TIOL-DDT 2617 · 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><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><font color="#663399" size="3">TIOL-DDT 2617 </font><br> 11 06 2015 <br> Thursday </strong></font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">I-T - Non-Deposit of TDS - No Direct Demand against Assessee </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN</strong> somebody deducts TDS from you but does not deposit it with the Government, what is your remedy? You will get deduction for TDS only if it figures in the Form 26AS Statement. All your pleas and proof that TDS has been deducted will not cut ice with the Department. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT has received grievances from many taxpayers that in their cases the deductor has deducted tax at source from payments made to them in accordance with the provisions of Chapter-XVII of the Income-tax Act, 1961 but has failed to deposit the same into the Government account leading to denial of credit of such deduction of tax to these taxpayers and consequent raising of demand. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Section 199 of the Act credit of Tax Deducted at Source is given to the person only if it is paid to the Central Government Account. However, as per Section 205 of the Act the assessee shall not be called upon to pay the tax to the extent tax has been deducted from his income where the tax is deductible at source under the provisions of Chapter-XVII. Thus the Act puts a bar on direct demand against the assessee in such cases and the demand on account of tax credit mismatch cannot be enforced coercively. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 205 reads as: <em><strong>Bar against direct demand on assessee.</strong> Where tax is deductible at the source under the foregoing provisions of this Chapter, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income</em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBDT wants this to be brought to the notice of all assessing officers so that if the facts of the case so justify, the assessees are not put at any inconvenience on account of default of deposit of tax into the Government account by the deductor. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTgxNzg=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Letter No. 275/29/2014-IT-(B)., Dated: June 01 2015 </font></strong></a></p> <p align="justify"><em><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">But isn't the issue well settled?</font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Look at this case: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">One Yashpal Sahni was Managing Director of a Company. His company paid him salary after deducting a TDS of Rs. 6,66,000 and after some time his job was terminated. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. Yashpal Sahni (assessee) filed his income tax return claiming credit of TDS amounting to Rs.6,66,000/-. The assessing officer issued an intimation under section 143(1) (a) of the Income Tax Act denying credit of the TDS amount of Rs.6,66,000/- and after imposing interest under section 234A, 234B and 234C of the Act raised a demand of Rs.12,73,940/-. He addressed several letters to various authorities including a letter addressed to the Income Tax Officer, TDS Circle calling upon them to initiate necessary action against the employer so as to recover the TDS amount collected and to compel the employer to issue TDS certificate to him. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Instead of recovering the TDS amount with interest from the employer, the income tax authorities, in furtherance of the intimation issued under section 143(1) (a) of the Act initiated penalty proceedings against the assessee under section 221(1) of the Act and by attaching the bank account of the assessee recovered a sum of Rs.17,89,587/- from the petitioner. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Challenging the attachment, the assessee filed a writ in the High Court. The High Court observed, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. From the language of section 205, it is clear that once the tax is deducted at source, the same cannot be levied once again on the assessee who has suffered the deduction. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Once it is established that the tax has been deducted at source from the salary of the employee, the bar under section 205 of the Act comes into operation and it is immaterial as to whether the tax deducted at source has been paid to the Central Government or not, because elaborate provisions are made under the Act for recovery of tax deducted at source from the person who has deducted such tax. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Once the mode of collecting tax by deduction at source is adopted, that mode alone is to be adopted for recovery of tax deducted at source. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The fact that the revenue is unable to recover the tax deducted at source from the person who has deducted such tax would not entitle the revenue to recover the said amount once again from the employee-assessee, in view of the specific bar contained in section 205 of the Act. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court ordered refund the amount of Rs.17,89,587/- with interest from the date of recovery. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We carried this decision of the High Court in <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2007/2007-TIOL-401-HC-MUM-IT.htm" target="_blank"><strong>2007-TIOL-401-HC-MUM-IT</strong> </a></font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Customs - EOUs - Fast Track</font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per para 7 of CBEC Circular No. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2006/cuscir06_17.htm" target="_blank"><strong>17/2006-Cus</strong> </a>dated 1st June, 2006, the Board has decided to extend the facility of importing goods without payment of duty on the basis of pre-authenticated procurement certificate to the units having physical export turnover of <font color="#FF0000">Rs 15 crores</font> and above in the preceding financial year and having a clean track record, for EOUs having a status holder certificate under the Foreign Trade Policy. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the opening Para of Circular No. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2007/cuscir07_19.htm" target="_blank"><strong>19/2007-Cus</strong> </a>dated 3rd June, 2007, Board decided to waive the requirement for physical verification of imported/indigenously procured duty-free goods before issuing rewarehousing certificate by the proper officer in respect of units set up under EOU/EHTP/STP/BTP scheme having physical export turnover of <font color="#FF0000">Rs.15 crores</font> and above in the preceding financial year and having a clean track record. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the para 6.40(c) of the new Handbook of Procedures (HBP) 2015-2020, EOUs <em>with a status holder certificate under FTP having physical export turnover of <font color="#FF0000">Rs.10 crore</font> and above in preceding financial year shall be allowed to import goods without payment of duty on basis of pre - authenticated procurement certificate issued by jurisdictional Customs / Central Excise Authority</em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the CBEC has modified the above circulars in tune with the new Policy to make the turnover limit as Rs. 10 crore instead of Rs. 15 crore. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTgxNzY=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No.19/2015-Cus, Dated: June 09, 2015 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Huge Increase in Collection of Excise Duty in First Two Months </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> Excise collections have increased from Rs. 11,838 crore in May 2014 to Rs. 21,809 crore during May, 2015 registering an increase of 84.2 %. Central Excise collections during April to May 2015 increased to Rs. 38,535 crore from Rs. 20,493 crore (during April to May 2014) and thus registering an increase of 88%. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs collections have increased from Rs.13,539 crore during May, 2014 to Rs.15,700 crore during May 2015 registering an increase of 16%. Customs collections during April to May 2015 increased to Rs. 29,986 crore from Rs. 25,094 crore (during April to May 2014) and thus registering an increase of 19.5%. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax collections have increased from Rs. 11,031 crore in May 2014 to Rs. 12,484 crore during May 2015 registering an increase of 13.2%. Service Tax collections during April to May 2015 increased to Rs.27,607 crore from Rs. 23,482 crore (during April to May 2014) and thus registering an increase of 17.6%. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Responding to the indirect tax collection figures, the Union Finance Minister Arun Jaitley said that these indirect tax collections reflect in part the effect of the additional measures taken by the Central Government including the Central Excise increase on diesel and petrol, increase in clean energy cess, and the withdrawal of exemptions for motor vehicles and consumer durables. He said that the underlying momentum in the economy is improving across all sectors including manufacturing as reflected in healthy Excise collections during the first two months of the Current Financial Year 2015-16. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Customs/CE - AIDS Drugs Exempted </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has exempted Anti-Retroviral Drugs (ARV Drugs) and Diagnostics and Equipments like HIV-DNA-PCR Kits, when imported into India, from the whole of the duty of customs and from the whole of the additional duty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The importer is required to produce prior to clearance of the said goods, before the Assistant Commissioner of Customs or Deputy Commissioner of Customs having jurisdiction, a certificate from an officer not below the rank of Deputy Secretary to the Government of India in the Ministry of Health and Family Welfare to the effect that the said goods are required for the National AIDS Control Programme funded by Global Fund to fight AIDS, TB and Malaria (GFATM). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similar exemption is given in Central Excise also for these goods manufactured in India with identical condition. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Both the notifications are valid till 31st March 2016. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTgxODA=" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 37/2015-Cus., Dated June 10 2015 </strong></font></a></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTgxNzk=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 33/2015-CE., Dated June 10 2015 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Anti Dumping Duty on Vitamin E - Re-imposed; no retro effect </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ANTI</strong> Dumping Duty on Vitamin E, originating in or exported from the People's Republic of China, was provisionally imposed vide Notification No. 41/2003-Cus dated 17.3.2003. This expired on 16.9.2003. Nobody noticed the expiry. Definitive anti dumping duty was imposed by notification No. 145/2003- Cus dated the 6th October, 2003 - nearly twenty days after the provisional imposition lapsed. This duty expired on 16.3.2008. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government by Notification No. 43/2008 dated 04.04.2008 extended the validity of the notification till 16.3.2009 - nearly 20 days after its expiry. This extension also lapsed on 16.3.2009 and nobody noticed for about ten days. They re-imposed the duty (but without retrospective effect) on 27.3.2009, by Notification No. 33/2009-Cus. This expired on 26.03.2014. Again nobody noticed. Life was breathed into the notification again on 9.5.2014 by Notification No. 16/2014 - after 13 days of its death. It was extended till 26.03.2015. 26th March 2015, same story - they forgot. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now they have again imposed the anti dumping duty for another five years, but thankfully with prospective effect. We should be grateful to the Board for not imposing it retrospectively. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTgxNzc=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 29/2015 - Cus(ADD)., Dated: June 10 2015 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Selection for post of Member AAR </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REVENUE</strong> Department invites applications for the post of Member (Revenue) in the Authority for Advance Rulings (Income Tax). A serving Member from the Indian Revenue Service, who is a Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, can apply. The post carries a pay range of Rs. 75500-80000 and retirement age is 62 years. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTgxNzU=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">F.No. A. 12026/13/2015-ADJ dated June 10, 2015 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600">Central Excise - Whether penalty under CENVAT Credit Rules was to be imposed even if there was no mensrea? NO, rules HC </font></strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>substantial question of law before the High Court was: </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Whether the penalty under Rule13(1) of CENVAT Credit Rules, 2002 was to be imposed even if there was no mens rea on the part of the assessee? </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Both the parties agreed that the question of law is no longer <em>res integra</em>, as it stands decided by the Supreme Court of India in <em>Commissioner of Central Excise, Chandigarh Versus Pepsi Foods Limited </em>- <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2010/2010-TIOL-109-SC-CX-LB.htm" target="_blank">2010-TIOL-109-SC-CX- LB</a></strong> wherein it has been held that:- </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">22. "It is well settled that when the statues create an offence and an ingredient of the offence is a deliberate attempt to evade duty either by fraud or misrepresentation, the statute requires "mens-rea" as a necessary constituent of such an offence. But when factually no fraud or suppression or misstatement is alleged by the Revenue against the respondent in the show-cause notice the imposition of penalty under Section 11-AC is wholly impermissible. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court had reminded itself of the fundamental principle: </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"...that an accused person cannot be convicted without proof of mensrea, unless, from a consideration of the terms of the statute and other relevant circumstances, it clearly appears that must have been the intention of Parliament."</font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of the settled position of law, the High Court held that no other and further order is required to be passed in this appeal.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see Commissioner of Central Excise, Chandigarh Vs Saluja Exim - <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTAzNTMz" target="_blank">2015-TIOL-1426-HC-HP-CX</a></strong> </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600">New CVC sworn in</font></strong></em></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_KV_Chowdary.jpg" alt="Legal Corner Icon" width="556" height="442" hspace="5" border="0" align="center"><br> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">President of India swearing in Mr. KV Chowdary as the new Central Vigilance Commissioner at Rashtrapati Bhavan yesterday.</font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p> <p><strong><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></strong></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"><a href="mailto:vijaywrite@tiol.in"><strong>vijaywrite@tiol.in</strong></a></font></p> </body> </html>