossible to collect this amount from the clients after about six years - had the Department woken up a little earlier, perhaps the damage could have been a little less. If he does not make the pre-deposit, the appeal will be dismissed and all the time the department will be breathing down his neck to collect the ‘arrears' especially in the targeted months of January-March. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee approached the High Court and with masterly precision and concise expression reminding one of scientific formulae, in less than 200 words, Justice Reddy hit the nail on the head of this malaise called pre-deposit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Justice Reddy noted that the indiscriminate denial of the power of waiver is like telling the party to <em><strong>pay or perish</strong></em>. He observed that while collecting taxes is a sovereign power, adjudication of disputes is a duty.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The following words of Justice Reddy should be a guide/checklist for all tax appellate authorities and they should read these six sentences before delivering every order on pre-deposit.</font></p>
<div align="justify">
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
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<td valign="top" bgcolor="#FFFFB3"><p><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">The condition as to pre-deposit of the entire amount involved would certainly put heavy burden on the assessee. </font></strong></p></td>
</tr>
<tr>
<td valign="top" bgcolor="#FFFFB3"><p align="justify"><strong><font color="#0000FF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whatever may be the justification in enacting such a provision, the remedy of appeal for a citizen cannot be made so dearer, nor can it be kept beyond the reach of an assessee. </font></strong></p></td>
</tr>
<tr>
<td valign="top" bgcolor="#FFFFB3"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF0000">Indiscriminate denial of the power of waiver would result in a situation where an aggrieved party would be indirectly told</font></strong> <strong><font color="#663366">"pay or perish</font></strong>". </font></p></td>
</tr>
<tr>
<td valign="top" bgcolor="#FFFFB3"><p><strong><font color="#0000FF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Just as levy of taxes is an attribute of sovereign power, adjudication of disputes is equally an important attribute of the same species. </font></strong></p></td>
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<tr>
<td valign="top" bgcolor="#FFFFB3"><p><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">The only difference is while the former partakes the character of the right of the sovereign Government, the latter is in the form of its duty. </font></strong></p></td>
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<td valign="top" bgcolor="#FFFFB3"><p><strong><font color="#0000FF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Unless it is tempered with an element of reasonableness, the adjudicatory mechanism is prone to be just an eye-wash. </font></strong></p></td>
</tr>
</table>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Interestingly, in spite of these observations, the High Court ordered pre-deposit of 50 per cent of the tax demanded. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this judgement today. Please see<strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=19661" target="_blank">Breaking News</a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Governmental Authority - Redefined </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Sl. No.12 of Notification No. 25/2012-Service Tax dated 20.06.2012, there is exemption for - <em>Services provided to the Government, a local authority or a <font color="#663366">governmental authority</font> by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of - civil structure, canal, dam etc…. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Sl. No. 25, there is exemption for -<em> Services provided to the Government, a local authority or a <font color="#663366">governmental authority </font>by way of - water supply, public health, repair of aircraft etc……</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Sl. No. 34, there is exemption for - <em>Services received from a provider of service located in a non- taxable territory by - (a) Government, a local authority, a<font color="#663366"> governmental authority</font> or an individual in relation to any purpose other than commerce, industry or any other business or profession; </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Sl. No. 39, there is exemption for - <em>Services by a <font color="#663366">governmental authority</font> by way of any activity in relation to any function entrusted to a municipality under article 243 W of the Constitution. </em></font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the question is what or who is a/the</font><em><font color="#663366" size="2" face="Verdana, Arial, Helvetica, sans-serif"> governmental authority? </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Para 2, Clause (s) of Notification No. 25/2012-Service Tax dated 20.06.2012, ‘governmental authority' is defined as: </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"governmental authority'' means a board, or an authority or any other body established with 90% or more participation by way of equity or control<font color="#663366"> by Government</font> <font color="#FF0000">and</font> set up by an Act of the Parliament or a State Legislature to carry out any function entrusted to a municipality under article 243W of the Constitution."</font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this definition is changed to:</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"governmental authority" means an authority or a board or any other body; </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) set up by an Act of Parliament or a State Legislature; <font color="#FF0000">or </font></font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) <font color="#FF0000">established by Government,</font> </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">with 90% or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The purpose of this amendment seems to be to clarify the definition in better language. As per the earlier definition, the governmental authority had to be set up by an Act of Parliament or State Legislature and there was a doubt as to whether by Government in the earlier definition was in relation to ‘establishment' or ‘control'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board should be kind enough to come out with a Circular explaining the purpose of this substitution lest the field formations have a field day! