TIOL-DDT 2368 · the untouched capture
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<p><font size="3" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399"><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 2368</font></strong></font><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
05.06.2014<br>
Thursday</font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs Duty on Goods sent for job work abroad </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> the RAC Meeting of Hyderabad Zone recently, a Member asked a question. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is any custom duty payable and at what rate, when goods sent out to a job worker located outside the country are brought back after getting them processed at the job worker's factory. Is there any time limit for the return of the processed goods? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department answered: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With regard to the goods that are to be sent out to a job worker located outside the country and brought back after getting them processed at the job worker's factory, the procedure to be followed and other details are available in Notification No.43/96-Cus, dated 23.07.1996 <strong>(Gen. Exemption No.128)</strong>. Rate of duty on re-imported goods is governed by exemption Notification 94/96-Cusdt.16.12.96 as amended. </font></p>
<p align="justify"><font color="#0000FF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Now what is General Exemption No. 128? Has the Government given any serial numbers for its general exemptions and special exemptions? Where did the Department get this number from? </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SEZ - Clarifications on Free Trade Warehousing Zones (FTWZ)</strong> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> Instruction No. 49 dated 12.03.2010, the Department of Commerce had in Point No. (iv) clarified that </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>there are no limitation on Units set up in FTWZs located in Sector Specific SEZs to carry out Trading and Warehousing Activities in respect of any product. </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Instruction No. 71 dated 12.11.2010, they amended this and clarified that </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>instead of there being no limitation on units set up in FTWZ located in Sector Specific SEZs to carry out Trading and Warehousing Activities in respect of any product, it has been decided that units in Free Trade Warehousing Zones (FTWZ) in a Sector Specific SEZ can store goods required for development of zone or setting up of units or for manufacturing and export/DTA sale of goods and services or finished products of the units in that particular sector specific zone. </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is now further amended to stipulate that </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a unit in Free Trade Warehousing Zone (FTWZ) in Sector Specific SEZ shall be allowed to provide services for products which are covered within the sector approved for Sector Specific SEZ to other SEZ/SEZ units. </font></em></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=260&filename=sez/sez_instructions/sez14ins080.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Department of Commerce (SEZ DIVISION) Instruction No.80/2014, Dated: May 18, 2014 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Tobacco Board Authorised to issue Certificate of Origin </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended the Public Notice No. 59/2009-14(RE-2013)/ dated 15.05.2014 to authorise Tobacco Board also to issue Certificate of Origin for Tobacco products under Global System Of Trade Preferences (GSTP). </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2013/dgft13pn061.htm" target="_blank">DGFT Public Notice No.61/2009-2014 (RE-2013), Dated: June 03, 2014 </a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT - Online complaint resolution system relating to EDI issues </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> Trade Notice issued by DGFT states, </font></p>
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<td><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An online complaint resolution system relating to EDI issues has been established where users can file online complaint. <strong>User can go to 'icon' "EDI complaint resolution"</strong> and feed following data in the system to get the issues addressed. A key number for each complaint will be generated which can be followed up by the users and DGFT officials for early resolution of issues. If the issue is not resolved in 5 working days email may be sent to Shri Anil Kumar Sinha, DDG(NIC) - anilksinha@nic.in. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. All stakeholders are requested/encourage to use the facility of online complaint resolution system relating to EDI issues with effect from 04.06.2014. </font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It doesn't say where (in which website) this icon can be found. And this icon cannot easily be found in the DGFT web site! </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=329&filename=notification/dgft/2013/dgft_trade_notice_10_2014.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Trade Notice No.10/2014, Dated: June 04, 2014 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">LUTs and Bonds </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SOME</strong> more questions raised in the RAC meeting were: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Many manufacturers - exporters are complaining that Divisional Assistant/Deputy Commissioners are insisting on several documents at the time of Renewal of Letter of Undertaking (LUT) which are legally not required to be given. For example, the proof of export is being demanded for CT1 exports where Merchant Exporter is the exporter and not the manufacturer. Secondly, department is insisting on Bank Realization Certificate (BRC) for renewal of LUT. Submission of BRCs are not mentioned anywhere in the Rules or Instructions or CBEC circular. In fact, for claiming rebate also the department is insisting for BRC which are not required to be submitted. The industry desires that a Trade Notice may be issued giving checklist of documents required for renewal of LUT, so that there is one uniform procedure followed in all the four Commissionerates. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Department is having a view that a manufacturer - exporter cannot execute a B1 General Bond and has to execute LUT only. According to department B1 bond can only be executed by a Merchant Exporter. Industry view is that LUT is optional and if a manufacturer exporter can also execute B1 Bond. The advantage of B1 Bond is that it does not require renewal every 12 months, as in the case of LUT. The department may confirm that a manufacturer-exporter can also execute B1 Bond by complying with requirements associated with such execution. </font></p>
