TIOL-DDT 2621 · 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 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 2621</font><br> 17 06 2015 <br> Wednesday </strong></font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Service Tax - Department loses huge Case on Limitation </font></em></strong></font></p> <p align="justify"><font size="3"><strong><font color="#FF6633" face="Verdana, Arial, Helvetica, sans-serif">ONLY for failure on the part of the adjudicating authority to exercise jurisdiction vested in him, extended period is not invokable. </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was a huge case and had all the drama of Indian litigation and had gone up to the Supreme Court at the stage of Stay. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner had demanded a Service Tax of more than Rs. 87 Crores and imposed a penalty of Rs. 150 Crores on Sri Chaitanya Educational Committee for the Service Tax payable for the period 2003-2007. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal granted full waiver of pre-deposit <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2010/2010-TIOL-1306-CESTAT-BANG.htm" target="_blank"><strong><em>2010-TIOL-1306-CESTAT-BANG</em></strong></a> on the ground of limitation till the disposal of the appeal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department was not impressed and took the matter to the High Court. The High Court of Andhra Pradesh set aside the order of the Tribunal and remanded the case by holding that the Tribunal ought not to have granted the order of stay or dispensation of pre-deposit without imposing conditions. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2011/2011-TIOL-147-HC-AP-ST.htm" target="_blank"><em>2011-TIOL-147-HC-AP-ST</em></a></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In remand proceedings, the Tribunal again did not order any pre-deposit keeping in view the fact of attachment of property valued at Rs 27 crores can be considered as enough security to safeguard the interest of revenue. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2011/2011-TIOL-661-CESTAT-BANG.htm" target="_blank"><em>2011-TIOL-661-CESTAT-BANG</em></a></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Against this order, the department filed appeal again in the High Court. The High Court held that the order of the Tribunal granting blanket waiver of pre-deposit <em>ex facie </em>constituted a clear erroneous exercise of discretion. In the High Court, Revenue suggested a pre-deposit of 50% of the service tax liability that is about 44 crores. The High Court ordered pre-deposit of Rs. 80 crores. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2011/2011-TIOL-694-HC-AP-ST.htm" target="_blank"><strong><em>2011-TIOL-694-HC-AP-ST</em></strong></a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the Revenue got more than what it pleaded for. It asked for only 50 percent of 87 Crores, but it got 80 Crores! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Obviously, the party had to appeal to the Supreme Court, which it did. In the Supreme Court also, the Counsel for Revenue fairly pleaded for a pre-deposit of 50 percent of the tax and the Supreme Court allowed a pre-deposit of a third of the Service Tax demand, which would come to about Rs. 30 Crores. - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=42&filename=legal/sc/2012/2012-TIOL-02-SC-ST.htm" target="_blank"><strong>2012-TIOL-02-SC-ST</strong> </a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This case was decided by the Tribunal recently, by majority. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Member (T) set aside the penalty of over Rs. 150 crores but confirmed the Service Tax; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Member (J) set aside most of the Service Tax of Rs. 87 crores on limitation and agreed with the Member (T) on setting aside the penalty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Third Member agreed with both the Members, with the result that most of the demand of over Rs. 240 crores, is gone on the ground of limitation. This is exactly the ground on which the Tribunal had granted unconditional stay in the first place five years ago. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the course of his judgement, the Member (J) observed, <em>only for failure on the part of the adjudicating authority to exercise jurisdiction vested in him, extended period is not invokable</em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We will bring you this very recent judgement of the Tribunal tomorrow. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Notification comes into effect on date it is published and offered for sale - SC </font></em></strong></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN</strong> does a notification issued under Section 5A of the Central Excise Act or Section 25 of the Customs Act come into effect? </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was a question I asked in the very first <strong>DDT</strong> on <u>01.12.2004</u>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTUwNzk=" target="_blank"><strong>DDT 1865 25.05.2012</strong> </a>asked,</font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When is a notification effective from ? </font></em></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 5A(5) of the Central Excise Act stipulates, </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5) Every notification issued under sub-section (1) or sub-section 2(A) shall, - </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) <strong>unless otherwise provided</strong>, come into force <strong>on the date of its</strong> issue by the Central Government for publication in the Official Gazette; </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) also <strong>be published and offered for sale</strong> on the date of its issue by the Directorate of Publicity and Public Relations, Customs and Central Excise, New Delhi, under the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963). </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 25(4) of the Customs Act has similar provisions. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Can't the publication and effective date of notification be more simple and transparent? And shouldn't the Law need a little change? </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was a question before the Supreme Court recently. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court had held that for bringing the notification into force and making it effective, two conditions are mandatory, viz., </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) Notification should be duly published in the official gazette, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) it should be offered for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue was a hike in the tariff value of certain oils by a notification dated 3.8.2001. The notification was sent for publication after the normal office hours, i.e., much after 5 p.m. on 03.08.2001. It was almost at the midnight, may be few minutes before 12 in the night. Even if it is to be treated as notification having been published on 03.08.2001 itself, i.e., just before the midnight, an issue has arisen as to whether it could be made effective qua the goods which were already cleared during the day time on the basis of earlier notification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court noted that the second condition was not satisfied inasmuch as it was offered for sale only on 06.08.2001, as it was published on 03.08.2001 in late evening hours and 04/05.08.2001 were holidays. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the notification was effective only from 6.8.2001.