TIOL-DDT 2319 · 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></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 2319</font><br> 24.03.2014 <br> Monday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>India sure to have new Finance Minister </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHATEVER</strong> be the result of the elections, India is sure to have a new Finance Minister in less than two months. Since we began the great economic open up in 1991, we had only Finance Ministers - Manmohan Singh, Jaswant Singh, P. Chidambaram, Yashwant Sinha and Pranab Mukherjee and for different reasons all of them are out of reckoning for the post of the new Finance Minister. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chidambaram has chosen to opt out of the election fray. He says,<em> "enough is enough in Delhi and I should work for the people in my hometown"</em>. He also says that</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ He is 68 years old, and probably left with another seven to ten years of active life. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Had enough wealth, enough to lead a comfortable life for the next ten years; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ wife, a practising advocate, was earning good money. So was his daughter-in-law, a medical practitioner.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ He had served for 30 years in Delhi, working 17-18 hours a day. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Had he been given relatively light portfolios such as Civil Aviation or Textiles, he could have worked for two-three hours a day and relaxed. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Elect One; get Two</strong>: Campaigning for his son Karti in the Sivaganaga Constituency, Chidambaram said that like hitting two mangoes with one stone, the people could elect Karti to Parliament and himself to serve in the constituency with their one vote. A good package indeed, but when Hillary Clinton made such an offer, there weren't many takers. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Deterrent Action - Board's Powers given to Chief Commissioners</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> virtue of Rule 12CCC of the Central Excise Rules, the Central Government may in order to prevent evasion of, and default in payment of duty of excise, provide for certain measures including restrictions on a manufacturer, first stage and second stage dealer or an exporter by Notification, specify the nature of restrictions including suspension of registration in case of a dealer, types of facilities to be withdrawn and procedure for issue of such order <em><font color="#FF0000">by an officer authorized by the Board</font>.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And by Rule 12AAA of the CENVAT Credit Rules, the Central Government may in order to prevent the misuse of the provisions of CENVAT credit, provide for certain measures including restrictions on a manufacturer, first stage and second stage dealer or an exporter by Notification, specify the nature of restrictions including restrictions on utilization of CENVAT credit and suspension of registration in case of a dealer and type of facilities to be withdrawn and procedure for issue of such order <em><font color="#FF0000">by an officer authorized by the Board</font>.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Notification No. 5/2012-CENT dated 12.3.2012, the Government prescribed the facilities to be withdrawn and detailed guidelines to be followed by the officials while imposing restrictions or withdrawing facilities. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Notification No. 6/2012-CENT dated 13.3.2012, the CBEC authorised Member (CE) of the Board as the officer authorised to issue orders in terms of Notification No. 5/2012-CENT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Come March and all the energies of the Board are concentrated on Revenue and more Revenue and searching for more avenues. As per the existing Rules and procedure, the Board Member has to give orders for deterrent action and Delhi is too far. So, they have amended Rule 12CCC of the Central Excise Rules, Rule 12AAA of the CENVAT Credit Rules, superseded Notification No. 5/2012-CENT dated 12.3.2012 by a new Notification and rescinded Notification No. 6/2012-CENT dated 13.3.2012. The words <em><font color="#FF0000">by an officer authorized by the Board</font> </em> are substituted with <em><font color="#FF0000">by the Chief Commissioner of Central Excise</font> </em> in the above two Rules. Since the Rules specify the officer, there is no need for Notification No. 6/2012-CENT dated 13.3.2012 and is so rescinded. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Needless to say, proceedings already initiated continue - with the Chief Commissioner. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Apart from giving the power to the Chief Commissioners, there are some minor changes like: the period of restriction may not be more than 6 months for the first offence and not more than 1 year for the subsequent offence. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now that the powers are with the field, we can perhaps expect more misuse and abuse. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Is it CENVAT Credit or Cenvat Credit</strong>? In the latest Notification, <strong>CENVAT Credit </strong>is used 10 times and <strong>Cenvat Credit </strong>twice. By an overwhelming majority, <strong>CENVAT Credit </strong> is correct. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These provisions, as they say, have a chequered history. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/print_story.php?newsid=14493"><strong>DDT 1814 - 14.03.2012 </strong></a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4764"><strong>DDT 523 - 02.01.2007 </strong></a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/print_story.php?newsid=14661"><strong>Rule 12AAA of CCRs& Rule 12CCC of CX Rules: Constitutional validity of Notfn 5/2012 in Doubt </strong></a></font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2014/exnt14_13.