TIOL-DDT 2832 · 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 2832</font><br> 26 04 2016 <br> Tuesday </strong></font></p> <p align="center"><font face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600" size="3">Ill at Ease with ACES -Last Date for Service Tax Return Extended </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YESTERDAY</strong> was the last day for filing Service Tax return for the period October 2015 to March 2016, but there was no ACES to file the return. ACES simply crashed and there was no way that returns could be filed. We got many frantic calls, messages and mails from frustrated assessees. We sent a sample message to ADG, Systems. Even the normally responsive ADG didn't reply. But yes, there was light at the end of the dark tunnel - the Board understood the problem and extended the last date till 29th April 2016 as <em>Difficulties have been faced by assessees in accessing the ACES application on 25th April 2016.</em> There was no difficulty; it was simply not accessible.</font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTk1Nzg=" target="_blank">CBEC Order No.1/2016-Service Tax., Dated: April 25, 2016 </a></font></strong></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f1"></a>What is wrong with ACES? </font></em></strong></font></p> <p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS </strong>is what CBEC proclaims about ACES. </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Automation of Central Excise and Service Tax (ACES) is the e-governance initiative by Central Board of Excise and Customs (CBEC). It is one of the Mission Mode Projects (MMP) of the Govt. of India under National e-Governance Plan (NeGP). It is a software application which aims at improving tax-payer services, transparency, accountability and efficiency in the indirect tax administration in India. This application is a web-based & workflow-based system that has automated all major procedures in Central Excise and Service Tax. </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>In the post-independent era of Indirect Tax administration in India, ACES is the most significant IT-based initiative undertaken that has transformed the way about 18.20 lakh indirect taxpayers transact their business with the department of Central Excise and Service Tax. Being an innovative reform initiative in the indirect tax department, ACES had benefited members of trade, industry and commerce. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ACES application has resulted in a major change in the way the Central Excise and Service Tax field formations conduct their regular business vis-a-vis the Trade & Industry. e-filing and e-processing of documents has started replacing manual filing and handling of paper documents. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The main purpose of the initiative was to re-engineer the business processes and transform the existing tax administration into a modern, efficient and transparent system. Its objective was to strike an optimal balance between trade facilitation and enforcement and to promote a culture of voluntary compliance. It aims at reducing physical interface of the business community with the departmental officers and to provide a transparent and paper-less business environment with improved taxpayer services delivered through an automated process</font></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the department, most of the officers do not know how to use ACES and so they don't use it. The assessees have no choice; they have to use it, at least to file their returns. Assessees with unlimited patience have accepted government incompetence as a way of life and many have stopped even complaining, as they find that complaints don't solve the problems. The same hardware, the same software and the same officers for too long a time have rusted ACES. Perhaps ACES has to be reinvented and re-engineered. Till then instead of ease of doing business, it is going to be one hell of doing business. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f2"></a>Make all officers to file returns </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RETURN</strong> filing is such a torture that many an assessee would rather close business than go through the punishment of filing returns. In fact, many of the officers of the Department will not be able to file the returns. Is it not grossly unfair to ask the assessees to file a return which you yourself cannot do? No assessee should be made to file a return that an officer cannot file. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Every officer of the Department from Inspector to Chairman should be mandatorily made to file at least one return a month on behalf of an assessee. Maybe even the Minister should file a couple of returns in a year. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday, delivering the YB Chavan Memorial lecture, RBI Governor Raghuram Rajan said that every senior official in the government should live one day like a common man without any assistants, and try to get one routine task done, so that they get a better sense of the scale of changes which are required in the country. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He said, </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Most officials realise how complex the system is only after retirement, and an exercise like this will give them a much better sense of the changes required. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A lot of officials, including myself, learn the difficulties of working in India as an 'aamaadmi' only once we leave office, lose the assistant, the assistant to the assistant, and the assistant to the assistant's assistant. Post retirement, and I have seen this with all the people I know, they realise the system is much harder to deal with. </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rajan's suggestions are most appropriate for the tax officials. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f3"></a>Excisability of Bagasse - CBEC Clarifies - Beware there is Rule 6(3) </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is a long and complicated story. Excisability of bagasse and similar waste products arising during the course of manufacture has been under dispute for a long period of time. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In 2008, the definition of "<em>excisable goods</em>” in clause (d) of Section 2 of the Central Excise Act, 1944 was amended by adding an explanation that for the purposes of this clause, "<em>goods</em>” include any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Based on this, by Circular No. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2009/excircular904.htm" target="_blank"><strong>904/24/2009-CX</strong> </a>dated 28.10.2009, CBEC clarified that with this amendment in Section 2 (d), the bagasse, aluminium/zinc dross and other such products termed as waste, residue or refuse which arise during the course of manufacture and are capable of being sold for consideration would be excisable goods and chargeable to payment of excise duty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What about the period prior to 2008. Board said, "wait for the decision in <em>Balrampur Chinni Mills Ltd </em>case in Supreme Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Circular No. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2011/excircular941.htm" target="_blank"><strong>941/02/2011-CX</strong> </a>dated 14.02.2011, Board informed, "<em>The Civil Appeal filed by the department in the case of M/s Balrampur Chinni Mills Ltd. has been dismissed by the Hon'ble Supreme Court on 21.7.2010. Accordingly the cases pending for the period prior to budgetary changes of 2008 in respect of excisability of Bagasse may be taken out from the Call Book and decided in the light of the law decided by the Apex Court</em>.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Instruction <strong> <a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTcyNTQ=" target="_blank">F.No.17/02/2009-CX </a></strong>(Pt.) dated 12.11.2014, Board wanted the field to follow the decision of the CESTAT Larger Bench - <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTYxODU=" target="_blank"><strong>2014-TIOL-1762-CESTAT-Mum-LB </strong></a>which held, "<em>Aluminium dross and skimmings and similar non-ferrous metal dross and skimmings which arise as a by-product in the process of manufacture of aluminium / non-ferrous metal products are manufactured goods and hence excisable w.e.f. 10.05.2008 in view of the explanation added to Section 2(d) of the Central Excise Act, 1944</em>." </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">in the case of <em>M/s Union of India and Ors vs M/s DSCL Sugar Ltd</em> - <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA3NTQ3" target="_blank"><strong>2015-TIOL-240-SC-CX</strong> </a> dated 15.07.2015, the Supreme Court examined the issue and reaffirmed that bagasse is not a manufactured product. The Judgement applies to both periods, before and after the insertion of explanation in Section 2(d) of the Central Excise Act, 1944 by the Finance Act, 2008. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of the Supreme Court judgement, all the above Board Circulars have become non est and the Board has fairly rescinded them now. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board, therefore, advises that cases kept in Call Book on the above issue may be taken out and adjudicated. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Wait, wait - it's not all good news. Board reminds that rule 6 of the CENVAT Credit Rules (CCR), 2004 was amended with effect from 01.03.2015 by inserting explanation 1 and explanation 2 in sub-rule (1) of rule 6. These explanations continue in the present rule 6 also :- </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Explanation 1. - For the purposes of this rule, exempted goods or final products as defined in clauses (d) and (h) of rule 2<u> shall include non-excisable goods cleared for a consideration from the factory</u>. </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Consequently, Bagasse, Dross and Skimmings of non-ferrous metals or any such byproduct or waste, which are non-excisable goods and are cleared for a consideration from the factory need to be treated like exempted goods for the purpose of reversal of credit of input and input services, in terms of rule 6 of the CENVAT Credit Rules, 2004. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, when you clear Bagasse or such waste, you are caught in the web of Rule 6. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It would have been <a></a>easier to pay duty on bagasse than to comply with Rule 6. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTk1Nzc=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No.1027/15/2016-CX, Dated : April 25, 2016., Dated: April 25, 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="f4"></a>FTP -No Import of Dogs for Breeding </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has introduced policy conditions on import of dogs under Chapter 01 of ITC (HS), 2012 - Schedule - 1 (Import Policy): </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Import of dogs is allowed only for the following specific purposes:- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i. Pet dog with valid pet book and relevant records/documents in the name of importer. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii. Dogs imported by the R&D Organisations for conducting research with the recommendation of CPCSEA. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iii. For the internal security by the Defence and Police Force. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">Import of commercial dogs for breeding or any other commercial activities other than the purposes mentioned above is not permitted . </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTk1Nzk=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No.3/2015-2020., Dated: April 25 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="f5"></a>Ratifying the WTO's Trade Facilitation Agreement will help India further boost economic growth </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INDIA</strong> has ratified the new Trade Facilitation Agreement (TFA). India's WTO ambassador Anjali Prasad handed over her country's instrument of acceptance to Director-General Roberto Azevêdo on 22 April. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/wto_ddt2832.jpg" alt="Legal Corner Icon" width="135" height="95" hspace="5" border="0" align="left">"<em>I'm very pleased to receive India's instrument of ratification from Ambassador Prasad</em>,” DG Azevêdo said. "<em>India is one of the most dynamic economies in the world today and has become a top recipient of foreign investment. Ratifying the WTO's Trade Facilitation Agreement will help India further boost economic growth by reducing trade costs and supporting its integration into the global economy.</em>” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Concluded at the WTO's 2013 Bali Ministerial Conference, the TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f6"></a>Service Tax - Supreme Court upholds quashing of Show Cause Notice </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CAN</strong> a Show Cause Notice be quashed when there is a statutory adjudication and appellate procedure? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An assessee who supplied manpower was stuck with a Show Cause Notice to pay tax under the category of cargo handling service. The assessee challenged the Show Cause Notice in the High Court and the High Court quashed the Show Cause Notice. The Department took the matter to the Supreme Court pleading that it was not appropriate for the High Court to deal with the writ petition, bypassing the adjudicatory machinery provided under the Act, more so when the statutory appeals against the adjudication orders are also provided. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court found that the High Court has simply gone by the contract in question and taking into consideration all the averments, which were made in the show cause notice, on the basis of admitted facts, it has come to a conclusion that even when the allegations in the show cause notice are accepted, the said contract does not amount to providing any 'Cargo Handling Service' as defined under Entry 23 of Section 65 of the Act. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Therefore, Supreme Court was of the opinion that the High Court did not commit any mistake or illegality in entertaining the writ petition when no disputed questions of fact were involved and the legal issue was to be decided on the basis of the facts, as admitted by the parties, which were so specifically recorded by the High Court itself. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For more details on this case, please <strong>see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=26815" target="_blank">Breaking News</a> </strong></font></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"> <strong> <a href="mailto:vijaywrite@tiol.in">vijaywrite@tiol.in </a></strong></font></p> </body> </html>