TIOL-DDT 506 · the untouched capture
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<p align="justify"> <font size="3"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 506 </font></strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong></strong></font></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><br>
06 12 2006 <br>
Wednesday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise arrears - Sterlite Optical Technologies no favour shown - FM </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellants are a large industrial house. The captains as someone would call them. If the captains and the marshals were to engage themselves in such fraudulent activities the corporals and soldiers would not be far behind. Had the appellants paid appropriate duty on the optical fibres and pre-forms at a time when such duty became payable the govt. coffers would have been that much fuller. <strong>The appellants did evade duty through subterfuge, careful planning and no small cunning. If there is any case which deserves a penalty under Section 11AC it is the appellants'</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is an extract from the order of the Tribunal in <em>Sterlite Optical Technologies Ltd v Commissioner of Customs & Central Excise, Aurangabad -</em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2005/2005-TIOL-565-CESTAT-MUM.htm"> <font size="1">2005-TIOL-565-CESTAT-MUM</font> </a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue figured in the Lok Sabha yesterday when Mr. Mohan Singh made a special mention and said that he was not making any allegations but wanted clarity on the issue in the interest of preserving the dignity of the office of the Finance Minster. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The FM replied, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Sir, I am happy that fortuitously I am present in this House when my distinguished friend raises this issue. Let me assure him that I hold no grievance against him because he did not make any allegation against me; he simply wanted facts and I am giving him the facts as best as I know. <br>
<br>
There was an adjudication in the year 2003 by the Adjudicating Authority. Our Government came into office in May 2004. The company filed an appeal which was pending at that time. The appeal was defended by the Department when the UPA Government was in office and the Government succeeded in the appeal and order of adjudication was confirmed .(The Tribunal order referred above - DDT) Therefore, after the UPA Government was in office, no lenience has been shown to any one. The adjudication order has been confirmed by the appellate authority against which the company has filed a statutory appeal in the High Court of Bombay and the High Court of Bombay has granted a stay. Any number of companies, after adjudication by the Tribunal, go to the High Court by way of statutory appeal and obtain a stay. The Department has moved to the High Court to vacate the stay. The case was transferred to the Aurangabad Bench. The Aurangabad Bench, as you know, did not have, during that period, a regular Revenue Bench, and, therefore, the case was not heard for several months despite the efforts of the Department, Finally, the Department instructed its counsel to mention the matter to the Chief Justice of the High Court of Bombay. The matter was mentioned. The Chief Justice said: "File an application before me on the administrative side." An application has been filed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chief Justice has heard the application. He has asked the other side to file a counter. The Chief Justice has assured us that the case would be taken up for disposal very early. <strong>It is completely wrong to say that the Minister has anything to do with recovery or non-recovery. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In fact, I have got a list of companies where there are arrears. There are over 20 companies with huge arrears. This is one of the companies. As I said, after our Government came into force, we have recovered more arrears than any Government before. I have given these figures in this House. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On this adjudication, we will contest the case strongly and we will instruct the senior counsel to appear in the matter. <strong>I am confident that the Government will win the matter in the High Court </strong>, and once the stay is vacated, the money will be recovered if the adjudication order is upheld. Please have no fear, no apprehension that any favour is being shown to anyone in this matter. " </font></p>
<font size="2" face="Verdana, Arial, Helvetica, sans-serif">FM means business!
