TIOL-DDT 2775 · the untouched capture
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<p><font size="3"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 2775<br>
</font></strong></font><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">29 01 2016<br>
</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Friday</font></strong><font size="3"><strong><font color="#663399" size="3" 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></p>
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<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Take Strict Action against erring officials of Customs and Excise - PM</em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PRIME</strong> Minister, Shri Narendra Modi, in March 2015, launched a multi-purpose and multi-modal platform PRAGATI (Pro-Active Governance And Timely Implementation). PRAGATI is a unique integrating and interactive platform. The platform is aimed at addressing common man's grievances, and simultaneously monitoring and reviewing important programmes and projects of the Government of India as well as projects flagged by State Governments.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The PM recently chaired his ninth interaction through PRAGATI. Taking strong exception at complaints and grievances from people, related <strong>to the customs and excise sector,</strong> the Prime Minister asked for strict action against responsible officials. He urged all Secretaries whose departments have extensive public dealing, to set up a system for top-level monitoring of grievances immediately.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sir, it is a difficult task to fix responsibility in revenue departments. Instead of opening bulky vigilance files and constituting inquiry officers, there is a better alternative. We have several High Court and Tribunal orders pointing out the erring officials and imposing costs on them. Take direct action against them and the rest will fall in line.</font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600"><em>Easy Way of collecting taxes - First Arrest, then recover and then issue notice: </em></font></strong></font><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em><strong>Can there be pre determination of offence without a notice?</strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is an interesting case. A few days ago the newspapers were abuzz with the story of the Managing Director of EBIZ.Com being arrested by DGCEI for alleged evasion of Service Tax to the tune of 17 crore rupees. The case was before the Delhi High Court yesterday.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These extracts from the Delhi High Court's order delivered yesterday will reveal the concept of ease of doing business.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is a writ petition by EBIZ.Com. Private Limited seeking a declaration that the search conducted by the DGCEI, Respondent No.2 on the business premises of the Petitioner on 19th January 2016 apprehending evasion of payment of service tax by the Petitioner, as well as the summons issued to the Petitioner on 19th & 21st January 2016 by the DGCEI to be illegal and ultra vires to the provisions of the Finance Act, 1994.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is stated by Mr J.K. Mittal, learned counsel appearing for the Petitioner that Mr Pawan Malhan, the Managing Director (MD) of the Petitioner was arrested by the Senior Intelligence Officer DGCEI (Headquarters) on 20th January, 2016 and continues to be in custody. He has drawn the attention of the Court to the remand application filed before the Magistrate by the DGCEI in which it is stated that in the course of the search undertaken in the business premises of the Petitioner, the statements of two accountants, Mr. Sulabh Jain and Mr. Narendra Kumar and two business associates, Mr. Pawan Mishra and Mr. Shubham Chaudhary, were recorded. The statement of the MD was also recorded. Copies of some of the invoices were seized from which it was concluded that from the years 2011-12 till 2015-16 (till 6th January, 2016) the Petitioner had wrongly availed of exemption (under Notification No. 26/2012-ST dated 20th June, 2012) from payment of service tax on some of the services provided by claiming to be a "tour operator" and had avoided payment of service tax to the extent of Rs. 17 crores. The DGCEI stated in the remand application that the Petitioner had not remitted service tax collected from the customers to the extent of Rs. 17 crores and had thereby committed an offence punishable under Section 89 (1) (ii) of the Finance Act, 1994.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. Mittal informs the Court that the bail application of the MD of the Petitioner is coming up for hearing before the Learned Additional Sessions Judge on 29th January, 2016. He points out that the accounts of the Petitioner's accounts have been periodically audited by the Commissioner of Service Tax (CST) since 2009. Further, the premises of the Petitioner was searched on two earlier occasions. He states that the Petitioner has been filing the service tax returns on a regular basis availing the exemption under the aforementioned notification by claiming to be a tour operator. The Petitioner was issued a notice under Section 73 (1) of the Finance Act 1994 on 17th November 2014 by the CST demanding a service tax of Rs. 34,00,425 which demand was confirmed by an order dated 21st December, 2015. This order is being challenged by the Petitioner. Another show cause notice dated 2nd November, 2015 demanding a service tax of Rs. 5,33,541 issued by the CST is yet to be adjudicated. It is further stated that a refund claim by the Petitioner to the extent of Rs.35 lakhs is still pending with the CST. In the above circumstances, it is prayed that no further coercive steps be taken against the Petitioner.