TIOL-DDT 580 · the untouched capture
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<html> <head> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> </head> <body> <p align="justify"><b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 580</font></b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><br> 26.03.2007<br> Monday</b></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Prilled ammonium nitrate – Dutiability – Board releases draft circular</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vide Board’s Circular <b><u>No. 44/89-CX.3 dated 19.7.1989</u></b>, the field formations were instructed that no central excise duty is to be paid on prilled ammonium nitrate obtained from melt ammonium nitrate and no modvat of such duty, even if paid is to be allowed in pursuance of Tribunal’s order in case of M/s. <i>Anil Chemicals Pvt. Ltd</i>. In another Circular <b><u>No. 56/89- CX-3 dt. 21.9.1989,</u></b> it was instructed that the instructions issued vide Circular dt. 19.7.89 would apply, mutatis mutandis to the process of conversion of Ammonium Nitrate melt into crystalline coated ammonium nitrate.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After this, the larger Bench of the CESTAT in the case of <i>Supreme Chemicals Works Vs. CCE, Jaipur</i>, had held that Ammonium Nitrate in the form of fine powder particles obtained from crude lumps of Ammonium Nitrate, damaged Calcium Ammonium Nitrate (CAN) and Ammonium Nitrate melt satisfy the two tests – one of manufacture and other of marketability, for subjecting any goods to levy of excise duty. The Tribunal further held that the statement of law laid down in CCE, Aurangabad Vs. Anil Chemicals Pvt. Limited must be held to be incorrect. Based on the law laid down by the larger Bench of the Tribunal, the regular Bench has decided the appeals in the case of M/s. Supreme Chemicals works accordingly vide its final order No. 360-62/2000-C dt. 03.8.2000.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has been decided by the Board to accept the above said order of larger bench dated 7.6.2000 and final order of the tribunal dated 3.8.2000 on this issue. Consequently, Board has decided to withdraw the circular Nos. 44/89-CX.3 dated 19.7.1989 and 56/89-CX.3 dated 21.9.1989, as they are inconsistent with the settled position of law. Therefore the Circulars Nos. 44/89-CX-3 & 56/89-Cx-3 may be treated as withdrawn.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants that pending disputes, if any, to be decided accordingly.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But why did it take the Board seven years to decide the issue? No answer, apparently!</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants your opinion on this <u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/draftcir.htm" target="_blank">draft circular</a></u> by 5th April 2007. </font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Service Tax on sale of space – airways and railways</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGST informs the field that the Board had an occasion to examine the Service Tax liability by Railways on sale of space for advertisements. It was also discussed that some of the Airlines are also selling space for advertising in their plane/tickets etc. and are required to pay service tax. The Board wants the filed to make an urgent inquiry about service tax liabilities of the Airlines and report whether they are paying service tax on this account. If not, necessary action may be taken to recover service tax within the current finance year itself and report the recovery particulars. The DGST wants the field to furnish the first report including recoveries, if any, by 25th March, 2007 So that the board is apprised of the matter and the final report to be furnished on recovery particulars/action taken to be furnished by 10th April, 2007. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2007/dgstair.htm" target="_blank">F.NO. V/DGST/21(<st1:place>Deccan</st1:place> Air) 01-06 Dated : March 14, 2007</a></u></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Seizure of goods – clarification – be careful about the six months period</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In compliance with a recent Court order, the Government has paid a large amount of damages in a case where an imported car was cleared by the Customs authorities on 05.06.1993, impounded on 11.06.1993, and seized nearly 2 years later on 05.03.1995. Consequently, the Show Cause Notice dt. 08.05.1995 was quashed by the High Court for the reason that it was time barred. Though the Department argued that the car had been seized in March 2005, and the Show Cause Notice was therefore not time barred, the High Court pointed out that the act of impounding the car and depriving the owner of its use amounted to its seizure, and that the physical deprivation of the custody or enjoyment of the goods in question is the test for determining whether there is seizure of goods.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has reiterated that any act of the Customs authorities whereby the owner of the goods is deprived of the custody or physical possession or enjoyment of the goods amounts to seizure, attracting the statutory requirement of issuing a Show Cause Notice within 6 months (or the extended period of 1 year) of the seizure of the goods. Thus, seizure of goods will include detention of the goods, impounding of the goods, issuing a notice to the owner of the goods that he shall not remove, part with, or otherwise deal with the goods except with prior permission/taking physical possession of the goods etc.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board also reiterates that there is no provision in the Customs Act for detention of goods, as distinct from the seizure of goods. Sec 110 of the Customs Act provides for seizure of goods when there is a reasonable belief that the goods are liable for confiscation. Where it is not practicable to seize goods, in the sense of taking physical possession of the goods, a notice may be served on the owner of the goods that he shall not remove, part with, or otherwise deal with the goods except with prior permission. When goods are thus detained, the statutory requirement of issuing a Show Cause Notice within 6 months (or the extended period of 1 year) should not be lost sight of merely because the Department has not taken physical possession of the goods.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2007/cusinstruct0307.htm" target="_blank">F.No. 591/34/2005-Cus(AS) Dated : March 06, 2007</a></u></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>CWC, Loni appointed custodian of ICD</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner of Customs & Central Excise, Ghaziabad, has appointed Central Warehousing Corporation, Loni, District Ghaziabad to be the custodian of Imported goods received, at the Inland Container Depot of the Central Warehousing Corporation located at Village Banthala and Loni District Ghaziabad, as notified under section 8(a)&(b) vide Public Notice No. 01/2007-Cus dated 16.03.07 in containers through various gateway ports until these are cleared for home consumptions or are warehoused or are transshipped, in accordance with the provision of Chapter VIII of the Act. Similarly, the Central Warehousing Corporation, Loni will also be the custodian of the Export Cargo brought in to said Inland Container Depot, Loni for stuffing, accountal, customs examination transportation and safe delivery of the Customs Sealed containers at gateway ports for onward shipment to various international ports subject to certain conditions. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Custodian shall – </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I. provide free furnished office space for the Customs Officers and staff at the place of clearance. And shall also provide additional space as and when required by the department.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">II. provide separate office space for CHA and Steamer agents etc.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">III. bear the establishment charges of the customs staff posted for the said Customs area. The Commissioner Customs & Central Excise, <st1:place><st1:City>Ghaziabad</st1:City></st1:place> shall decide the staff, which is required to be posted, considering the workload of Customs Area.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">IV. also provide residential accommodation for the Customs staff posted in the area as and wherever requisitioned by the Commissioner of Customs & Central Excise, <st1:place><st1:City>Ghaziabad</st1:City></st1:place>.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">V. provide free suitable transport from the nearest railway head or suitable point for the Customs Staff by the custodian.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">VI. make adequate arrangements for sanitary facilities, pure drinking water supply and other allied facilities, including canteen facility, for the officers and staff working in the area.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">VII. not charge any rent/demurrage on the goods detained by the Customs Department under the Customs Act or any other Act for the time being in force. However, the Customs department shall pay the rent to the custodian after the ownership of the goods vests in the Government after confiscation. The rate of rent for such goods shall be fixed by the Commissioner in consultation with CPWD or local Revenue or Rent Control Authorities.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">VIII. provide a suitable office premises at proper Customs Check post with adequate equipment for communications and office furniture. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">IX. be liable to pay merchant overtime to Customs till the post of the officers are sanctioned on cost recovery basis by the Customs Department.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/pnotice01.htm">Public Notice No. 02-Cus./2007 Dated: 22.03.2007 of Gaziabad Commissionerate</a></u></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> </body> </html>