<p><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department clarified: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Renewal of LUT may not be rejected, as it will stop the exports. However, if conditions of the earlier LUT are not fulfilled, necessary recovery action may be initiated simultaneously. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioners will issue Trade facilities with regard to checklist for acceptance of LUT as well as B1 Bond. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Should Babus work more hours? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WILL</strong> Prime Minister Modi bring in a new work culture among his babus? Many Government employees believe that a Government job is a social welfare policy of the State and work is a personal choice. Punctuality is an unknown trait in many Government offices - even those who are very punctual are punctual only when leaving the offices not when arriving at the offices. The five-day week introduced nearly thirty years ago has made the offices places for recreation. Employees who operate from places other than their work stations virtually work only for three days. They don't arrive on Mondays and leave on Thursdays. Many employees leisurely drop into the offices by 1130 in the morning and troop out by 4.30 in the evening. And this happens right in Delhi where the Prime Minister, President and all the top brass live and work. The giant machinery of Government works because there are still some dedicated people who work extra hours. The Government is full of willing employees - Half the employees are willing to work and the other half are willing to let them work. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All this may change soon - it is heard that the Government is planning to do away with the five day week or if it is continued, babus will be asked to put in extra hours of work. </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"> - Friday's cases</font></strong></font></strong></font></p>
<p><font 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"><strong><font color="#663399">Customs </font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Compounding of Offence - Considering that no minimum sentence or penalty was attracted for offence that petitioner was charged with, denial of compounding meant that he would have to face a long trial which ultimately would, in all probability, culminate in small fine - Order of CC rejecting application is erroneous: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> petitioner has prayed for quashing the order of the Chief Commissioner (Customs) where under his application for compounding made under Section 137 of the Customs Act was rejected. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The facts are that the petitioner arrived from Hong Kong and was caught by the Customs authorities while smuggling ten thousand pieces of microchips (micro SD cards) valued at Rs.15,80,000/-. While initially he stated that the goods were given to him at Hong Kong by one Rakesh Jain for delivering the same to a person in Jaipur, later he admitted that the articles were procured by him only and that he bought them from the market to sell them in India. Apparently, he also made certain contradictory statements in the bail application presented on his behalf before the Metropolitan Magistrate. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether once AO has passed block assessment order, fresh notice u/s 148 can be issued to reopen assessment on basis of certain materials found post-search - YES: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE'S</strong> returns were accepted and intimation u/s 143(1) was issued. A search and seizure operation was conducted u/s 132(1). Based on this search and seizure, block assessment order was made u/s 158BC. After passing block assessment, AO issued notice u/s 148 giving the reason that certain income chargeable to tax had escaped assessment for the year 1999-2000 and which has come to his notice subsequently. Similar notices were issued for AY 2000-01 and 2001-02. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The reasons stated that subsequent to the search and seizure operation, post search enquiries were made and it was found that the gift transaction shown in the return of income were not regular transactions but purely arranged transactions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue before the Bench is - Whether once AO has passed block assessment order, a fresh notice u/s 148 can be issued to reopen assessment on the basis of certain materials found post-search. And the answer is YES. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Limitation - Section 73 prior to 10.09.2004 - for invoking longer limitation period existence of fraud wilful mis-statement, suppression of facts etc, was not necessary Demand upheld - Penalty set aside - CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is only w.e.f. 10.09.04 that the section 73 was substituted by a new section 73 whose language was identical to the language of section 11A(1) of the Central Excise Act, 1944 in which the invoking of extended limitation period of five years from the relevant date is linked with the existence of fraud, wilful mis-statement, suppression of facts and deliberate contravention of rules on part of the assessee. In terms of section 73 as it stood during the period of dispute, for invoking longer limitation period existence of fraud wilful mis-statement, suppression of facts and deliberate contravention of the provisions of Finance Act. 1994 or of the rule made there under with intent to evade tax was not necessary and what was required was reason to believe on the part of the Assistant./Deputy Commissioner that on account of omission or failure on the part of the assessee to file return under section 70 for any prescribed period or to disclose wholly or truly all the material facts required for verification of assessment under section 71, some value of the taxable service has escaped assessment or has been under-assessed or service tax has not been paid or has been short-paid or any sum has erroneously been refunded. In this case during the period of dispute the appellant were not filing any return and had not even taken any registration and hence in terms of the section 73(1)(a) as it stood during that period, longer limitation has been correctly invoked. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">See our Columns Tomorrow for the judgements</font></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>
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