TIOL-DDT 2414 · 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><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 2414</font><br> 11.08.2014<br> Monday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Government re-imposes ADD on Sodium Nitrite - No retrospective Effect </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Anti Dumping Duty on Sodium Nitrite falling under heading 2834 of the First Schedule to the Customs Tariff originating in or exported from the European Union, was imposed by Notification No. 49/2008-Customs, dated the 11th April 2008 and was to expire on 10th April 2013. In this case, the Board acted just in time and on 10th April 2013, by Notification No. 4/2013-Customs(ADD) extended the validity of the notification till the 10th April, 2014. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, this notification expired on 10.04.2014.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the Designated Authority finds that: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the product under consideration continues to be imported at the dumped prices from the subject country; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the domestic industry continues to suffer material injury on account of dumped imports;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) the material injury to the domestic industry on account of dumping of subject goods is likely to continue<strong> if the anti dumping duties from subject country are revoked</strong>. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And has recommended <strong>continued imposition</strong> of the anti-dumping duty on the subject goods, originating in or exported from subject country. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thus, he warns that the anti dumping duty should not be revoked and there should be <strong>continued imposition.</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But how can they <strong>continue</strong> when the imposition has lapsed and is no more valid? In this case even the recommendation of the Designated Authority came a month after the notification had lapsed. Even he must have got used to the retrospective imposition of the Board. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, now the Government has re-imposed the Anti Dumping Duty for another five years but with effect from 08.08.2014. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Who is responsible for the Revenue loss and for the injury to the domestic industry for the period from 11th April 2014 to 7th August 2014, when there was no anti dumping duty on this product in spite of dumping and injury? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accountability is not a well-known trait of a babu. </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anyway <strong>DDT</strong> is happy that at least now Board has realised that it is not properand legal to impose anti dumping duty retrospectively.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps the Government has become wiser after the Delhi High Court decision in the case of <em>Kumho Petrochemicals Co. Ltd.</em> - <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTQ5MTU=" target="_blank"><font size="1">2014-TIOL-1130-HC-DEL-AD</font></a></strong>. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2014/ctariffadd14_037.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 37/2014-Cus(ADD), Dated: August 08, 2014 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Plea of family responsibilities or health ground cannot be mitigating factor in corruption cases. Emotions or sentiments have no role to play - CBI Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Special Judge for CBI of a Delhi Court last week awarded a sentence of three years rigorous imprisonment and a fine of Rs. 50,000 on an Income Tax official for accepting a bribe of Rs. Three lakhs in 1995. The convict was working as a Junior Engineer in the Office of Appropriate Authority Department of Income Tax and he had taken this money to give a “No Objection Certificate” in a property deal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The case took 19 years to reach the first stage of decision and the officer who was 41 years old at the time of offence is now about 61. It was submitted on his behalf that he is a law-abiding citizen not involved in any (other) criminal case or civil dispute. It is submitted that his one son is still studying and his presence by his side at this juncture is very essential to settle him in his life. He is an acute diabetic and is on a high medication dose. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Court was not impressed and observed, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The plea of family responsibilities or the health ground also cannot be a mitigating factor in corruption cases. The charge of PC Act are grave and serious. The corruption is working like an invincible syndicate. There should be a zero tolerance for bribe and corruption in any place. The emotions or sentiments have no role to play in dealing with the question of award of sentence in the corruption cases. No mitigating circumstances as suggested may be a ground for any leniency. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the present case as may be noted the incident is of the year 1995 and bribe amount of Rs. 3 lac as involved was by any imagination a big amount at that point of time</font></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this case, the person who gave the bribe was also convicted, but unfortunately, he was not a beneficiary in the transaction; he was only an employee of the person who allegedly gave the bribe. Interestingly CBI had failed to collect any evidence against him; (the actual beneficiary of the property transaction) hence he was not charge sheeted. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Carrying the bribe for your boss is also an offence! </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Free Hospitality and Car - CBEC Chief Commissioner Acquitted in CBI case </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GETTING</strong> a free hotel accommodation or a car is a normal ‘right' of any revenue officer. Assessees frequently arrange this kind of hospitality and transport to all senior officers (even some juniors) without a murmur (usually). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Officers should be careful while availing this kind of hospitality, for the CBI might be after them. Even assessees must be careful while extending the hospitality, for the CBI might be after them too as this case would show. