TIOL-DDT 2336 · 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 color="#663399" size="3"><s><strong><font size="2"><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 color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=20079"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2014_1.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="250" height="123" hspace="5" border="0" align="right"></a></font></strong></font></strong></font></strong></font></strong></font></strong></s></font></strong></font><font color="#663399" size="3">TIOL-DDT 2336</font><br> </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>21.04.2014<br> </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Monday</strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Appeals to Tribunal - Reference to Third Member - COMMISSIONER challenges CESTAT President's choice of Third Member - High Court declines to interfere</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is a strange case where the Commissioner of Central Excise has challenged the decision of the President of the CESTAT in his choice of the Third Member. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <em>SRJ PEETY STEELS PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, AURANGABAD</em> - <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTI5OTY=" target="_blank"><font size="1">2013-TIOL-1945-CESTAT-MUM</font></a></strong>, at the stay stage, there was a difference of opinion between the two Members of the Division Bench.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. Ashok Jindal, Hon'ble Member (J) felt that the applicant has made out a case of 100% waiver of pre-deposit and accordingly he proposed waiver of pre-deposit of entire amount of duty and penalty and stay of demand thereof during the pendency of the appeal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. P R Chandrasekharan, Hon'ble Member (T) differed and directed a pre-deposit of 25% of the duty adjudged.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. SS Kang, Hon'ble Vice President as Third Member agreed with the Hon'ble Member (Judicial) and waived pre-deposit of duty, interest and penalty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The case came up for final hearing before the Bench of Mr. SS Kang, Hon'ble Vice President (as Member Judicial) and Mr.PK Jain, Hon'ble Member (T). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. Kang allowed the appeal of the assessee and set aside the impugned order. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr.PK Jain differed and proposed to uphold the impugned orders and dismiss the appeals. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the matter has to go again to the Third Member and here it took an interesting turn.- <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTMxMTQ=" target="_blank"><font size="1">2014-TIOL-582-CESTAT-MUM</font></a></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue came to know that the Hon'ble President of CESTAT has nominated Mr. Ashok Jindal as Third Member. Revenue felt that it was necessary in the interest of justice to nominate a member who can consider the point of difference afresh, instead of nominating a member who has already formed a view about the matter at the time of hearing of stay Application. Therefore, it was inappropriate to nominate him. Therefore, to ensure the principles of natural justice and fair play, the Commissioner of Central excise, Aurangabad filed a Miscellaneous Application before the President, CESTAT to nominate the Third Member to resolve the difference of opinion to either the Hon'ble President or any Member, who has not earlier heard the matter. The President did not relent and stuck to his decision to nominate Mr. Ashok Jindal as the Third Member. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The aggrieved Commissioner took the matter in writ petition to the Aurangabad Bench of the Bombay High Court challenging the President's order nominating Mr. Ashok Jindal as Third Member as totally illegal, bad in law and inconsistent with the settled Judicial precedents, arbitrary and not in accordance with the principles of natural justice. The High Court by its order dated 14.03.2014 - <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTI5OTU=" target="_blank"><font size="1">2014-TIOL-465-HC-MUM-CX</font></a> </strong> directed that Mr Ashok Jindal to whom the matter is referred, shall defer the hearing till 26th March, 2014. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court has now disposed of the petition observing that the Court cannot interfere in the matter. Without expressing its opinion, the High Court left the matter to the President of the Tribunal for passing appropriate orders. It would be open for the President to reconsider the issue for making reference of the matter to himself or to another learned Member for hearing and deciding the same. The learned President may take appropriate decision in the facts of the case. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the question whether a Member who had already formed an opinion at the Stay Stage can be the Third Member at the Final Stage is left undecided. Apparently it is not illegal - otherwise the High Court would have passed an order. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This would also raise a question whether those Members who were earlier associated with the case can be Members of the Larger Bench. In fact in one case, the two Members of the Division Bench which referred the matter to a Larger Bench constituted (along with a Third Member) the Larger Bench! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ultimately it is all confusing and pretty costly for the assessee. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTMxODg="><font size="1">2014-TIOL-533-HC-MUM-CX</font></a></strong> </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Allegation of Clandestine manufacture and removal of Ingots without payment of duty on basis of electricity consumption - a long and tiring journey! </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IF</strong> you want to know more details of the above case, read on…. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is a case where the department has alleged clandestine manufacture and removal of MS Ingots without payment of duty.