TIOL-DDT 2312 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!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><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 2312 </font><br>
12.03.2014 <br>
Wednesday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Arrest - BAIL - No Retrospective application of offence HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> question is whether the arrest and bail provisions in Service Tax brought into the Statute with effect from 10.05.2013 will have retrospective effect. That is can a person be arrested for an act committed before 10.05.2013 </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday, we carried a decision of the Bombay High Court which held that the offence is a continuing one and bail was rejected. (<strong>see <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTk5NzE=" target="_blank">DDT 2311</a></strong>) </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But a few months back, the Calcutta High Court had held that the provisions did not have retrospective effect and bail was granted. The Calcutta High Court order was mentioned before the Bombay High Court, but the Bombay High Court was not inclined to accept the Calcutta Order. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While pleading for bail in the Calcutta High Court, the petitioner's lawyer contended that: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. the alleged offence was born not on a solitary date. It took birth on several dates in between the period ranging from 2008 till 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. if any offence taken place well ahead is taken cognizance of, then retrospective effect cannot be carried so as to infringe the right as guaranteed under Article 20 sub-clause (1) along with Article 21 of the Constitution of India. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The lawyer for the Union of India took the plea that <em>the alleged offence is a continuing one and is alive even today</em>. (the same plea taken by Revenue in Bombay High Court). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Calcutta High Court observed:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. It is correct that the offence is alive till now but it is not less than correct that when it was originated, the offence was bailable. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. It is also reckoned that the new Act does not have any retrospective effect. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the Court released the petitioner on bail on furnishing a bond of Rs.30,000/-, with two sureties of Rs.15,000/- each and subject to the conditions that: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The petitioner shall meet the complainant every alternate day till the filing of the application or further order whichever is earlier. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The petitioner shall furnish his telephone numbers both land and mobile, with the complainant so that he may be available on call. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The petitioner shall not leave the jurisdiction of the State of West Bengal without permission of the Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The petitioner shall deposit his passport, if any, with the complainant. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. The petitioner shall deposit a sum of Rs. 10 lakhs with the complainant authority, with ten days from the date of his release. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Later, the Court deleted Conditions (1) and (3) above. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Commenting on the Bombay High Court judgement analysed in yesterday's DDT, a Law Student wrote in, "<em>As a student of law, I think this is in violation of Article 20(1) of the constitution of India and the HC order is wrong."</em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, what is the position? A Service Tax offender arrested in Calcutta will get bail, but an assessee arrested in Mumbai will not. What about those arrested in States other than West Bengal and Maharashtra? The courts there can follow either Calcutta or Bombay High Court decisions - means they may or may not get bail! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Should this issue finally go the Supreme Court?</font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <font size="1"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTI1NTU=" target="_blank">2014-TIOL-314-HC-KOL-ST</a></font> </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">No hold-up of Refunds/Drawback - CBEC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ON </strong>10.03.2014, several newspapers carried reports that </font><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">duty refunds touching Rs 19,000 crore is likely to further hamper the chances of improvement in exports from India, according to Federation of Indian Export Organisations (FIEO).</font></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span"> Federation of Indian Export Organisations (FIEO) President Rafeeque Ahmed regretted that despite repeated requests, the customs authorities have failed to clear the claims. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">"They (revenue department) appear to be more concerned about meeting their revenue targets. Since October last year, the claims are pending and it has reached about Rs 19,000 crore and soon it will touch Rs 25,000 crore by end of the fiscal," Ahmed told PTI. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">He said liquidity is a big issue for exports and pending claims of refund of service tax (Rs 3,000 crore), duty drawback (about Rs 10,000 crore), excise rebate (Rs 6,000 crore) and VAT are affecting exports. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">"The pending claims are highest at JawaharLal Nehru sea port (Rs 3,059 crore) and Chennai sea port (Rs 1,280 crore)," he said . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC was quick to react. In a Press Release, the CBEC yesterday clarified: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">The Central Board of Excise and Customs (CBEC) has denied the report that the Customs, Excise Duty and Service Tax refunds/drawbacks are being held-up by the Department. This was mentioned in a certain section of media attributing to a statement by President, Federation of India Export Organisations (FIEO) to the effect that Customs, Excise Duty and Service Tax refunds/drawbacks are being held-up by the Department. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">This is not correct. The following statement will indicate that more amounts have been refunded in 2013-14 compared to the corresponding period in the previous year. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">For the period April - February</font></strong></p>
<p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">(Rs. in crore) </font></strong></p>
<table border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td width="149" valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">Head </font></strong></p></td>
<td width="148" valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">2012-13 </font></strong></p></td>
<td width="136" valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">2013-14 </font></strong></p></td>
<td width="162" valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">Increase (%) </font></strong></p></td>
</tr>
<tr>
<td width="149" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">Customs </font></p></td>
<td width="148" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">14867 </font></p></td>
<td width="136" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">18144 </font></p></td>
<td width="162" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">22.0 </font></p></td>
</tr>
<tr>
<td width="149" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">Central Excise </font></p></td>
