TIOL-DDT 2528 · 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 align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><s><strong><strong><strong><strong><strong><font color="#663399"><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></strong></strong></strong></strong></s></strong><font color="#663399" size="3">TIOL-DDT 2528</font><br> 30 01 2015<br> Friday </strong></font></p> <p align="center"><strong><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em>Resurrected Anti Dumping - Board Clarifies its own Confusion - Contempt of Court? </em></font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> Circular No. <strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=NTM0NQ==" target="_blank">28/2011 </a></strong>-Customs, dated 8th July 2011, signed by none other than the Joint secretary, TRU, the Board clarified;</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Definitive/final anti-dumping duty can be collected only for a period of five years from the date of its imposition. Generally by virtue of Sub-section (2) of Section 9A of the Customs tariff Act, 1975, the anti dumping levy notified in pursuance of final findings of the Director General (AD) is effective from the date of imposition of provisional </em></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>duty and therefore the period of five years is to be computed from such date. Collection beyond that period is permissible only when the said levy is extended by a notification either for further period of five years (in pursuance of the final findings of the Designated Authority in a Sun Set Review) or for one year (during the pendency of Sun Set Review). Thus, a definitive/final anti-dumping duty can be collected beyond the stipulated period only when a notification extending the levy has been issued, before the expiry of the parent notification. <strong><font color="#660000">Unless such revalidation or extension is carried out by a fresh notification, the collection of final anti-dumping duty should cease on the completion of five years as mentioned above</font></strong>. Where the findings in a review are notified after the lapse of the parent notification, the notification in such cases would be effective prospectively from the date of issue of such notification </em>. </font> </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, Board has a rethinking. In its latest Circular, Board says that the Circular was issued in a different context and so Board has substituted the above para with this: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Definitive/final anti-dumping duty can be collected only for a period of five years from the date of its imposition. Generally by virtue of sub-section (2) of section 9A of the Customs tariff Act, 1975, the anti-dumping duty levied in pursuance of final findings of the Directorate General of Anti-Dumping and Allied Duties (DGAD) is effective for a period of five years from the date of imposition of provisional duty<font color="#FF6633"><u> except in cases where the DGAD initiates a review before expiry of such five year period</u> . In cases where the DGAD has not initiated any sunset review before the expiry of aforesaid five years, no anti-dumping duty can be collected beyond the period of five years from the date of its imposition.". </font></em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The highlighted portion is replaced with the above portion marked in red. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board seeks to derive its strength from the second proviso to Section 9A (5) of the Customs Tariff Act, which reads as under: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to conclusion before such expiry, the anti-dumping duty <strong>may </strong> continue to remain in force pending the outcome of such a review for a further period not exceeding one year </em>. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sir, <strong>'may'</strong> does not mean <strong>'will'</strong>. In fact this very question has been clearly explained by the Delhi High Court in the <em>Kumho Petrochemicals </em> case <strong><em>(<a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTQ5MTU=" target="_blank">2014-TIOL-1130-HC-DEL-AD</a>)</em>. </strong>The High Court in simple terms elucidated:</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The next issue is the legality of the levy pending sunset review. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The original levy has a life of only five years. Thus, the legality of such levy is supported - by virtue of Section 9A (5) only for that duration. If the respondents (Government) wish to continue the levy for a period beyond that, during pendency of sunset review (which might not be concluded by the time the first period expires) <strong>they have to issue a notification </strong>, before the expiry of that period. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. It needs to be underlined here that but for the second proviso, there can be no legal extraction, during the sunset review, if the proceeding extends beyond the first five year period. In other words, the second proviso truly carves out an exception and makes the levy which otherwise would be invalid, on account of the operation of the main part, i.e. Section 9A (5), valid if its conditions are fulfilled. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The second proviso to Section 9A (5) precluded the Central Government from continuing the levy beyond that period or date, except to the extent its conditions were fulfilled, i.e. if the levy of the duty were to have been notified before such date. In such cases, the power under the second proviso to Section 9A(5), after expiry of the date of the original notification, is unavailable. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Neither does Section 9A (1) nor Section9A (5) permit the extension of anti-dumping duty once the main period of five years lapses, as held earlier. </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">6. The imperative nature of second proviso to Section 9A (5) leaves no room for doubt that in case the Central Government wishes to extend the levy during the sunset review period, it has to comply with the terms of that provision and do so, before expiration of the original period </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Was there any doubt in the High Court verdict, dear Board? The Law allows you to extend the Anti Dumping duty beyond five years, if the review is not completed, but even the Board will know that you have to extend it by a notification <strong>before </strong> the expiry of five years, not <strong>after</strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has been consistently forgetting to extend the notifications before their expiry and they always arrogantly assumed the power to resurrect dead notifications. Finally some good sense dawned and they issued the Circular No. 28/2011 clarifying that they have to extend the notifications before expiry. But binding itself with such responsibility was always inconvenient - in any case they never followed their own circular. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is understandable that Board has no respect for its own circulars, because usually the current officers only have contempt for their illustrious predecessors. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But it is sad that Board has no respect for the High Court. Isn't it audacious and contemptuous for the Board to issue a Circular nullifying the High Court's judgement? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has gone in appeal to the Supreme Court against the order of the High Court and it is unbecoming of a Government wing to clarify the law against the view of the High Court, when the same issue is pending in the Apex Court. This is a tragedy, especially when you have a Prime Minister who talks about less Government and ease of doing business. Our Babus are capable of frustrating any policy of the Government. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why can't the Board realize that it is not above law and when you are required to issue a notification before a certain period, you have no option, but to issue that notification well in time? The failure of the babu to wake up in time should not be taken advantage of, in illegal interpretations, with scant respect to the Law as laid down by the High Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In fact in the decision referred, the High Court had quoted the Privy Council in a 1936 judgement: </font></p> <blockquote> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"Where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all." </em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/cuscir.htm" target="_blank"><strong>CBEC Circular No. 05/2015-Customs., Dated: January 28, 2015 </strong></a></font></p> <p align="center"><font face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600" size="3"><em>No Appeal Against Vodafone - CBDT </em></font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YESTERDAY</strong> we reported that the Union Cabinet had decided to accept the order of the High Court of Bombay in the Vodafone case, where the demand was to the tune of Rs 3,200 crore in a transfer pricing case. <strong><em>(<a href="http://www.taxindiainternational.com/case_lawDesc.php?qwer43fcxzt=NDMzMQ==" target="_blank">2014-TII-19-HC-MUM-TP</a>)</em>. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today we have to report that the Board has also accepted the Order. The CBDT instruction states: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>It is hereby informed that the Board has accepted the decision of the High Court of Bombay in the above mentioned Writ Petition. In view of the acceptance of the above judgment, it is directed that the ratio decidendi of the judgment must be adhered to by the field officers in all cases where this issue is involved. This may also be brought to the notice of the ITAT, DRPs and CsIT (Appeals).</em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On 28th January, the Cabinet accepted the decision and a day later the Board accepted it. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why should the Board accept something that has already been accepted by the Cabinet? Even the President of India is bound by the decision of the cabinet - can the Board <strong>refuse </strong>to accept it after the cabinet has accepted it? And in these matters, who is the authority to accept the High Court order - the cabinet or the Board or both? </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTc2MTc=" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT Instruction No. 02/2015, Dated: January 29, 2015 </strong></font></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600"><em>Tax laws still adversarial - ASSOCHAM </em></font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSOCHAM</strong> in its pre-budget memorandum to the Prime Minister and the Finance Minister mentioned several loopholes in the tax laws, which make them quite adversarial to the tax-payers and investors quite contrary to the often-repeated commitments to make tax administration non-adversarial and consistent. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ASSOCHAM submitted: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Many of the provisions in substantive as well in procedural Direct Tax Laws are not equitable and fair. Many of the provisions are unfair and heavily biased in favour of the tax administrators with no accountability. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The entire responsibility and the burden has been shifted from the tax administrators to tax payers under the pretext of tax evasion measures. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Giving a nightmarish experience to the tax payers, at present scrutiny assessments are being done in physical mode despite the fact that the selection of the scrutiny case is random and computer based. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Under the provisions of Chapter XVIIB tax is required to be deducted at source on various types of payments. The scope of this chapter is being expanded from year to year. There are various nature of payments about which the normal understanding all along has been that they are not subject to TDS. However, all of a sudden some of the Assessing Officers take a different stand. This is hardly a consistent policy-driven administration, as is promised by the Prime Minister. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. amendments to the direct laws other than the tax rates should be delinked from the Budget exercise, since the Budget is a confidential exercise. In the process, certain crucial amendments to tax laws are passed along with the Budget without any public debate in the name of confidentiality. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. delays in Income Tax refund, giving effect to appellate order leads to drain of liquidity resulting in huge borrowing costs and should be processed within reasonable time frame. </font></p> </blockquote> <p align="center"><font color="#006600" face="Georgia, Times New Roman, Times, serif"><strong><font size="3"><em>Tax Donations to Political Parties </em></font></strong></font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ASSOCHAM</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> says that 75% of the donation received by the political parties are falling in the category of voluntary contribution not in excess of Rs.20,000/- with the result that there is no trail of the name and address of the person who has made such contribution. The normal perception is that these contributions have come out of the money which has not been subjected to tax. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ASSOCHAM is right. No poor Indian will make a donation to a political party. All the cash donations received by political parties are black and obviously untaxed. And they come from people who should have paid the tax. So, when they don't pay, why not collect it from the recipients, the political parties? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ASSOCHAM suggest that each political party shall be required to pay tax at the rate of 30% in respect of the anonymous donation received by it. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Good suggestions;but who is going to accept this? Even in the unlikely event of the Finance Minister proposing such a move, it is sure to be shot down unanimously by all the parties. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><strong><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><strong><font color="#006600">Jurispruden</font></strong></strong></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em><font color="#FF6633" size="4">tiol</font></em></strong></font></strong></font><em><strong><strong><font color="#006600">-Monday's cases</font></strong></strong></em></font></strong></strong></em></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="" width="100" height="84" hspace="5" border="0" align="left"><strong><font color="#663399">SERVICE TAX </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Telecom Towers - Management & Maintenance or repair service - Cost of diesel filled in generators is<em> prima facie</em> not includible in gross value as diesel is not required for providing such service but diesel consumption is required for generating electricity - Pre-deposit waived & stay granted: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellants are engaged in providing service of maintenance and repair of telecom towers of various telecom companies like M/s. Bharati Infratel Ltd. classifiable under ‘Management and Maintenance or repair service'. The appellant had paid service tax under the said service but they had not included the value of diesel which they had been filling in the generators. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department wants the value of diesel so filled to be included in the AV for the purpose of payment of service tax and so this mighty demand tall as the telecom tower. </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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether Sec 54E benefit is available even if assessee invests or deposits whole or part of net consideration in specified asset within six months from date of consideration received - NO: HC </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee, an individual, had sold two plots of land for Rs.8,98,775/-. The original assessment made u/s 143(3) was set aside by the CIT(A) and the AO was directed to make fresh assessment. Thereafter, the AO completed the fresh assessment and passed an order. In the fresh assessment, the assessee claimed deduction u/s 54E on the basis of investment of Rs.1,89,400/- made in NRDB on 20th February, 1987, within six months of the receipt of final instalment. However, the AO, rejected the claim of the assessee. On appeal, CIT(A) dismissed the said appeal. On further appeal, Tribunal had also dismissed the appeal of assessee. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue before the Bench is - Whether the benefit of Section 54E is available where the assessee has invested or deposited the whole or any part of net consideration in any specified asset within six months from the date of consideration received. NO is the answer. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise</strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>When two exemption Notifications are available to an assessee, he can always opt for one which is most beneficial for him and in this regard Department can not force assessee to avail particular exemption Notification: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Department had a twisted view. It was of the opinion that the appellant assessee ought not to have cleared the goods for export on payment of duty as they were entitled for the nil rate of duty in terms of notification 30/2004-CE since they had not taken any credit on inputs and, therefore, what was paid on their own volition was "deposit" and not duty. Inasmuch as since the goods were exempted, the appellant could not have availed credit of duty paid on capital goods in view of rule 6(4) of the CCR, 2004 as by the department logic they had been exclusively used in manufacture of <em>"exempted goods"</em>. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our Columns Monday for the judgements </strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice weekend.</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@tiol.in" target="_blank"><strong>vijaywrite@tiol.in </strong></a></font></p> </body> </html>