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Writing complex sentences is no more the forte of our law drafters as in the days of yore - now they should adapt the bulleted style for expressing whatever they want to convey. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2014/stnot14_002.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 2/2014 - ST., Dated: January 30, 2014 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - Amendment to Drawback Rules - Board explains </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RECENTLY</strong> the Government had amended the Drawback Schedule with effect from 25.01.2014 by Notification No.05/2014-Customs (N.T.), dated 21.01.2014. The main changes/amendments made are: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) Separate entries have been created for (i) Accelerated Freeze Dried (AFD) crustaceans under tariff item 030603 (ii) knitted or crocheted fabrics containing 5% or more by weight of spandex/ lycra/ elastane, for grey as well as dyed, under tariff items 600210 to 600217 and 600410 to 600417 (iii) gloves, specially designed for use in sports namely golf gloves, made of synthetic materials, under tariff items 611609 and 621608 (iv) fabric swatches under tariff item 630701 and (v) poultry equipment and parts thereof under tariff item 843601; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) Drawback Caps have been changed for tariff item nos. 420207, 420210 & 420307, coir products falling under chapter 57 and motor cars of heading 8703; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c) Drawback rate of 1.7% or 1.9% (Customs portion) under chapter 87 has been changed to 2%. Tractors (8701) have been provided composite rate and cap;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">d) Description for tariff item no. 4820200001 has been amended to cover only those stationery items which are either with PVC/BOPP jackets or are laminated. Drawback rates and caps have also been rationalized for tariff item nos. 4820200001, 4820200009, soft stuffed toys (950304), PVC inflatable toys (950305) and croquet sets (95069962); </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">e) Existing entry under tariff item no. 731902 i.e. "Steel Cops/pirn/bobbins" has been replicated under heading 7326 with same rate and cap. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants the field formations to issue necessary Public Notices and Standing Orders for guidance of the trade and officers/staff. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2014/cuscir14_003.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 3/2014-Cus., Dated: January 30, 2014</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff Value of several items marginally reduced </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Government has decreased the Tariff value of Gold from 407 USD to 404 USD per 10gms and that of Silver from 663 to 635 USD per kilogram with effect from 31.01.2014. Tariff values of other items are also slightly reduced. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is no change in the tariff value of Poppy Seeds and Areca nuts. And as suggested by us in <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTkxNzI=" target="_blank">DDT 2242</a></strong>, the Board has done away with insertion of remarks “No change” against the tariff value(s) in this notification too so as to avoid the ‘cut & paste' fracas that had happened in its notifications 111/2013-Cus(NT) and 116/2013-Cus(NT) and reported by us in <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTkwNTc=" target="_blank">DDT 2232</a> &<a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTkxNzI=" target="_blank"> 2242</a></strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, the remarks “No change” appearing in the table below have been added by us for quick reference. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tariff values as on <strong>15 .01.2014 </strong>and with effect from <strong>31.01.2014 </strong>are as under: </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td colspan="6" valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span"><strong>Table 1</strong></font></p></td>
</tr>
<tr>
<td valign="top" bgcolor="#D2EED2"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">S. No. </font></strong></p></td>
<td colspan="2" valign="top" bgcolor="#D2EED2"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chapter/ heading/ sub-heading/tariff item </font></strong></p></td>
<td valign="top" bgcolor="#D2EED2"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Description of goods </font></strong></p></td>
<td valign="top" bgcolor="#D2EED2"><p align="center"><font color="#569753" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff value USD(Per Metric Tonne) <br>
from 15.01.2014 </font></p></td>
<td valign="top" bgcolor="#D2EED2"><p align="center"><font color="#FF0000"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff value USD (Per Metric Tonne) <br>
from 31.01.2014 </font></strong></font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) </font></strong></p></td>
<td colspan="2" valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4) </font></strong></p></td>
<td valign="top"><p align="center"><font color="#FF0000"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5) </font></strong></font></p></td>
</tr>
<tr bgcolor="#D2EED2">
<td valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1 </font></p></td>
<td colspan="2" valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511 10 00 </font></p></td>
<td valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Crude Palm Oil </font></p></td>
