TIOL-DDT 298 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body bgcolor="#FFFFFF"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 298</font><br> 07 02 2006<br> Tuesday</b></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>Absolutely no duty on export goods – Board issues Section 37B order - but what is export under bond?</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The policy of not only the Government of India but most governments is that only goods and not taxes should be exported. But sometimes overanxious officers forget this basic philosophy and in any case they have to go strictly by the rules and the Board is really no help – what no help, it is responsible, most of the time for all the confusion. Just look at such a confusion.<br> <br> Goods can be exported without payment of duty under Rule 19 of the Central Excise Rules. Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 prescribes the procedure for this export without payment of duty. The basics question is, what is duty? Rule 19 says that any excisable goods may be exported without payment of duty. We would naturally assume this means all duties of excise like SED, AED, CESS etc,. There is no clarity on this in the rules. In the simplification era when the Government deleted rules and brought back the rules in notifications, this duty got defined in the Notification No. 42/2001. This notification stipulated that duty means Excise duty, AED, education Cess, NCCD etc,. But this education cess was included in the meaning of duty only with effect from 10.08.2004, while the cess was effective from 09.07.2004. So for a month there was no mention of education cess in the notification and several notices have been issued to manufacturer exporters to pay education cess on their exports. The logic of the department was that while excise duty and AED were not required to be paid for exports, education cess had to be paid. Because the amounts were not much, many assessees paid up to ‘buy’ peace with the department<br> <br> After nearly two years and much unwanted litigation, Board has now come up with a Section 37B order that no duty whatsoever need be paid when goods are exported <b>under bond</b> under Rule 19. The whole cause of the litigation was Board’s ignorance of the existence of Notification No. 42/2001 when the 2004 budget was presented. Why should Board go about defining ‘duty’ in the notification and then forget to include a new duty that was introduced in the budget? Board’s definition of duty in the notification includes all duties collected as excise duty; then what was the need to list them? Would not a simple sentence in Rule 19 that duty means all duties collected as excise duties suffice? Should simple things be so complicated with a notification, then forgetting to amend it on time and then issuing a Section 37B order as to make life miserable for all concerned?<br> <br> Will the section 37B order put the issue to rest? Not at all if nit picking and hair- splitting continue with agile auditors and others in the field. The order says that no duty is required to be paid when goods are exported <b>under bond</b> under Rule 19 of the Central Excise Rules. Sadly Board has again forgotten that manufacturer exporters need not execute a bond. They can export under a <b>Letter of Under Taking</b> (LUT). Now Board’s order says that no duty is required to be paid when exports are under <b>bond</b>. This can be interpreted by the intelligent officer to mean that this facility is not available when goods are exported under LUT! Before another round of litigation starts, Board should clarify that no such litigation should be initiated or will they wait for another couple of years to give this clarification?<br> <br> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=48&filename=notification/37B/levyonexports.htm"><strong>Board’s Section 37B Order No. 60/1/2006-CX., dated 13-1-2006 and Corrigendum dated 30-1-2006</strong></a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Benefit of plea bargaining introduced in India - Cr. PC amended</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Criminal Law Amendment Bill, 2005 has come into effect. The legislation was approved by Parliament in its last session and the President signed it subsequently. The Act has since been notified in the Gazette of India as Act No. 2 of 2006. <br> <br> The Act is intended to prevent the evil of witnesses turning hostile. Sections 161, 162 and 344 have been amended by inserting new sections 164A and 344A in the Code of Criminal Procedure, 1973. The amendments to the Code of Criminal Procedure, 1973 and the Indian Evidence Act, 1872 provide that statement made to the Police by any person during investigation, if given in writing, is to be signed and quickly transmitted to the Magistrate. In all offences punishable with death or imprisonment for 7 years or more during investigation, the witness has to record his statement before a Magistrate. The statement of the witness duly recorded before a Magistrate under oath would be treated as evidence at the court’s discretion. There would be summary trial for perjury with provisions for enhanced punishment. <br> <br> Disposal of criminal trials in the courts takes a long time and in many cases trials do not begin for as long as 3 to 5 years after the accused was sent to judicial custody. In many cases persons accused of criminal offences are unable to secure bail for different reasons and have to languish in jail as under-trial prisoners for years. The act incorporates the concept of plea bargaining as recommended by the Law Commission of India in its 154th Report on the Code of Criminal Procedure. This means pre-trial negotiations between defendant and prosecution during which the accused agrees to plead guilty in lieu of certain concessions by the prosecutor. The benefit of plea bargaining would, however, not be admissible to habitual offenders. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Anytime, anywhere filing of I-T returns</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Income Tax department will soon introduce a system where assessees can file their returns from anywhere in the country by the click of a mouse, with the setting-up of a single national database linked through computers with all 742 income-tax offices in 510 towns. Setting up of a national database will introduce jurisdiction-free filing and processing of returns, all India data matching and centralized MIS reporting.</font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>Cascading effect of industrial decay</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Till a couple of years ago Alang near Bahvnagar was a busy industrial township famous for its ship breaking industry. Ships stopped coming for break up and production fell down to 200 MTs from 15000 MTs and the worst hit are the re rolling mills whose supply of steel has been stopped and the oxygen plants which are now struggling for oxygen to survive. There were 175 oxygen plants; barely 5 survive now.</font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Greek and Latin - DDT's new feature</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i><font color="#663399"><b>Res judicata</b>:</font></i> - a final judgement already decided between the same parties on the same question by a legally constituted court having jurisdiction is conclusive between the parties and cannot be raised again. Is the principle applicable to tax matters? There is a general opinion that it is not. In Sankaralinga Nader v. CIT (ILR 53 Madras 420), the Full Bench of the Madras High Court observed<br> <br> <i>“If fresh facts come to light which on an investigation would entitle the Income-tax Officer to come to a different conclusion from that of his predecessor we think he is entitled to reopen the question. But if there are no fresh facts it is difficult to see how he can arbitrarily go behind the facts of finding of his predecessor. The same principles of natural justice or judicial dealing, which Court impose upon Income-Tax Officer, would prevent them capriciously setting aside the orders of their predecessors based on enquiry.”</i><br> <br> The great Judge, MC Chagla, in N.A. Shah & Co. v. Commissioner of Income-tax (1956-i 30 ITR 618) posed the question ‘Can it be said that in the subsequent year when that very question arises it is open to the Income-tax authorities at their sweet will to come to a conclusion which is contrary to the one arrived at in the earlier assessment’? He observed:<br> <br> <i>‘Even though the principle of res judicata may not apply, even though there may be no estoppel by record, it is very desirable that there should be finality and certainty in all litigations including litigations arising out of Income-tax Act. It is not a very satisfactory thing that an assessee should feel a grievance that one Tribunal came to one conclusion and another Tribunal came to a different conclusion and that the two conclusions are entirely inconsistent with one another. Therefore the second Tribunal must be satisfied that the circumstances are such as to justify it in departing from the ordinary principles which apply to all Tribunals to try and give as far as possible a finality and a conclusiveness to the decision arrived at. We should also like to lay down a further limitation upon the power of the Tribunal to revise the decision given earlier by that very Tribunal. The effect of revising this decision should not lead to injustice and the court must always be anxious to avoid injustice being done to the assessee”.</i><br> <br> For that very reason res judicata will be applicable in customs and excise matters. In a recent order </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2005/2005-TIOL-804-CESTAT-BANG.htm">2005-TIOL-804-CESTAT-BANG</a></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">, the Tribunal observed,<br> <br> <i>“Therefore, the same issue of valuation of the impugned goods cannot be reopened. In our view, it is barred by Res-judicata, in the light of the various decisions of the Supreme Court and other Judicial fora. If the issue is reopened, what happens to the Tribunal’s Order dismissing department’s appeal? In our view, the valuation whether right or wrong, has reached finality. It cannot be agitated again and again. If that is allowed, there will not be any end to the number of proceedings. Today the investigation has revealed that ‘A’ is the importer. After a few months investigations may reveal the importer to be some ‘B’. Are we going to allow another proceedings in the light of new facts? There should be finality to litigation. No doubt, when the investigation is not proper, the cause of justice suffers. That is no reason to have multiplicity of proceedings, which is against the public policy”</i></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">If you think that you can think about a thing, inextricably attached to something else, without thinking of the thing it is attached to, then you have a legal mind.</font></b> - <i><b>Henry C. Blinn</b></i></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#FF6666">Until Tomorrow with more DDT</font></b></font></p> <p align="justify"><font color="#FF6666"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></b></font></p> <p align="justify"><font color="#FF6666"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font></b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p> </body> </html>