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ms. Pooja Bhaskar, learned counsel appearing for the DGCEI first submitted that since Mr Satish Aggarwala, Standing Counsel for the DGCEI is not available in Delhi today, the further hearing of the case should be deferred. However, Mr Atul Singh, Deputy Director DGCEI and Mr Sunil Joshi, SIO, DGCEI were present in the Court along with the relevant records, which were perused by the Court. This includes a note prepared proposing the search of the premises and a separate note prepared proposing the arrest of the MD of the Petitioner.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>It is not clear from these notes that prior to going in for the extreme measure of arresting the MD of the Petitioner, the DGCEI examined the entire previous records of the Petitioner and in particular the assessments in relation to the years 2011-12 onwards.</strong> In particular, it is not clear whether the DGCEI was conscious of the pending proceedings and show cause notices issued by the CST under Section 73 (1) of the Finance Act, 1994. And the proceedings consequent thereto. This aspect is significant since the invocation of the powers of arrest without warrant under Section 90 (1) read with Section 89 (1) (ii) of the Finance Act 1994 presupposes the arrival of a satisfaction regarding the Assessee having collected service tax but failing to pay to the Department as envisaged in Section 89 (1) (d) thereof. The question that would arise is whether there can be a pre-determination regarding the offence under Section 89 (1) (d) of the Finance Act 1994 without issuance of a notice under Section 73 (1) regarding the alleged evasion of payment of service tax in the sum of Rs. 17 crores, followed by an adjudication.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the circumstances, the Court is satisfied that the Petitioner has made out a prima facie case and accordingly an interim direction is hereby issued restraining the DGCEI from taking any further coercive action against the Petitioner or any of its officers or employees till the next date of hearing.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is clarified that as far as the proceedings consequent upon the arrest of the MD of the Petitioner pending in the Court of the learned ASJ is concerned, it will proceed in accordance with law and this Court expresses no opinion in that regard. Further, it is made clear that the Petitioner will continue to cooperate with the DGCEI, answer the queries and provide whatever documents are available in its possession as and when required by the DGCEI.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr Mittal states that only last night a notice dated 21st/22nd January, 2016 has been received by the Petitioner from the CST asking for documents relating to FYs 2013-14 and 2014-15 which he states have already been seized by the DGCEI pursuant to the search conducted on 19th January, 2016.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the oral request of Mr. Mittal, the Commissioner Audit-II, Ghaziabad Commissionerate, CGO Complex-II, Kamla Nehru Nagar, Ghaziabad, U.P. is impleaded as Respondent No.3. The amended memo of parties be filed within one week.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notice is issued to Respondent no.3. It is further directed that proceedings consequent upon the notice dated 21st/22nd January, 2016 issued to the Petitioner by Respondent No.3 shall remain stayed till the next date of hearing.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the next date of hearing one officer each from the Respondent Nos. 2 & 3 who is conversant with the facts of the case will remain present with all the relevant records of the case.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">List on 21st March, 2016.</font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Import of livestock and livestock products - CBEC clarifies - after 9 years</em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WITH</strong> regard to import of livestock and livestock products, in view of outbreak of Avian Influenza disease in number of countries, Board vide Circular No 13/2007 Cus dated 02.03.2007, had clarified that:</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>6. As per existing provisions in respect of clearance of Diplomatic baggage and cargo, it is once again reiterated that the import of goods which is prohibited by the law or regulated by the quarantine provisions, inspection can be conducted only in the presence of the diplomatic agent or of his authorized representative. However any such inspection should be undertaken only after prior consultation or authorization of the protocol division of Ministry of External Affairs (MEA). A representative of MEA should invariably be present at the time of inspection. Further, Inspection should be based on prior intelligence and with the approval of the Commissioner of Customs.</em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In cases where declaration itself contains presence of livestock and livestock products in the cargo, the standard procedure of referral to Quarantine authorities need to be adhered to. MEA has informed that such requirement of quarantine authorities in respect of Diplomatic cargo need to be informed to all Diplomatic Missions before the procedure is put in place. Accordingly, it is decided that such referral by Customs should commence only after MEA has briefed all Diplomatic Missions about these requirements. <u><strong>In view of this, Customs should follow procedure of referral to quarantine authorities only after further direction of the Board.</strong></u> Meanwhile, clearance of such items by Diplomatic Missions may continue unhindered. Where any difficulty is being faced in clearance of Diplomatic cargo the same should be immediately referred to the Board.</font></em></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Here are the further directions, after 9 years:</font></p>
