TIOL-DDT 2814 · 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><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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 2814</font><br> 28 03 2016 <br> Monday</strong></font></p> <p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>The Gold Excise - When to Register - Board <font color="#FF0000">Creates</font> Confusion</em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Gold merchants are a worried lot; they have understood that the Government is not going to roll back the 1% excise duty. The Government has assured them that there would be no Inspector Raj and things are quite simple. But many are scared of the brilliant excise officers and the old timers recall the tyranny they faced under the gold control regime.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When the CBEC issues a clarification, it is expected that things would become simpler and less complicated, which really is not the case always. The field officers are capable of thwarting the noble intentions of the Board. But what do you do when the Board itself confuses?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On 18th March, the CBEC issued a Press Release clarified several issues relating to the Gold Excise. One of the clarifications was:</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>d) A jewellery manufacturer having turnover less than Rs. 12 crore during the preceding financial year and less than Rs. 6 crore in the <font color="#FF0000"><strong>current financial</strong></font> year is not required to take registration and file return.</em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now what is the 'current financial year'? Generally, we understand it as 2015-16 ending on 31 st March 2016.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, as per the Board clarification, a jewellery manufacturer having turnover of more than Rs. 6 crore in 2015-16, is required to get registered. This has sent shock waves down the gold shops. This duty was imposed with effect from 1 st March 2016 and immediately the shutters were downed in most of the shops and many of them are yet to open. Some of them plan to open today, but are jittery as they will have to get registered as per the Board's clarification as their turnover for 2015-16 till February 2016 was more than Rs. 6 crore. I tried to convince many gold merchants that the turnover from April 2015 to February 2016 is irrelevant and for registration this year only the clearances of March 2016 are relevant. But not many were convinced as the mighty Board clarified otherwise.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I told them they were exempted from registration if:</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Their turnover in 2014-15 was less than Rs. 12 Crore, and</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Their turnover in 2015-16, during March 2016 was less than Rs. 50 lakh, even if the turnover from April 2015 to February 2016 was more than Rs. 6 crore.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But they were scared that the Department will go by the Board clarification and ask them to get registered if the turnover for the current year (2015-16) was more than Rs. 6 crore.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I asked a senior officer of the Central Excise Department as to what the <font color="#FF0000">current year</font> was. He told me, <em>"reading holistically, it should be taken as 2016-17."</em> How can the current year be 2016-17 when we are still in March 2016? What do you call the year 2015-16? The learned senior officer had no answer.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFD7AE" span="span"><strong>Will the Board clarify? and urgently before the <font color="#FF0000">current year</font> comes to an end.</strong></font></p> <p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><a name="f1"></a>'Twice' Review of an order - Strictly NO, warns Board</em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> Committee business of review of orders is proving to be a pungent thing.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC has noticed that an Order-in-Appeal was reviewed by the Committee twice.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps, Board does not like anything which is done 'over and over again' so has come out with an instruction and informs the field formations that there are no provisions in the Customs Act, 1962, the Central Excise Act, 1944 and the Finance Act, 1994 for reviewing the same order twice.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board further instructs the field formations to abide strictly by the provisions mentioned in law for reviewing the orders and <font color="#FF0000">counter check revenue figures in the disputed demands</font> before taking a view whether a case is fit for preferring an appeal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, it is informed that the instruction has been issued with the approval of the competent authority.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps an RTI application would reveal who the 'competent authority' is.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The entire issue, to our knowledge, emanates from the case of <em>Alufit India Pvt. Ltd. </em>- <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA5ODU0" target="_blank"><strong>2016-TIOL-57-CESTAT-MAD</strong> </a>- Order dated 11.12.2015 - <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjU2OTQ=" target="_blank"><strong>DDT 2759 - 06 01 2016</strong></a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In this case, initially, the OIA was accepted by the Committee on 21.12.2012 by citing the Litigation Policy inasmuch as the duty involved was Rs.90,508/-. Interestingly, neither in the OIO nor in the OIA any duty demand was quantified or confirmed as the issue pertained to classification.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ On 24.04.2015, the Committee passed a review order - Kindly note that on the first occasion the O-in-A was examined and found legal and proper and on re-examination after more than two and a half years, the review order came to be passed.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Obviously, when the appeal was filed before the CESTAT, it was badly delayed and so the Revenue sought a condonation of delay of 947 days which the Bench flatly refused.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The Bench also observed that Section 129A (2) or Section 129D of Customs Act does not empower the Committee of Commissioners to review their own order again and take different view; there is also a time limit to review any order and the section does not empower the Committee to review the order beyond the specified period.</font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Last but not least, the Bench wanted the CBEC to complete the picture.</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It said - </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span"><em>"We bring it to the notice of the CBEC [Board] and Chief Commissioner of Customs, Chennai to take necessary steps on the powers of Committee to review the orders under Section 129D and 129A (2) of Customs Act and issue necessary guidelines to the field formations as deem fit."</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Quite possibly, this is the reason the current Instruction dated 17th March 2016 makes its appearance.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But, the Board, it appears, is unaware of the decision dated 14.12.2015 delivered by the Mumbai Bench of the CESTAT.