<td valign="top"><p><font color="#569753" size="2" face="Verdana, Arial, Helvetica, sans-serif">877 </font></p></td>
<td valign="top" bgcolor="#D2EED2"><p align="center"><font color="#FF0000"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">857 </font></strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2 </font></p></td>
<td colspan="2" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511 90 10 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBD Palm Oil </font></p></td>
<td valign="top"><p><font color="#569753" size="2" face="Verdana, Arial, Helvetica, sans-serif">897 </font></p></td>
<td valign="top"><p align="center"><font color="#FF0000"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">880 </font></strong></font></p></td>
</tr>
<tr bgcolor="#D2EED2">
<td valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3 </font></p></td>
<td colspan="2" valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511 90 90 </font></p></td>
<td valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Others - Palm Oil </font></p></td>
<td valign="top" bgcolor="#D2EED2"><p><font color="#569753" size="2" face="Verdana, Arial, Helvetica, sans-serif">887 </font></p></td>
<td valign="top" bgcolor="#D2EED2"><p align="center"><font color="#FF0000"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">869 </font></strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4 </font></p></td>
<td colspan="2" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511 10 00 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Crude Palmolein </font></p></td>
<td valign="top"><p><font color="#569753" size="2" face="Verdana, Arial, Helvetica, sans-serif">899 </font></p></td>
<td valign="top"><p align="center"><font color="#FF0000"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">896 </font></strong></font></p></td>
</tr>
<tr bgcolor="#D2EED2">
<td valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5 </font></p></td>
<td colspan="2" valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511 90 20 </font></p></td>
<td valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBDPalmolein </font></p></td>
<td valign="top"><p><font color="#569753" size="2" face="Verdana, Arial, Helvetica, sans-serif">902 </font></p></td>
<td valign="top" bgcolor="#D2EED2"><p align="center"><font color="#FF0000"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">899 </font></strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6 </font></p></td>
<td colspan="2" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511 90 90 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Others -Palmolein </font></p></td>
<td valign="top"><p><font color="#569753" size="2" face="Verdana, Arial, Helvetica, sans-serif">901</font></p></td>
<td valign="top"><p align="center"><font color="#FF0000"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">898 </font></strong></font></p></td>
</tr>
<tr bgcolor="#D2EED2">
<td valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7 </font></p></td>
<td colspan="2" valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1507 10 00 </font></p></td>
<td valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Crude Soyabean Oil </font></p></td>
<td valign="top"><p><font color="#569753" size="2" face="Verdana, Arial, Helvetica, sans-serif">944 </font></p></td>
<td valign="top" bgcolor="#D2EED2"><p align="center"><font color="#FF0000"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">917 </font></strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8 </font></p></td>
<td colspan="2" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7404 00 22 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Brass Scrap (all grades) </font></p></td>
<td valign="top"><p><font color="#569753" size="2" face="Verdana, Arial, Helvetica, sans-serif">3995</font></p></td>
<td valign="top"><p align="center"><font color="#FF0000"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3959 </font></strong></font></p></td>
</tr>
<tr bgcolor="#D2EED2">
<td valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9 </font></p></td>
<td colspan="2" valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1207 91 00 </font></p></td>
<td valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Poppy seeds </font></p></td>
<td valign="top"><p><font color="#569753" size="2" face="Verdana, Arial, Helvetica, sans-serif">3195 </font></p></td>
<td valign="top" bgcolor="#D2EED2"><p align="center"><font color="#FF0000"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3195 (No Change) </font></strong></font></p></td>
</tr>
<tr>
<td colspan="6" valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span"><strong>Table 2 </strong></font></p></td>
</tr>
<tr bgcolor="#D2EED2">
<td valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1 </font></p></td>
<td valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">71 or 98 </font></p></td>
<td colspan="2" valign="top" bgcolor="#D2EED2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Gold, in any form in respect of which the benefit of entries at serial number 321 and 323 of the Notification No. 12/2012-Customs dated 17.03.2012 is availed </font></p></td>
<td valign="top"><p align="center"><font color="#569753" size="2" face="Verdana, Arial, Helvetica, sans-serif">407 per 10 grams </font></p></td>
<td valign="top" bgcolor="#D2EED2"><p align="center"><font color="#FF0000"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">404 per 10 grams </font></strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">71 or 98 </font></p></td>
<td colspan="2" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Silver, in any form in respect of which the benefit of entries at serial number 322 and 324 of the Notification No. 12/2012-Customs dated 17.03.2012 is availed </font></p></td>
<td valign="top"><p><font color="#569753" size="2" face="Verdana, Arial, Helvetica, sans-serif">663 per kilogram </font></p></td>
<td valign="top"><p align="center"><font color="#FF0000"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">635 per kilogram </font></strong></font></p></td>
</tr>
<tr bgcolor="#D2EED2">
<td colspan="6" valign="top" bgcolor="#D2EED2"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span"><strong>Table 3 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">080280 </font></p></td>
