TIOL-DDT 2361 · 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><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>TIOL-DDT 2361</font><br> 27.05.2014<br> Tuesday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax deposited against a wrong assessee code - No Remedy? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YESTERDAY's</strong> DDT story on this subject raised considerable interest, reaction and perhaps a little confusion. Several Netizens drew my attention to CBEC Circular No. 58/7/2003-ST dated 20.05.2003, wherein the Board had clarified that the assessee need not be asked to pay again, if he has paid the Service Tax under a wrong accounting code and the matter should be sorted out with the PAO. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">First of all we should understand the Codes; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>1. Accounting Code</strong> - This is used for each service and for Education Cess and Secondary and Higher Education Cess. There are 120 codes for services and two for cesses. In each service there are separate codes for Tax Collection, other receipts, penalties and refunds. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>2. Assessee Code/ Service Tax Code:</strong> This is the 15 digit PAN based Registration Number for each assessee. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the accounting code is for a service and the assessee code is for an assessee. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the hot question was payment of Service Tax under the wrong </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Accounting code</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Assessee/Service Tax Code.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If the payment is made under the wrong code that is if you pay Service Tax under the code for cargo handling instead of goods transport, the department is prepared to condone your lapse and the PAO will set right the mistake, but if you pay the tax under a wrong assessee code - you are doomed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even when the assessee paid the tax under a wrong assessee code, in a particular case, the Commissioner (A) allowed the party's appeal. Strangely this order of the Commissioner (A) was accepted by the Department and not appealed against. Please see<strong> <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTgyMjY=">DDT - 2151 18.07.2013 </a></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is this kind of wrong payment for which the Mumbai Service Tax Commissioner says that there is no remedy. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There are lots of instructions and clarifications from the e-PAO and various Central Excise Officers doing the rounds. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In any case, when the Government has once received the tax on a service under whatever service tax code, there is no meaning in asking an assessee to pay the tax again. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Duplicate RBI? </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> has come to the notice of the Reserve Bank of India yesterday that a fake website has been created at <strong><a href="http://www.rbi-inonline.org/savings.html" target="_blank">http://www.rbi-inonline.org/savings.html</a></strong> by some unknown persons offering various banking facilities and asking members of public to apply on-line for opening “RBI Savings Account”. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Reserve Bank clarifies that as India's central bank, the Reserve Bank of India does not offer services offered by commercial banks, such as, savings bank account, current bank account or credit cards. As such, the question of the Reserve Bank offering online banking services, as is indicated on the fake site, does not arise. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Reserve Bank has cautioned members of public not to fall prey to spurious offers made by the fake website. The Reserve Bank has further cautioned members of public that applying on line on that website could result in compromising one's own crucial personal information, that may be misused to cause financial and other loss to them. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Members of public may visit the official website of RBI at rbi.org.in and see press releases issued earlier which are made available as scrolling headlines for more information about various kinds of fictitious offers of huge moneys sent in the name of the Reserve Bank or its Governor and other senior officials and what to do in case of receiving such offers. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/RBI_PRESS_RELEASE_14_2290.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI Press Release 2013-2014/2290, Dated: May 26, 2014 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Cadre Review - Chairperson again writes to field for dossiers </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC </strong>Chairperson in her note yesterday informs that about 5000 folders pertaining to the reports of Superintendents/appraisers for promotion to the grade of Assistant Commissioners have been compiled. But she informs that 256 dossiers are yet to be received. She has suggested that the Associations should take up the matter with Zonal Chief Commissioners to get those dossiers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chairperson emphasises that existence of complete and correct dossiers is necessary before proposal for DPC can be sent to UPSC. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There are several vacancies even without cadre review - now the CBEC wants to club those vacancies along with cadre review. This means that those unfortunate officers who are retiring in the next few months will miss their promotion because the department wants mass promotion. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/cbec_chairpersons_Group_B_A.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Letter D.O.F. 5/1/2014-CH(EC) Dated: May 26, 2014</font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Will the Modi Government review Cadre Review? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WITH</strong> accent on more governance and less government, will the Modi Government review the cadre review in the Revenue departments? One fact is undisputable - all these posts were created with only one goal - promotion for the staff; revenue is of least importance. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">WTO DISPUTE SETTLEMENT <br> Panel established on US-India dispute over solar energy </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Dispute Settlement Body of WTO, on 23 May 2014, established a panel to examine a complaint by the United States regarding India's domestic content requirements under its solar energy programme. Brazil, Canada, China, the European Union, Japan, Korea, Malaysia, Norway, Russian Federation and Turkey reserved their third-party right to participate in the panel's proceedings. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The United States reiterated its concern about India's domestic content requirements under its solar energy programme known as the National Solar Mission (NSM). The US emphasized that it was not challenging India's NSM Programme on the basis that it promotes solar power generation. Rather, the US was challenging the domestic content requirements in India's measures that discriminate against imported solar cells and modules in favour of “like” domestic products. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The US, for the second time, requested the Dispute Settlement Body (DSB) to establish a panel to examine the matter set out in its panel request. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The panel is now established. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Brazil, Canada, China, the European Union, Japan, Korea, Malaysia, Norway, the Russian Federation and Turkey reserved their third-party right to participate in the panel's proceedings. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tech Savvy PM </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WITHIN</strong> minutes of taking over as Prime Minister of India, the PM's website was online. The Prime Minister says, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#F8F4DA" span="span">I envision this website as a very important medium of direct communication between us. I am a firm believer in the power of technology and social media to communicate with people across the world. I hope this platform creates opportunities to listen, learn and share one's views. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#F8F4DA" span="span">Through this website you will also get all the latest information about my speeches, schedules, foreign visits and lot more. I will also keep informing you about innovative initiatives undertaken by the Government of India.</font></p> </blockquote> <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">Service Tax </strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">ST - Land owner executing Power of attorney in favour of Applicant for entering upon land & constructing complex -as title is not transferred to the applicant they cannot be treated as owner of land - <em>prima facie</em> applicant has provided Construction of Complex Service which is taxable - Pre-deposit ordered: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> service tax demand of Rs.46,75,705/- has been confirmed against the applicant with penalties and interest on the ground that they provided Construction of complex service. </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 possible cancellation of an existing debt, depending on outcome of on-going litigation is too distant contingency to make dues unenforceable and therefore, TRO is entitled to recover amount due u/s 226(3) - YES: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">‘<strong>EHTPL</strong>' is a SPV constituted by agreement between Andhra Pradesh Industrial Infrastructure Corporation Ltd. (“APIIC”), holding 74% and Emaar Properties holding 26%, for the purpose of establishing an integrated project comprising golf course, convention centre-cum-exhibition complex, residential and commercial complexes, hotels, etc. Assessee is engaged in the business of construction/land development for industrial projects and residential townships, entered into a development agreement with ‘EHTPL'. Subsequently, the said agreement was cancelled and a new agreement was entered as per which the assessee was to receive consideration of 75% of gross revenue from sale of buildings constructed on EHTPL's land and 25% was to remain EHTPL's share. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Three years after the execution of the said agreement, the Government of Andhra Pradesh, on the recommendation of APIIC, prohibited the registration of documents in the integrated project being developed by Assessee and APIIC issued notice to EHTPL to terminate agreement with the assessee as it was without APIIC's approval. APIIC also filed a civil suit against EHTPL and EMGF seeking rendition of accounts and a permanent injunction on the transfer of properties to third parties. A PIL was taken up by the High Court, in which the CBI was directed to conduct inquiry into allegations of irregularity in the development agreement. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue before the Bench is - Whether the potential or possible cancellation of an existing debt, depending on the outcome of on-going litigation is too distant a contingency to make the dues unenforceable and therefore, the TRO is entitled to recover the amount due under section 226(3) of the Act. 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">Central Excise </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Valuation - s.4 of CEA, 1944 - Non-compete fee and Trademark licence fees are additional considerations flowing from Procter & Gamble Godrej Ltd. to Godrej Soaps Ltd. and are, therefore, includible in assessable value - extended period rightly invoked: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant entered into a Joint Venture Agreement and pursuant to the same various other related Agreements were also entered into like Non-competition agreement, assignment of Trademark, Trademarks licence agreement and Manufacturing agreement. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Joint Venture Agreement and other related agreements were terminated w.e.f. 31/07/1996. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An enquiry was initiated in the year 1996 by the Department to find out as to whether the appellant GSL (Godrej Soaps Ltd.) has under-valued the assessable value of Toilet Soaps of certain brands during the period of its alliance with PGG (Procter & Gamble Godrej Ltd.). The enquiry revealed that GSL had manufactured and cleared Toilet Soaps to PGG at an under-valued price inasmuch as it had not included the additional consideration received by it on account of advertisement expenses incurred by PGG during the period 1-3-1993 to 31-7-1996 on the Toilet Soap Brands/Trademarks licenced to PGG by G&B totally amounting to Rs.73,88,56,730/- while computing the assessable value of said goods, thereby short-paid Central Excise duty. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT </strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p> </body> </html>