TIOL-DDT 523 · the untouched capture
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<p align="justify"><b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT
523</font></b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><br>
02.01.2007<br>
Tuesday</b></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Kill
joy Board dampens New Year spirit - plans physical control and bar on
Cenvat credit</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Welcome
to the first edition of DDT in the New Year. The consultants must have had the
most enjoyable New Year eve with the bonanza presented on a platter by the CBEC
working over time on a holiday. See our Breaking News stories <a
href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4756">CBEC
works overtime for a New Year gift to consultants - Denial of monthly payment
of duty and physical control for alleged offenders</a>.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
news was so important, that we could not hold it over the year end. The
department is in a hurry. Adjudication and appeals are time consuming anti
revenue measures and most often the Judiciary does not understand the wisdom
of the great Revenue officers. Now if the Revenue has a suspicion that an
assessee is committing an offence, they are going to</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.
Disallow monthly payment of duty and insist on consignment wise payment of excise
duty</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.
Disallow use of Cenvat Credit, and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3.
Impose physical control. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For the next three months,
the entire department is going to be busy with this exercise. And the exercise
is pretty cumbersome.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is how it is supposed
to work.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.
An officer gets a doubt that an assessee is an offender – normally these doubts
will come during revenue drives against disobedient assessees.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.
The Commissioner is informed.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3.
After satisfying that the assessee is indeed an offender, the Commissioner send
a report to the Chief Commissioner </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4.
The Chief Commissioner sends a recommendation to the Board on what punishment
is to be given to the offender-assessee.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.
Before that the Chief Commissioner should give a hearing to the assessee, but
he is not required to pass any speaking order.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6.
On getting the recommendation from the Chief Commissioner, an officer authorised
by the Board will issue an order specifying the punishment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.
This mysterious officer of the Board is not required to give any Show Cause
Notice , nor a speaking order. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8.
Board thinks his order is final.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps, Board has forgotten
that we still have Courts in this country! Board wants a recommending officer
to give a hearing, but he need not pass any order and the officer who will pass
the order need not hear. Will this strange system pass even initial judicial
scrutiny? As no adjudication or appellate mechanism is prescribed, assessees
will have to run to the nearest High Court. Does the CBEC plan to clog our High
Courts completely?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If somebody is an offender,
don’t you have laws to punish him? Why can’t the Board understand that this
type of actions will not generate Revenue but only litigation?</font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>The
Year 2006 with DDT</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let me take you through
a whirlwind tour of the year that just went by as seen by DDT.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Export
containers- tamper-proof bottle seals</font><strong> – </strong></b>CBEC stated
the year with a circular on 2.1.2006that the containers for movement of goods
to gateway ports/ICD/CFS should be sealed with tamper proof one time bottle
seals. For the seals supplied by the department, cost will be recovered. However
exporters can use their own seals. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">NTT
grounded – stayed by several High Courts </font>-</b>The National Tax Tribunal
which was notified in the first week of the year by the government has again
run into troubled waters. At least three High Courts – Punjab and Haryana, Orissa
and Madras have stayed the implementation of the Act – at least partially. But
this partial stay is paralytic. The P&H High Court has stayed Section 23
of the Act which requires the High Courts to transfer their cases to the NTT,
while the Madras High Court has stayed the constitution of the Tribunal.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Star
studded year for Revnue. </font> – </b>It was stars all the way. <b> </b>Actor
Saif Ali Khan appeared before the customs department to answer the charges of
duty evasion on an imported car, Toyota Lexus, though he is said to have avoided
the summons initially. The Customs had Dhoom fame Aishwarya Rai very tense after
a huge amount of Euros was found in her mail. AmitabBachan who was paying large
amounts of Service Tax had also a few friendly calls from the Income Tax department.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Online
submission of applications – DGFT initiative </font>- </b>DGFT had automated
the entire process of issuance and transmission of DEPBlicences for shipments
effected from 1st October 2005 from specified 23 EDI ports. Now 10 more EDI
Custom ports will be added to the list of EDI ports.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Customs
wins Oracle award-</font> </b>The Indian Customs has won the Oracle award –
“Oracle Excellence in e-Governance Award”. The Indian Customs is one of the
oldest licenced users of Oracle. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Prospective
disobedience of appellate orders – Board issues draconian circular</font> -
Board</b> wants the field to respect the stay orders of the appellate authorities
only for the past period but to implement the impugned order prospectively.