<td colspan="2" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Areca nuts </font></p></td>
<td valign="top"><p align="center"><font color="#569753" size="2" face="Verdana, Arial, Helvetica, sans-serif">1816 </font></p></td>
<td valign="top"><p align="center"><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">1816 (no change) </font></strong></p></td>
</tr>
</table>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2014/cnt14_008.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 8/2014-Cus (NT), Dated: January 31, 2014 </strong></font></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">NFSG Benefits to 19 IRS (CCE) officers </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has granted NFSG to 19 IRS (Customs and Central excise) officers. NFSG means Non-functional Selection Grade and the pay scale starts at Rs. 37400 + a grade pay of Rs. 8700. The total pay hike would be around Rs. 37,000/-. How do you know who these NFSG officers are? You will find them suddenly without any provocation or order calling themselves Additional Commissioners. Nobody knows who appointed them as Additional Commissioners, but once they get this coveted NFSG, they are called Additional Commissioners - Of course now technically there is no difference between the powers of a Joint Commissioner and Additional Commissioner. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is learnt that 33 officers of the Department are cleared for promotion as Commissioners. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/cbec_notification_14_03.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Notification No.03/2014 in F. No.A.32012/21/2013-Ad-II Dated: January 31, 2014 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">First Lady Chief of CBEC Retires </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> first ever lady to become Chairperson of the CBEC Praveen Mahajan has retired and she is succeeded by another lady Shanti Sundaram. The only thing that the departmental officers expect from the new chairperson is promotions and the assessees - less of Government. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We wish the new Chairperson all the best. </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"> – Tuesday's cases</font></strong></font></strong></font></p>
<p><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">CENVAT - Prior to 2011, trading was not considered as service at all and, therefore, appellant could not have taken credit pertaining to trading activities<em> ab initio</em> - Pre-deposit ordered of Rs.3 Crores: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PRIOR</strong> to 2011, trading was not considered as service at all and, therefore, the <font color="#FF0000">appellant could not have taken credit pertaining to the trading activities ab initio.</font> Since Rule 6(3) talks of dutiable as well as exempted services, it cannot apply to a situation wherein credit taken pertains to a non-service activity. Similarly, in the case of Insurance services availed by the appellant, bulk of it pertains to traded goods and, therefore, the <font color="#FF0000">appellant could not have taken credit in respect of this service for the manufacturing activity undertaken at their Alibag factory</font>. </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 where assessee admits tax liability on its own, law does not require further evidence to corroborate same - YES: AP HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is a company. During assessment, AO made an assessment on the basis of voluntary statement made by the MD of assessee. In that statement, it was admitted that certain defects persist in maintenance of expense vouchers. The payments were not properly recorded. Taking into account the above deficiencies, which were not deliberate and to cover up any other omissions and commissions, assessee voluntarily offer Rs.20.00 lakhs as additional income in respect of training and development divisions of the company and EOU division of the company. The fact shows that at the time of assessment, assessee had not retracted the aforesaid admission making voluntary disclosure. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issues before the Bench are - Whether voluntary admission of income by the assessee can be considered as a valid piece of evidence and Whether in case an assessee accepts the tax liability on its own, there is no need to collect further evidence or making any enquiry. And the verdict goes against the assessee. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Refund - No prudent business man/organization would continue to bear incidence of higher duty without passing same to buyer of goods - refund claims hit by Bar of unjust enrichment -: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> respondents had imported 75 consignments of Aloe Vera Products viz. Aloe Vera Gel, Aloe Berry Nectar and Forever Freedom and cleared the same between May, 2003 and April, 2005. A dispute arose between Revenue and the respondent regarding the classification of the product. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While respondent sought classification of these products under Customs Tariff Heading 2009 as Fruit Juices & Vegetable Juices, Revenue decided the classification under Customs Tariff Heading 2106 as Food Preparation. The matter was finally decided by the Tribunal <font size="1"><strong>(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=28&filename=legal/cestat/2005/2005-TIOL-964-CESTAT-MUM.htm">2005-TIOL-964-CESTAT-MUM)</a></strong></font> in favour of the respondent. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Consequent to the said decision, the respondent filed a refund claim for differential amount of Customs duty paid to the extent of Rs.7,61,06,909/- The Deputy Commissioner vide his order dt. 14.11.2006 held that the said amount was required to be refunded. However, the refund claim was adjudicated to be hit by the bar of unjust enrichment and, therefore, adjudicating authority directed that the refund amount shall be credited to the Consumer Welfare Fund in terms of Section 27(2) of the Customs Act, 1962. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p>
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