TIOL-DDT 2342 · the untouched capture
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<p><strong><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif"><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>TIOL-DDT 2342 </font><font size="3" face="Verdana, Arial, Helvetica, sans-serif"></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
</font></strong><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">29.04.2014 <br>
</font></strong><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tuesday </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Separate Registration as Importer in addition to registration as Dealer </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> received this mail from a harassed assessee -</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The recent amendments vide notifications 08 to 11/2014-CE (NT) effective from 1 st April, 2014 have created myriad of complex issues at the field level. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some of them are narrated below- </font></em></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Many officers in the department now think that every importer must obtain Central Excise registration irrespective of whether he wants to pass on the CENVAT Credit or not. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. A person acting as a trader of indigenously procured goods and also as an importer is required to obtain two separate registrations - one as a dealer & the other as an importer. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The website (aces.gov.in) does not permit selection of multiple categories in the same application. In the drop down Menu list, a person can select only one of the options. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. A few officers also insist that the person must have separate premises for each registration. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Why 2 separate registrations by the same Company or Individual, having ONE PAN Number? <br>
</font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. In fact, in case of a manufacturer's depot, the format requires three registrations: </font></em></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- One as a ‘Manufacturer's Depot' </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Another as a ‘Dealer'; and </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- The third one as an ‘Importer' </font></em></p>
</blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. The rule obeying officer would insist the manufacturer to have three godowns. Keep three sets of invoices, RG23D and file three returns. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. Moreover, the assessee is warned that action would be taken for recovery of CENVAT credits passed without having a separate registration </font></em></p>
</blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board should understand that framing of rules and regulations is one thing and implementing is another helluva job. It is as if the Board is disconnected with the ground reality!</font></em></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Hope the Board takes cognizance of this unintended mess and does the needful so that what it sought to achieve by the amendments is not lost in the maze of additional paper work. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">High Court Order not followed because the party is different!!!!!!!!!!!!! </font></strong></font></p>
<p align="center"><font color="#006600"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Blatant Judicial Disobedience by Young IRS Officer - High Court directs CBEC to issue Circular </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> new brand of young officers are joining the Department whose Himalayan arrogance is comparable in quantity and quality only to their humungous ignorance. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is the story of a young lady IRS officer who joined the Department in 2009 and in 2011 was posted as an Assistant Commissioner of Central Excise in a vibrant Division in a Commissionerate, who has shown her utter lack of respect for the judiciary and orders of higher authorities. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a refund claim before her, the party cited an order of the Gujarat High Court in <em>Commissioner of Central Excise and Customs vs. NBM Industries</em> reported in <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2011/2011-TIOL-677-HC-AHM-CX.htm"><strong><em><font size="1">2011-TIOL-677-HC-AHM-CX</font></em></strong></a>, in which it has been held by the Court that on inputs used in manufacturing of goods cleared by DTA units to 100% EOU refund of CENVAT credit is available and it could not be denied on the ground that it was the case of deemed export and refund would be granted only in case of physical export. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Despite the above binding direct decision of the Court, the Assistant Commissioner, Central Excise and Customs Division, Vapi in her orders has rejected the refund claims of the claimant on the ground inter alia that the decision of the High Court in NBM Industries is in the case of another assessee and not in the case of claimant and each one must fight its own battle and must succeed or fail in such proceedings and also on the ground that the decision of the Madras High Court in the case reported in <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=27&filename=legal/hc/2006/2006-TIOL-433-HC-MAD-EXIM.htm"><strong><em><font size="1">2006-TIOL-433-HC-MAD-EXIM</font> </em></strong> </a>is against the assessee . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">She is in Vapi and the Gujarat High Court is her jurisdictional High Court. She refuses to follow the jurisdictional High Court and wants to follow the Madras High Court judgement. It may be noted that the Gujarat High Court had taken into consideration the Madras High Court judgement while deciding the NBM Industries case and came to the conclusion it did and this learned Assistant Commissioner had no business to distinguish between the Gujarat High Court and Madras High Court judgements. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Without following the long winding appellate channels, the assessee approached the High Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the High Court, the Counsel for the Revenue was not in a position to defend the impugned orders passed by the Assistant Commissioner on merits. He tendered unconditional apology and has requested not to take any further action against the Assistant Commissioner as she has recently joined the department in the year 2011 and she has acted <em>bonafidely</em> to protect the interest of the revenue. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court observed that<em> it is required to be noted that the decision of Division Bench of this Court in the case of NBM Industries is binding upon the respondent. Merely because the said decision is in the case of another assessee , the respondent could not have ignored the same and/or not followed the same by holding that it is not binding ruling as the same is in case of another assessee. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court further observed, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"The Adjudicating Officer acts as a quasi-judicial authority. He is bound by the law of precedent and binding effect of the order passed by the higher authority or Tribunal of superior jurisdiction. If his order is thought to be erroneous by the Department, the Department can as well prefer appeal in terms of the statutory provisions contained in the Central Excise Act, 1944.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>As such by not following the binding decision of this Court in the case of NBM Industries (Supra), the respondent <strong>adjudicating authority has rendered herself liable for the prosecution/proceedings under the Contempt of Courts Act. </strong></em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To maintain the rule of law and judicial discipline, the lower authority is bound by the decision of the higher appellate authorities/courts. However, considering the fact that there is no other malafide alleged and that the respondent is reported to be recently joined the department in the year 2011 and the unconditional apology tendered, we close the proceedings so far as the proceedings under the Contempt of Courts Act are concerned."</font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As the Court felt that despite clear and unequivocal message by the pronouncement of the decisions by the Supreme Court as well as High Court, the message has not reached to the concerned authorities, the CBEC was directed to issue <em>a detailed circular to all the adjudicating authorities considering the observations made by this Court in the present judgment and order as well as the law laid down by the Hon'ble Supreme Court in various decisions referred to in the present judgment and order, within a period of 30 days from the date of receipt of the present order so that such eventuality may not happen again and again</em>.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Court ordered cost of Rs. 5000/- in each petition along with the refund. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Assistant Commissioner who was so revenue conscious has ended up paying interest for the delayed refund and costs to the assesse and narrowly escaped contempt proceedings. All because two years in the academy and two years in the field made her believe that she is a super power far above the Courts. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By virtue of powers wasted on such officers who have only contempt for the Laws and Courts, the Revenue loses heavily. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This kind of disrespect for Law and disobedience of higher judicial authorities is more dangerous than corruption and just like we have a Prevention of Corruption Act, we should have a Section in the Central Civil services Conduct Rules for Prevention of disrespect for and disobedience of higher judicial authorities - that even if they are not punished for contempt of Courts, they should be liable to departmental punishment under Conduct Rules. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">We understand that the Board is likely to issue the Circular very soon as directed by the High Court. But then blatant disregard for the Board Circulars is another hallmark of the service and the helpless Board usually takes a serious view - and nothing more . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And we hear from the corridors of the Gujarat High Court that the Central Excise Department is still in the High Court premises - maybe trying to get an extension for paying the refund and costs and issuing that Circular. And the case is posted for 13.6.2014. </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTMzMjM="><font size="1">2013-TIOL-1172-HC-AHM-CX</font> </a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC wants a Joint Secretary, Tax Research Unit (TRU) </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> had in CBEC F. No. A.35017/32/2013-Ad.II, Dated: January 09, 2014, called for applications for the post of Joint Secretary, Tax Research Unit (TRU). IRS officers of Commissioner level are eligible to apply. Board wanted the applications latest by 21.01.2014. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is a very prestigious post, but who wants prestigious posts these days? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When the Judges write orders stating, "The legislature in its wisdom….”, what it really means is, "the JS (TRU) in his wisdom….” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But obviously there were not many takers for the job and Board has decided to invite fresh applications. This time, the Board wants the applications latest by 16.05.2014. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government should think of providing some special facilities for those working in the TRU (or for that the Board) so as to attract talent into the North Block. Today working in Delhi is the only incentive. While Commissioners in the field have a good time, the JSTRU will have to slog it down with boring notifications and egoistic ministers. Working as JSTRU is like a Catch-22 situation - better avoided - for many officers.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Finance Minister P. Chidambaram used to personally interview the candidates for the post of JSTRU, but this time, the candidates are spared that agony as by the time the selection process, we will have a new Finance Minister.</font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/deputation/vcacancy35017_2014.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F. No.A.35017/32/2013-Ad.II, Dated: April 28, 2014</font></strong></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"> - Wednesday's cases</font></strong></font></strong></font></p>
<p><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">CST Act, 1956 </strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Error apparent on face of record- Section 8 of CST Act, 1956 - If an interstate sales transaction is not covered by Form C, rate of tax would be equivalent to rate of VAT applicable for commodity in particular state - Inter state sale transactions without Form C - Application of wrong rate of tax by grouping all items - Application for rectification made by petitioner but not considered despite reminders - Department directed to consider Application for rectification and pass orders.: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> petitioner is a manufacturer of petroleum products like Bitumen, Hexane Slack wax etc., and filed returns for CST for assessment year 2007-08. The respondent passed assessment order dated 04.07.2012. On a perusal of the order, the petitioner found certain errors apparent on the face of the assessment order. In the assessment order, the respondent grouped interstate sale transactions of all the petroleum products without Form C and assessed the total turnover at 30%, even though the petitioner gave details of sales of individual items with name of each of the commodities sold. Whereas the respondent erroneously grouped the entire list of commodities under the nomenclature petroleum products and assessed the entire turnover to tax at 30% which is applicable for sale of petrol and not for other petroleum products like bitumen, Hexane slack wax etc.,. The petitioner then filed rectification application under Section 84 of the TNVAT Act, 2006 and sought for rectification of the error. However, despite repeated reminders the respondent did not pass any order on the rectification application and the petitioner filed Writ Petition praying for quashing the assessment order as arbitrary and illegal and to direct the respondent to consider the representation for rectification. </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 block assessment, it is necessary that name of assessee must figure in warrant of authorisation u/s 132 - YES: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is a lady. Her husband's premises were searched pursuant to a search warrant. During the course of search of the husband's residential premises certain documents were seized. A panchanama was drawn on 24th February, 2006, which revealed the locker keys pertaining to three lockers which were in joint names of S.K. Mohile and Ashish S. Mohile and the assessee. The lockers were at Bank of Baroda. On 23rd February, 1996 a warrant of authorization was issued in the name of the Branch manager, Bank of Baroda to search the lockers. The argument advanced was that, in the facts and circumstances of the case and in law, AO had no jurisdiction to pass an assessment order in the present case u/s 143(3) read with Section 158BC as no search warrant was served on the assessee. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issues before the Bench are - Whether Search as per the provisions of Sec 132 is always person-specific and not premise-specific; Whether, for the purpose of block assessment, it is necessary that the name of the assessee must figure in the warrant of authorisation u/s 132 and Whether mere presence of the assessee's name in the panchnama enables the Revenue to initiate block assessment. 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">Revenue alleging that the respondent had imported Motherboards, Modems, Fast Ethernet Adapters, etc. in CKD condition - from the evidence on record it cannot be said that the parts imported by Respondent are not further worked upon - there is also no suppression since respondent has not misdeclared goods - Revenue appeal dismissed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Respondents made import of electronics parts/components namely, Resistors, Inductors, Chips, Codecs, Driver CDs, Labels, Heat Sinks, Regulators, Capacitors etc. of Motherboards, Modems, Fast Ethernet Adapters, Ethernet Cards, Switches, Hubs etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Show Cause Notices were issued to the Respondents on the ground that the items imported are appropriately classifiable as Motherboards, Modems, Fast Ethernet Adapters, etc. in unassembled forms by applying Rule 2(a) of the General Rules for Interpretation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CCE, Goa dropped the proceedings and the Revenue is before the CESTAT. </font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements </font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more<strong> DDT</strong></font></p>
<p><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"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p>
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