TIOL-DDT 2378 · the untouched capture
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<p><strong><font size="2" 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><font color="#663399" size="3">TIOL-DDT 2378</font><br>
19.06.2014 <br>
Thursday </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">The FARCE Called Adjudication and what Board understands </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A </strong>Citizen, under the RTI Act asked the CBEC for certain information on the process of adjudication in the Department, vide his application dated 21.04.2014.</font></p>
<p align="justify"><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">DETAILS OF THE INFORMATION SOUGHT:</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">In customs and central excise department, departmental officers have been entrusted with the function of adjudication authorities at difference level. From, various publications and websites, it is gathered that quality and level of the adjudication orders has drastically been declined. In most of the cases, adjudicating authorities do not apply their mind to the facts and the material of the case but pass on the files for their sub-ordinate staff like Inspectors and Superintendents to prepare full adjudication orders on their behalf, even without deciding the case on the files. Even in some cases, the adjudicating authorities are not aware of the facts and cannot redraft the order after going through the order drafted by the sub-ordinate officer.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">In the public interest following information is sought under the RTI Act. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">(i) Whether there is any adjudication manual prevalent in the central excise department, which is required to be followed by all the adjudicating authorities? If yes the details thereof. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">(ii) Whether it is the duty or responsibility of Superintendent OR Inspector OR Senor Tax Asstt. OR Tax Assistant posted in adjudication branches to prepare or draft or make adjudication orders for Commissioner, Additional/Joint/Deputy/Assistant Commissioner.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">(iii) Whether the following instructions are being followed, which are available at department's website<strong> <font color="#0000FF">http://www.cbec.gov.in/draft-circ/dft-adj-manual-29nov11.pdf</font></strong> (page 25) and also at the reporters website <a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/CBEC_Draft_Adjudication_Manual.pdf"><strong>http://www.taxindiaonline.com/RC2/pdfdocs/wnew/CBEC_Draft_Adjudication_Manual.pdf</strong> </a></font></p>
<p align="justify"><strong><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">Recommendations by the office Assistants or other Sub-ordinates for the final decision of the cases: </font></em></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">An officer when adjudicating a case under the Central Excise Act and Rules or the Customs Act or Finance Act, 1994, acts in a quasi-judicial capacity and that he should, after the enquiry, take an unbiased decision in each case applying his own mind to the materials disclosed in enquiry independently. He has to apply his own mind to the facts and circumstances of the case and reach at his own decision unfettered by anything else. From this it follows that even the narration of facts in an adjudication order has to be drafted by the adjudicating officer himself. From this point of view, any positive suggestion in regard to the penalty etc. whether in an office note or elsewhere is liable to be regarded as an interference with the functions of the Adjudicating Officer thereby vitiating the decision. Office notes should not, therefore, go to the extent of recommending the final decision or the actual penalty, in the adjudication of offence cases. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">(iv) Is it true that the adjudication order is to be drafted by the concerned adjudicating authority himself/herself without any interference or without any legal opinion from sub-ordinate staff so that their decisions should not be influenced? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">(v) Whether the departmental instructions allow the making of adjudication order by sub-ordinate staff for the adjudicating authority, under the garb of instruction on notesheet put up brief facts of the case? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">(vi) Whether there have been cases of threat, duress, pressure, inducement or promise, by the adjudicating authority to his sub-ordinate staff (TA/STA/Insp./Supdt.) such as when the sub-ordinate staff expressed their inability to make the adjudication order for him/her. These threat, duress, pressure and inducement or promise can be of following types </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">(a) Threat of spoiling the ACR/APR,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">(b) Threat of issuing memo/charge sheet/suspension,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">(c) Warnings/calling for explanations in office notes,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">(d) Verbalscoldings,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">(e) Pressuring and demoralizing the staff by rude or discourteous behavior, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">f) Punitive transfer of any kind, etc.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">(vii) If so, the number of such cases Central Excise Commissionerate wise may be furnished in the following table form. Such cases happened in the financial years 2011- 12, 2012-13 and 2013-14 may be given. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">Name of Commissionerate No.of cases of nature as mentioned in:</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">Clause (a) of para (vi) above.Clause (b) of para (vi) above.Clause (c) of para (vi) above.Clause (d) of para (vi) above.Clause (e) of para (vi) above.Clause (f) of para (vi) above.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">(viii) What disciplinary action lies upon the adjudicating authority, who has got his subordinate subject to threat, duress, inducement or promise of the kind given in para (vi) above</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">(ix) What disciplinary action lies upon the adjudicating authority who is found to be getting his/her adjudication orders made from sub-ordinate staff? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">(x) In case no stenographer is provided to such adjudicating authority, whether the adjudicating authorizes are required to write the discussions and findings part and order part of adjudication order, in their own hand on the note sheet or type themselves on their personal computers, before drafting of complete orders.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">(xi) Since most of the adjudicating authorities have been provided with the desktops and laptops, they are supposed to be having computer skills. Whether such officers are required to make orders on their own laptops/desktops and issue fair orders from their end without involving any sub-ordinate officer. Whether this practice is being followed in the field formations or not. If not, the reasons may kindly be broadly furnished. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And here is the answer he got from the exalted Board vide its reply dated 05.06.2014. </font></p>