<td width="148" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">17884 </font></p></td>
<td width="136" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">23154 </font></p></td>
<td width="162" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">29.5 </font></p></td>
</tr>
<tr>
<td width="149" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">Service Tax </font></p></td>
<td width="148" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">1328 </font></p></td>
<td width="136" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">2111 </font></p></td>
<td width="162" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">58.9 </font></p></td>
</tr>
<tr>
<td width="149" valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">Total </font></strong></p></td>
<td width="148" valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">34079 </font></strong></p></td>
<td width="136" valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">43409 </font></strong></p></td>
<td width="162" valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">27.4 </font></strong></p></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">The Newspapers in December 2013 reported a similar statement of the FIEO President. Look at the near identical statement reported then.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">We have been requesting the customs authorities to clear the claims but they do not seem to be responding. They appear to be more concerned about meeting their revenue targets. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">He said that liquidity is a big issue for exports and pending claims of refund of service tax, duty drawback, rebate claims and VAT are affecting exports. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At present, out of 118 ports, in 103 ports duty drawback claims alone are pending to the tune of Rs. 4,821 crore . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC clarification does not exactly answer the alleged grievance of the FIEO President. He says that pending claims have touched Rs. 19,000 Crores and is likely to reach Rs. 25,000 Crores soon. The CBEC clarification only says that they have given more refunds this year than they did last year. Will the Board please clarify whether claims to the tune of Rs. 20,000 Crores are pending with the Department? If it is true, the Board is throttling exports and exporters. And this is totally anti national. Incentives for exports are not alms doled out by the Board - Export is a National Priority and the Board should not be a stumbling block. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Election Commission to use Revenue Intelligence </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Election Commission seems to be serious on tracking black money during the elections. They have set up a Committee to monitor black money. The Committee includes intelligent officers from Income Tax Intelligence, Financial Intelligence Unit, Directorate of Revenue Intelligence, Central Economic Intelligence Bureau, Narcotics Control Bureau, etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Elections are sure to spur a lot of economic activity. In each Parliamentary constituency an estimated Rs. 100 Crores are spent and this would mean about a mind boggling 50,000 Crores. That kind of money pumped into the economy can really make a substantial change in the economic conditions of the country. </font></p>
<p align="center"><strong><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"> – Thursday's cases</font></strong></font></strong></font></strong></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">Dues owing by assessee cannot be recovered from properties of appellant, who is <em> bona fide</em> purchaser in auction - In law, person cannot be remediless, particularly in respect of matter, which is void ab initio from day one - If action complained of is non est from day one, same can be challenged even after 100 years in writ petition: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> unit belonging to an assessee was mortgaged in favour of U.P. State Financial Corporation. Since the assessee failed to honour its commitment to U.P. State Financial Corporation, the Corporation took over the unit of the assessee and, thereafter, by public auction, sold the same to the appellant. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is the case of the appellant that after the unit was sold the C.Ex Department contended that as the assessee failed to discharge its dues due and owing to the Excise Department, the appellant being the successor is liable to pay the same. </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, for purpose of depreciation, wind electric generators are to be treated at par with wind mill - NO: ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee had claimed 100% depreciation on wind electric generators, The CIT(Central) Hyderabad in its order u/s 263 of the Act had pointed out that the depreciation at 25% only was allowable on electrical equipment. Consequently, the Assessing Officer during the course of assessment proceedings found that the assessee had claimed 100% depreciation on wind electric generators. The Assessing Officer was of the view that the wind electric generators are in nature of electrical equipments and depreciation is allowable at 25% only but not at 100% as claimed by the assessee. Accordingly, the Assessing Officer calculated the depreciation at 25% and added back the balance as excess depreciation claimed by the assessee. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issues before the Bench are - Whether wind electric generators, for the purpose of depreciation, can be treated at par with Wind Mill; Whether wind electric generators are ancillary or an integral part of Wind mill; Whether is it required to see the rate of wear and tear for the rate of depreciation and Whether Functional Test is required to check for granting higher rate of depreciation. And the verdict goes in favour of 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">It would be absurd to allege that an institution run by State Government and which is associated in implementation of various welfare schemes of centre and State Government by organizing various training programmes to improve the skills of poorer sections of society of having evaded service tax by taking recourse to fraud, willful misstatement, suppression of facts etc.-neither longer limitation period nor penalty is attracted: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is an undertaking of the State Government of Madhya Pradesh, Public Financial Institutions and lead banks of the State and was set up with the sole objective of up-lifting socio economic conditions of the people below poverty line and weaker sections of the society by the way of imparting to them skill development as well as entrepreneurship so that they can earn their livelihood on their own through meaningful employment and for this purpose, the appellant institution conducts various livelihood development and training programmes. According to them, they undertake various training programmes under the welfare scheme of the Central Government and State Government like Prime Minister Rozgar Yojana (PMRY), Prime Minister Employment Generation Programme (PMEGP), Mass Employment Generation through Science & Technology (MEGSET), Entrepreneurship Awareness Camps (EACs), Entrepreneurship Development Orientation Programmes (EDOPs), Swayam Siddha project for upliftment and development of women in the rural areas, Rani Durgawati Swarozgar Yojana (RDSY), Management Development Programmes/Development Orientation Programmes (MDPs/DOPs), CM Gharelu Kamkaji Mahila Yojana (CMGKMY), National Health Rural Mission (NRHM) etc. </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 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>