</font>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income tax collected almost a lakh crores - Recovery of arrears good </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The collection of income tax in the current financial year till 15th November 2006 amounts to Rs.98 ,298 crore as against Rs.69,465 crore collected during the corresponding period of last financial year. ? Even recovery of outstanding income tax dues in the current year till September 2006 amounts to Rs.8 ,033 crore as compared to Rs.4,276 crore recovered during April-September 2005. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Apart from the statutory steps being taken for recovery of outstanding tax dues as prescribed under the Income Tax Act (including attachment of bank account, debtors, etc, attachment and sale of immovable property, etc) the following special measures are also being taken to expedite recovery of direct tax arrears: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Monitoring of recovery of arrears in large cases by a Task Force. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Identification of cases involving substantial amount of arrears pending before Commissioners (Appeals) and ITAT and requesting these authorities to dispose off such appeals early so that the demand can be collected during the current financial year itself. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Requesting the President of ITAT not to allow stay of demand beyond 180 days as prescribed in section 254(2A) of the Income-tax Act. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Requesting Settlement Commission to dispose off high-demand cases expeditiously. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This information was given by the Minister of State for Finance in the Rajya Sabha yesterday. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But is it fair to <strong>request </strong>the Tribunal not to grant stay beyond 180 days just because the government wants to create some arrears and show them as collected ?. Will the grounds for granting stay become stale after the magical 180 days for no fault of the assessee? The next stage of arrears collection should be for the Boards to give a direction to the appellate authorities not to grant stay or better still to pass orders in favour of Revenue! </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Same rate of excise duty and Service Tax</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The MOS in the Finance Ministry told Rajya Sabha yesterday </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A duty of excise called the Central Value Added Tax (CENVAT) is levied on excisable goods which are produced or manufactured in India . The mean CENVAT rate is 16% of the value of goods. Service tax is levied on taxable services at the rate of 12% of the value of taxable services. Finance Minister in his Budget 2006-07 speech has stated that there is a large consensus that the country should move towards a national level Goods and Services Tax ( GST ) and hence we must converge the service tax rate and CENVAT rate. World over, goods and services attract the same rate of tax. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The task force on Implementation of the Fiscal Responsibility and Budget Management Act, 2003 in its report of July, 2004 observed ?Stand alone taxation of both goods and services is structurally inconsistent with the scheme of input credit across goods and services which is so vital to eliminating multiple taxation and cascading effects?. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will there be a 16% Service Tax soon</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Implementation of VAT satisfactory MOS, Finance </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Minister of State in the Finance Ministry told the Rajya Sabha, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The experience with implementation of VAT has been very encouraging so far. The new system has been received well by all the stakeholders. The introduction of VAT has helped in putting in place a uniform and transparent system of taxation across the States. The fact that more and more States are joining VAT shows that the system is stabilising and succeeding. <br>
<br>
It is seen from the provisional tax revenue data furnished by States/ UTs that during 2005-06, the tax revenue of 25 VAT implementing States/ UTs registered a growth rate of about 13.8% as compared to 2004-05, which was higher than the Compound Annual Growth Rate ( CAGR ) of Sales Tax revenues of these States/ UTs for last 5 years upto 2004-05. Further, during first 7 months of the year 2006-07 (April-October), the tax revenue of 30 VAT implementing States/ UTs has registered a growth rate of 26.1% over the corresponding period of the previous year. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">States/ UT, namely, Uttar Pradesh, Tamil Nadu and Puducherry are yet to implement VAT. The Government of Tamil Nadu has decided to implement VAT w.e.f . 01.01.2007. The Government of Puducherry has informed that it proposes to implement VAT w.e.f . 01.04.2007. The Government of Uttar Pradesh has yet not taken a decision regarding implementation of VAT. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Duty free import of pulses extension of date </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Notification No. 21/2002-Customs, import of pulses is allowed at nil rate till 1 st April 2007. This date is now extended to 1 st August 2007. </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=23&filename=notification/custom/2006/ctariff06_115.htm">NOTIFICATION NO. 115/2006-Customs, Dated : December4 , 2006 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Offices abroad remittances RBI provides greater flexibility </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Initial Expenses - remittance up to fifteen per cent of the average annual sales/income or turnover during the last two financial years or up to twenty-five per cent of the net worth, whichever is higher, to be allowed </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Recurring Expenses - remittance up to ten per cent of the average annual sales/income or turnover during the last two financial years. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Acquisition of Immovable Property - a company incorporated in India having overseas offices require prior permission of the Reserve Bank to acquire immovable property outside India for its business and for residential purpose of its staff, subject to certain terms and conditions. Now AD banks to allow remittances by a company incorporated in India having overseas offices for initial and recurring expenses, to acquire immovable property outside India for its business and for residential purpose of its staff. </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=49&filename=notification/rbi/2006/rbi06cir018.htm">A.P . (DIR Series) CIRCULAR NO. 18/RBI., Dated: December 4, 2006 </a></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more DDT </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </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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