TIOL-DDT 2896 · 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><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=26988"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2016.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="252" height="220" hspace="5" border="0" align="right" ></a></font><font color="#663399" size="3">TIOL-DDT 2896</font><br> 26 07 2016<br> Tuesday </strong></font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Customs - Smuggled Goods - Burden of Proof </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per section 123 of the Customs Act, <em>where any goods are seized in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This applies to gold and manufactures thereof , watches and any other class of goods which the Central Government may by notification specify. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government had by Notification No. 204/84 - Customs, dated 20th July, 1984 specified the following goods: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Omitted. <br> 2. Omitted. <br> 3. Omitted. <br> 4. <font color="#FF0000">Synthetic yarn and Metallised yarn. <br> </font>5. Fabrics made wholly or mainly of synthetic yarn. <br> 6. Omitted. <br> 7. <font color="#FF0000">Electronic Calculators. <br> </font>8. Omitted. <br> 9. <font color="#FF0000">Watches, watch movements (including partly assembled movements), dials and cases for watches. <br> </font></font><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">10. Zip fasteners. <br> </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. Omitted. <br> 12. Omitted. </font><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> 13. Silver bullion. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Government has issued a new notification superseding the above notification specifying only two items - Silver bullion and Cigarettes. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, now the ‘burden of proof on the accused' applies to gold, watches, Silver bullion and Cigarettes. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MjAyMzQ=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No.103/2016-Customs (NT)., Dated July 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="f1"></a>Service Tax - Supplementary Invoice - Whether Interest Payable </font></em></strong></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN</strong> Supplementary invoice is raised at a later date, whether interest on service tax is to be paid on such supplementary invoices. The value enhancement which led to issue of supplementary invoice is not even known at the point of provision of service or while the initial invoice is raised.</font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was a question raised in a recent meeting of the Regional Advisory Committee of the Chennai Service Tax Zone. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department replied: </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rule 6(4) of the Service Tax Rules, 1994 covers a similar situation and provides for payment of Service Tax on provisional basis subject to permission by the JAC/JDC and all the conditions of Rule 7 of the Central Excise Rules, 2002 are applicable to such provisional assessment. As laid down under Rule 7 of the Central Excise Rules, 2002 in case of differential Service Tax payment at later date, interest shall be automatic. Moreover, the point of taxation applicable to the original transaction equally applies to the supplementary invoice also. Therefore, it is viewed that interest is payable on the differential value collected under supplementary invoices. </font></em></p> </blockquote> <p align="center"><font size="3"><strong><em><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif"><a name="f2"></a><font face="Georgia, Times New Roman, Times, serif">Service Tax Audit by Department - What is Department's Stand After Mega Cabs Judgement?</font></font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTE0NDc5" target="_blank"><strong>Mega Cabs Vs UOI - 2016-TIOL-1061-HC-DEL-ST</strong></a>, the Delhi High Court declared Rule 5A(2) as amended in terms of Notification No. <strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTczMjE=" target="_blank">23/2014-Service Tax</a></strong> dated 5th December 2014 of the Central Government, to the extent that it authorises the officers of the Service Tax Department, the audit party deputed by a Commissioner or the CAG to seek production of the documents mentioned therein on demand is ultra vires the FA and, therefore, struck it down to that extent. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a recent meeting of the Regional Advisory Committee of the Chennai Service Tax Zone, a question was asked, </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In light of the Delhi High Court Judgement, wherein it has been held that the new provisions of Audit under Rule 5 A(2)is ultra vires to the Act, what is the reaction of the Department and what is the stand adopted for future?</font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department replied, </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is understood that the Department has gone on Appeal against the decision, until the issue is resolved, current practice would continue . </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When a High Court has decided an issue, what is there to be resolved? Should every issue be resolved only by the Supreme Court and will the department disobey the orders of all other courts? </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f3"></a>Service Tax - Construction of Flats - The Doubt Lingers </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>the same RAC meeting, a Builders Association raised a question; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is a problem when there is a practice of registering land sale separately and payment of service tax based on the construction agreement and that when the construction is complete and completion certificate obtained from State authorities. This practice of dual agreement i.e. agreement for sale of Un Divided Share (UDS) and agreement of Construction is unique to this part of the country and therefore after completion of construction, if they still prefer to register the UDS land, the value for payment of Service Tax is an issue to be resolved and whether they can opt for Works Contract or still pay under construction services after availing the available abatements. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The department replied: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It was the stand of the Department that the choice is left with the builder to choose between Works Contract or Construction Service. And according to the agreement service tax is to be paid. It was further clarified that only at the point of sale, of the constructed portion, service tax liability arises. On obtaining Completion Certificate it would attract State VAT and the construction part would be a self service if there is no agreement entered for construction based on the UDS land sale. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Association also wanted to know whether corpus deposit added and paid to the association would attract service tax. The Department replied that as the issue is pending before the court, the issue is <em>sub-judice</em> and cannot be taken up in this forum. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f4"></a>Will the 'Record of Personal Hearing' be Given to assessee? </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>the same RAC Meeting, the Department clarified, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though statutorily, no provision is available for giving copy of record of Personal Hearing, taking into consideration the Principles of natural justice, there is no bar in making available the Copy of Personal Hearing Record. However, it is for the individual adjudicating authority to follow this principle.</font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f5"></a>Transfer of an Additional Commissioner </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> Transfer Order No. 75/2015, dated 09.06.2015, the CBEC transferred Dr. Lalaiah Dhandem, Additional Commissioner from Hyderabad to Coimbatore. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In his writ petition before the High Court against the transfer, the Additional Commissioner pleaded that he has serious apprehension of physical harm at the hands of drug mafia, if he is transferred to Coimbatore and that therefore, the Board may be directed to consider his transfer and posting at any place other than Coimbatore. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Inasmuch as a serious apprehension is expressed by the petitioner, the High Court on 30.06.2016 directed the Board to consider posting the petitioner at any place other than Coimbatore, within a period of two weeks from the date of receipt of a copy of the order. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In compliance with order dated 30.06.2016 passed by the High Court, the Board has cancelled the the transfer order of Dr. Lalaiah Dhandem to Coimbatore Central Excise Zone and has now transferred him to Nagpur Central Excise Zone.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board directs: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Dr. Lalaiah Dhandhem may be relieved immediately to join at his new place of posting on or before 01.08.2016, under intimation to the Board. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. No representation whatsoever in this matter shall be entertained before he joins at his new place of posting. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The Chief Commissioners concerned shall send compliance report regarding relieving and joining of the above officer to the Board. </font></p> </blockquote> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MjAyMzU=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Office Order No. 83/2016, Dated: July 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="f6"></a>A Commissioner's Struggle for Promotion </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Mr</strong>. Yuvraj Gupta was initially appointed as a Probationer in the Customs and Excise Department on 11th December, 1972. He was promoted from time to time and in the year 1996 he was promoted asa Commissioner. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the year 2003, when he was posted as Commissioner (Investigation) in the Settlement Commission (Customs and Central Excise), Mumbai, a departmental inquiry was initiated against him vide a memorandum dated 6th September, 2003 which culminated into an order dated 30th July, 2009 whereby the Government communicated a displeasure to him. No penalty or punishment as prescribed under the CCS(CCA) Rules was awarded to him. In the year 2003 itself he was due for consideration for promotion to the rank of Chief Commissioner but on account of the departmental inquiry initiated against him on 6th September, 2003 his name was kept in a sealed cover. He superannuated on 31st December, 2008 and till the date of his retirement, the departmental inquiry continued and thus he could not be promoted to the rank of Chief Commissioner by the DPC which was conducted in the year 2003. He pleads that a displeasure is not a punishment either as per the rules or guidelines and, even otherwise, once the inquiry had been concluded the Department is bound to open the sealed cover and take a decision in the matter. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since the year 2009, he has been running from pillar to post as repeated representations filed on his behalf have fallen on deaf ears. He has repeatedly requested the department to open the sealed cover and communicate the findings of the DPC and has also sought implementation thereof. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Charge against the Commissioner was: </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"That Shri Yuvraj Gupta while functioning as Commissioner of Customs, C.S. International Airport, Mumbai during the period June-July, 2000 committed gross misconduct in as much as he manipulated his entry into the MVHA (Mumbai Veteran Hockey Association) team as Chief-de-mission to visit USA and UK by exercising official influence on his subordinate, namely, Shri M.R.Negi, Superintendent of Customs, Mumbai, though the said Shri Yuvraj Gupta had no association with the game of hockey and more so, he was never a member of MVHA. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">That Shri Yuvraj Gupta was sanctioned special casual leave from 7.7.2000 to 21.7.2000 by Chief Commissioner of Customs, Mumbai to accompany the MVHA team to take part in hockey tournament in Los Angeles between 15.7.2000 to 16.7.2000 in the capacity of Chief-de-mission. He however, did not take part in any of the activities of MVHA except attending the prize distribution ceremony in Los Angeles and though he was aware about the cancellation of hockey matches scheduled to be played in London during his stay in USA, he visited London for private purposes misutilising the special casual leave granted to him and thus used MVHA as a front to facilitate his visit to USA and UK. Thus, Shri Yuvraj Gupta committed gross misconduct and thereby contravened Rule 3(1) of Central Civil Services (Conduct), Rules, 1964". </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Two weeks ago, the Delhi High Court passed an order directing the Board to open the sealed cover within a period of three weeks and pass appropriate orders forthwith thereafter. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will he get that retrospective promotion eight years after his retirement? </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#D1D1E7" span="span">Taxes are the life-blood of any Government; but it cannot be overlooked that such blood is taken from the arteries of the taxpayer and therefore, the transaction is to be accomplished in accordance with principles of justice and good conscience. </font></strong></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><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>