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No.13/2014-Central Excise (N.T.), Dated: March 21, 2014 </strong></font></a></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2014/exnt14_14.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No.14/2014-Central Excise (N.T.), Dated: March 21, 2014 </strong></font></a></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2014/exnt14_15.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No.15/2014-Central Excise (N.T.), Dated: March 21, 2014 </strong></font></a></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2014/exnt14_16.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No.16/2014-Central Excise (N.T.), Dated: March 21, 2014 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Two IT Assistant Commissioners arrested by CBI for bribe of ten lakhs- Bonus - few bottles of foreign liquor </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A </strong>granite merchant in the small but prosperous town of Trissur in Kerala was told by two Assistant Commissioners of Income tax that his tax liability of Rs. 50 lakhs could be reduced to 1 lakh if he paid Rs. 10 lakhs to them. He did and also informed the CBI. When the CBI officers reached the spot, the clever IRS officers tossed out the bundles of currency, but that didn't help them. When their houses were raided, 14 foreign liquor bottles were found and the State Excise officers also entered the scene and booked an excise case for possession of more than the permissible quantity of foreign liquor. [It seems the maximum quantity of Foreign Made Foreign Liquor that a person can possess in Kerala is 2.5 litres.] </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Election 2014 - Holidays for Central Government Offices </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has issued instructions for closing of the Central Government Offices in connection with the general elections to the Lok Sabha and State Legislative Assemblies of Andhra Pradesh, Odisha & Sikkim and Bye Elections to Legislative Assemblies of some States, scheduled to be held in 2014. </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The relevant offices/organizations shall remain closed on the day of poll in the notified areas where general elections to the Lok Sabha and State Legislative Assembly are scheduled to be conducted. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. In connection with bye-election to State Assembly, only such of the employees who are bona-fide voters in the relevant constituency should be granted special casual leave on the day of polling. Special Casual leave may also be granted to an employee who is ordinarily a resident of constituency and registered as a voter but employed in any Central Government Organization/Industrial Establishment located outside the constituency having a general/bye-election. </font></p> </blockquote> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/office_memorandum_1272014.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DOPT F. No. 12/7/2014-JCA2, Dated: March 21 2014 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax - Most important tax in World </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PAKISTAN</strong> Tax Bar Association Academy Chairman Abdul Qadir Memon says that service tax has emerged as one of the most important tax throughout the world, not only in terms of total tax revenues for the exchequer but also as a control and monitoring tool for the ever-expanding services sector. He said that India introduced the law of Service Tax vide Finance Bill 1994 and today it's collecting approximately 1.50 lakh crores annually. India through the Finance Act, 2012 has brought a new definition for the "Service", whereby all services rendered are taxable except those listed in "negative list" </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Daughter Decides - Always </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> Commissioner took his daughter to a restaurant. The daughter gave the menu card to her father and asked him to choose what they should order. The father said, even in my office, I don't take any decisions, why should I do it now - you decide.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After some years, the Commissioner became an honourable Member of a Tribunal. The daughter and dad again went to a restaurant. This time the daughter said,<em> "every day you take a number of decisions on complicated matters - deciding on the menu should be easy; now you decide."</em>The father replied, <em>"I am so fed up of taking so many decisions every day in the court; should I do it in a hotel also?; You decide."</em></font></p> <p align="center"><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/show_cause_notice.jpg" alt="" width="400" height="405" hspace="5" border="0" align="center"></font></strong><br> </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 align="justify"><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><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise</font></strong></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Differential duty paid before finalization of provisional assessment - harmonious reading of rule 7(4), 8(1) and 8(3) of CER, 2002 would lead one to conclude that appellants are required to pay interest - fact that they have paid duty before formal finalization order issued by AC/DC will not make any difference to said position - Appeals dismissed: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants are manufacturers of Tyres, Tubes & Flaps and these are transferred to various distribution centers, sales depots and C & F agencies to be sold in the replacement market. At the time of clearance from the