TIOL-DDT 2678 · 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><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 2678</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> 04 09 2015 <br> Friday</font></strong></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600">Customs - Valuation - Quantity or Price - Huge Win for Oil Companies in Supreme Court</font></strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Supreme Court delivered a landmark judgement day before yesterday. We reported the CESTAT Order in this case on 17.03.2006 as <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=3457" target="_blank"><strong>Shortage in quantity of imported goods - quantity is not relevant for valuation - oil companies in for a shock - Revenue wins huge case in Tribunal</strong></a>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After nearly a decade, it is now the Revenue that is in for a shock and the huge win is for the Oil Companies! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In respect of liquid bulk cargo, the quantity of goods imported is equivalent to the quantity received in shore tank. The ocean loss is proportionately shared by all the refineries concerned. The point at issue is the valuation of the crude imported. According to Revenue, irrespective of the quantity of crude received in the shore tanks, they have to pay duty on the basis of the amount paid. On the other hand, the Oil Companies contend that duty is payable only on the value of the crude received in the shore tanks. In other words, the Oil Companies want to pay duty only on the actual quantity received in the shore tanks despite the fact that they had to make payment on the basis of the quantity shown in the Bill of Lading. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On 24th July, 2002, the Commissioner of Customs passed a detailed order in which he held that since the basis of customs duty had changed into an ad valorem regime, <em>"transaction value</em>" would necessarily mean the value at which the goods were to be purchased from the foreign supplier. According to the Commissioner, full payment for the goods has to be made by the importer only on the basis of the quantity mentioned in the bill of lading. This being the case, therefore the "<em>transaction value</em>" of the said goods would only be as per the payment made of the amounts stated in the bill of lading and not the quantity received ultimately in the shore tanks at ports in India. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal agreed with the Commissioner. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Supreme Court has held that each one of the reasons given by the Tribunal is incorrect in law as: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. It lost sight of the fact that a levy in the context of import duty can only be on imported goods, that is, on goods brought into India from a place outside of India. Till that is done, there is no charge to tax. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The taxable event in the case of imported goods, is "import". The taxable event in the case of a purchase tax is the purchase of goods. The quantity of goods stated in a bill of lading would perhaps reflect the quantity of goods in the purchase transaction between the parties, but would not reflect the quantity of goods at the time and place of importation. A bill of lading quantity therefore could only be validly looked at in the case of a purchase tax but not in the case of an import duty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Sections 13 and 23 of the Customs Act have been wholly lost sight of. Where goods which are imported are lost, pilfered or destroyed, no import duty is leviable thereon until they are out of customs and come into the hands of the importer. It is clear therefore that it is only at this stage that the quantity of the goods imported is to be looked at for the purposes of valuation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The basis of the judgment of the Tribunal is on a complete misreading of Section 14 of the Customs Act. First and foremost, the said Section is a section which affords the measure for the levy of customs duty which is to be found in Section 12 of the said Act. Even when the measure talks of value of imported goods, it does so at the time and place of importation, which again is lost sight of by the Tribunal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. "<em>Transaction value</em>" which occurs in the Customs Valuation Rules has to be read under Rules 4 and 9 as reflecting the statutory position, namely, that valuation of imported goods is only at the time and place of importation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. The Tribunal's reasoning that somehow when customs duty is ad valorem the basis for arriving at the quantity of goods imported changes, is wholly unsustainable. Whether customs duty is at a specific rate or is ad valorem makes not the least difference to the statutory scheme. Customs duty whether at a specific rate or ad valorem is not leviable on goods that are pilfered, lost or destroyed until a bill of entry for home consumption is made or an order to warehouse the goods is made. This is for the reason that the import is not complete until what has been stated above has happened. </font></p> </blockquote> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this case today. Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=24588" target="_blank">Breaking News</a></font></strong></p> <p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>The Government shall speak only in one voice. It has only one policy: SC </em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is a not so strange case where one department of the Government gave a concession which another department sought to deny on hyper technical grounds. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government of Himachal Pradesh had as a part of Industrial Policy allowed a concessional rate of 1% of Central Sales Tax till 31.03.2009. The State Cabinet met on 20.05.2009 and approved extension of the concession till 31.03.2013. Accordingly the Principal Secretary (Industry) issued a notification that the <u><em>the Governor, Himachal Pradesh is pleased to extend the incentive of validity of concessional rate of CST @ 1% upto 31.03.2013 or till the time CST is phased out, whichever is earlier</em></u>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thereafter, the Excise and Taxation Department of the State Government issued statutory Notification allowing the tax <u><em>at the rate of 1% of the taxable turnover of such goods with immediate effect for the period ending 31.03.2013</em></u>. This Notification was issued on 18.06.2009. So, technically there was no concessional tax during the period from 01.04.2009 to 17.06.2009.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The State had the audacity to argue that since the notification under the Act providing for tax concession was issued only on 18.06.2009 wherein it was specifically mentioned that the notification would have immediate effect and would operate for the period ending on 31.03.2013, the assessee is not entitled to the CST concession @ 1% for the intervening period between 01.04.2009 to 18.06.2009. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court yesterday held: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFBE7D">1. The State Government cannot speak in two voice. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Once the Cabinet takes a policy decision to extend its 2004 Industrial Policy in the matter of CST concession to the eligible units beyond 31.03.2009, upto 31.03.2013, and the Notification dated 29.05.2009, accordingly, having been issued by the Department concerned, viz., Department of Industries, thereafter, the Excise and Taxation Department cannot take a different stand. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFBE7D">3. What is given by the right hand cannot be taken by the left hand. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFBE7D">4. The Government shall speak only in one voice. It has only one policy. The departments are to implement the Government policy and not their own policy. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Once the Council of Ministers has taken a decision to extend the 2004 Industrial Policy and extend tax concession beyond 31.03.2009, merely because the Excise and Taxation Department took some time to issue the notification, it cannot be held that the eligible units are not entitled to the concession till the Department issued the notification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFBE7D">6. The State Government cannot levy the tax against its own policy. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. The State Government is bound by the policy decision taken by the Council of Ministers and duly notified by the Department concerned, viz., Department of Industries. </font></p> </blockquote> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this case today. Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=24587" target="_blank">Breaking News </a></font></strong></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Customs - CBEC Prescribes More Ease of Doing Business - No Piece meal queries </font></em></strong></font></p> <p><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#4EB0E0"><strong>CBEC</strong> Notes: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Trade facilitation has been accorded priority by the Government since it is critical for Ease of Doing Business in India. The progress in Ease of Doing Business is being monitored at the highest level. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. In order to facilitate genuine trade and to reduce dwell time, it is necessary to streamline the procedures at every stage of assessment till out of charge of goods is given by Proper Officer of Customs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Increasing number of queries and resultant delay in assessment process is a matter of concern. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Further, instances have come to notice that in cases, during re-assessment of Bill of Entry by the proper officer, the queries seeking clarification from importer are raised in a piece meal manner. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. There is also no mechanism to monitor the time taken in raising queries and completing re-assessment by the officers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. The C&AG in its report on Trade Facilitation of Import and Export through Ports has highlighted this point and desired that a system of periodical review and analysis of queries raised must be devised by the Department. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. Further, the areas where maximum number of queries are raised should be identified which could be disseminated for the benefit of trade so that they could take preventive action. </font></p> </blockquote> <p align="justify"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#4EB0E0">Board decides and desires that: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. genuine clarification sought by officers from importers/exporters are raised in one go and not in a piece meal manner. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. field formation could consider listing of the queries frequently raised in course of assessment and disseminate them through Public Notice or sensitize trade about the same so that importers could take preventive action to avoid such queries or be better prepared to reply to such queries. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. the time taken after answering the queries should be further curtailed and in fact documents that are delayed are accorded priority after receipt of satisfactory reply from importers. </font></p> </blockquote> <p align="justify"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#4EB0E0">Board directs that: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. All Chief Commissioners to instruct officers under their jurisdiction to strictly adhere to aforementioned guidelines. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Commissioner of Customs may also devise a mechanism for monthly update/review of the same. The review must include type and frequency of queries raised by the proper officers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Chief Commissioners should also consider suitable sensitization of importers about most common errors so that avoidable delays in completion of reassessment by proper officer may be avoided in future. </font></p> </blockquote> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTg0Nzk=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 22/2015-Customs., Dated: September 03, 2015 </font></strong></a></p> <p align="center"><em><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600">Customs - Commissioner drops DRI Case, CESTAT with DRI, Supreme Court sustains Commissioner's Order</font></strong></font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>a rare show of judicial spine, a Commissioner dropped a demand raised by DRI. Such judicial independent thinking is not normally tolerated in the Department which took the matter in appeal to the CESTAT. CESTAT surprisingly allowed the Revenue Appeal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CESTAT had observed, "<em>Instead of appreciating the evidence unearthed by the investigating officer with reference to the goods imported, the adjudicating authority has embarked himself on a detour deviating from the main issue</em>". </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed, “<em>We are at loss to understand what is meant by this statement.</em>" </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Court further observed, “<em>the CESTAT does not seem to have come to grips with the real issue at all.</em>" </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court set aside the order of the Tribunal and restored the order of the Commissioner. The Commissioner passed his order on 1st March, 2001 and his decision is given the stamp of approval by the apex court 14 years later. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this case today. Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=24586" target="_blank">Breaking News</a> </font></strong></p> <p align="center"><strong><em><font size="3" face="Georgia, Times New Roman, Times, serif" style="background-color:#B0FFC5">Customs - New Exchange Rates from Today</font></em></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has notified new exchange rates for Imported Goods and for Export Goods with effect from 4th September 2015. The USD is at a high of 66.85 rupees for imports and 65.80 rupees for exports. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTg0NzY=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 84/2015-Customs (NT), Dated: September 03, 2015 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Black Money FAQ </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT</strong> has issued another clarificatory circular on <em>the applicability of various provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015</em>. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTg0Nzg=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Circular No. 15/2015., Dated September 03, 2015</font></strong></a></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p> <p><strong><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice weekend.</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" target="_blank"><strong>vijaywrite@tiol.in </strong></a></font></p> </body> </html>