TIOL-DDT 2383 · 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"><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><strong><font color="#663399" size="3">TIOL-DDT 2383</font><br> 26.06.2014<br> Thursday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Notice issued based on AG Audit objection - AG drops para - Department wants duty</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is often said that the department is a major litigant before the judiciary and is responsible for chocking the appellate forums. Here is an example. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The officers of CAG raised an objection that the assessee is not entitled for an exemption. Once there is an objection by CAG, whether the department accepts it or not, there should be a protective demand. So, a Show Cause Notice was issued to the assessee. Department contested the audit objection and in a rare gesture, the CAG dropped the para. The Adjudicating Authority (also in a rare gesture) dropped the demand. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the department felt that the Adjudicating Authority was wrong in dropping the demand and filed appeal with the Commissioner (Appeals). The Commissioner (Appeals) in not so rare a gesture upheld the demand. On appeal filed by the assessee, the Tribunal has recently set aside the demand. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps the litigation-loving department will now go in for appeal to the Supreme Court against the CESTAT Order.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is there any justification to demand duty when the Audit itself had closed the para, most probably based on the department's reply that there is no case on merits? How can the department take two contrary stands before the CERA audit and the CESTAT? </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=OTQ1NzM=" target="_blank">2014-TIOL-1131-CESTAT-KOL</a>; Please also see our <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=20749" target="_blank">CobWeb</a> today. </font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Automobiles - Reduction in duty rates to continue - Sunset clause extended </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FOR</strong> the last few days, many newspapers carried advertisements by car dealers luring the buyers with the caption - buy before the excise duty rates go up again. They were referring to the Notification No 4/2014-Central Excise, Dated: February 17, 2014, which reduced duty rates of automobiles. This Notification has a sunset clause -<em> "Provided further that nothing contained in this notification shall apply to goods specified against serial number 345 to 369 of the said Table after the 30th day of June, 2014."</em> - Now, the Government has decided to extend the reduced duty benefit till 31 st December 2014 and accordingly issued Notification No 6/2014 CE dated 25.06.2014 amending the Mega exemption Notification No 12/2012 CE dated 17.03.2012. Similarly the reduced rate of 10% for goods falling under chapters 84 and 85 of the Tariff has also been extended till 31st December 2014. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a press release, the FM said "We expect the industry to show positive results in the coming months. We also expect that the benefit of these duty concessions will be passed on to the consumers at large” </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2014/etariff14_06.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 6/2014 CE, Dated: June 25, 2014 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Excuse me??? </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> PIB press release on the issue states <em>"In February 2014, the Government had reduced the <font color="#FF0000"><strong>excuse</strong></font> duty on:….” </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The <em><font color="#FF0000"><strong>excuse</strong></font></em> was not once. A later part of the Press Release states,<em> "Likewise, to stimulate growth in the capital goods and consumer durable sector, <font color="#FF0000"><strong>excuse</strong></font> duty was reduced from 12% to 10% on all goods falling within Chapters 84 & 85 of the Central Excise Tariff”. </em></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/Change in period of maintenance and preservation of records </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SECTION </strong>12 of Prevention of Money Laundering Act, 2002 was amended vide Prevention of Money Laundering (Amendment) Act, 2012. In terms of the earlier amended provisions, Authorised Persons were required to maintain and preserve records mentioned therein for a period of at least ten years. In view of the amendment to Section 12 of Prevention of Money Laundering Act, 2002 in 2012, Authorised Persons are now required to maintain and preserve records for a period of at least five years. The same is clarified now by RBI. This applies for Money Changing Activities. Similarly for Money Transfer Service Scheme, Authorised Persons who are Indian Agents under MTSS are now required to maintain and preserve records for a period of at least five years. </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2013/rbi13cir149.htm" target="_blank">RBI Circular No 149</a> and <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2013/rbi13cir150.htm" target="_blank">150, Dated: June 25, 2014</a> </font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT also cautions against Political Recommendations for transfers</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT</strong> <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=20719" target="_blank">2380-23.06.2014</a></strong> had reported about the CBEC OM regarding representations being received from VIPs and other political sources recommending transfer/posting of officers and reminding the officers about the bar under Rule 20 of the Central Civil Services (Conduct) Rules 1964. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Obviously political pressure for transfers is not unique to CBEC; it is prevalent in CBDT too. So CBDT has also advised its officers to refrain from indulging in such practices henceforth, failing which they will be liable to disciplinary action - <em>if your source is not big enough</em>. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/policy/Office_Memorandum35015.