TIOL-DDT 2972 · the untouched capture
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<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 2972</font><br>
17 11 2016<br>
Thursday</strong></font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600">Deferred payment of Customs duty - Procedure laid down</font></strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>VIDE </strong> Customs Notification No. <a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MjA3Mjk=" target="_blank"><strong>134/2016-Customs (N.T)</strong> </a>& <a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MjA3MzA=" target="_blank"><strong>135/2016-Customs (N.T.)</strong> </a>Importers certified under Authorized Economic Operator Programme as AEO (Tier-Two) and AEO (Tier-Three) were permitted to make deferred payment of duty of Customs. These are the Deferred Payment of Import Duty Rules, 2016 effective from yesterday.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board has spelt out the operational procedure as below -</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ Every importer certified as AEO-T2/AEO-T3 shall obtain ICEGATE Login which is essential to avail benefits envisaged in the AEO Programme. Every AEO-T2/AEO-T3 is advised to nominate a nodal person <strong><em>borne</em></strong> on their establishment who would be responsible for authenticating all the customs related transactions on behalf of the AEO.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ It is important for the AEO to exercise due caution in nominating the AEO nodal person to prevent misuse of facility of deferred payment. The contact details of AEO nodal person shall also be provided in ICEGATE login to ensure that the information reaches in time at their registered mail for authentication. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ An intimation addressed to the AEO Programme Manager with a copy to the Principal Commissioner(s) of Customs or the Commissioner(s) of Customs, as the case may be, having jurisdiction over the port(s) of clearance shall be considered as an intimation by an eligible importer of his intention to avail the said benefit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ The eligible importer who intends to make deferred payment shall indicate the same using flag<em> "D"</em> in the Payment Method column of Bill of Entry filed. In order to ensure that the facility of deferred payment is availed only by the eligible importer, option has been provided in ICEGATE Login for AEO Nodal person to acknowledge such intent and authenticate using One Time Password (OTP) sent to his registered e-mail address. The Nodal person would be able to authenticate multiple Bills of Entry at once. Only on such authentication by the eligible AEO importer, customs clearance would be provided for the consignment under deferred payment of duty Rules. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ The eligible importer also has an option to select the challans belonging to the deferred period and pay at anytime, even before the due date at their convenience. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please also see <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=Mjg1MTU=" target="_blank"><strong>DDT 2963 03 11 2016</strong></a></font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/cuscir.htm" target="_blank">Circular No 52/2016-Cus; Dated: November 15, 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>Demonetisation - I-T Monitor <br>
Deposits between 9th November and 30th December - PAN and Financial Statement Mandatory </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong> demonetisation of old Rs.500 and Rs.1000 currency notes has led to unfathomable modes of exchanging the same into legitimate currency. And the Government wants to send out a clear message that it is not going to be mute spectator while money is getting laundered right royally. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Rule 114B of the Income Tax Rules, quoting of PAN is mandatory in cases of certain transactions exceeding 50000 rupees. Now the deposits in banks from 9th November to 30th December 2016 (consequent to the monetisation) also come under this category. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Rule 114E of the Income Tax Rules, certain transactions are to be reported to the Income Tax Department by banks and other authorities. Now this is made applicable to deposits of more than 12.5 lakhs in current accounts and 2.5 lakhs in other accounts from 9th November to 30th December 2016. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBDT has amended the below mentioned Income Tax rules in the following fashion - </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">114B. Transactions in relation to which permanent account number is to be quoted in all documents. </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Rule 114B, in the Table, Serial no. 10 and the entries relating thereto are substituted with the following - </font></p>
<div align="justify">
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sl. No. </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nature of Transaction </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Value of Transaction </font></strong></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) </font></strong></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>10. </strong></font></p></td>
<td valign="top"><p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Deposit with,- </font></em></p>
<p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) a banking company or a cooperative bank to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act); </font></em></p>
<p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Post Office. </font></em></p></td>
<td valign="top"><p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Cash deposits,- </font></em></p>