In simple terms this means if the central excise Commissioner passes an order
that the mangoes grown in the factory premises are dutiable and demands duty
and the assessee goes to the Tribunal and gets a stay and waiver of pre deposit,
Board will honour the Tribunal’s order only for the past period and for future
clearances you may have to pay excise duty on those mangoes, unless the Tribunal
specifically mentions that the stay applies for future too.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Used
Rails fall under CTH 7302 and not 72.04</font> - </b>By Circular No. 1/2005
dated 11.1.2005, Board had clarified that used rails should be classified under
7204. After about a year, Board now has changed its view and for the sake of
uniformity has declared that used rails would correctly fall under CTH 7302.
was there no uniformity under 7204? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Air
Cargo agents are covered under Business Auxiliary service – DGST</font> - </b>For
once, the DGST, famous for his clarifications, was not giving one; he was passing
a speaking order on the directions of the Bombay High Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">JM
Kishore - Indian Customs Officer wins WCO prize</font> - </strong>Mr. <b>JM
Kishore</b> an Appraiser in Vizag Customs House secured sixth place in this
International event. In the top ten, Mr Kishore was the sole representative
of Indian Customs, while Mr NasruddinDjokoSurjono of Indonesian Customs obtained
the second prize.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Absolutely
no duty on export goods – Board issues Section 37B order - but what is export
under bond?</font></b> - 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?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Anytime,
anywhere filing of I-T returns </font>- </b>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.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">File
notings are not, as a matter of law, exempt from disclosure under Right To Information
Act – CIC </font>- </b>In a landmark order the Central Information Commission
has ordered that file notingsare not exempted from disclosure under the RTI
Act. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Tax on education
is regressive – Kerala High Court</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
even if the State is not able to finance higher education as required under
the Directive Principles of State Policy under article 41 of the Constitution,
it should not deny and discourage opportunities for education by adding cost
to it in the form of tax on education which will certainly disable the economically
weaker sections from pursuing higher studies</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
If education is run on business lines, then solution is to amend section 11
and other relevant provisions of the IT Act withdrawing the exemptions to institutions
and Government can simultaneously provide financial aid to beneficiaries which
will put an end to misuse of income-tax provisions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Service
Tax on Goods Transport – Clearance to depot – eligible for credit</font> - </b>Board
has now clarified that in case of depot sales of goods, the credit of service
tax paid on the transportation of goods up to such depot would be eligible,
irrespective of the fact, whether the goods were chargeable to excise duty at
specific rates or ad valorem rates on the basis of valuation under section 4
or 4A of the Central Excise Act.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">The
Bird Flu – the taxman not chickening - Are poultry Farms covered under Service
Tax ambit?</font> </b>Service Tax net- especially Business Auxiliary Service-
is so wide that even the service providers themselves do not know about providing
any taxable service until they are caught in the net. - An alert Service Tax
officer sees a tremendous opportunity in this process. Whether the chicken contracts
Flu or not, it is sure to attract Service Tax.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Construction
Service - DG, Service Tax overrules Board Circular – issues notice to Board</font>
- </b>The DGST is at it again. In a controversial letter to all the Chief Commissioners,
He (yes, he is a Capital H) has not only over ruled a Board Circular but put
the Board on Notice – all because only 43 days are left to collect the Service
Tax illegally, in this financial year.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">CBEC
and CBDT – Rules notified for selection of Chairmen and members</font> -</b> Can
you believe it, there are no rules for the appointment of the Chairman
and Members of the CBEC and CBDT? In <i>Sunil Kumar Chaudhury v Union
of India</i>, the
Central Administrative Tribunal asked the governmental counsel as what were
the rules for appointment of the Chairman and Members of CBEC. He really
had no answer. Now the rules are made. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Valuation
for Service Tax</font></b> - It had to come one day. Once the tax is on the
value, the method of valuation is important. In Central Excise, valuation has
been a major issue of contention. (personally, I made a small fortune writing
a book on valuation) All the complicated concepts of Central Excise valuation
were not imported into Service Tax all these days and finally in this year’s
budget an honest attempt has been made by a sincere government to complicate
Service Tax valuation. Section 67 is to be amended to include considerations
other than money to the value for taxable services. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">CESTAT
bench at Ahmadabad </font>- </b>The President deserves all praise for expanding
the Tribunal and taking it nearer to the litigants. But this expansion should
continue. Hyderabad should be the next destination. With 8 Central Excise Commissionerates
and two big custom houses, Andhra Pradesh deserves to have a bench of the Tribunal.