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the Supreme Court agreed. The appeal by the Department was dismissed and the appeals by the assessees were allowed. </font></p> <p align="justify"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=23882" target="_blank"><strong>Breaking News</strong></a> + <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTAzNzA2" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2015-TIOL-140-SC-CUS</font></strong></a></font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Will CBEC change its style of issuing notifications? </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Supreme Court judgement comes as a jolt to the relaxed and casual style of the Board. They usually issue notifications late in the evening after everybody has left office. And they assume that notifications are effective from 00.00 hours of the day. When goods are cleared at 11 am, how on earth are the importers or for that matter the officers to guess that Board will come out with a notification late in the evening? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Law is a Law only when you make people aware of it. How can you enforce a law in the morning that you enacted only in the evening? The culture and arrogance of retrospectively taxing the unsuspecting taxpayer is the culprit. They forget that only Parliament has the power to legislate retrospectively, not the Board. But some babus think that they are above Parliament, because all the laws <em>passed</em> by parliament are actually <em>written</em> by them. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sometime back a senior lawyer was arguing in a Tribunal that the definition given in the Act has no meaning. The president of the Tribunal said that it was a law passed by Parliament and we should assume that Parliament does not pass laws for fun. The senior advocate said, “what Parliament, this is drafted by some under secretary!." The President sagely advised, “You should see the end product, not the origin - even though it was drafted by an under secretary, it has undergone scrutiny at several stages and has finally got parliamentary approval. All modern laws are drafted by bureaucrats… after all, you were also once a junior lawyer." </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the Law, notification is to<em> <strong>be published and offered for sale on the date of its issue</strong> by the Directorate of Publicity and Public Relations. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Does the Directorate of <em>Publicity and Public Relations</em> ever publish a notification or offer it for sale. If they don't, are the notifications invalid?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now that the Supreme Court has held that the Notification is valid only from the date it is published and offered for sale, will the Board ensure that notifications are<em><strong> published and offered for sale on the date of its issue</strong></em> <em>by the Directorate of Publicity and Public Relations? </em>Or will they change the law? Or will the field officers deny exemption and ask assessees to produce proof of publication by the Directorate? Is the Board not required to mention in its web site where this all-important Directorate is and how one can<strong> buy</strong> a notification from them? Will the Directorate advertise when a notification is published and available for sale? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The whole problem started with mentioning this Directorate in the Act. Wasn't it a sacrilege that they made Parliament to pass such a law? And now that has turned against them. Law making is certainly too serious an affair to be left to inexperienced babus - experienced babus don't read. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Customs - MEIS - Ineligible Items </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Notification No. 24/2015 - Cus, dated 8.4.2015, goods imported into India against a duty credit scrip issued by the Regional Authority under the Merchandise Exports from India Scheme (MEIS) are exempted. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is a list of Export categories or sectors ineligible for duty credit scrip entitlement. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Government has amended the list to make certain changes to include <em>items, which are prohibited for export under Schedule-2 of Export Policy in ITC (HS)</em>, in the negative list and to add a clause <em>unless specifically notified in Appendix 3B of Appendices and Aayat Niryat Forms of Foreign Trade Policy 2015-2020</em>, for certain items. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this notification was issued yesterday evening and most probably the Directorate of <em>Publicity and Public Relation</em> is not aware of this - yet. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When will the notification come into force?</font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTgyMTU=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No.38/2015 - Customs, Dated: June 15, 2015</font></strong></a></p> <p align="center"><font size="3"><em><strong><font color="#006600" face="Georgia, Times New Roman, Times, serif">FTP - Release of Beta Version of online ANF3A </font></strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> its mission to improving 'ease of doing business' and move towards paperless submission and processing of various applications under Foreign Trade Policy (FTP), Government has released a Beta version of online ANF3A and it is now possible to not only apply online for claiming rewards under MEIS 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 (other than 'Proof of Landing' and shipping Bills in case of exports made from Non EDI ports) would no longer be required. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All IEC holders/applicants are encouraged to submit/upload the documents (including 'Proof of Landing') online using digital signatures. In case of documents submitted online, the concerned RA shall not insist on physical copies of such uploaded documents. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTgyMTY=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Trade Notice No. 05/2015, Dated: June 16, 2015 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Use Aadhaar for IT Return </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT</strong> Chairperson Ms. Anita Kapur said yesterday that “if you give your Aadhaar number while filing your income tax returns, then you don't need to submit the Income Tax Return - Verification (ITR V) form." </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Explaining the strategies of CBDT she said, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If the Aadhaar number and your PAN number match, then on your mobile, we will send you OTP (one-time password). So, once you upload your return instead of going and printing ITR V printout, there will be icon showing where you need to put the OTP and validate the return. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I cannot anticipate what the Shah panel is going to recommend. But we have this instance where the Bombay High Court judgment went against us in the Shell and Vodafone cases (transfer pricing disputes), subsequent to which we asked officers not to do future assessments and not to agitate these further in appeals. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We have also told our officers not to go for any coercive recovery in the FPI-MAT case and to grant treaty benefit wherever applicable. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If you will go to any (tax) office, you will see there is pressure to be sensitive to the concerns of taxpayers. But if you are not harsh with tax evaders, you are not doing your job. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If you don't do assessment based on that judgment, tomorrow the CBI will come, the CVC will come and the CAG will come and will ask the officer ... this judgment is in your favour, why did you not follow that judgment. What answer does my officer have?" what do you expect my officer to do? Can we stand up and say I will not make an assessment despite knowing that this is the judgment? </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600">WCO Photo Competition 2015 - The Afghan Entry</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/Afghan.jpg" alt="Legal Corner Icon" width="457" height="295" hspace="5" border="0" align="center"></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 color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</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>