<p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) exceeding fifty thousand rupees during any one day; or </font></em></p>
<p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) aggregating to more than two lakh fifty thousand rupees during the period 09th November, 2016 to 30th December, 2016.". </font></em></p></td>
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</table>
</div>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#00DDDD" span="span">114E. Furnishing of statement of financial transaction</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In rule 114E, in sub-rule (2), in the Table, after serial number 11 and entries relating thereto the following serial number and entries shall be inserted -</font></p>
<div align="justify">
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sl. No. </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nature and value of Transaction </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Class of person (reporting person) </font></strong></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) </font></strong></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>12. </strong></font></p></td>
<td valign="top"><p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Cash deposits during the period 09th November, 2016 to 30th December, 2016 aggregating to - </font></em></p>
<p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) twelve lakh fifty thousand rupees or more, in one or more current account of a person; or </font></em></p>
<p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) two lakh fifty thousand rupees or more, in one or more accounts (other than a current account) of a person. </font></em></p></td>
<td valign="top"><p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) A banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); </font></em></p>
<p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Post Master General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898)."; </font></em></p></td>
</tr>
</table>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In sub-rule (5), the following proviso is inserted - </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided the statement of financial transaction in respect of the transactions listed at serial number (12) in the Table under sub-rule (2), shall be furnished on or before the 31st day of January, 2017.</font></em></p>
</blockquote>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/itnot.htm" target="_blank">Notification 104/2016, Dated: November 15, 2016</a></font></strong></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>RBI also instructs:</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Reserve Bank of India has advised the Banks that: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Anybody depositing more than Rs. 50,000/- in cash in their bank account has to submit a copy of the PAN card in case the bank account is not seeded with PAN </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. In addition to the above provision, in the IT Rules, PAN reporting requirements are there for other transactions, which banks need to insist upon. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The banks are, therefore, advised to take note of the above and ensure strict compliance with the provisions of 114B of the Income Tax Rules, 1962. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MjA3NzU=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI/2016-17/135 DCM (Plg) No.1287/10.27.00/2016-17., Dated November 16 2016</font></strong></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600"><a name="f2"></a>Recovery - Rule 16A of DBK Rules already exists as S. 75 of CA, 1962</font></strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FROM</strong> <strong>1991-1993</strong>, the appellant exported garments and were allowed duty drawback. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, the appellant was not able to realise export proceeds of Rs.11.73 crores since the foreign buyers were declared bankrupt. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They informed RBI accordingly. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The customs authorities required the appellant to repay the duty drawback allowed earlier along with interest to the extent of the amount of sale proceeds not realised. The demand was confirmed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Appellate authority dismissed the appeal and the contention of the appellant that Rule 16A of the Duty Drawback Rules, 1995 was not retrospective was rejected. It was held that Rule 16A has to be harmoniously construed with the provisions of Section 75 of Customs Act, 1962, and therefore, recoveries can be effected in respect of exports made earlier and where foreign exchange has not been realized. <font color="#990000"><em>It was further held that the drawback was not limited to customs duty but included duty on excisable goods as well. </em></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In revision petition, the High Court held that Rule 16A of the Duty Drawback Rules, 1995 could not be retrospective and that <font color="#990000">all payments made towards the <strong>Central Excise</strong> component of drawback before <strong>06.12.1995</strong> [when rule 16A was inserted] <strong>cannot be recovered</strong> even though the export proceeds have not been realized. </font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, prior to this, the appellant had deposited the entire sum of drawback with interest. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Civil Appeal filed by the department was dismissed on the ground of delay. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And so the refund claim was filed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The AC rejected the claim to the extent of its <strong>customs component</strong> of Rs.46,06,890/- and also the claim for interest. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court partly allowed the Writ Petition by directing the department to pay the appellant interest for the delayed refund of the <strong>excise duty </strong>component at the rate of 12% p.a. The claim for refund of the customs component of the drawback together with interest was <strong>rejected.</strong> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court has upheld this order. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=28630" target="_blank">Breaking News</a></font></strong></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600"><a name="f3"></a>There are no provisions in CEA, 1944 to reopen assessment by issuing another SCN</font></strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PROVISIONAL</STRONG> assessments of goods cleared by appellant from their factory to HPCL, BPCL and IOCL were finalised by the Asst. Commissioner on 30.12.2003. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On such finalised assessment, the respondent filed refund claim. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The adjudicating authority held that the refund claim of Rs.14,03,758/- is sanctioned and directed the respondent to take credit in CENVAT account and ordered for reopening of the assessment in respect of the final assessment of HPCL and BPCL for the period 1999-2000 to 2000-2001, by issuing fresh show-cause notice. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner (A) set aside this portion of the order recording that the Assistant Commissioner/Deputy Commissioner is not competent to re-open the final assessment if there is no appeal filed against the assessment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue is in appeal on the ground that facts were suppressed by the respondent assessee while finalizing the provisional assessment and documentary evidence were not produced; that the doctrine of sub-silentio is applicable hence the adjudicating authority's order of re-opening the final assessment is correct. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bench observed - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The factual matrix is that the assessments were finalised by the adjudicating authority and an order dated 30.12.2003 was issued. It is also on record that this order dated 30.12.2003 is not appealed against by the revenue. Provisions of Central Excise Act, 1944 specifically provides for appellate mechanism under Section 35 against adjudication orders. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Revenue had remedy to file an appeal against the order finalizing assessment, which they have not done so. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In the absence of an appeal against finalisation of assessment, adjudicating authority as a Deputy Commissioner could not have ordered reopening by directing to issue a show-cause notice. There are no provisions in the Central Excise Act, 1944 to reopen the assessment by issuing another show-cause notice. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ First appellate authority has correctly relied on CBEC Circular dated 16.12.1999 which was in respect of issuing of corrigendum subsequent to the adjudication order, when the Law Ministry has opined that the corrigendum cannot be issued on passing of the adjudication order. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Expressing surprise at the argument of revenue defending the action of directing issuance of show-cause notice for re-opening of final assessment, the impugned order was upheld and the Revenue appeal was rejected. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTIwMDU1" target="_blank">2016-TIOL-2991-CESTAT-MUM</a></font></strong></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f4"></a>Demonetisation bug catching up?</font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PAKISTAN </STRONG>Finance Minister Ishaq Dar made it clear that the government was not considering demonetisation of Rs. 5,000 currency notes and withdrawal of Rs. 40,000 prize bonds. </font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f5"></a>Bribe in Brand New Notes </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT </strong>took less than a week to find the new notes in the bribery chain. NDTV has reported that two officers of the Kandla Port Trust have been arrested for taking a bribe of Rs 2.9 lakhs. What surprised even the Anti Corruption agency was that the entire money was in the new 2000 rupee notes! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Earlier it was reported that an assistant in a Zilla Parishad in Maharashtra was arrested while accepting a bribe which contained 17 new 2000 rupee notes. Three employees of Madhya Pradesh State Government were arrested on Tuesday - and they had five 2000 rupee notes. In this case, interestingly, the ACB asked the complainant to arrange for the new notes as taking old notes may not amount to corruption! But in Maharashtra three officers were arrested even for taking the demonetized currency as bribe. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems the cops in some cities do not accept the new 2000 rupee note for payment of fine, but a couple of hundred rupee notes as bribe is welcome. <br>
<br>
I was in distant Shillong yesterday where a small time businessman told me hopefully that the Modi Government has brought down bribes to a reasonable 4 digit figures from the astronomical amounts and that itself is a good sign.</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"><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 <strong><a href="mailto:vijaywrite@tiol.in" target="_blank">vijaywrite@tiol.in</a></strong></font></p>
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