TIOL-DDT 458 · the untouched capture
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<html> <head> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <title>Taxindiaonline's DDT 402</title> </head> <body> <p> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 458</font><br> 27 09 2006<br> Wednesday</b></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Duty paid before Show Cause Notice – the Machino effect no more valid?</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The recent judgement of the P&H High Court (which we are carrying today) over ruling the Larger Bench decision of the Tribunal that no interest is payable and penalty imposable if the duty had been paid before issue of Show Cause Notice, must come as music to the ears of Revenue. But is it the end of the story? In Tax litigation, there is no period, only a pause.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The latest judgement of the High Court raises some very tricky issues.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The High Court has remanded the issue of penalty to the Commissioner (Appeals) and the question of interest to the Tribunal. The order says, “we set aside the order of the Commissioner (Appeals) and the Tribunal and remand the matter back to the Commissioner (Appeals) for a fresh decision on the question of penalty……..The Tribunal will also take a fresh decision on the question of liability to pay interest” . When the matter is remanded to the Commissioner (Appeals), how can the Tribunal take a fresh look? Or is it a mistake?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The <i>Machino</i> judgement of the Larger Bench was based on the <i>RashtriyaIspat</i> case upheld by the Supreme Court. Now for an adjudicating or appellate authority bound by the decisions of higher judicial authority, there are two judgements – one of the Supreme Court confirming that there can be no penalty or interest when duty is paid before issue of Show Cause Notice and one from the P&H High Court holding otherwise. These authorities are bound more by the Supreme Court order than the High Court one.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. There is an order of the <st1:City><st1:place>Madras</st1:place></st1:City> High Court that penalty cannot be imposed even if the duty is paid before adjudication (not necessarily before Show Cause Notice). At least this is binding in Tamil Nadu. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">May be the issue has to go back the Supreme Court and after that the government can undo it with a retrospective legislation. Today we are carrying a detailed analysis of the issue in <u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4309">our special column</a></u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4288">.</a> </font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Footwear - </font></strong><font color="#006600"><strong>without soles or with outer soles? DGFT corrects PN but makes another mistake.</strong></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Appendix 37D, giving details of various products that qualify for benefits under Focus Product Scheme needed a small correction. Sl. No. 8 of the table is for “Footwear <b>without</b> soles of rubber, plastics, leather / composition leather & uppers of leather”. Now the DGFT says it should be “Footwear <b>with outer soles</b> of rubber, plastics, leather or composition leather and uppers of leather”. Good correction indeed. God knows what the position was all these days for shoes with soles! But in making this correction, the DGFT has made another mistake. The PN says, “the Director General of Foreign Trade hereby makes the following correction in the <b>Sl. No. A</b> of Appendix 37D……….” There is noSl. No. A, what they mean is Sl. No, 8. Maybe the DGFT babus are emulating their counterparts in the CBEC.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2006/dgft06pn057.htm">PUBLIC NOTICE NO. 56/(RE-2006)/2004-2009, Dated: September 22, 2006</a></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">10,000 MTs of sugar allocated for export</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGFT has allocated a total quantity of 10,000 MTs of White Sugar out of free sale portion of 2005-06 season’s production for export to EU as preferential White Sugar quota for the year 2006-07.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2006/dgft06pn056.htm">PUBLIC NOTICE NO. 57 (RE-2006)/2004-2009, Dated: September 25, 2006</a></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">PAN verification for D MAT accounts – date extended</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If you have a D- MAT account, you must have received several letters from your DP warning you that no transactions will be allowed after 30<sup>th</sup> September unless you get your original PAN verified physically. Though there are thousands of duplicate PAN cards floating around, there are many without a PAN card. Because of the difficulties expressed by investors and banks, SEBI has now extended this deadline to 31<sup>st</sup> December 2006. The SEBI circular No. 13/2006 issued yesterday says,</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“4.2. In the light of the practical difficulties expressed by various market participants as detailed above in adhering to the present deadline of September 30, 2006, the present deadline has been extended to December 31, 2006, as a one time measure.”</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/sebicir13.htm">MRD/DoP/Dep/SE/Cir-13/06 dated September 26, 2006 </a></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Biometric coding for PAN cards</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The income tax department is contemplating enhancing security features in Permanent Account Number (PAN) cards by introducing biometric identification and coding that will also help in checking against duplicate cards, according to the Mumbai Chief Commissioner K. Venkataramani. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">‘Though the concept is in the nascent and incubation stage, it will weed out the existence of duplicate PAN cards,’, he said addressing a news conference.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> ‘Biometric identification can provide extremely accurate, secured access to information. Fingerprints as well as retinal and iris scans produce absolutely unique data sets when done systematically’</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The IT department had as many as 158,427 out of a total of 323,699 PAN cardholders in the Mumbai circle alone having ‘duplicate’ PAN cards. He wanted that the duplicate cards be surrendered by 31<sup>st</sup> December and after that there could be a penalty up to Rs. 10,000/- --- for each use of a duplicate card.</font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Deadline – a line beyond which you are dead.</b></font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more DDT </font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></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@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></span></font></p> </body> </html>