TIOL-DDT 2612 · 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><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2"><strong><font size="2"><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 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></strong></font></strong></font></strong></font></strong></font></strong></font><font color="#663399" size="3">TIOL-DDT 2612</font><br> </strong></font><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">04 06 2015<br> </font></strong><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thursday</font></strong></p> <p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Tax - Legislative Liability cannot be Transferred by Contract</em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> an interesting case, the Commissioner had adjudicated and confirmed a demand of over seven crore rupees with consequent penalty and interest on the <em>Delhi Transport Corporation </em>which provided the taxable service of sale of space or time for advertisement to several advertising agencies but failed to obtain registration, file returns or remit service tax on the consideration received for rendition of the taxable service.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Delhi Transport Corporation contended that agreements entered with the advertisers contained a specific clause that the liability to tax, including service tax would be borne by the recipient of the service/the other party to the agreement; that they were under a bona fide belief that the liability to remit service tax stood transferred to the recipient qua the agreements; that this was a bona fide belief which caused the failure to file returns and remit service tax.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While dismissing the appeals of the Corporation, CESTAT President, Justice Raghuram observed <strong><em>(<a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTM5Njc=" target="_blank">2014-TIOL-898-CESTAT-DEL</a>)</em></strong>,</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. A bona fide belief is a belief entertained by a reasonable person.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The appellant is a public authority and an instrumentality of the State and should have taken care to ascertain whether it was liable to tax in terms of the provisions of the Act.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. It is neither alleged, asserted nor established that there is any ambiguity in the provisions of the Act, which might justify a belief that the appellant/service provider, was not liable to service tax.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. It is axiomatic that no person can harbour a "bona fide belief" that a legislated liability could be excluded or transferred by a contract.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. The appellant was clearly and exclusively liable to service tax on rendition of the taxable service of "sale of space or time for advertisement".</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. This liability involved the non-derogable obligation to obtain registration, file periodical ST-3 returns and remit service tax on the consideration received during the period covered by such ST-3 returns.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. These were the core and essential obligations the appellant should have complied with.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. We therefore find no basis for the claim that the appellant harboured a bona fide belief.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Delhi Transport Corporation took the road to the High Court. The High Court agreed with the CESTAT that the plea of <em>"bona fide belief"</em> is devoid of substance and observed,<em> "The appellant is a public sector undertaking and should have been more vigilant in compliance with its statutory obligations. It cannot take cover under the plea that contractors engaged by it having agreed to bear the burden of taxation, there was no need for any further action on its part. For purposes of the taxing statute, the appellant is an assessee, and statutorily bound to not only get itself registered but also submit the requisite returns as per the prescription of law and rules framed thereunder."</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However the High Court was lenient on penalty. It observed, <em>"given the explanation about poor financial position in which the appellant was placed, possibly on account of highly subsidized transport facilities provided and the dependence on the grants from the government, reasonable cause had been shown for the default in paying service tax within the prescribed time ---- the imposition of penalty of Rs.7,19,01,910/- (Rupees Seven Crores Nineteen Lacs One Thousand Nine Hundred Ten Only) under Section 78 of the Finance Act, 1994 is unjust and uncalled for."</em> <strong><em>(<a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTAxODMy" target="_blank">2015-TIOL-961-HC-DEL-ST</a>)</em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is the bus on its way to the Supreme Court?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The point is many assessees believe that:</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. They are not liable to pay Service Tax if there is an agreement with the service recipient that tax liability is on the recipient.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. They need not (or did not) pay Service Tax as it was not reimbursed by the recipient.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And there are many service recipients who refuse to reimburse the service tax paid/payable by the service provider. But that does not absolve the service provider from his statutory mandate of paying the tax.</font></p> <p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em><strong>Trade in Border Haats across border of Tripura between India and Bangladesh</strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has operationalized provisions of Memorandum of Understanding dated 23.10.2010 between India and Bangladesh by facilitating border trade through two new border Haats at Kamalasagar, Tripura on the Indian side and TarapurKasba on Bangladesh side.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The following commodities will be allowed to be traded in the Border Haats at Kamalasagar, Tripura (India) & TarapurKasba (Bangladesh) near border Pillar No-2039 :</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i. Locally produced vegetables, food items, fruits, spices;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii. Minor local forest produce e.g. bamboo, bamboo grass and broom stick but excluding timber;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iii. Products of local cottage industries like Gamcha, Lungi etc;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iv. Locally produced small agricultural household implements e.g., dao, plough, axe, spade, chisel etc.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">v. Locally produced garments, melamine products, processed food items, fruit juice, etc.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vendors who are allowed to sell their products in the Border Haats shall be the residents of the area within five (5) km radius from the location of Border Haats. The vendees may offer immediate consumption items of snack foods/juices as may be allowed by the Haat Management Committee.