TIOL-DDT 2679 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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 color="#663399" size="3">TIOL-DDT 2679 </font><br>
07 09 2015 <br>
Monday </strong></font></p>
<p align="center"><em><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600">Ease of Doing Business - Mandatory Pre-deposit for appealing to CESTAT - Tilted against small assessee</font></strong></font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Section 35F of the Central Excise Act, for appealing against an order of the Commissioner of Central Excise to the CESTAT, the assessee-appellant has to make a mandatory pre-deposit of 7.5% of the duty demanded. If the duty demanded is 4 crores, he has to make a pre-deposit of Rs. 30 lakhs, but if the demand is 400 crores, he need not deposit 7.5% that is 30 crores, as there is a ceiling of Rs. 10 crores. For an assessee with a demand of Rs. 400 crores, a deposit of 10 crores may not be difficult, but for the one with a demand of Rs. 4 crores, Rs. 30 lakhs may be a huge amount and he may not be in a position to raise this amount and has to face the sad situation of not being able to appeal at all. How will such an assessee continue in business? With ease or otherwise! And a demand of 4 crores or 400 crores does not make any difference for the Commissioner for him they are only figures. </font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600"><em>753 Crores Evasion Case on Steel Major - High Court Does not interfere at Show Cause Notice Stage </em></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> steel unit was issued a demand notice for Rs. 753.55 Crores alleging suppression and evasion for the period from 2010-11 to 2013-14. It was a discovery during audit that the production figures did not match with the production capacity and so the notice of evasion of Rs. 750 crores. What was the department doing for five years when the assessee was merrily evading hundreds of crores? To evade 750 crores of excise duty, you have to clear at least 7500 crores worth of material. Assuming the price of steel to be Rs. 25,000, they have to clear 30 lakh tons of steel. Did so much of steel simply vanish into thin air? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee approached the High Court for quashing the Show Cause Notice as it did not contain a single justifiable reason for the purpose of issuing the notice. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court however did not oblige, but asked the assessee to file its objections with the department within two weeks and the adjudicating authority to pass appropriate orders within six weeks thereafter. Please see <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA2MzI5" target="_blank"><strong>2015-TIOL-2048-HC-MAD-CX </strong></a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, what will happen if the Commissioner confirms the demand? This assessee has to just pay Rs.10 crores as pre-deposit for filing the appeal in the CESTAT. This may not be difficult for this assessee who pays about Rs. 3500 crores annually as excise duty. </font></p>
<p align="center"><strong><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em>Laying Pipelines for Water Supply Projects - High Court upholds CESTAT ruling in Indian Hume Pipes </em></font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#4EB0E0" span="span"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Indian Hume Pipes -<em> <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA2MzMw" target="_blank"><strong>2015-TIOL-2049-HC-MAD-ST</strong></a>: </em></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is one of the most cited decisions of the CESTAT in recent times. Prior to 01.06.2007, though at some places, demand notices were issued for payment of service tax on the activities of laying of pipelines for drinking water supply projects undertaken by classifying the service under<em> "Commercial or Industrial Construction Service (CISS)" or "Erection, Commissioning or Installation Service (ECIS)",</em> these demands were successfully contested by the assessees with favourable judgement in case of <em>Indian Hume Pipes </em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2008/2008-TIOL-1665-CESTAT-MAD.htm" target="_blank"><strong>2008-TIOL-1665-CESTAT-MAD</strong></a>. In this case, the Commissioner had found that the assessee had rendered taxable services under the category 'Erection, Commissioning or Installation', which was quashed by the Tribunal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the recent celebrated Larger Bench Decision in the case of Lanco Infratech and several others - <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTAyMTY1" target="_blank"><strong>2015-TIOL-768-CESTAT-BANG-LB</strong></a>, the Larger Bench referred to <em>Indian Hume Pipes </em> and observed that from the decision in Indian Hume, it is clear that laying of pipelines/ conduits for transmission of water or for disposal of sewerage falls within the ambit of CICS and not ECIS. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the <em>Indian Hume Pipe </em> is taken by Revenue in appeal to the Madras High Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court gave its verdict recently. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court at the outset made it clear that if the dispute was on a finding of fact by the Tribunal, as to whether the activity carried on by the Assessee was a construction activity or an activity of erection, installation and commissioning, then there can be no appeal on such question of fact. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court referred to the recent Larger Bench decision and dismissed the Revenue Appeal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this decision today. <strong>Please see</strong> <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=24606" target="_blank">Breaking News</a></strong></font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Anti Dumping Duty on Acrylonitrile Butadiene Rubber - extended after death </em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> anti dumping duty on Acrylonitrile Butadiene Rubber imposed by Notification No. 1/2009-Cus, dated 02.01.2009, had expired on 01.01.2014 and by Notification No. 6/2014-Cus(ADD), dated 23.01.2014, they extended it till 01.01.2015 after being dead for 23 days which expired on 1.1.2015. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the government has imposed anti dumping duty on Acrylonitrile Butadiene Rubber originating in or exported from Korea RP. This is valid for five years. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTg0ODQ=" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 46/2015-CUSTOMS (ADD), Dated: September 4, 2015 </strong></font></a></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>FTP - Exemption to Textiles from Testing </em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended the General Note 10 Regarding Import Policy under ITC (HS), 2012 - Schedule - 1 (Import Policy). - Textile and Textile Articles Containing Hazardous Dyes: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Textiles and Textile Articles originating from specific countries (where the use of Azo Dyes in Textiles and Textile Articles is banned) are exempted from testing of samples for presence of Azo Dyes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A new Appendix - 2X is introduced in the Appendix and Ayat Niryat Forms of FTP 2015 -20 listing the countries wherefrom import of Textiles and Textile Articles is exempted from testing of samples for presence of Azo Dyes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTg0ODA=" target="_blank">Notification No. 19/2015-2020, Dated: September 04, 2015</a> and <a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTg0ODE=" target="_blank">DGFT Public Notice No. 32/2015-20, Dated: September 04, 2015</a></strong></font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>DGFT Notifies new SION </em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DIRECTOR </strong>General of Foreign Trade has notified a new SION with serial number J-377 in Textile Product Group for export product 'Dipped Belting Fabrics (EP) Conveyor Duck/Synthetic Fabrics of Nylon 6/66 & Polyester 840 Denier and above'. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTg0ODI=" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Public Notice No. 33/2015-20, Dated: September 04, 2015 </strong></font></a></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Can a Lawyer make a concession and bind his client? </em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#4EB0E0" span="span"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">An advocate, in the discharge of his duty knows but one person in the world and that person is his client. </font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>LONG</strong> ago when I appeared before a Commissioner in a Personal Hearing, I submitted to the learned Commissioner that if the major demand in my case is dropped, I would not press the other issues and pay the duty, interest and penalty on those items. The Commissioner asked me if I had the authority to make such a concession. I told him I had. As can be expected, he confirmed the whole demand and for matter of record, the whole demand, including the parts which I was ready to concede was quashed by CESTAT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The question is, <em>"Can an advocate make a concession on behalf of his client?"</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a recent case, the Supreme Court made some interesting observations. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Lawyers are perceived to be their client's agents. The law of agency may not strictly apply to the client - lawyer's relationship as lawyers or agents, lawyers have certain authority and certain duties. Because lawyers are also fiduciaries, their duties will sometimes be more demanding than those imposed on other agents. The authority-agency status affords the lawyers to act for the client on the subject matter of the retainer. One of the most basic principles of the lawyer-client relationships is that lawyers owe fiduciary duties to their clients. As part of those duties, lawyers assume all the traditional duties that agents owe their principals and, thus, have to respect the client's autonomy to make decisions at a minimum, as to the objectives of the representation. Thus, according to generally accepted notions of professional responsibility, lawyers should follow the client's instructions rather than substitute their judgment for that of the client. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The law is now well settled that a lawyer must be specifically authorized to settle and compromise a claim, that merely on the basis of his employment he has no implied or ostensible authority to bind his client to a compromise/ settlement. To put it alternatively that a lawyer by virtue of retention, has the authority to choose the means for achieving the client's legal goal, while the client has the right to decide on what the goal will be. If the decision in question falls within those that clearly belong to the client, the lawyers conduct in failing to consult the client or in making the decision for the client, is more likely to constitute ineffective assistance of counsel. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The Bar Council of India Rules, 1975, provide for the ‘Standards of Professional Conduct and Etiquette' to be observed by all the advocates under the Advocates Act, 1972. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>An advocate has to conduct himself and his duties in an extremely responsible manner. They must bear in mind that what may be appropriate and lawful for a person who is not a member of the Bar, or for a member of the Bar in his non-professional capacity, may be improper for an advocate in his professional capacity. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>While Rule 15 mandates that the advocate must uphold the interest of his clients by fair and honourable means without regard to any unpleasant consequences to himself or any other. Rule 19 prescribes that an advocate shall only act on the instructions of his client or his authorized agent. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>It is expected of the lawyers to obtain necessary instructions from the clients or the authorized agent before making any concession/statement before the Court for and on behalf of the client. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Therefore, it is the solemn duty of an advocate not to transgress the authority conferred him by the client. It is always better to seek appropriate instructions from the client or his authorized agent before making any concession which may, directly or remotely, affect the rightful legal right of the client. The advocate represents the client before the Court and conducts proceedings on behalf of the client. He is the only link between the Court and the client. Therefore, his responsibility is onerous. He is expected to follow the instructions of his client rather than substitute his judgment. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Generally, admissions of fact made by a counsel is binding upon their principals as long as they are unequivocal; where, however, doubt exists as to a purported admission, the Court should be wary to accept such admissions until and unless the counsel or the advocate is authorised by his principal to make such admissions. Furthermore, a client is not bound by a statement or admission which he or his lawyer was not authorised to make. Lawyer generally has no implied or apparent authority to make an admission or statement which would directly surrender or conclude the substantial legal rights of the client unless such an admission or statement is clearly a proper step in accomplishing the purpose for which the lawyer was employed. We hasten to add neither the client nor the Court is bound by the lawyer's statements or admissions as to matters of law or legal conclusions. Thus, according to generally accepted notions of professional responsibility, lawyers should follow the client's instructions rather than substitute their judgment for that of the client. We may add that in some cases, lawyers can make decisions without consulting client. While in others, the decision is reserved for the client. It is often said that the lawyer can make decisions as to tactics without consulting the client, while the client has a right to make decisions that can affect his rights. We do not intend to prolong this discussion. We may conclude by noticing a famous statement of Lord Brougham: </em></font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"an advocate, in the discharge of his duty knows but one person in the world and that person is his client."</em></font></p>
</blockquote>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In many judgements, we see the words,<em> "the learned AR/Counsel fairly concedes….."</em>. The conceding may not be fair after all - in all cases. </font></p>
<p align="center"><font size="3"><strong><font color="#006600" face="Georgia, Times New Roman, Times, serif"><em>Abhishek Verma - A World Champion Working as an Assistant in Income Tax</em></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RECENTLY </strong>Abhishek Verma won the Archery World Cup. He was given the Arjuna Award last year. Abhishek works as a Tax Assistant in the office of the CIT (Central)-02 at New Delhi. A Circular from the Principal Chief Commissioner of Income Tax states that the Income Tax Department is proud to have him as part of the department. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A World Champion working as a tax assistant? Shameful! They must make him at least a Commissioner. </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>
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