<blockquote>
<p align="justify"><strong><font color="#0000FF" size="2" face="Verdana, Arial, Helvetica, sans-serif""style="background-color:#00FF00" span="span">Information Provided: </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#00FF00" span="span">The information sought pertains to <strong>adjudication manual</strong> and the <strong>conduct of the Adjudicating authorities</strong>. It bas been observed that vide BMB No. 62/09 issued vide F. No. 296/04/2009-CX-9 dated 20.10.2­009, the work of updating CBEC manuals (including adjudication manual) was being co-ordinated by the DGICCE­Accordingly RTI application is being transferred to the CPIO, office of the DGICCE, IP Estate, New Delhi - 110002 under Section 6(3) of the RTI Act, 2005. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is it not atrocious? The RTI applicant has not asked anything about updating of the Adjudication Manual. He simply asked whether there existed a manual and of course certain information on the adjudication process. And the bright Board shunts it to the DGICCE. What will the DG do now? The entire Government machinery will be misused to ensure that information is <strong>not</strong> provided. It is more than two years since the Board put up the Draft Adjudication Manual and nothing further is heard about it. There is another atrocity. While replying to the applicant, they removed the Draft Adjudication Manual from the Departmental website. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Should we assume that the Board does not understand the simple questions asked by the applicant or are they too smart? If the Board cannot answer a few questions on adjudication, can such a Board's officers be entrusted with the task of adjudicating cases involving Crores of rupees? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Adjudication in most cases is a commercial activity and on that ground, they could have refused to furnish the information and that would have been a far more accurate reply than this patently arrogant denial of information and making the applicant move from pillar to pillar. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">How can anyone explain to the Finance Minister or the Prime Minister that their officers are bent upon frustrating every effort and scheme of the Government and they have converted it into a fine art in which they alone can excel? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe the Revenue Secretary whom they are trying to unseat can understand the game and call the bluff. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Answer but don't answer </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is nothing novel. Nearly ten years ago, I had a meeting with the then Central Vigilance Commissioner who told me that he had serious doubts on the replies given by the Revenue Authorities to questions and complaints forwarded by him to the respective Board or the Department. For example if he asked a question as to why CENVAT credit was being denied, the Revenue can reply that CENVAT is a duty and the assessee has to pay it and not ask for credit as there is no system of paying duty on credit basis! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CVC wanted TIOL to assist him in ascertaining whether the replies were correct. For many reasons we could not oblige the CVC. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">IRS officer - Dismissal from Service consequent to conviction in corruption case - High Court declines to intervene. </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> this case with many twists in the tale, the petitioner is a Deputy Commissioner of Income Tax against whom a chargesheet had been issued by the Department on 29.10.2003. He was dismissed from service for accepting illegal gratification.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was quashed by the CAT on 9.7.2009. However the CAT permitted the Department to issue fresh memo and the same was issued, which was again challenged and which was allowed by the Tribunal in 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Simultaneously prosecution proceedings were initiated and the trial court on 8.11.2012 held him guilty of offence under section 7 and 13(1)(d) read with section 13(2) of the Prevention of Corruption Act and sentenced him to two years of imprisonment. He has challenged the judgment of the Trial Court in Criminal Appeal No.1927 of 2012. The appeal is admitted and his sentence is suspended. However, his request for suspension of conviction is refused. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At this stage, the Department issued another Show Cause Notice proposing to dismiss him from service in view of the conviction by the Court. He challenged the Show Cause Notice before the CAT which dismissed his application. Against the CAT order, he is before the High Court arguing his case in person. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court saw no reason to interfere at the Show Cause Notice stage. The Court observed, "<em>Admitted facts, however, are that the petitioner has been convicted for offence punishable under the Prevention of Corruption Act. His sentence is suspended, but the conviction is not. As per the settled law, therefore, it would be open for the department to proceed further on the basis of such conviction. However, the petitioner has approached the courts merely at a show cause notice stage, we are not inclined to entertain this challenge only on this ground without expressing any further opinion. The contention of the petitioner was not that since he has filed appeal against his conviction that the department cannot exercise powers under rule 19 of the CCS (CCA) Rules. His contention, however, was that in the previous departmental proceedings, he was exonerated by virtue of the judgment of the Tribunal and therefore, despite his subsequent conviction on same set of facts, no punishment can be imposed. As noted, since the challenge is at the stage of show cause notice, keeping all contentions open, we allow the department to take a final view on the representation made by the petitioner in the background of the show cause notice issued to him for imposition of major punishment. The same shall be done unmindful of any of the observations made in this order or in the judgment of the Tribunal impugned in this petition</em>."</font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTQ0NDY=" target="_blank"><font size="1">2014-TIOL-991-HC-MUM-SERVICE </font></a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Complaints against babus - What are `Anonymous complaints'? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DOPT </strong>has clarified that `Anonymous complaints' are such complaints which do not carry both, name and address of the complainant. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DOPT had in OM. dated 18.10.2013 clarified that: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) No action is required to be taken on anonymous complaints, irrespective of the nature of allegations and such complaints need to be simply filed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Complaints containing vague allegations could also be filed without verification of identity of the complainant. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) If a complaint contains verifiable allegations, the administrative Ministry/ Department may take cognizance of such complaint with the approval of the competent authority to be designated by the Ministry/Department as per their distribution of work. In such cases, the complaint will be first sent to the complainant for owning/disowning, as the case may be. If no response is received from the complainant within 15 days of sending the complaint, a reminder will be sent. After waiting for 15 days after sending the reminder, if still nothing is heard, the said complaint may be filed as pseudonymous by the Ministry/Department. </font></p>
</blockquote>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/oms/AnonymousComplaints_2014.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DOPT OM No. 104/76/2011-AVD.I, Dated: June 18 2014 </strong></font></a></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/oms/Complaints_2013.htm"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DOPT OM No. 104/76/2011-AVD.I, Dated: October 18 2013 </font></strong></a></p>
<p align="center"><strong><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></strong></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">Commissioner (A) not addressing issues raised in appeal memorandum - In its absence, it would be inappropriate and difficult to record finding on the same at second appellate stage - matter remanded: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> demand was issued for a total amount of Rs.51.26 lakhs which comprised of wrong availment of CENVAT Credit of Rs.32.37 lakh and short payment of Service Tax of Rs.18.88 lakh. Against the order of the adjudicating authority confirming the demand and imposition of penalty, the appellant filed an appeal before the Commissioner(A). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The lower appellate authority allowed the appeal in the matter of disallowance of CENVAT credit by the original authority but did not record any finding on the short payment of tax or in the matter of penalty. Inasmuch he reduced the demand to Rs.18.88 lakhs but retained the penalty of Rs.51.26 lakhs. </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 when assessee involved in taking up cause of trade & industry has been granted registration u/s 12A, it loses eligibility for Sec 80G benefits merely because a copy of registration is not available and even Revenue is not able to trace its file - NO: ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>assessee is an association undertaking various activities, seminars, medical relief, awareness programmes and also activities of general public utility without any profit motive. It had applied for registration u/s 12A and the same was claimed by the assessee to had been granted to the assessee in the year 1988-89. Thereafter, it had also applied for recognition u/s 80G and it was granted accordingly. However, the assessee's application for renewal of recognition u/s 80G was rejected holding that the assessee had resorted to agitational activities. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether when the assessee-association involved in taking up the cause of trade and industry has been granted registration u/s 12A, it loses eligibility for Sec 80G benefits merely because a copy of registration is not available with it and even Revenue is not able to trace its file. And the answer favours the Association. </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 - Paper in reels cleared on payment of duty to job worker who converted same into paper sheets and same were finally sold from job worker's premises to ultimate buyers -<em> prima facie</em> duty liability to be discharged on sale price of job-worked goods - Pre-deposit ordered of entire duty demanded: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant is a manufacturer of paper and paper boards. The paper is cleared from the factory both in reel form as also in sheet form. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In respect of paper for which orders were received for supply in sheet form, the appellant cleared the paper in reel form to the job-worker for cutting of paper reels into paper sheets. They discharged excise duty liability on a lower value as applicable to reels. After undertaking the job work, the goods were sold form the job workers' premises to the ultimate buyers at a higher price as applicable for the sheets. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The department was of the view that in respect of such clearances of paper reels, the duty liability should have been discharged on the price at which sheets were sold to the ultimate buyers. And so the duty stands confirmed. </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><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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