</font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTgxMzU=" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Public Notice No. 15/2015-2020 (RE-2015), Dated: June 03, 2015</strong></font></a></p> <p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em><strong>FTP - Release of Beta Version of Online ANF5A - one more step to paperless transactions</strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A </strong>Trade Notice by DGFT states that the Government is committed to improving 'ease of doing business' and move towards paperless processing of applications. Trade is informed that a Beta version of online ANF5A has now been released and it is now possible to not only apply online for grant of EPCG Authorization but also to upload the required supporting documents using digital signatures of the applicant. As a result, henceforth, in case the applicant submits the supporting documents online, along with the application, submission of physical copies of documents would no longer be required.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">During the trial phase of the beta version of online ANF5A i.e. upto 30th June 2015, the applicants would be required to submit signed paper copies of the printout of ANF5A along with the physical copies of only those documents which have not been submitted online.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This transitional arrangement would remain effective during the trial phase of the beta version of the software i.e. upto 30th June 2015. With effect from 1st of July 2015, the submission of physical copies of the application and its supporting documents would be totally dispensed with and only online applications, along with digitally uploaded/submitted documents would be accepted.</font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTgxMzQ=" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Trade Notice No. 3/2015., Dated June 01 2015</strong></font></a></p> <blockquote> <p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Vacancies in IT Settlement Commission</em></strong></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</STRONG> Revenue Department has invited applications for filling up six vacancies in various Benches of the Income Tax Settlement Commission. The O.M states,</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the Settlement Commission (Income Tax/ Wealth Tax) (Recruitment and Conditions of Service of Chairman, Vice-Chairman and Members) Rules, 2015, Chief Commissioners or Principal Chief Commissioners or Principal Commissioners of Income-tax or officers of equivalent rank <u><strong>who are in service on the date of occurrence of the respective vacancy shall be considered qualified for appointment as Member.</strong></u> (Also see yesterday's DDT)</font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTgxMzY=" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Revenue Department Office Memorandum in A-12026/10/2015-Ad.I., Dated: June 02, 2015</strong></font></a></p> <blockquote> <p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em><strong>Jurispruden<font color="#FF6633">tiol</font> - Recent SC Judgements</strong></em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF0000">Central Excise - SSI Exemption - 'kalimark' trademark belonged to several persons including the assessee - assessee using this trade mark entitled to SSI exemption:</font></strong> In his adjudication, the Commissioner returned a clear finding that the assessee is the <em>legal owner of the brand names within his marketing area.</em> But on appeal by the Department, the Tribunal took a different view in a lengthy order in 2005. The SSI unit appealed to the Supreme Court, where it has now succeeded now.</font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTAzMjUz" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Please see Kali Aerated Water Work, Salem Vs Commissioner of Central Excise, Madurai - <font face="Verdana, Arial, Helvetica, sans-serif"><font size="2">2015-TIOL-136-SC-CX</font></font></em></font></strong></a></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF0000">Central Excise - SSI Exemption - Use of Brand Name of another person - assessee using the brand name of another person with his permission - Permission will not make the assessee owner of the brand name - Not entitled for SSI benefit. Tribunal Order set aside.:</font></strong> This is another case of an SSI unit against which the Department is in appeal before the Supreme Court. None appeared for the assessee in the Supreme Court. It is not easy for an SSI unit to go all the way to the Supreme Court and keep an appeal live for ten years. In this case the Supreme Court allowed the Revenue appeal.</font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTAzMjUy" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Please see Commissioner of Central Excise, Bangalore Vs Vetcare Organics Pvt Ltd -2015-TIOL-135-SC-CX</em></font></strong></a></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF0000">Central Excise - Classification of petroleum products - C4Raffinate and propylene - Classification under 2711.19 correct and eligible for exemption under notification No. 6/2000 - CE dated 1.3.2000.:</font></strong> The whole issue was of classification and an exemption notification and a comma.</font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTAzMjU0" target="_blank"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see Commissioner of Central Excise, Vadodara Vs Indian Petrochemicals Corpn Ltd - <font size="2" face="Verdana, Arial, Helvetica, sans-serif">2015-TIOL-137-SC-CX</font></strong></font></em></a></p> <p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Google apologises for Modi's image among top ten criminals</em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOOGLE</STRONG> apologised after Prime Minister Modi's image started showing up in the image search, "top 10 criminals in India".</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But if you search for just <em>"criminals of India"</em>, you get the images of also</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Dr. Manmohan Singh</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Anil Ambani</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Sushma Swaraj</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Kiran Bedi</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Jayalalithaa</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Amitabh Bachchan</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. Rahul Gandhi</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. Arvind Kejriwal</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. P. Chidambaram</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. Sonia Gandhi</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This has been covered by almost every newspaper in India today. But we must remember Google is a search engine and it searches words, images etc and it is not an opinion. For example if you search for tax evaders India, you will get almost all the above images and some officials including Revenue Secretary and RBI Governor and many of the politicians who have held the office of the Finance Minister. And Modi's picture also appears if you search <em>"most honest politicians of India".</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us use a search engine for searching not sensationalising. And I also found Modi's picture in the list of <em>"Sexiest Indians".</em></font></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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6666">Have a nice day.</font></strong></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"><strong>vijaywrite@tiol.in</strong></a></font></p> </body> </html>