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Board’s
numbering system goes for another toss – Circular No. 12/2006 issued again -</font></b><font color="#663399">
</font>The least that you can expect from a premier Revenue collecting Board
is arithmetical accuracy. The Board can never have any authentic statistics
on the exact amount of revenue collected; on the number of Commissioners it
has; the number of ranges or for that matter any numbers. But the least it can
do is to keep track of the numbers of the circulars it issues.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Idli</font>
<font color="#663399">Dosa is not fully exempted after all</font><font color="#0000FF">
</font>- </b>The budget has been termed as an idlidosa budget (perhaps without
chutney). The explanatory notes to the budget stated that idlidosa mix is being
exempted but if you referred the relevant notification, you would understand
that they were taxed at 8%. Now which one do you believe – the notes or the
notification? Fortunately Board clarifies that the notification is right and
not the notes.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">It’s
not butter mil but butter milk – Government amends notification.</font> - </b>Somebody
is obviously running a spell check on the notifications issued in the budget.
They should have done it before these got printed, but better late than never.
So the Government has amended the Customs notification No. 20/2006 – cus to
correct some spelling mistakes like mil for milk and cocoon for concoon. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Income
Tax Form 16 amended -</font> </b>The CBDT has amended Form 16, the certificate
of tax deduction issued for income from salaries. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Cenvat
Credit Rules amended – Service exporters eligible for refund </font>- </b>As
per Rule 5 of the Cenvat Credit Rules, Exporters who cannot use their cenvat
credit are allowed a refund of the credit utilized. This facility is allowed
to the manufacturers and service providers, but somehow the Rule omitted service
providers and the omission continued for nearly two years. Similarly the refund
was not available if rebate was claimed under Central Excise Rules but forgot
to mention rebate under Service Tax. Of course this did not matter, as according
to the rules the service exporters were any way not eligible for refund. This
lapse is now rectified. Any rectification is good any time and Board deserves
all praise.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Candles
exempted – Notification issued </font>- </b>After we reported that candles were
exempted, a doubt has been expressed whether it was exempted by a notification
or in the Finance Bill. It was indeed exempted by a notification. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Service
tax on maintenance of Computer Software–Board clarification – impossible to
implement</font>.</b>Demands Can be raised from 9. 7. 2004, the date on which
Notification No.20/2003-ST dated 1.08.2003 was rescinded vide Notification No.
7/2004 dated 9.7.2004.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Target
plus abolished.</font></b> In a terse notification, the Government has abolished
the Target Plus Scheme with effect from 1.4.2006. The DGFT says this is in public
interest. It should be.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">AreIIMs
manpower recruiting agents?</font></b><font color="#663399"> </font>The Service
Tax department thinks so</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Rail
fare collected by <font color="#FF0000">air</font> travel agent exempted!!!!!!!</font>
- </b>The rail fare collected by <font color="#006600">air travel</font> agent
in respect of service provided by him; and<font color="#FF0000"> (Does the air
travel agent collect rail fare? Board should know or they should have asked
the Railway Board.) [ Boardhs of course later corrected this lapse]</font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Central
Excise valuation – Return fare – Includible? </font> - </b>Board says, yes.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Foreign
Service – Indian Tax</font></b><font color="#663399">- “<b>It may be noted that
only services received in India are taxable under these provisions”</b></font><b>.
