TIOL-DDT 2586 · 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><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3"><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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3"><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=23157"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2015_1.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="300" height="148" hspace="5" border="0" align="right" ></a></font></strong></font></strong></font></strong></font></strong></font></strong></s></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></s></font></strong><font color="#663399" size="3">TIOL-DDT 2586 </font><br> 28 04 2015<br> Tuesday </font></strong></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600">A pre-deposit story </font></strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Commissioner of Central Excise was pleased to confirm a demand of Rs. 61 lakhs on <em>Kisaan Gramodyog Sansthan.</em> On appeal along with an application for Stay, the Tribunal ordered a pre-deposit of Rs.10 lakhs on 14.11.2011. On 22.02.2012.the CESTAT dismissed the appeal for non-compliance with the order of pre-deposit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee filed an appeal before the High Court, which was dismissed on 26.07.2012. The Supreme Court on 03.01.2013 dismissed the Special Leave Petition against the High Court order. After this, the assessee deposited the amount as originally directed by the CESTAT and moved the Tribunal in a miscellaneous application for restoration of the appeals. The said application was dismissed, vide order dated 08.04.2013. Against this order, the assessee filed an appeal before the High Court. The High Court dismissed the appeal on 12.11.2014 with the observations, <em>"Once a substantive appeal has been filed before the High Court against an order of the Tribunal on the application for waiver of pre-deposit, the order of the Tribunal, in such a case, would merge with the order of the High Court. No prayer was made before the High Court, which dismissed the appeal for extension of time for pre-deposit or for restoration of the appeal. No such prayer was also made before the Supreme Court when the special leave petition was dismissed. In that view of the matter, the Tribunal was not in error in dismissing the miscellaneous application.</em>" </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The <em>Kisaan Gramodyog Sansthan</em> filed an appeal in the Supreme Court. This time around, the Supreme Court allowed the appeal on the ground that<em> no prejudice would be caused to either side if the Tribunal is directed to accept the "pre-deposit amount" as deposited by the appellants and hear the appeal on merits . </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Supreme Court; </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Directed the Tribunal to accept the "pre-deposit amount" paid by the appellants, which is in compliance with its earlier order and then decide the appeal on merits, in accordance with law and without reference to the period of limitation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Requested the Tribunal to dispose of the appeal as expeditiously as possible, at any rate within six months. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Clarified that all contentions of both the parties are left open. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And please remember, <strong>this order has no precedential value</strong> as the Supreme Court concluded,<em> "We clarify that this order shall not be treated as precedent in any other case."</em> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see <em><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTAyMDc5" target="_blank">Kisaan Gramodyog Sansthan Vs Commissioner of Central Excise, Kanpur</a></em></strong>. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Appeal before Commissioner (Appeals) - Limitation </font></em></strong></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span"><strong>TIME </strong> taken to pursue the appeal in the wrong forum to be excluded - Principles of Section 14 of the Limitation Act applicable - Supreme Court </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is by now an accepted law that the Commissioner (Appeals) under the Indirect Taxes has no power to condone the delay beyond a period of 90 days. And it is said that no authority in the Country has the power to condone this delay. All other authorities under the law have powers - inherent or otherwise to condone delay. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this Customs case before the Supreme Court, the appellant had imported a ship and had given a bank guarantee for some differential duty. On 25.3.1992, the Collector of Customs, Rajkot, directed the Assistant Collector, Bhavnagar to encash the bank guarantee furnished by the appellant. On 2.4.1992, the Superintendent of Customs and Central Excise sent a letter to the appellant communicating the decision of the Collector. The bank guarantee was duly encashed on 3.4.1992. After protesting against the said illegal action of the Department in encashing the bank guarantee, the appellant preferred an appeal against the Superintendent's letter dated 2.4.1992 and the Collector's order dated 25.3.1992 before CEGAT. On 23.6.1998, the Appellate Tribunal allowed the appeal and set aside the order of the Collector dated 25.3.1992. In the year 2000, the Department preferred an appeal before the Supreme Court. On 12.3.2003, the Supreme Court allowed the appeal holding that the letter of the Superintendent was appealable to the Commissioner (Appeals) and not the Tribunal. The Supreme Court held that the Tribunal passed the order without any jurisdiction and so the order cannot be sustained. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Immediately after the judgement, the importer filed an appeal before the Commissioner (Appeals), which was promptly dismissed as filed after 11 years. The importer is back in the Supreme Court through the legal channels. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Supreme Court held that though Section 14 of the Limitation Act (Exclusion of time of proceeding bona fide in court without jurisdiction) is not applicable in a Customs case, the principle on which Section 14 is based, being principles, which advance the cause of justice, would nevertheless apply. The Supreme Court observed that there is a vital distinction between extending time and condoning delay. The Supreme Court held that exclusion of Section 14 or the principles contained in Section 14 would be unduly harsh and would not advance the cause of justice. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court concluded, <em>the principle of Section 14 which is a principle based on advancing the cause of justice would certainly apply to exclude time taken in prosecuting proceedings which are bona fide and with due diligence pursued, which ultimately end without a decision on the merits of the case</em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is hope at the end of the tunnel - 23 years after the bank guarantee was encashed, the issue is before the Commissioner (Appeals) - and it can go again up to the Supreme Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this case today. Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=23475" target="_blank">Breaking News</a>. </strong></font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">High-level Committee to sort out taxation issues and make system predictable</font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> an opinion piece in<em> <a href="http://www.ft.com/intl/cms/s/0/df701f7a-ea68-11e4-96ec-00144feab7de.html#axzz3YYhS3luh" target="_blank"><strong>Financial Times</strong></a></em>, while seeking to contain the adverse fallout of revenue department's move to levy MAT on foreign investors, the FM Arun Jaitley mentioned that India plans to set up a high-level committee to sort out taxation issues of the past and make the system predictable. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">That is what more he opinionated - </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Even though it is only the legacy issues (concerning taxation) that haunt us, we recognise that we must put a quick end to them. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ I am considering a high-level committee to explore what can be done to resolve the past and move beyond it in a way that would provide real predictability and certainty to investors. This committee will be instructed to report back expeditiously so that early actions can be taken. We have fashioned tax policies for the 21st century. Our tax administration cannot afford to lag behind. We will not let it. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The disputes that are now attracting attention are legacy cases, which are tax demands arising from actions that the tax authorities and the judiciary took before NDA government came to power. </font></p> <p align="center"><em><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600">Careless Revenue not bothered about appeals filed </font></strong></font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TWO </strong>years ago we reported the decision <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODc4ODM=" target="_blank">2013-TIOL-655-CESTAT-MUM</a></strong> in <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTc1OTY=" target="_blank">DDT 2092</a></strong> under the caption, <font color="#FF0000"><em>Self-goal - Lackadaisical Revenue gets its appeal dismissed for not furnishing a certified copy of the order appealed against</em></font>.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems that the enthusiasm and brouhaha while filing an appeal before the Tribunal loses its effervescence the moment the appeal gets registered in the CESTAT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the present case, the Commissioner of Service Tax, Mumbai-II had filed seven appeals against the orders passed by the Commissioner of Service Tax (Appeals), Mumbai-II in the year 2014. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems that although the Revenue was issued "defect notices" by the Registry, the defects were not removed. And so, when the matters were listed for ascertaining compliance of removal of defects, the AR drew a blank. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Noticing that the defects were not removed, the CESTAT disposed of the appeals as non-maintainable. </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Can the Department afford such a lackadaisical posture? Quite possibly, they would be back with an apology plea after rectifying the defects. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTAyMDgw" target="_blank">2015-TIOL-747-CESTAT-MUM </a> </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"><strong><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></strong></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"><strong>vijaywrite@tiol.in </strong></a></font></p> </body> </html>