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The department has based their allegation on the study conducted by Dr.N.K. Batra, Professor of IIT, Kanpur and the opinion given by All Indian Induction Furnace Association. Inasmuch as the department has come up with a formula that 1026KW of electricity is required to manufacture 1MT of MS ingots. And by taking the electricity bills raised by Maharashtra State Electricity Board as the base, the Revenue has alleged that during the period in dispute all the manufacturers should have manufactured the quantities as alleged in the SCNs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vide different adjudication orders the demands were confirmed with interest and penalties were imposed. But naturally, the demands are in crores of rupees. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellants, 38 of them which included more than two dozen manufacturers, took the matter to the CESTAT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the Division Bench of <em>Shri P G Chacko </em>, Member(J) [writing for the Bench] & <em>Shri S K Gaule </em>, Member (T) while ordering pre-deposit of 50% of the duty and 25% of penalty observed - </font></p> <blockquote> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">"When a person indulges in clandestine manufacture and removal of goods, he will not keep any records - When the department discharged their initial burden of proof by showing excess consumption of electricity (a major input) by the appellants, the latter did not have any valid explanation to offer. Hence the Revenue cannot be faulted for demanding duty on the steel ingots which could have been manufactured by consuming the excess quantity of electricity."</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We reported this order dated <strong>28.02.2011 </strong> as <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2011/2011-TIOL-288-CESTAT-MUM.htm" target="_blank"><font size="1">2011-TIOL-288-CESTAT-MUM</font></a>. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Not pleased with this Stay order, one of the appellants SRJ PEETY STEELS PVT LTD filed an appeal before the Bombay High Court citing the Tribunal order in <em>Nasik Strips Pvt. Ltd. vs. Commissioner of Central Excise, Nasik</em> <strong><font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2010/2010-TIOL-1110-CESTAT-MUM.htm" target="_blank">2010-TIOL-1110-CESTAT-MUM</a></font></strong> and several other decisions of the CESTAT, wherein, the CESTAT had granted full waiver of the deposit, as an interim relief, where the facts were similar to their case. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Holding that the Tribunal should take a consistent view regarding pre­-deposit when the facts and circumstances in the matters before it are similar, the matter was remanded by the High Court. We reported this order dated <strong>20.07.2011 </strong> as <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2011/2011-TIOL-695-HC-MUM-CX.htm" target="_blank"><font size="1">2011-TIOL-695-HC-MUM-CX</font></a></strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue SLP filed against this order of the High Court was dismissed by the Supreme Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In remand proceedings, whereas the Member (Judicial) <em>Shri Ashok Jindal </em> took a view that the facts of the case in hand are similar to the facts of the case of <em>Nasik Strips Pvt Ltd</em>. - <strong><font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2010/2010-TIOL-1110-CESTAT-MUM.htm" target="_blank">2010-TIOL-1110-CESTAT-MUM</a></font> </strong>& <em>Mithulal Gupta and Bhagwati Ispat Pvt. Ltd</em>. - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2006/2006-TIOL-350-CESTAT-DEL.htm"><strong><font size="1">2006-TIOL-350-CESTAT-DEL</font></strong></a> wherein the Bench has granted unconditional waiver of pre-deposit, he held that the applicant had made out a case of 100% waiver of pre-deposit.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Member (Technical) <em>Shri P.R.Chandrasekharan </em> took an opposite stand and referring to Orange City case <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODgwMDQ=" target="_blank"><font size="1">2011-TIOL-950-HC-MUM-CX</font></a></strong> [Order dated 23.11.2011] where in a similar set of circumstances, the Bombay High Court had directed to make a pre-deposit of 25% of demand of duty at the interim stage of stay, directed the present appellant to also make pre-deposit of 25% of the duty adjudged. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The third Member on reference, <em>Shri S.S.Kang </em>, Vice President observed that there is no evidence on record in respect of receipt of unaccounted raw material or clandestine clearance of goods manufactured by the applicant or any admission by the applicant. And holding that the Tribunal decision <em>R.A. Casting</em> - <em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2008/2008-TIOL-2732-CESTAT-DEL.htm"><strong><font size="1">2008-TIOL-2732-CESTAT-DEL</font> </strong></a></em>in a similar set of facts had allowed the appeal, the Vice President granted waiver from pre-deposit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And so, by a Majority decision the appellant was granted waiver from making any pre-deposit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We reported this order dated <strong>27.02.2013 </strong> as <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTI5OTY=" target="_blank"><font size="1">2013-TIOL-1945-CESTAT-MUM</font></a></strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, some of the other appellants [Orange City Alloys Pvt. Ltd. &Ors] who were involved in the Stay order <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2011/2011-TIOL-288-CESTAT-MUM.htm" target="_blank"><font size="1">2011-TIOL-288-CESTAT-MUM</font></a> </strong>had also filed appeals before the Bombay High Court. Their appeals were heard by a Division Bench other than that which had heard the appeal of <em>SRJ Petty Steels </em> and the Bench observed that it was unable to agree with the decision dated 20.07.2011 remanding the case back to the Tribunal. The Division Bench referred the matter to a Larger Bench. See this order dated <strong>24.10.2011 </strong> - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2011/2011-TIOL-661-HC-MUM-CX.htm" target="_blank"><font size="1">2011-TIOL-661-HC-MUM-CX</font></a></strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Larger Bench of the Bombay High Court heard the matter and passed the following order on <strong>09.11.2011-</strong></font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>28) For all the aforesaid reasons, we answer the question referred to us by holding that the Aurangabad Bench in the case of M/s. SRJ Peety Steels Pvt. Ltd. (supra) was not justified in remanding the proceedings back to the CESTAT for reconsideration without expressing its view as to the validity of the impugned order dated 28th February, 2011 or the validity of the orders of the CESTAT in the case of Nasik Strips Pvt. Ltd. (supra) and Mithunlal Gupta (supra). Accordingly, we hold that the decision of the Aurangabad Bench cannot be treated as precedent and the Division Bench of this Court would be within its power to dispose of the appeals on its own merits without being bound by the decision of the Aurangabad Bench in the case of M/s. SRJ Peety Steels Pvt. Ltd. (supra). </em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2011/2011-TIOL-701-HC-MUM-CX-LB.htm" target="_blank"><font size="1">2011-TIOL-701-HC-MUM-CX-LB</font></a>. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appeal filed by <em>Orange City Alloys Pvt. Ltd.</em> was heard by the Division Bench of the High Court and vide Order dated <strong>23.11.2011</strong>,the High Court directed the Appellants to make a pre-deposit of twenty five per cent of the demand for duty; dispensed with the deposit of penalty and also directed the Tribunal to dispose of the appeal.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We reported this order as <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODgwMDQ=" target="_blank"><font size="1">2011-TIOL-950-HC-MUM-CX</font></a>. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All the appeals were heard together by the CESTAT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Again, there was a difference of opinion. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Vice President <em>Shri. S.S.Kang </em> observed that the case of the Revenue is on the basis of electric consumption only and in view of the Tribunal decision in <em>R A Casting Pvt Ltd</em> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2008/2008-TIOL-2732-CESTAT-DEL.htm"><strong><font size="1">2008-TIOL-2732-CESTAT-DEL </font></strong> </a>which was upheld by the Allahabad High Court and the Supreme Court, the orders are required to be set aside and the appeals were allowed.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, the Member (Technical) <em>Shri P.K. Jain </em> in a detailed order distinguished the Tribunal order cited of <em>R A Casting </em>& after admitting additional evidence submitted by the Revenue upheld the orders of the adjudicating authorities and dismissed all the appeals. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, in view of the difference in opinion, the matter came to be referred to the Third Member. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We reported this order dated <strong>31.01.2014 </strong> as <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTMxMTQ=" target="_blank"><font size="1">2014-TIOL-582-CESTAT-MUM </font></a></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rest as they say is history and as detailed above. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>After all, proving a clandestine removal is a gargantuan task! </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Appeal to CESTAT relating to Refund - No Fee </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is a trivial issue, but has been a matter of litigation for the past 20 years. Any way the Larger Bench of the CESTAT in <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODkxNjM=" target="_blank"><font size="1">2013-TIOL-1103-CESTAT-DEL-LB</font></a></strong>, emphatically held that in Customs, Excise and Service Tax appeals no fee is payable if the appeals pertain to refunds. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The matter should have ended there, but NO; a litigation loving Government took the matter in appeal to the High Court. The Central Excise Commissioner was <strong>aggrieved </strong> with the order of the Larger Bench and appealed to the High Court with the usual condonation of delay application. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court found no substantial question of law and therefore dismissed the Commissioner's appeal thereby upholding the order of the Larger Bench of the Tribunal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is the Commissioner <strong>aggrieved </strong>? The fee collected by the CESTAT does not come to the CBEC or the Commissioner. In what way is the Commissioner concerned with the fee collected or not collected by the CESTAT? Has the Commissioner taken it upon himself to protect the Revenue of the Central Government in all the Departments of the Government? Is the Commissioner Government of India? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The question of law suggested by the Commissioner was </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"<em>Whether on the facts and in the circumstances of the case the CESTAT, New Delhi has gravely erred in interpreting the provisions of Section 86 (6) of the Finance Act, 1994 and holding that no fees is payable in filing appeal before the CESTAT relating to refund/rebate of Service Tax, Customs and Central Excise matter <strong>depriving the revenue to collect fee </strong> from the parties from all over India with regard to filing of appeals in the matters of refund/rebate of Service Tax, Customs and Central Excise matters?"</em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr Commissioner you are a litigant before the CESTAT and the CESTAT is not a source of Revenue for you and you don't collect the fee; so there is no question of depriving you of collecting fees. Of course it will be a good idea to pay a fee to the opposite party in a litigation - frivolous litigation may come down a little if for every appeal before the Tribunal, the Commissioner has to pay a fee (or call it an amount) to the assessee. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this case, just imagine the amount of time, money and paper the Department has wasted in protecting the fee to be paid to the Tribunal which the Tribunal itself held was not required! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this case before the High Court, the assessee was not represented. The maximum fee payable for an appeal before the Tribunal is Rs. 10,000/-. He would rather lose the case in the High Court than spend more than the fee payable, if at all, to defend the case. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner has no such problems - for him every adverse order should be escalated to the next higher level - after all he is spending our money, not his. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us hope the Department does not take this matter to the Supreme Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTMxNjc=" target="_blank"><font size="1">2014-TIOL-525-HC-ALL-ST</font></a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SOP - Verification/Correction of Arrear Tax Demand - CBDT Instructions </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT has issued detailed instructions laying down a Standard Operating Procedure (SOP) for verification and correction of demand by the AOs. As per this SOP, the taxpayers can get their outstanding tax demand reduced/deleted by applying for rectification along with the requisite documentary evidence of tax/demand already paid. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The SOP is expected to mitigate the long standing grievances of taxpayers by way of reduction/deletion of tax demands. The CBDT has further noted that many taxpayers are committing mistakes while furnishing their tax credit claims in the return of income. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Such mistakes include: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. quoting of invalid/incorrect TAN;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. quoting of only one TAN against more than one TAN tax credit; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. furnishing information in wrong TDS Schedules in the Return Form; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4.furnishing wrong challan particulars in respect of Advance tax, Self-assessment tax payments etc.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBDT, therefore, desires the taxpayers to verify if the demand in their case is due to tax credit mismatch on account of such incorrect particulars and submit rectification requests with correct particulars of TDS/tax claims for correction of these demands. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Source: PIB Press Release </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs - New Exchange Rates from 18th April </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has notified new exchange rates for Imported Goods and for Export Goods with effect from 18th April 2014. The US Dollar is 60.80 rupees for imports and 59.80 rupees for exports. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Exchange rates were last notified on 03 April, 2014. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2014/cnt14_032.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 32/2014-Cus (N.T.), Dated: April 17, 2014 </strong></font></a></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"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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">Service Tax </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Construction Service - Revenue cannot be allowed to receive service tax twice in respect of same construction activities, once from contractor and second time from person who has collected the same: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">REVENUE's contention is that the appellant, who has collected the amount, was required to deposit the same himself with the Revenue. There is no justification for the above stand of the department. Admittedly, the appellant is the owner of the flats, who is selling the same to its customers. The value of said flat is being recovered by the appellant from the buyer and all the taxes payable to the Government are to be collected by him from their buyers along with the cost of the flats. Whether such Service tax collected by them from the buyers is deposited directly with the department by themselves or is deposited with the Revenue by the contractor being the job worker for the appellant is immaterial as long as Service tax so collected is deposited. The Revenue cannot be allowed to receive service tax twice in respect of same construction activities, once from the contractor and the second time from the person who has collected 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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether when serious irregularities are pointed out in Special Audit Report and fact that assessee was also given opportunities to inspect records seized during Search but it did not avail it, penalty is inescapable consequence in such case - YES: Delhi HC </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee, a contractor, undertaking projects of Indian Railways on turnkey basis, filed its return of income declaring a total income of Rs.88,91,700/-. On the basis of the materials gathered in the course of a search carried out in the assessee's premises as well as in the premises of the directors and trusted persons, the assessing officer referred the matter to a special audit in terms of Section 142(2A) of the Act. The special audit reported that there were large number of transactions for which no supporting vouchers were available, that several discrepancies in cash and journal vouchers and changes in the dates of the vouchers were noticed, that there were discrepancies in the adjustments of cash books with cash vouchers, that there were payments made to the Railway staff which were not allowable as deduction under the Act, that several payments were made without obtaining any signature of the recipients, that the assessee did not maintain any stock register and did not disclose any work-in-progress in the balance sheet, that several items of capital expenditure were passed off as revenue expenditure and so on.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue before the Bench is - Whether when serious irregularities are pointed out in Special Audit Report and the fact that the assessee was also given opportunities to inspect records seized during Search but it did not avail it, penalty is inescapable consequence in such a case. And the verdict goes in favour of Revenue. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Kerala General Sales Tax Act</strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Sale by brand name holder or trade mark holder to be first sale for purpose of Section 5(2): SC </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IF</strong> the following three conditions are satisfied, the sale by the brand name holder or the trademark holder shall be the first sale for the purpose of the Act. </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Sale of manufactured goods other than tea; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Sale of the said goods is under a trade mark/brand name and; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) The sale is by the brand name holder or the trade mark holder within the State. </font></p> </blockquote> <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>