– </b>This is a wonderful clarification. Let us hope the field follows it.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Should
officers get reward for doing their duty? – Delhi High Court-</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#0000FF">
</font></b>The Delhi High Court asked the government to explain whether it was
within law to give rewards to Government servants for discharging their duties.
A Customs officer had approached the court for a higher reward as his bosses
were not sanctioning him further rewards after he has crossed Rs. 10 lakhs of
reward. The Court observed, "cases where officials have made false claims
for bounty and rewards is reported with alarming frequency. This malaise has
infiltrated even the Army. According to press reports, persons have been killed
only to further certain officers' careers."</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Municipal
water exempted from excise duty</font> -</b> Drinking water supplied by civic
bodies taxable? Surprisingly the answer is yes. It is really surprising why
the shrewd excise men did not pounce upon Municipal Corporations to pay duty.
Obviously the government realized the lapse and now a notification is issued
exempting waters not cleared in sealed containers.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Central
Excise officers not to visit any factory without Assistant Commissioner’s permission</font>
- </b>It seems Board had Vide letter F.No.201/07/2006-CX6 dated 31.03.2006,
decided that for visiting units other than SSI units also prior permission of
Asstt. Commr/Dy.Commr should be obtained and reiterated that the officer visiting
these units should follow all the procedures laid down for visit to SSI units
including making entries of relevant particulars in visitors book being maintained
by the assessee and that any violation would be viewed very seriously.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Don’t
issue summons at the drop of a hat - CBEC</font></strong> - it is desirable
that summons need not always be issued when a simple letter, politely worded,
can also serve the purpose of securing documents relevant to investigation.
Board has emphasized the use of summons only as a last resort when it is absolutely
required.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">DEPB
rates notified retrospectively</font> - </b>Don’t worry! This is in favour of
the trade. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Service
Tax clarification from Customs Commissioner - Customs EDI centre liable to Service
Tax</font> -</b>clarified a Mumbai Customs Commissioner.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Default
of monthly payment of duty – Payment only through PLA – no need of order from
Assistant Commissioner </font>- </b>The duty has to be paid from PLA consignment
wise till dues are cleared with interest and there is no need of any order from
the Assistant Commissioner/Deputy Commissioner.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">New
Form – not all that Saral -</font></b>“Nothing can be simpler”, declared the
mandarins of AyakarBhavan about the new Income Tax form for individuals. But
tax professionals are not impressed. They feel it is notsimpler than Saral.
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Service
Tax on Goods transport – DGST confirms withdrawal of controversial letter. -
</font></b>It is more than a year since we broke the story of the DGST’s controversial
letter not to allow abatement to manufacturers paying Service Tax on goods transport.
Even after we confirmed several times that the DGST had withdrawn his circular,
the field officers were not prepared to accept the withdrawal and thousands
of Show Cause Notices have been issued all over the country. While the Chief
Commissioners were prompt in circulating the DGST’s first missive, they ignored
his second letter withdrawing the first one.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">KP
Singh transferred -</font> </b>The high profile DG, Service Tax , Mr. KP Singh
has been transferred to the very significant Tax Arrears Recovery unit. During
his stint as DG , he was famous for issuing controversial and often illegal
directions to the field and even to the Board. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Service
Tax on post offices – Board clarification opens a Pandora’s box</font> </strong>In
order to take the postal department out of the purview of Service Tax, Board
has issued a circular which is bound to result in more damages than solutions.
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Service
Tax – consulting work by Chartered accountants exempted - </font></strong>In
the last budget, the exemption to CAs doing other work like representing, consulting
etc, was withdrawn. The CA’s institute had represented to the government that
this was discriminatory as a lawyer appearing before a court was not subject
to Service Tax, but if a CA did the same job, he had to pay the Service Tax.
