TIOL-DDT 426 · the untouched capture
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<p > <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT
426</font><br>
11 08 2006<br>
Friday</b></font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Central
Excise – interest on interest</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As
of now there is no interest on delayed payment of interest on Central Excise
duty. If you are prepared to pay 13% interest, you can pay the interest
any time you want. In fact if you pay off the duty, you can pay interest
any time you want. But this “accommodation” as Audit would call it may not
last long. The CAG in its latest report has pointed out that the provision
to collect interest on delayed payment of interest does not exist in the
Central Excise law and because of this, the defaulters enjoy an unintended
benefit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
ministry has replied that there are no provisions under the law and Audit’s
objections are taken note of. So it will be only a matter of time, may be till
next budget before these provisions will be inserted in the statute. </font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">To
appeal or not to appeal – that’s the question</font></strong></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Can
Audit question the decision of the commissioner not to file an appeal?</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please
see the two paras extracted from the latest Audit Report</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On
this being pointed out (June 2004), the Ministry stated (August 2005) that the
order in appeal was accepted by the commissioner in June 2002 and therefore
it had attained finality in terms of legal provisions.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Reply
is not tenable as provisions of rule 8 were mandatory in nature and therefore
the case was fit for appeal. Failure of department in not doing so resulted
in financial accommodation to the assessee to the tune of Rs.1.90 crore.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Commissioner (Appeals) allowed utilization of credit for duty payment even after
default. The department must have thought, it was not worthwhile to go in appeal.
One of the rarest of rare cases when department decides not to appeal. If the
department takes such a judicial decision, the Audit is not going to keep quite.
Audit has alleged financial accommodation in not appealing. If every decision
not to appeal is subject to Audit scrutiny, then, nobody in the department will
accept any order. Before deciding to accept an order, the officers have to now
think of the Audit sword. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>No
appeal</i> is no more an appealing proposition for the revenue officers. As
such our Tribunals and courts are clogged with frivolous revenue appeals on
matters which have reached finality long ago. The assessees feel frustrated
when they are stuck with Show Cause Notices based on silly audit objections
(the abatement on GTA service is a classic example). Now even appellate orders
are under Audit scrutiny. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At
what stage would Audit allow the department to accept an order? Tomorrow if
a Tribunal order is accepted, the Audit can raise the same objection. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They
can go a step further and say that even the Supreme Court order should not be
accepted and the government should have brought in a retrospective legislation.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Where
will all this end at? Are we condemned to spend our money, time and energy in
litigation? What makes the Audit think that it can sit in judgement over the
orders of a Commissioner (Appeals) and a jurisdictional commissioner who accepted
that order? Is it not interference in the judicial work?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Audit
is absolutely essential, but if the whole purpose of audit is to increase litigation
and produce mountains of paper waste, it is time, we had a fresh look at the
whole scheme. For that one para in the Audit report, thousands of man-hours
must have been wasted. Audit says, “reply of the department is not tenable”.
Now what does it want the commissioner to do? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG
should do a study on frivolous objections raised by Audit, number of Show Cause
Notices issued consequently, amount of paper and man-hours spent, the stages
of adjudication and appeals and final result and finally the net loss to the
country because of that objection should be computed and informed to Parliament.
</font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Values
of public service </font></strong></font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Establish
merit as the fundamental principle in employment, promotion and placements –
does it mean no reservations?</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Public Services Bill 2006 (see our <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4103">'Special
Column'</a>) envisages that the
public servants</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
1. function in an apolitical manner regardless of the political party in power;
keeping the interests of the nation in mind;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
2. function with the objective that Public Service and Public Servants are to
serve as instruments of good governance and to provide services for the betterment
of the public at large and foster socio-economic development;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
3. act objectively, impartially, honestly, equitably, diligently and in a fair
and just manner;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
4. act with integrity and in a courteous and transparent manner.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
5. establish high standards, and ensure quality service, effective working and
prompt decision making;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
6. be accountable for the decisions and the decision making process in the discharge
of functions;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
7. enable effective management, professional growth and leadership development
in Public Services;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
8. uphold the highest ethical standards;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
9. establish merit as the fundamental principle in employment, promotion and
placements; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
10. recognize that the Public Service and Public Servants are required to discharge
the functions with due regard to the diversity of the Indian nation/community
and religion but without discrimination of caste, community, religion, gender
or class and duly protecting the interest of poor, underprivileged and weaker
sections;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
11. conduct themselves in a manner such as to promote the principles underlying
the Constitution of India while providing honest, impartial and frank advice
to political executive in the discharge of their functions;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
12. recognize that misuse of official position or information amounts to violation
of the trust reposed in the public servant;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
13. ensure that public moneys are used with the utmost economy and care;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
14. ensure that the Public Service provides a workplace that is free from discrimination
and that recognizes and utilizes the diversity of the Indian community it serves;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
15. ensure that the Public Service establishes workplace relations that value
communication, consultation, cooperation and input from employees on matters
that affect their workplace.</font></p>
<p align=center > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<strong><font color="#006600">Prof Lalu Prasad Yadav, MBA</font></strong></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Gone
are the days when our Lalu prasad was at the receiving end of all stupid jokes.
Now he is a case study for premier management schools. Ms. Karine Le Joly,
Director of Academic Coordination, International Programmes, HEC School of Management,
Paris, France called on Lalu Prasad yesterday. Ms. Joly had come here to study
the tremendous turn around achieved by the Indian Railways. She also evinced
keen interest in the steps taken by the Indian Railways to achieve this success
in such a short period. Ms. Joly said that the HEC School of Management was
conducting training programmes for Divisional Railway Managers (DRMs) of Indian
Railways and another batch of DRMs was due in Paris in September 2006. She said
that the significant success of the Indian Railways in such a short period had
compelled her to make a case study of the same. She said she was here to study
the methods adopted to bring about this significant turn around.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">May
be they don’t teach you how to run railways in Harvard. The Harvard educated
Finance Minister can perhaps take a crash course on financial management from
his colleague in the Railway ministry for better management of the revenue administration.
</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until
Monday with more DDT </font></p>
<p align="justify" ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have
a nice weekend. </font></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@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p>
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