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBI booked a criminal case against Ram Prakash who retired as a Chief Commissioner in Customs and Central Excise, (DG, Service Tax) on the charge that while working as a Commissioner, he had indulged in corrupt practice by abusing his official position as Public Servant in availing hotel accommodation in Hotel Sheraton, New Delhi from 03.7.2009 to 04.7.2009. It is further alleged that accused Ram Prakash had also availed transport facilities from M/s Megha Engineering & Infrastructure Ltd., an assessee during the said period. The Commissioner was Accused No.1 and the assessee Accused No.2. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Recently a Delhi CBI Court acquitted both the accused. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Court noted: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Perusal of the bills towards payment of taxi charges show that the name of the person who has used the taxi is not Ram Prakash. The name mentioned on the bill is of one Ram Prasad. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The CFSL report also does not support the prosecution's case since the opinion in this case regarding the handwriting on the vouchers and other documents has been taken twice. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Even in the cross examination of the IO he has admitted that the charge sheet is based on voucher no. 964 dated 06.9.2007 which is the bill in the sum of Rs. 3,255/­ amount towards taxi charges in the name of Sh. Ram Prasad, C/o M/s <em>Megha Engineering & Infrastructure Ltd.</em> He has admitted that during his investigation he had not come across any assessment or adjudication order or issuance of any Show Cause Notice in any matter qua M/s Megha Engineering & Infrastructure Ltd. during the period of posting of accused Ram Prakash as Commissioner, Hyderabad ­ IV. The IO has also admitted that GEQD, Shimla had not been able to give any opinion on the documents sent in this case as they had found the samples inadequate. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. M. Sridhar Reddy, Commissioner, Central Excise & Customs, Thiruvananthapuram, Kerala on the other hand has stated in his cross examination that after 12.5.2009 accused Ram Prakash, the then Commissioner had not dealt with the file of M/s Megha Engineering & Infrastructure Ltd. in any manner. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. (it is clear that) during the period July, 2009 the accused had not been posted as Commissioner, Hyderabad, nor he had dealt with files or matters pertaining to M/s Megha Engineering & Infrastructure Ltd. It has also not come on record by way of any testimony or document that accused was abusing his official position to influence or extend favour to M/s Megha Engineering & Infrastructure Ltd in any manner as a public servant. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Court found that: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The prosecution was not able to prove beyond reasonable doubt that accused Ram Prakash had used accommodation in the five star hotel and car provided by M/s Megha Engineering & Infrastructure Ltd. Neither any witness has identified the accused to be the same person nor the signatures on any alleged vouchers or bills of the taxi or hotel accommodation could be proved beyond reasonable doubt by the handwriting experts to be of accused Ram Prakash. The Director of M/s Megha Engineering & Infrastructure Ltd. has categorically denied having ever booked any room or having provided any taxi to the accused at any point of time. It has also emerged on record clearly that in the entire investigation the IO had not come across any assessment order or show cause notice issued by accused against his co­accused M/s Megha Engineering & Infrastructure Ltd. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The alleged incident in question pertains to July, 2009 and, therefore, there is no evidence on record that accused had abused his official position to give undue favour to accused M/s Megha Engineering & Infrastructure Ltd. or in July, 2009 he was in any position to show any favour to accused M/s Megha Engineering & Infrastructure by abusing his official position as Government Servant. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The prosecution has, therefore, failed to prove his case beyond reasonable doubt. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Court placed on record its appreciation for the Senior PP for CBI who has conducted the trial of the case in the best possible manner. However, the witnesses did not support the prosecution on crucial points and, therefore, the benefit of the same has to be given to the accused persons. Accordingly, the accused Ram Prakash and accused M/s Megha Engineering & Infrastructure <strong>are given benefit of doubt and are acquitted of the charges framed against them</strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For this case CBI had 24 Prosecution witnesses including two Commissioners and some retired officers, most of whom had to travel to Delhi at Government expenses to appear before the Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ram Prakash had an earlier CBI case against him where he was accused of taking a bribe of Rs. 5 lakhs. He was acquitted in that case also (with strictures against CBI) as reported by us in<strong> <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTg2OTc=" target="_blank">DDT 2197 25.09.2013</a></strong>. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Audit by CE Officers - MMC never considers individual audit para of draft audit report but it considers complete audit report as whole-COMMISSIONER </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> Commissioner appearing as a witness before the CBI Court in the above case stated (under oath): </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• The Internal Audit Working of the Commissionerate is detailed by the Government of India in Manual called EA-2000 which contents elaborate mechanism proforma and other details relating to the working of internal audit of a Commissionerate. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• The draft audit report including all its enclosures and considering the discussions, queries, supplementary questions raised by the various officers, draft audit report is finalized then it becomes audit report and such AR is issued to all concerned including party and other departmental officers for information and necessary action. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• <strong>The Audit Section does not have the legal power of search, seizure and arrest</strong> against any offender which separate section called the Anti Evasion Section is empowered and working in the Commissionerate. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• <strong>MMC (Monthly Monitoring Committee) never considers individual audit para of draft audit report but it considers complete audit report as a whole</strong> and take appropriate decision thereon. The minutes of MMC are not available in the audit file. </font></p> </blockquote> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Only Advocates to appear before VAT Authorities </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TAX</strong> Lawyers Association, Lucknow has filed a petition before the Lucknow Bench of the Allahabad High Court challenging Rule 73 read with Rule 79(2)(f) of the U.P. Value Added Tax Rules 2008 which permits outsiders to practice in the field of Law before the VAT Authorities under the VAT Act. The Advocates invited the Court's attention towards Section 33 of the Advocates Act 1961 which provides that only Advocates are entitled to practice before any Court or authority. They further submitted that impugned Rule is ultra vires to the Constitution in view of the provision contained in the Advocates Act 1961 since under the garb of the impugned Rule, outsiders have been permitted to appear before the authorities under the VAT Act to practice in the field of Law. Attention has been invited to certain leaflets which seem to be advertisement by certain persons who are not registered Advocates inviting assesses with regard to filing of return on payment of Rs.400/- and odd. Submission is that under the garb of said Rule, persons who are not skilled lawyer or have no knowledge in the field of Law, are appearing before the authority under the VAT Act, are spoiling academic atmosphere of the profession. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court on 6th August 2014 issued notice to the Advocate General and as an interim measure directed that <strong>any person, who is not a registered advocate, shall not be permitted to appear before the Authority under the VAT Act</strong>. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Do Away with Income Tax - Dr. Subramanian Swamy </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BJP</strong> leader Dr Subramanian Swamy urged the Centre to do away with the system of collecting income tax and instead find out other means to raise money to the exchequer. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The revenue earned through the collection of income tax was about Rs 2 lakh crore annually. The government could compensate the amount, which was levied mainly from middle and upper middle class, by yearly auction of spectrum and coal fields, he said while delivering a lecture on "Indian economy, past, present and future". </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FM addresses CBEC Chief Commissioners today </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FINANCE</strong> Minister Arun Jaitley will address the inaugural session of the annual conference of Chief Commissioners and DGs of CBEC today. It is a routine practice for the Finance Ministers to exhort the Chief Commissioners to meet the Revenue targets; to be facilitators and not enforcers; to make procedures simple. All the Chief Commissioners and their accompanying assisting officers are in Delhi with tons of reports and brochures and the field will relax for a couple of days after the hectic work of preparing those brochures which nobody will look at.</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"> - Tuesday's cases</font></strong></font></strong></font></p> <p><strong><font color="#663399" 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">Service Tax</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether for computing the aggregate value of taxable services, receipts in respect of BAS which is exempted in terms of notfn. 14/2004-ST is to be taken - in view of Explanation “B” to paragraph 3 of SS notification, applicant has <em> prima facie</em> strong case in favour - Pre-deposit waived & Stay granted: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PROCEEDINGS</strong> were initiated by issuing a SCN demanding service tax in respect of ‘Business Support services' as well as of ‘Renting of Immovable property' services. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The adjudicating authority dropped the SCN. However, the Commissioner (Appeals) allowed the Revenue appeal and held that the applicants are not entitled for the benefit of the Small Scale exemption notification. Inasmuch as he held that for the purpose of computing the aggregate value of taxable service the receipts in respect of exempted service are also to be taken into consideration. </font></p> <p><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 franchise fee remitted to non-resident for simply using trademark 'Dominos' is required to be partly treated as capital expenditure - NO: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is carrying on business of manufacturing and sale of pizza from its retail outlet. The assessee had entered into an agreement with M/s Dominos Pizza International, Inc. USA which was paid a <em>lumpsum</em> consideration of $200000, which was capitalised and was not treated as revenue expenditure. The AO treated 25% of the franchise fee as capital expenditure. On appeal, the Tribunal held that 25% of the payment made was capital in nature, while balance 75% was revenue expenditure in the hands of the Indian assessee. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue before the Bench is - Whether franchise fee remitted to non-resident for using trademark 'Dominos' is required to be partly treated as capital expenditure. And the High Court says NO. </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">Appellant should not suffer for dereliction of duty by Revenue-Appeal Allowed for this.- CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NORMALLY</strong>, for the failure of the Revenue, the assesse is punished and the Department not prone to irritants like accountability often get away with it. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Not always. Not this time. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This case is before the Tribunal in its second round. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Show Cause Notice neither questioned genuineness of the transaction nor use of the goods in manufacture. The invoice disclosed the name and address of manufacturer consignor instead of second stage dealer. Revenue's charge is that the particulars of excise duty were not furnished by the appellant. </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"> <strong> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p> </body> </html>