Government has relented and exempted representation work done by CA/Cost Accountant/CS
from Service Tax. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Interest
converted into loan – deduction - CBDT clarifies - </font></b>As per the explanations
to Section 43B of the Income-tax Act, inserted by the Finance Act 2006, any
sum payable by the assessee as interest on any loan or borrowing or advance
shall be allowed as deduction if such interest has been actually paid and any
interest which has been converted into a loan or borrowing or advance but has
not been actually paid shall not be allowed as deduction in the computation
of income.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">What
is duty? DGFT clarifies -</font> </b>The DGFT has received representations
asking for clarifications on the meaning of the <b>duty</b> as it appears
in the policy and procedures - DGFT now clarifies that duty in these
cases means only the
<b>‘Basic Customs Duty'</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">EASIEST
- </font>Electronic Accounting System in Central Excise & Service Tax -
Now you can actually pay your excise and Service Tax without moving out of your
office, any time you want to pay, using the internet banking facility.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Err
for revenue – <i>Nagarkar</i> overruled -</font> </strong>actually in
practice, very few officers are charge sheeted on account of their
orders. And even the few who had to face disciplinary proceedings could
succeed by citing the Supreme Court case of <i>ZBNagarkar. - </i>This
case was a big protection for the rare officer passing a judicial order.
But now the Supreme Court has ruled that Nagarkar is bad law. Wehad
carried in depth analyses of the now famous DuliChand case</font></p>
<p align="justify"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Uttaranchal
HP exemption extended till 2010</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Service
Tax FAQ – great work by Coimbatore Central Excise </font>- The</strong> Coimbatore
Chief Commissioner has published a beautiful booklet “Service Tax – FAQ” . The
extremely useful and compact booklet has detailed information on 25 select services
apart from the 15 new services.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Disobedient
IRS – angry FM –</font></strong>Transferred officers not joining at their new
places – with some no amount of threat will work.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Compassionate
PC – Blast victims’ wives to get job - </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">TIOL
had been running a campaign for substantial help the families of the Customs
and Central Excise and Income Tax officers who were victims of the Mumbai blast.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Export
of buffalo meat – both male and female prohibited -</font> </strong>Incidentally
more than the sex of the animal, the bone of contention in these matters is
the bone of the animal as boneless meat is allowed to be exported, male or female.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Palm
oil exemption – Board corrects faulty notification. - Now Board has corrected
this mistake. The (i) is changed to (j). A former TRU official told us that
it is impossible to make such mistakes, as the latest version of the notification
would be available in the file. Then why does it happen? It requires great talent!</font></strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Isn’t
the customs commissioner a customs officer? Board has appointed</strong><b>the
Commissioner of Customs, Amritsaras an officer of Customs</b>. <strong>We thought
that the Commissioner of Customs, Amritsar was already a customs officer but
Board has appointed him as one only from 5<sup>th</sup> September 2006. What
officer was he before that? </strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>E
payment of Service Tax – no penalty please - Today DDT would like to offer a
bouquet of the most fragrant flowers to the CBEC. We had raised several questions
on the mandatory e payment and even conducted quick survey in the major cities,
to give the Board the quickest feed back possible. We had also raised a question
whether the limit of Rs. 50 Lakhs was for cash payment only or whether it includes
payment from cenvat credit too. </strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Bar
Council of India is a club liable to pay Service Tax? – No Charity!says, Board.
And so is FICCI! The Board clarification says that even if an organisation is
exempted under IT Act as a charitable institution, it need not automatically
go out of the purview of Service Tax. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Why
Maxwell when we have our own Mimansa? - </font></b>Justice MarkandeyKatju of
the Supreme Court is an authority on ancient Indian legal theories. His scholarship
in Sanskrit is so well acknowledged that he was invited to deliver the convocation
address of a <st1:PlaceName>Sanskrit</st1:PlaceName> <st1:PlaceType>University</st1:PlaceType>.