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the case of <em>CCE, Goa vs. Vinka Industries & Ors</em>. (<a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA5ODU4" target="_blank"><strong>2016-TIOL-60-CESTAT-MUM</strong>)</a>, on a similar issue, while condoning the delay, in the matter of 34 Revenue appeals, the CESTAT, WZB held that<font color="#FF0000"> the decision rendered by the Committee of Commissioners is an administrative function and a fresh decision by the same committee is valid in law.</font> Incidentally, the Bench placed reliance on the Madras High Court decision in <em>Commissioner of Customs, Tuticorin Vs. Madura Coats Pvt. Ltd. </em>- <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA5ODUz" target="_blank"><strong><em>2013-TIOL-1208-HC-MAD-CUS </em></strong></a>and the Delhi High Court decision in <em>Commissioner of Service Tax Vs. Japan Airlines International Co. Ltd. </em>- <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA0ODU5" target="_blank"><strong><em>2015-TIOL-1645-HC-DEL-ST-LB</em></strong></a>.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">More mileage can be derived from the Larger Bench CESTAT decision in the case of <em>Monnet Ispat & Energy Ltd</em>. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2010/2010-TIOL-1133-CESTAT-DEL-LB.htm" target="_blank">(<em><strong>2010-TIOL-1133-CESTAT-DEL-LB)</strong></em></a> where the Larger Bench held that the period which can be condoned in relation to filing of the appeal under section 35 E (4) of the CEA would include the period availed by the review committee in terms of section 35 E (1) or 35 E (2) of the said Act; that the Tribunal cannot sit in appeal over the review order of the Committee but Tribunal must be satisfied about delay in taking the decision as the same form part of the procedure relating to preparation of appeal against an impugned order. This view was agreed with by the Supreme Court in the case of<em> Kap Cones <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA0ODI3" target="_blank"><strong>2015-TIOL-149-SC-CX</strong></a></em>.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It may also be noted that the statute expressly or impliedly does not make the authority <em>functus officio - Vide: Chet Ram Vashist vs. Municipal Corporation of Delhi - AIR 1981 SC 653, Bhavnagar University vs. Palitana Sugar Mill Pvt. Ltd. - AIR 2003 SC 511, Balwant Singh vs. Anand Kumar Sharma </em>- AIR 2003 SC 1543, <em>Baru Ram Vs. Smt. Prasanni & Others - AIR 1959 SC 93 </em>and <em>Sharif-ud-Din vs. Abdul Gani Lone</em> - AIR 1980 SC 303 [para 11 of LB decision]</font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, did the Board actually jump the gun?</font></strong></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTk0Mjk=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Instruction F. No. 390/Review/36/2014-JC dated March 17, 2016</font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f2"></a>Inclusion of Interest Income in Return of Income filed by Persons liable to Pay Tax - CBDT Clarification</font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> Board of Direct Taxes(CBDT) informs the persons earning interest income that interest credited/received on deposits is taxable unless exempt under Section 10 of the Income-tax Act. Such interest income should be shown in the return of income even in cases where Form 15G/15H has been filed if the earning is not exempt under Section 10 of the Income-tax Act and the total income of the person exceeds the maximum amount not chargeable to tax.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tax payers are advised to collect correct details of interest received or credited and</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ file their return of income for assessment year 2014-15 (if not filed already) on or before 31.03.2016 in case their total income exceeds the maximum amount not chargeable to tax.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ revise their return of income for assessment year 2014-15/2015-16 if the return already filed does not include taxable interest income.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ file return of income for assessment year 2015-16, if not filed so far by including taxable interest income if any, on or before 31.03.2016 and avoid penalty u/s 271F.</font></p> <p align="center"><font face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600" size="3"><a name="f3"></a>FTP - Board of Trade</font></strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PARA</strong> 300 of Foreign Trade Policy Statement 2015-2020, states:</font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">300. Two mechanisms are being put in place for regular communication with stakeholders. The first of these is a Board of Trade which will have an advisory role and offer a platform for discussion and consultation. The Board of Trade will be constituted once the policy comes into force.</font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has constituted the Board of Trade.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The objective is to have continuous discussion and consultation with trade and industry. The Board of Trade would, <em>inter-alia</em>, advise the Government on policy measures related to Foreign Trade Policy in order to achieve the objective of boosting India's trade.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The BOT shall have the following terms of references:</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) To advise Government on Policy measures for preparation and implementation of both short and long term plans for increasing exports in the light of emerging national and international economic scenarios;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) To review export performance of various sectors, identify constraints and suggest industry specific measures to optimize export earnings;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) To examine existing institutional framework for imports and exports and suggest practical measures for further streamlining to achieve desired objectives;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) To review policy instruments and procedure for imports and exports and suggest steps to rationalize those for optimum use; and</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) To examine issues which are considered relevant for promotion of India's foreign trade and for strengthening international competitiveness of Indian goods and services.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board consists of top businessmen like Pawan Munjal, MD Hero Motocorp, Kiran Majumdar Shaw, Chairman and MD Biocon Ltd, K Satish Reddy, MD Dr. Reddy's Laboratories Ltd, Anand Mahindra, MD Mahindra Group, YC Deveshwar, Chairman ITC Ltd.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board also consists of leaders of top trade associations and 20 Secretary level officers.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not known if the full Board consisting of over 70 powerful people of India can ever meet and discuss.</font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTk0MzE=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Trade Notice No. 21/2015., Dated March 23, 2016</font></strong></a></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"><strong><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></strong></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" target="_blank"><strong>vijaywrite@tiol.in</strong></a></font></p> </body> </html>