TIOL-DDT 6 · the untouched capture
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<html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body bgcolor="#FFFFFF"> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#0000CC" size="3">DDT6</font><br> 08 12 2004<br> Wednesday</b></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#009933"><b>National Tax Tribunal is back! <br> Bill introduced in Lok Sabha</b></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> <b>THE</b> NTT ordinance as is well known lapsed with the previous government, but the new Government is equally committed to the concept and introduced the Bill in Lok Sabha on Monday for creation of the NTT. <br> <br> <font color="#FF0000"><b>STATEMENT OF OBJECTS AND REASONS: </b></font><br> <br> The object of the bill as stated by the Law Minister Mr HR Bharadwaj is :- <br> <br> Under the direct and indirect tax enactments, an appeal lies to the High Court on a substantial question of law. Due to pendency of a large number of cases in the High Courts, huge revenue is blocked in such litigations. This is adversely affecting the national economy. Hence, urgent measures are required to be taken to speed up taxation matters pending before the High Courts. To achieve the aforesaid objective, it is proposed to establish a Tax Tribunal to be known as the National Tax Tribunal to hear cases on substantial question of law from the decisions of the Income-tax Appellate Tribunal and the Customs, Excise and Service Tax Appellate Tribunal. This Tribunal is being set up under article 323B of the Constitution and will act through its Benches. A person who has been a Judge of the Supreme Court or the Chief Justice of a High Court shall be the Chairperson of the National Tax Tribunal. The number of Benches to hear the cases under the direct tax laws and indirect tax laws shall be decided by the Central Government from time to time. With the establishment of the National Tax Tribunal all matters and proceedings pending in appeals and references under the direct tax laws and indirect tax laws before the High Courts shall stand transferred to it.<br> <br> Incidentally this is the same text of objects and reasons as presented by Mr Jaitley more than a year ago. Not a comma differs. At least the NDA cannot find fault with the Bill now! <br> <br> <font color="#FF0000"><b>More than a year passed by, but no escalation in costs! </b></font><br> <br> As per the Financial memorandum presented along with the Bill,<br> <br> The total expenditure per Bench and its staff requirement will be Rs. 31,51,000/- per annum. Accordingly, the total expenditure for 25 Benches would be around Rs.7.88 crores per annum. The total expenditure on infrastructural requirements on the non-recurring expenditure (for initial setting up) would be Rs. 15,00,000/- and Rs. 10 lakhs per annum is estimated as recurring expenditure, per Bench. Accordingly, total expenditure on the infrastructural requirements including recurring and non-recurring would be approximately Rs. 6.80 crores.<br> <br> Here again the figures match to a rupee with the figures given by Mr Jaitley in November 2003. May be the babus have forgotten about a concept called inflation.<br> <br> <font color="#FF0000"><b>NTT not to be a parking slot for retiring CCs and Board members: </b></font><br> <br> It is not as if Mr Jaitley's Bill is again presented verbatim. There <b>are</b> certain changes. In the previous Bill, Chairman and members of the Board(CBEC and CBDT), members of the Settlement Commission and Chief Commissioners could become members of the NTT. But the new Bill allows only members of the CESTAT, ITAT and High Court Judges/or those who are eligible to be High Court judges to become members of the NTT. So all the members of the CESTAT and ITAT with seven years of experience can hope to join the NTT and all the career bureaucrats in the Revenue departments who nursed hopes of becoming NTT members are going to be a disappointed lot. The idea is perhaps that only persons with long judicial experience will become members of the NTT and that would give it the stature of a High Court whose powers it is going to be vested with. Here the new Bill seeks to set right an anomaly prevalent in the old Bill. As per the old Bill, a Chief Commissioner with one year's service was eligible to become a member of the NTT. But a CC who had joined the CESTAT just a year ago would not be eligible as he was required to complete seven years in the CESTAT to be eligible to become a member of NTT. But his junior who was perhaps not selected for the CESTAT could join the NTT and sit in appeal over his orders. Now such problems will not occur. <br> <br> <font color="#FF0000"><b>No distinction between judicial and technical members</b></font><br> <br> Another major deviation from the previous Bill now is that the concept of judicial and technical member has been done away with. All are members - may be this will give the NTT a better status as a judicial and judicious body. </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(See full text of the <a href="http://taxindiaonline.com/RC2/pdfdocs/NTT.pdf">Bill in 'what's New'</a>)</font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> <font color="#006633"><b>PREFERENTIAL QUOTA FOR EXPORT OF SUGAR TO USA</b></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> The DGFT has allocated 8,150 MTs of raw sugar under Preferential Tariff quota for export to USA for the year 2005 (October 2004 to September 2005). M/s Indian Sugar Exim Corporation Ltd., New Delhi is the designated agency for export of sugar to EU and USA under the preferential quota - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2004/dgft04pub029.htm">DGFT PN No.29/2004-09</a>. </font></p> <p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>DDT question</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Last week's DDT question for you was <b><font color="#FF0000">"When does a notification issued under Section 5A of the Central Excise Act or Section 25 of the Customs Act come into effect". </font></b><br> <br> The answer to the question covers a long story. In Pankaj Jain Agencies Vs. Union of India [1994 (72) E.L.T. 805 (SC)] it was held that mere publication in the gazette was enough and no further making available the notification to the public was required. In Collector of Central Excise Vs. New Tobacco Company [1998 (97) E.L.T. 388 (SC)] the Supreme Court held that if the publication of notification was through a gazette, the mere printing of it in the gazette would not be enough. Unless the gazette containing the notification is made available to the public, the notification cannot be said to have been duly published. <br> <br> In Garware Nylons Ltd Vs. Collector [1998 (100) E.L.T. 321 (SC)] the Supreme Court relied on the New Tobacco case and held that notification can be said to have been duly published when it made known to the public. As there were conflicting judgements of the Supreme Court, the issue was referred to a larger Bench. The Larger Bench in Union of India Vs. Ganesh Das Bhojraj (</font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2002/2002-TIOL-233-SC-CUS.htm">2002-TIOL-233-SC-CUS</a></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">) held that a notification would come into operation as soon as it is published in the official gazette and no further publication is required. So the decision in Pankaj Jain Agencies was held to be the correct law while the New Tobacco Company case was held to be not the correct law. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Interestingly in this case justice Lahoti gave a separate, though assenting judgement. He clarified that the view taken by the court will be confined to civil liabilities only and cannot be made a rule for universal application. What will happen if criminal consequences are to be inflicted by a notification and that notification though published in the gazette is not made available to be seen by those affected? The court left this question open for a future case. But justice Lahoti remarked where mens rea is an ingredient of offence committed by breach of a notification, ignorance of the notification would be a good plea for innocence. <br> <br> So the Supreme Court's ruling is that a notification is effective from the day it is published in the gazette, whether the gazette is available or not. But this is for the pre-1998 period. With effect from 1.8.1998, Section 5A and Section 25 have been amended to provide for the effective date of the notification. Now the notification will come into force <b>on the date of its issue for publication</b> in the official gazette. Unless a specific date is mentioned in the notification itself. Though this section requires the notification to be published and offered for sale by the Directorate of Publicity and Public Relations on the date of issue, this has nothing to do with the effective date of the notification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the position is the notification is effective from the date of its issue <b>for</b> publication in the official gazette and not the date <b>of </b>publication in the gazette. This view has been upheld in a recent order of the Bangalore Bench of the CESTAT in (</font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2004/2004-TIOL-1013-CESTAT-BANG.htm">2004-TIOL-1013-CESTAT-BANG</a></font>)<font size="2" face="Verdana, Arial, Helvetica, sans-serif"> in Hindustan Zinc Ltd. Vs. Commissioner, Wherein the Tribunal in Para 3 held that the Apex Court had in Union of India Vs. Ganesh Das Bhojraj had laid down that the effective date of notification will be the date on which the notification is dated. With all due respects to the Tribunal it is humbly submitted that the Apex Court in Ganesh Das Bhojraj case did not hold so. The Apex Court had held that the effective date is the date of publication in the gazette. But that was for the pre 1998 period. <b>Now the law is very clear that the notification is effective from the date of its issue.</b> Supreme Court had also taken note of the amendment to Section 25 in the <i>Ganesh Das Bhojraj</i> case. <br> <br> <b>DDT</b> thanks all the netizens who responded to the question and regrets that due to the tremendous response, it is not possible to give here the names of all the enlightened netizens who had answered the question. DDT will be grateful for your continued support and response. </font></p> <p align="center"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>The DDT question</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> An Assistant Commissioner confirms a duty demand with interest. The assessee pays the duty with interest and challenges the order before Commissioner (Appeals) who quashes the orders of the Assistant Commissioner. The party files a refund claim for the duty and interest paid. The AC says there is no provision to refund interest under the law. Section 11B deals with refund of duty, not interest. Is the assessee eligible for interest and if so, under what law? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please send your answer to <font color="#0000CC">vijaywrite@taxindiaonline.com </font><br> <br> Until Tomorrow with more of DDT<br> <br> Have a Nice Day </font></p> </body> </html>