In a landmark judgement on customs valuation, , Justice Katju laments that “It
is deeply regrettable that in our Courts of Law, lawyers quote Maxwell and Craies
….</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Ghosts
haunt LTU, Bangalore - </font></strong><font color="#663399"><b>Yes! The Board
had posted a dead officer and a retired officer to the LTU. And not dead or
retired yesterday but months if not years ago! </b></font><b>[</b>After we pointed
this out, live officers have been posted]</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">ER
1 and ER 3 again amended - Unpardonable waste of paper -</font> </strong>The
forms were again amended on 16.5.2005 and now in less than 18 months, the forms
are again changed. This time around the provocation is LTU. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">TIOL’s
XCuSE– excisable?</font></b> Now the question seems to be answered with
software moving from 8524 to 8523 in the tariff.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Service
Tax - Foreign air travel – even return journey is taxable </font>- </strong>Suppose
my friend buys a ticket for me in New York for a journey from Mumbai to London.
Am I liable to pay the tax and should I get registered before I board the aircraft?
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Simultaneous
availment of SSI exemption and cenvat credit. –</font> Yes says the Board.</strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Cenvat credit of
CVD paid through Export promotion scrips – No need to amend Cenvat Credit Rules
- Board</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Service
Tax- DGST no more Registering Authority - Records to be shown to CAG’s Audit
too </font>- </strong>Now the Rules are amended to provide that these records
are to be provided to audit party deputed by the Comptroller and Auditor General
of India. So it is once again proved that after all the CAG does not have any
constitutional powers to just go and audit anyone he feels like. He derives
his powers from the Central Excise Rules and now the Service Tax Rules. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>When the last date
for payment of duty is a holiday? - </strong><b> it is clear that duty/tax can
be paid and returns and appeals can be filed on the next working day if the
due date happens to be a holiday.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Tax
Return Preparers Scheme – CBDT’s new initiative -</font> </b>Want help in filing
your tax return? For just Rs. 250/- you will get assistance from a TRP to be
appointed by CBDT. About 5000 TRPs are to be trained in 80 cities by NIIT.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax Ombudsman
- Immediate benefit is 12 more Chief Commissioners are going to get Member level
posts.</strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Excise Notification
exempting alcohol - Our understanding all these days was that there is no Central
Excise duty on alcohol fit for human consumption; it is supposed to be a state
subject. But Notification No. 34/2006-Central Excise, exempts lcohol.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">FM
at the LTU - </font></strong><font color="#663399"><b>Toilet is the best place
to judge the quality of the building - </b></font>Finance Minister Chidambaram
has formally declared the LTU in Bangalore functional. Obviously Chief Commissioner
KS Nair had done a good job and the FM was happy. The FM wants to come back
to the LTU incognito and inspect the toilets for he believes that <b>Toilet
is the best place to judge the quality of the building.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Service
Tax on government departments????????? – Board clarifies?</font> - </strong>DAVP,
customs officers supervising exports, police providing protection etc, may be
potential tax evaders.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Return unwanted
seized records – Board member tells field.</strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Catering in trains
– who is liable to pay Service Tax? IRCTC in trouble for Seeking a clarification.</strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Namkeen, Bhujia, PalakPanner
– delicious exemptions? No more heating of palakpaneer.</b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Section 11B not applicable
to North East refunds – Board clarifies</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">No
Service Tax on </font></strong><font color="#663399"><b>Public Authorities performing
statutory functions – Board clarifies -</b></font><b> </b>Where is it laid down
that statutory activities are outside the purview of Service Tax? Shouldn’t
there be either an exemption or exclusion?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Delayed
refunds – High Court raps Customs Commissioner – Disciplinary action ordered</font>
- </b>For those overzealous Revenue officers, who are quick to demand but slow
to refund, here is bad news. The government will end up paying interest and
you will be stuck with a charge sheet. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Customs
loses a case for not depositing Rs.2500/- </font></strong>The department which
collects over a Lakh of Crores of taxes, could not find the Rs. 2500/- to comply
with the directions of the Sessions Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">There
is no Crown and the illusive crown has no precedence in recovery of arrears.</font></b>
<font color="#000000">You cannot recover arrears just because you are the Government.
There should be a charge. </font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Budget
file – exempted from disclosure?</font> </b>Not really</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These are certainly not
the most important events of 2006, nor even a representative sample. Let us
hope for a better 2007 </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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