TIOL-DDT 2793 · the untouched capture
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<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><font size="3"><strong>TIOL-DDT 2793</strong></font></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><br>
24 02 2016<br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Wednesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em>Revenue does not appear to be inclined to follow binding orders of Supreme Court - Provisional Release ordered by High Court</em></font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Deputy Commissioner of Customs, ICD imposed the following conditions for provisional release of certain goods seized by the DRI.</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) 100% payment of differential duty amounting to Rs. 1,21,66,403. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) execution of bond equivalent to 100% value of the goods i.e. Rs.4,70,60,877/-. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) furnishing Bank Guarantee equivalent to 25% of the differential duty of Rs. 1,21,66,403/- with auto renewal clause as per RBI guidelines. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) furnishing an undertaking by the importer that they will not dispute, challenge the quantity and weight of the seized goods at any stage. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court noted that <em>in spite of orders of the Supreme Court and the High Court, Revenue continues to impose harsh conditions for provisional release of goods; Revenue does not appear to be inclined to follow the binding orders of the Supreme Court, and are compelling exporters and importers to approach this Court every time for relaxation of the conditions imposed for the provisional release of good </em>s. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">High Court ordered provisional release on the Petitioner executing a bond in a sum equal to 100% of the value of the goods and further furnishing security in the form of a bank guarantee for a sum equivalent to 30% of the differential duty, with an auto renewal clause. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see</strong> <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTExNTA1" target="_blank"><strong>2016-TIOL-344-HC-DEL-CUS</strong></a></font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em><strong>Galaxy K Zoom is Mobile Phone, not Camera - AAR</strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><img src="http://www.taxindiaonline.com/RC2/image/stories/DDT%202793.jpg" alt="Legal Corner Icon" width="125" height="125" hspace="5" border="0" align="left">GALAXY</STRONG> K Zoom is powered by Android Kit-Kat operating system and a quad 1.3GHz processor along with the dual-core 1.7GHz processor. It has a 4.8" HD SAMOLED (Pentile) touch screen. It comes with 2 GB RAM, 8GB in built memory, and has external memory of up-to 64GB. It has a support system for micro SD cards. Most of the specifications of the hardware and the software installed in the product, matches with the other mobile phones of the Galaxy series. However, one of the distinguishing features of this product from its predecessor in the Galaxy series is the quality of its camera. It is equipped with a 20.7MP BSI CMOS having 10x Zoom, w/Flash. Other important feature of the product is its In-Call feature. This allows the user of the product to capture and share an image even when on call, with a simple twist of zoom ring.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The question before the Authority for Advance Ruling was whether this is a mobile phone under Customs Tariff Heading 8517 or a camera under CTH 8525. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The AAR held that the product <em>Galaxy K Zoom is classifiable as telephone under Customs Tariff Heading 8517.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=26174" target="_blank">Breaking News</a> </strong> for more details.</font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600"><em>Activities of Amazon do not amount to manufacture - AAR</em></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AMAZON</STRONG> Seller Services Private Limited is a private limited company incorporated in India under the Companies Act, 1956. They provide an IT enabled/online platform to third party manufacturers/merchants to list and market their products; that this platform is offered on <a href="http://www.amazon.in" target="_blank">www.amazon.in </a> for which a fee is charged to merchants for such online listing services; that for this purpose, as an additional service offering, they established a fulfillment center at the warehouse(s) that receives, stores, packages and ship the products listed online for sale by the merchant to the customers purchasing the products; the sale of goods will be directly by the merchants; Amazon only operates as an IT enabled platform which enables the sale by listing the goods and by providing incidental services such as stocking the goods in its warehouse and undertaking activities such as assortment, packing and stickering prior to delivery of the goods to the merchant's customer; after completion of the above activities, the goods are stored in their warehouse; upon a merchant's customer placing a purchase order on the merchant's product through Amazon's online platform, the goods are appropriately dispatched to the customer after performing the necessary activities. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The question before the Authority for Advance Ruling was whether the following activities of Amazon amounted to manufacture under Central Excise. </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Activities relating to spectacles and frames (placing in case, tightening screws on eyewear) </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Bagging, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Boxing,</font></em></td>
</tr>
<tr>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Bundling, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Cleaning and lint brushing, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Consignee detailing and Cardboard foot printing. </font></em></td>
</tr>
<tr>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. debundling and jewellery correction, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. Filing, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. Folding and hanging, </font></em></td>
</tr>
<tr>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. Freebies, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. hanging and ironing, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">12. Inserting bookmark, </font></em></td>
</tr>
<tr>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">13. Inserting freebies, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">14. Inserting moisture absorbing tablets,</font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">15. Inserting warranty card, </font></em></td>
</tr>
<tr>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">16. Inspection and testing, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">17. Jewellery correction, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">18. lint brushing and deodorizing, </font></em></td>
</tr>
<tr>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">19. Placing the product in original box / pack, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">20. Polishing, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">21. Protective stickering, </font></em></td>
</tr>
<tr>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">22. Sensitive material covering, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">23. set creation and rubber banding, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">24. shinning and coating, </font></em></td>
</tr>
<tr>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">25. Sorting, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">26. Stickering, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">27. Stuffing and adding dunnage to glassware, </font></em></td>
</tr>
