TIOL-DDT 464 · 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
464</font><br>
06 10 2006<br>
Friday</b></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">LTU</font></strong><font color="#006600"><strong>
– powers and functions of Chief Commissioner </strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC
has issued instructions on the powers and functions of the LTU Chief Commissioner.
The Chief Commissioner is expected to undertake the following functions:-</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Overall administration of LTU.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++Co-ordination
between the direct tax and the indirect tax wings of LTU.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Distribution of work amongst the LTU officers.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Monitoring of revenue collection.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Conducting Quality Assurance Checks/ taxpayer feedback system.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Devising effective taxpayer assistance system </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Review of the orders passed by the Commissioners as adjudicating authority
(as a member of Review Committee).</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Issuance of trade notices/ circulars to bring about uniformity in tax administration
as well as determination of amount of tax payable.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Coordination with the Boards (CBEC and CBDT), Directorates and with other
field formations in the matters such as audit verification, revenue recoveries,
etc.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Regarding
the other officers, the Board says,</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
There will be Commissioners posted in LTU, who would be holding executive
and appellate charges.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
The powers and duties would be similar to that of other field commissioners.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
However, they are required to play a pro-active role in ensuring the fulfilment
of objectives of a LTU.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
The Commissioners of Direct and Indirect Taxes are expected to work in a coordinated
manner.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Other Group ‘A’, ‘B’, ‘C’ officers along with supporting staff will be posted
by CBDT and CBEC.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++The
Chief Commissioner, LTU will assign a Client Executive for each taxpayer from
among the Additional/Joint/Deputy/Asstt. Commissioner posted in LTU, and the
said Client Executive will be the single point interface with the large taxpayer
for all purposes.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
The officers posted in LTU will have All India jurisdiction in respect of
all registered premises of a large taxpayer registered in that particular
LTU. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
The erstwhile Central Excise or Service Tax Commissionerate officers will
have concurrent jurisdiction.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++However,
the interaction with these units will be limited to specific functions requiring
physical presence of the officers for purposes as warehousing, sealing or
any other work as assigned by the LTU.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2006/excircular833.htm">CIRCULAR
NO.833/10/2006-CX., Dated: October 5, 2006</a></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">LTU</font></strong><font color="#006600"><strong>
procedure</strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board
has issued another set of instructions on the procedure to be followed in the
LTUs.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>1.
Receipt of Consent Form and its Acceptance: </b>On receipt of the consent form
from the large taxpayer, the Chief Commissioner, LTU will get the said consent
form verified, and if the eligibility conditions prescribed under the rule and
the notification have been satisfied, the taxpayer will be informed by way of
issue of an acceptance letter. The process of acceptance would not normally
take more than 7 days. Once a taxpayer acquires the status of LTU, the entire
jurisdiction of central excise, service tax and income tax matters shall stand
transferred to the said LTU in respect of all his manufacturing units, service
providing premises, and other registered premises located throughout the country.
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>2.
Client Executive:</b> The Chief Commissioner, LTU will assign a Client Executive
for each large taxpayer from among the Additional/Joint/Deputy/Asstt. Commissioner
posted in the LTU either from the Income Tax or Central Excise Department. The
said Client Executive will be the single point interface with the large taxpayer
for any assistance, clarification, and grievance redressal.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>3.
Transfer of intermediate goods/inputs/capital goods:</b> The goods can be removed
by the sender premises under an invoice or a transfer challan, which should
contain all details as in case of an invoice except the value. However, the
facility of such removal without payment of duty or reversal of credit is not
permitted when the recipient unit is availing the benefit under specified area
based exemption notification or where the sender premises is an EOU or a unit
located in EHTP or STP. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>4.
Transfer of credit:</b> Rule 12A(4) of the Cenvat Credit Rules, 2004 provides
an option to a large taxpayer to transfer Cenvat credit (of central excise duty
or service tax) accumulated in one manufacturing unit or service providing unit
to any of its other manufacturing or service providing units. Such transfer
can be made by way of issue of a transfer challan containing the details as
provided in the said sub-rule. The said transfer challan can be sent by fax
or electronically by way of e-mail attaching the scanned copy of the challan
to other unit for taking credit which should be followed by the original copy
of the challan.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>5.
Excess payment: </b>Rule 12 BB of the Central Excise Rules, 2002 provides a
facility that if a large taxpayer manufacturing excisable goods has paid at
any time excess excise duty on account of arithmetical error, he would be permitted
to adjust the said excess duty paid by him in the subsequent period.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>6.
E payment:</b> In case of difficulties in e-payment, a large taxpayer is permitted
to pay the duty (except in such cases of Service Tax where e-payment is mandatory)
in the respective jurisdiction where the factories or service providing premises
are situated or even in the jurisdiction of LTU, Bangalore.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>7.
Pending rebate/refund cases:</b> All the refund/rebate claims filed with the
jurisdictional Central Excise and Service tax Commissionerate till the date
of receiving the acceptance letter issued by the Chief Commissioner, LTU shall
be processed by the jurisdictional Commissionerate only, and these will not
be transferred to the LTU. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>8.
Export Procedures: </b>facility of self-sealing of export consignment is available
to all the large taxpayers. Therefore, all the taxpayers are expected to avail
this facility. However, in exceptional cases, where the taxpayer intends to
avail the facility of sealing by the Central Excise officers or the Customs
officers, they should apply for the same to the LTU who in turn will request
the jurisdictional Commissionerate to depute the staff for supervising the sealing
of export cargo. However, the processing of accepting the proof of export shall
be carried out only in the office of the LTU.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>9.