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT OM No. A-35015/32/2014-Ad.VI, Dated: June 25, 2014 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Company Law - format of annual return for 2013-14 and fees for allowing inspection of records </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has received requests for clarification about the applicability of form of annual return (MGT-7) prescribed under rule 11(1) of the Companies (Management and Administration) Rules, 2014 for financial years(s) commencing earlier than 1st April, 2014.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MoCA clarifies that <em>Form MGT-7 shall not apply to annual returns in respect of companies whose financial year ended on or before 1st April, 2014 and for annual returns pertaining to earlier years. These companies may file their returns in the relevant Form applicable under the Companies Act, 1956.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Companies have also sought clarity about permitting free of cost inspection of records under rule 14(2) and rule 16 of the rules and till a fee is prescribed for the purpose in the Articles. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Ministry clarifies that<em> until the requisite fee is specified by companies, inspections could be allowed without levy of fee.</em></font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/mca_circular_22_2014.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MoCA General Circular No. 22/2014, Dated: June 25, 2014 </font></strong></a></p> <p align="center"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600" size="2">Bribe for cancellation of Registration- Hyderabad Service Tax Supdt and Inspector arrested by CBI </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YOU</strong> have to pay a bribe to get a Service Tax Registration (which is actually online) and if you fail in business and want to close shop and surrender the Service Tax Registration Certificate - it's not all that easy. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday an Inspector and Superintendent in Hyderabad II Service Tax Commissionerate were caught red handed by the CBI while accepting a bribe of Rs. 15,000 from a Company Secretary. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBI sources revealed that their residences have been searched and further investigation is on. The two officers have been arrested and will be produced before the CBI Court today.</font> </p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/image2383.jpg" alt="Legal Corner Icon" width="438" height="407" hspace="5" border="0" align="center"></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 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">Customs</strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Review Committee has initially accepted order of Dy. Commr and subsequent decision to review order was only at instance of Audit - There is no provision under Section 129A and 129D of Customs Act, 1962 to reopen or review Review Committee's order - Committee has become functus officio: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> SCN was issued to the appellant proposing a change in classification of ‘dairy machine Ice cream candy' & demanding differential duty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Deputy Commissioner of Customs, Appraising Group, 5A, Customs House, Kolkata dropped the proceedings. Being aggrieved, Revenue filed an appeal before the Commissioner(Appeals) but the same was rejected on the ground of time bar. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Before the Tribunal, it is submission of the Revenue that the lower appellate authority should have taken a more liberal view and after condoning the delay should have gone into the merits of the case. </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 fails to declare salary income on which TDS was deducted, same is to be treated as 'undisclosed income' - YES: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee, an individual, is a salaried employee working as Works Manager with M/s. Khemani Distillery Private Limited, Daman from June, 1995 onwards. However, from 01.04.1987 to 31.03.1995 included in the block period the assessee was employed with Zandu Pharmaceutical Works Limited, Mumbai as Chief Engineer. The assessee had never filed his returns of income although he had income liable to tax during the block period. There was a search and seizure operation in the case of entire Khemani Group on 20.08.1997 and consequently the search was also conducted at the assessee's residence on 20.08.1997. In the course of search, cash of Rs.84,500/and jewelery of Rs.2,29,804/- were found, out of which, cash of Rs.50,000/- was seized. In the course of search, the assessee was also found to have investment in fixed deposit and other securities regarding to Rs.12,25,400/-. After search, the assessee consulted CA and he was advised that as the assessee had made the investment in FDRs etc. from his salary income and interest income, which can be considered as known sources, the salary and income from other sources can not be treated as undisclosed income. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue before the Bench is - Whether non-disclosure of income by not filing return of income on which the TDS is deducted, can be treated as "undisclosed income" within the meaning thereof in Section 158B(b) under Chapter XIV-B. And the answer goes against the assessee. </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">'Eveready Rechargeable/Ultima' - packing rechargeable battery with battery chargers in blister packs - applicant claims that no 'manufacture' occurs due to packing and branding exercise & that they are paying ST since July, 2010 and have also filed application under VCES, 2013 - <em>prima facie</em> case for total waiver of pre-deposit: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Department has alleged clandestine manufacture and removal of excisable goods against the appellant and in adjudication proceedings a Central Excise demand of Rs.16.69crores is confirmed along with equivalent penalty. The period involved is July, 2006 to June, 2011. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The case of the department is that the Applicant had received raw materials, i.e. rechargeable batteries, battery chargers, blisters, blister cards etc. from M/s. Eveready Industries India Ltd. (EIIL) under cover of commercial challans, and then converted the same into excisable goods known as 'Eveready Rechargeable/Ultima'; affixed the brand name as per the requirement of EIIL, and later sent the said goods to the depot of EIIL against the bills and challans. </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 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>