<tr>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">28. Tagging, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">29. Taping, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">30. testing and installing batteries, </font></em></td>
</tr>
<tr>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">31. tightening screws on eyewear), </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">32. Touching up and re-stitching, </font></em></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">33. Wrapping. </font></em></td>
</tr>
</table>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The AAR ruled that these activities would not amount to manufacture or deemed manufacture under Section 2(f) of the Central Excise Act, 1944.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see:</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. M/s Amazon Seller Services Private Limited - <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTExNTA3" target="_blank"><strong>2016-TIOL-06-ARA-CX</strong></a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Amazon Wholesale (India) Private Ltd. - <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTExNTA2" target="_blank"><strong>2016-TIOL-05-ARA-CX</strong></a></font></p>
</blockquote>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em><strong>The Agony of the Taxpayer; Pragmatic Board and Pedantic Field </strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span"><em>"..................Officers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist taxpayer in every reasonable way, particularly in the matter of claiming and securing any relief and in this regard the officers should take initiative in guiding the taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would in the long run benefit the Department for it would inspire confidence in him that he may be sure of getting a square deal from the Government..."- CBDT </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">It is heartening to note that the CBDT has given such humane guidance to the field officers. The best thing that the field officers can do to enhance the respect for and trust in the Department, is to follow these valuable words of advice in letter and in spirit, but then, sometime overzealous, even if well meaning, efforts to collect the revenue end up sacrificing these humane niceties on the way, and thus derail the efforts of the CBDT to earn taxpayer's confidence and trust. That must not be allowed to happen. An action or inaction which erodes any taxpayer's faith in Indian tax and judicial system does not do any of us any good. The well meaning advice given by the CBDT must be implemented to the fullest extent. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">The advice contained in the circular, which is reproduced above, is also legally binding on all the field officers. It is indeed a pity that even after such a pragmatic approach being conveyed to the field officers in no uncertain terms, a pedantic approach, as adopted by the Assessing Officer, is adopted in practice. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">It does not end here. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#F3DBCF" span="span">When the first appellate authority gives relief in such deserving cases, the agony of the taxpayer is not allowed to come to an end. </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">The appeals against the relief granted by the first appellate authority are filed as a matter of routine. One can understand the young Assessing Officers being overzealous in their approach and making such mistakes, something is needed to be done to ensure that the appeals are not filed before the higher forums as a matter of routine. Only if the field authorities are little more cautious, and stay away from such pedantic approach, such thoughtful initiatives and pragmatic approach of the Government, at the highest level, will earn more goodwill and greater trust at the ground level. There has to be proper mechanism to ensure that such frivolous appeals are not filed. However, if that does not happen and these frivolous appeals continue to clog the system …….. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is not an extract from a DDT. It is extracted from a recent order of the ITAT. </font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>FTP - DGFT notifies SION for Malted Milk Food </em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has notified a new SION with Serial Number E-133 in Food Product Group for export product <em>"Malted Milk Food"</em>.</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkyNDA=" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Public Notice No. 61/2015-20, Dated: February 23, 2016 </strong></font></a></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em><strong>"If you have guts, take action against me" - Lawyer to Court </strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AND</strong> the Court had the guts. It sent the lawyer to jail for six months with a fine of Rs. 2000/-. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a judgement delivered day before yesterday, the Madras High Court handed out this punishment on a lawyer who was charged with: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Trooping into the Court Hall without wearing formal robes </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Leading a procession of slogan shouting advocates </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Shouting at the lawyers in the court to boycott the court </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Preventing an advocate from arguing his case </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. When the Court asked him not to disturb the court proceedings and to give his lecture outside the court, telling the judges, 'If you have guts, take action against me'. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In its order, the High Court quoted from Supreme Court judgements: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Lawyers ought to know that at least as long as lawful redress is available to aggrieved lawyers, there is no justification for lawyers to join in an illegal conspiracy to commit a gross, criminal contempt of court, thereby striking at the heart of the liberty conferred on every person by our Constitution. Strike is an attempt to interfere with the administration of justice. The principle is that those who have duties to discharge in a court of justice are protected by the law and are shielded by the law to discharge those duties, the advocates in return have duty to protect the courts. For, once conceded that lawyers are above the law and the law courts, there can be no limit to lawyers taking the law into their hands to paralyse the working of the courts. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>It is high time that the Supreme Court and the High Court make it clear beyond the doubt that they will not tolerate any interference from any body or authority in the daily administration of justice. For in no other way can the Supreme Court and the High Court maintain the high position and exercise the great powers conferred by the Constitution and the law to do justice without fear or favour, affection or ill-will. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>If the judiciary is to perform its duties and functions effectively and true to the spirit with which they are sacredly entrusted to it, the dignity and authority of the courts have to be respected and protected at all costs. Otherwise, the very cornerstone of our Constitutional scheme will give way and with it will disappear the rule of law and the civilized life in the society. </em></font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em><strong>Central Excise Day Greetings </strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT</strong> greets all the Central Excise employees and their families on their DAY. </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more DDT</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Have a nice day.</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"><strong>vijaywrite@tiol.in</strong></a></font></p>
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