factory, appellants are not able to precisely determine the value of the goods as they grant various discounts, abatements etc. Therefore, they are clearing the goods on provisional assessment basis under Rule 7 of the Central Excise Rules, 2002. After completion of the financial year they get their accounts audited and they are submitting certificate from CA/Cost Accountant giving the details of the sales value, various discounts given etc. Along with these details, they also calculate the value (and hence differential duty amount) on which they are required to pay the excise duty. They submit these details to the Divisional Dy./Assistant Commissioner for finalization of the provisional assessment for the previous year. While furnishing these details to the Deputy/Assistant Commissioner they also pay the differential duty without waiting for formal order of Deputy/Assistant Commissioner. Order of finalization of the assessment is issued by the Deputy/Assistant Commissioner after few weeks/months (which is after payment of differential duty). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue in dispute is whether they are liable to pay interest on the differential duty that would commence from the month succeeding the date on which the duty was due and payable in relation to the goods cleared till the date of payment of differential duty. </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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether when assessee is into warehousing business, income earned as rental, interest on FDs and loans given to staff is also eligible for exemption u/s 10(29) - NO: Madras HC </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee a Government of Tamil Nadu sponsored undertaking, was formed originally under the Agricultural Produce (Development and Warehousing) Corporations Act, 1956. The said Act was repealed and in its place, the Warehousing Corporations Act, 1962 was framed. With the repealing of the 1956 Act, by the Warehousing Corporations Act, 1962, the Corporation continued its existence as a statutory Corporation constituted under the above-said Act. Under Chapter III of the Central Act, State Warehousing Corporations were established and they were public body corporate. The functions of the State Corporation were almost on similar lines as that of the Central Warehousing Corporation. The assessee is an authority constituted under law to satisfy one of the requirements of Section 10(29) of the Income Tax Act, 1961. The State Warehousing Corporation arranges facilities for acquiring and building godowns, providing warehousing facilities, storage and transport of agricultural produce, seeds, manures, fertilizers, agricultural implements and notified commodities to and from warehouses, apart from acting as an agent of the Central Warehousing Corporation or of the Government for the purposes of the purchase, sale, storage and distribution, of agricultural produce, seeds, manures, fertilizers, agricultural implements and notified commodities. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issues before the Bench are - Whether income earned by the assessee not the one derived from the letting of godowns for the stated purpose of storage, processing or facilitating of marketing of commodities and having no direct nexus to the activities, is eligible for exemption under Section 10(29) of the Act; Whether income incidental to the storage, processing or facilitating of marketing of commodities would qualify for exemption under the provisions of the Income Tax Act and Whether income from house property, from bank receipts, income on loans and advances made to the members of the staff, interest on bank deposits, dividend income, supervision charges, fumigation service charges, weigh bridge receipt, income from sale of tender forms and interest collected on belated refund of advances would be eligible for exemption under Section 10(29). And the verdict goes against the assessee. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Anti Dumping Duty - Refund when Original Assessment Order not challenged: Refund of Anti Dumping Duty is covered by Section 9AA of Customs Tariff Act which is complete code - Section 27 not applicable always: HC </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE scheme of anti-dumping duty under the CTA also provides for refund claims. The mechanism for refund of the duty imposed provisionally under Section 9A(2) pending determination in accordance with Section 9A, is indicated in Section 9A(2)(b). The mechanism for refund of duty imposed under Section 9A(1) after final determination, if the importer can show that he has paid a duty in excess of the actual margin of dumping for the imported article, is indicated in Section 9AA. The Central Government is empowered to make rules to provide the manner in which the application for a refund claim can be made under Section 9AA under Section 9AA(2). This being the case, the mechanism for refund in the Customs Act under Section 27, for claim of refund per se, does not apply. The applicability of Section 9A(8) to incorporate Section 27 of the Customs Act, would be after the final determination of applicability of anti-dumping duty under Section 9A(1), only - as far as may be - applicable keeping in mind Section 9AA. This is because, Section 9AA appears to be a complete code for refund claims after final determination, given that the Central Government is empowered to make rules regarding the manner and the time within which claims for refund may be made, under Section 9AA(2) of the CTA. Thus, Section 9A(8) would operate to incorporate Section 27 of the Customs Act only <strong>as far as may be applicable</strong>, in absence of rules on limitation, until they are made/alongside the rules once made. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our Columns Tomorrow for the judgements </strong></font></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>