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<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Ministry of External Affairs <u><strong>has now informed</strong></u> that the Diplomatic Missions who are importing Livestock/Livestock products have been submitting a Self Certification along with their Customs Duty Exemption Certificate for import of goods in the format Form 7A recently uploaded on the website of Ministry of External Affairs under the Useful Links/Protocol Division. In the self certification, the authorized signatory of the Diplomatic Mission certifies that he/she is aware that import and export of some specified goods may be restricted/prohibited under the Customs Act, 1962 and Notifications of the Government of India and other laws including the Livestock Importation Act.</font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>4. As such, the Diplomatic Missions are aware of the need for compliance of the laws of the land for import of all goods including Livestock products. Therefore, Diplomatic Missions are already following the procedure for import of Livestock products. However, Ministry of External Affairs has desired that top priority be accorded to Diplomatic Missions while issuing AQCS clearances for their Livestock product imports.</em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Keeping in view the above, it has been decided that Customs should commence standard procedure of referral to quarantine authorities in respect of Diplomatic Cargo and baggage. However, priority may be accorded to such consignments of Diplomatic Missions. Para 6 of the Circular 13/2007-Customs dated 2nd March, 2007 stands modified to this effect.</font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkwODk=" target="_blank">CBEC Circular No 02/2016-Customs, Dated: January 27, 2016</a></strong></font></p>
<p align="center"><em><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong>Filling up the Post of President CESTAT - Applications invited</strong></font></em></p>
<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=25883" target="_blank">DDT</a><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=25883" target="_blank"> 2773</a></strong> commented <em>"President Goda Raghu Ram will retire in March 2016 and perhaps the new President will be appointed under the above Rules. As it is not desirable to leave the CESTAT without a President, the process should begin immediately."</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The process has begun and an Advertisement calling for the applications has been issued. Applicants should submit their Resume along with self-attested photograph through Registrar General of respective High Courts or Registrar, CESTAT. The same should reach to the Under Secretary (CAT), Government of India, Ministry of Finance, Department of Revenue, Room No.51-II, North Block, New Delhi 110001 on or before 29.02.2016.</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/Vacancies_for_President_CESTAT.pdf" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>F.NO. A.12026/4/2016-Ad.1C (CESTAT) dated 28.01.2016.</strong></font></a></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Customs - Many items in list 3 of Notification No 12/2012 Cus omitted</em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SL</strong> No 147 of the Mega Exemption Notification provided for concessional rate of duty to (A) Drugs, medicines, diagnostic kits or equipment specified in List 3. This list has 181 items and now list 3, many of the items are omitted. Similarly, in list 4 also, many items are omitted. To encourage Make in India?</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=MTkwOTI=" target="_blank">06/2016-Customs, Dated: January 28, 2016</a></strong></font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><font color="#006600"><strong>Definitive Anti-Dumping Duty imposed on Mulberry Raw Silk from China</strong></font></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BASED</strong> on the recommendations of the DGAD, Government has imposed definitive Anti-Dumping Duty on 'Mulberry Raw Silk (not thrown) of grade 3A and below', falling under tariff item 5002 00 10 of Chapter 50 of the First Schedule to the Customs Tariff Act, 1975), originating in, or exported from, the People's Republic of China. The ADD shall be effective for a period of five years. ADD has also been imposed on imports of Melamine and the earlier ADD Notification No 10/2010 (Melamine) has been rescinded.</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=MTkwOTA=" target="_blank">Notification Nos 01/2016</a>, <a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkwOTE=" target="_blank">02/2016</a> & <a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkwOTM=" target="_blank">3/2016 -Customs (ADD), Dated: January 28, 2016</a></strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more DDT</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Have a nice Weekend.</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to <a href="mailto:vijaywrite@tiol.in" target="_blank"><strong>vijaywrite@tiol.in</strong></a></font></p>
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