ER-1 return:-</b>A new form is to be prescribed.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>10.Audit:</b>
As far as possible, the audit of the head office and all the units will be conducted
simultaneously. Dates for audit will be fixed in consultation with the large
taxpayer.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>11.Adjudication:
</b>All show cause notices pending adjudication, as on the date of issue of
acceptance letter will be transferred to the LTU along with all connected case
papers. Cases that are in the process of being adjudicated (i.e. where personal
hearings have been conducted) will be decided by the jurisdictional adjudicating
authority only.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>12.Investigations:</b>
All pending investigation cases as on the date of issue of acceptance letter
will be completed by the jurisdictional Commissioner.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>13.Arrears
of revenue :-</b> The complete details of the arrears of revenue will be forwarded
to the LTU by the respective Commissionerates. The case files are not to be
merely forwarded, but individual details of each case along with the full history
should be prepared and sent. Similarly, all cases pending before the Commissioner
(Appeals), CESTAT, High Court, and Supreme Court should be transferred to the
LTU with a self-contained note in each file.</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=31&filename=notification/excise/2006/excircular834.htm">CIRCULAR
NO.834/11/2006-CX., Dated: October 5, 2006</a></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
<strong><font color="#006600">Electronic payment of Service Tax – what’s the
status?</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service
Tax payable on 5<sup>th</sup> October was to be paid electronically in the
banks. The banks, the department and the assessees were totally ignorant
about the procedure. Many banks simply refused to open accounts, as they
were all busy with half-yearly closure of accounts. Frantic calls to the
department on whether this month’s tax could be paid manually were received
with evasive replies and
‘personal opinions’. Several assessees were worried that if they pay by challan
in the bank, the department will issue notices later alleging fraud, suppression
and evasion that taxes were not paid in the manner it was required to be paid.
Just imagine if the CBEC was entrusted to run a new train. All passengers
will be mandatorily required to buy tickets through a web site that does not
exist. The station master will send a compliance report that the train is
running successfully.</font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">E-payment
of Service Tax – who is liable?</font></b></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Is
the 50 Lakh limit for cash payment or does it include credit?</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As
if the confusion about banks not being ready is not enough, there is a new confusion.
Who is required to make e payments? As per the Proviso to Rule 6(2),</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Provided
that the assessee, who has paid service tax of rupees fifty lakh or above in
the preceding financial year or has already paid service tax of rupees fifty
lakh in the current financial year, shall deposit the service tax liable to
be paid by him electronically, through internet banking.”</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now
what is the Rs. 50 Lakhs? Is it the amount paid by cash or does it include
payment made through cenvat credit? The obvious answer is it covers only
payment by cash but where is it said so?, an indirect taxes expert working
with a top MNC consultancy firm asked me while he was on his way to a presentation
on e-payment.</font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Money
laundering, fraud, smuggling – Dalmia gets bail</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Barely
a week after he was indicted by a US court, </strong>on fraud charges,
DSQ promoter Dinesh Dalmia was released from a Kolkotta jail yesterday. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An
American Newspaper reported on September 30.</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
DineshDalmia, 45, of Fort Lee, and Ashish Paul, 45, of <st1:City>Norwood</st1:City>
were charged with wire fraud and money laundering in a 16-count indictment
handed up in U.S. District Court in <st1:City>Newark</st1:City>, U.S.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Dalmia, already the subject of a criminal complaint filed in March, is in
jail in India on stock fraud charges.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Each wire fraud charge carries up to 30 years in prison, plus a $250,000 fine,
and the money-laundering charges carry sentences up to 10 years and $250,000
each.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++The
indictment accuses Dalmia of using three New Jersey companies he controlled
-- Allserve, B2B Solutions and Vanguard Info Systems -- to secure multimillion-dollar
financing from several lenders, including CitiCapital Technology Finance of
Mahwah, G.E. Capital Finance of Connecticut and Fifth Third leasing Co. of
Ohio between 2003 and 2005.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Dalmia, using the alias "Nick Mittal", allegedly obtained the money
through lease-financing contracts for computer equipment and telephone lists
for call centers for the debt collection and telemarketing businesses he supposedly
ran.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
As proof of his need for financing, Dalmia is alleged to have presented the
lenders with fraudulent purchase agreements, invoices and delivery receipts
that he and Paul had created.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Also, he allegedly deceived the lenders by showcasing virtually worthless,
outdated equipment he had obtained from used computer dealers and was packaged
in what appeared to be clean, new hardware casing.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++The
money-laundering charges stem primarily from the movement of funds through
shell companies.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
cases in India and the US are not related —- after Dalmia fled following the
Calcutta Stock Exchange scam, he landed in the US and got involved in a scam
there.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
CBI arrested him in February when he came back to India to flee the US authorities.
Since March, he has been in jail for the Rs 120-croreCSE scam. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Following
a Calcutta High Court ruling on September 27, metropolitan magistrate granted
Dalmia bail on Thursday as the police failed file the charge-sheet against the
accused within 90 days of his physical production before the Chief Metropolitan
Magistrate. Kolkotta bail is not all freedom for Dalmia- CBI has other cases
against him.</font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">20
– point programme resurrrected</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Garibihatao”,
the slogan that Indira Gandhi used stunningly as part of her 20 point programme
way back in 1971 is back with a new package to change the face of India. What
prevented these people from implementing all these great ideas all these days?
Is it mandatory that we should have these slogans when elections are near? A
rhyme doing the rounds in those days was,</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Problems
are plenty,<br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Points
are twenty<br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Results
are empty!</strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nothing
has really changed </font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with
more DDT </font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice week
end. </font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments
to <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></span></font></p>
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