TIOL-DDT 629 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 629</font><br>
06.06.2007<br>
Wednesday</b></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Anti Dumping Duty on Parts of CFL – DGAD clarifies but Customs not convinced.</font></b></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>CESTAT convinced</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
following is from <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5410" target="_blank">DDT
604 dated 01.05.2007 </a></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">We are told of a letter addressed by DGAD to TRU in CBEC on the Anti Dumping duty on the scope of the product CFL imported from China PR and covered under Anti-Dumping Investigation conducted by the Designated Authority. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">We understand that DGAD in letter OM No. 162/2006-DGAD dated the 1<sup>st</sup> May, 2006 has told the Revenue Ministry that </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a.</font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti dumping duties were recommended / imposed on the following two types of CFLs :</font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i) Complete, ready to use compact fluorescent lamps wherein choke is integrated within the lamp.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii) Complete, ready to use compact fluorescent lamps wherein choke is external.</font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b.</font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti dumping duties were not recommended on parts / components of CFL.</font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c.</font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“CFL with choke” is complete ready to use compact fluorescent lamps wherein choke is an internal part.</font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">d.</font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CFL without choke as defined in the final findings is complete ready to use compact fluorescent lamps wherein choke would be external part.</font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are told that Customs Authorities simply refuse to accept the clarification. Fair enough, when they normally do not accept even CBEC clarifications and Supreme Court orders!</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are happy to report that though the Customs Department is not prepared to accept the clarification by the DGAD, the CESTAT was more than willing. After all he was the one who recommended imposition of the duty and his clarification should be more binding than any one else’s. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal observed that it can be noticed from the office memorandum the authority that recommends imposition of definitive anti dumping duty, have clearly indicated in the memoranda that the anti dumping duty were recommended on ready to use compact fluorescent lamp, whether chokes are integrated within the lamp or whether the choke is external. It is to be understood that the authority which recommends anti dumping duty has clearly indicated that the anti dumping duty has to be imposed only on ready to use CFL.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But please wait for another day. We will bring this important case to you tomorrow in <b><font color="#663399">ANCHOR DAEWOO INDS LTD v CC, KANDLA</font></b></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Exim Bank's LOC of USD 8 million to Seychelles</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Export-Import Bank of India (Exim Bank) has concluded an agreement dated July 10, 2006 with Government of Seychelles, making available to the latter, a Line of Credit (LOC) for USD 8 million, for financing purchase of essential commodities, which are eligible for export under the Foreign Trade Policy of the Government of India and the purchase of which goods may be agreed to be financed by Exim Bank under this Agreement. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Credit Agreement under the LOC is effective from April 25, 2007. Under the LOC, the last date for opening Letter of Credit / Disbursements is 72 months from the effective date of Credit Agreement. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Shipments under the credit will have to be declared on GR / SDF Forms as per instructions issued by Reserve Bank from time to time.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No agency commission shall be payable in respect of exports financed under the above line of credit. However, if required the exporter may use his own resources or utilize balances of his EEFC account for payment of commission in free foreign exchange. </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/rbi06cir069.htm" target="_blank">RBI Circular No. 69/2007, Dated June 05, 2007</a></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Laws help corruption?</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ one of the basic causes of corruption in our country are the laws themselves. To begin with, it is the laws, rules and regulations which are twisted and exploited by the corrupt elements to enrich themselves. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In fact behind practically every corrupt act, you will find some rule or regulation which is explored by the corrupt public servant. The permit licence raj introduced after independence probably provided a very rich soil for corruption to grow. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The second method by which the laws have contributed to corruption is the purely technical approach focusing on the letter rather than the spirit of the law. For example, in the Hawala case, people who confessed publicly that they had taken money have been discharged because confession alone was not enough to prove the guilt in the court of law. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ if a corrupt person takes a bribe of one crore, he can use that money itself to engage the best lawyer and quibble all the way to freedom and be a respected member of our society.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
The classic example of law protecting the corruption at the highest level
is the interpretation given to Article 105(2) of the Constitution by the
Supreme Court in the Jharkhand Mukti Morcha case to the effect that even
though Members of Parliament are public servants, if a Member of Parliament
receives any bribe for matters connected with his functions within the Parliament,
he will not be guilty because of the parliamentary privilege and the basic
structure of the constitution. The net result, however, is that we are not
only the biggest democracy of the world but <b>also the only democracy where
a Member of Parliament technically can accept a bribe for a work being done
within the parliament.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ one of the reasons why <st1:place w:st="on"><st1:country-region
w:st="on">India</st1:country-region></st1:place> is corrupt is because it is a land of too many laws. What we have today is a society where there is the implementation of the law and not the implementation of justice.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Black money in <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place> is like God. It is everywhere.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Government has made valiant efforts in the past to tackle the problem of black money mostly in the form of amnesty schemes. The net result of government's effort has been more like trying to use petrol to put out fire. The latest was the VDIS scheme which added insult to injury by providing for the black money hoarders, a soft 30% rate of taxation (which in effect was only 10% according to knowledgeable experts), as against the 40% which honest tax payers had paid.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ <b>The Customs and Excise Act provide excellent opportunities for corruption because of the ambiguity and discretion at different levels to decide what should be the applicable rate. It will be much simpler if there is an approach of zero discretion by precisely indicating the rate that is applicable for a particular product or services. In fact advance ruling must become a regular part of the system so that well before industrialists import, export or move goods out of the factory, the precise rate is known. For instance, if we take a product like KitKat, is it a chocolate or a biscuit? Many would say it is a chocolate. I am told it has been adjudicated to be a biscuit whereby there is considerable saving for industry and government loses revenue.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ So far as judiciary is concerned, the Brahmastra or the shield of 1971 Contempt of Court Act protect them. Any attempt at even making objective criticism runs the risk of person making the comments being held up for contempt of court. <b>Truth is no defence against judiciary</b>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Our legal system now is more oriented to protect the corrupt rather than punish the guilty.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Unless we bring in drastic change in the system, we will continue to have an environment in <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place> where the laws will be implemented but not justice.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>-
from former CVC Vittal’s speech six years ago.</b></font></p>
<div align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>From our Legal Corner</b>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><b><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_31.gif" alt="Legal Corner Icon" width="191" height="160" hspace="5" border="0" align="left"></b></b></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u>No works contract tax on own buildings – Raheja judgement distinguished. </u></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>to be a works contract under the Act, the activities mentioned therein ought to have been undertaken by means of an agreement, either implied or written, for cash, deferred payment, or other valuable consideration. If the activity is being undertaken by a person for himself, then it would not be a works contract under the Act and consequently, there will be no liability for payment of tax.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>The <st1:City
w:st="on"><st1:place w:st="on">Allahabad</st1:place></st1:City> High Court has delivered a landmark judgement on works contract. </b>We will bring you this <b>works</b> case tomorrow.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Make that spot payment and be damned! </font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>When officers ‘raid’ your factory, normally they coerce and threaten you to make a spot deposit of the duty allegedly evaded. Most assessees succumb to these pressures and make a decent deposit. Later this very spot payment is used as evidence against them. Recently the Supreme Court asked one such assessee why he paid the duty when no duty was payable. The reply was that it was made under pressure, but the court was not really impressed, because the courts cannot believe that high profile assessees will succumb to threats from small time officers and simply pay up huge amounts of money to buy peace. That, as we all know, is unfortunately the stark reality! A leading company like Pepsi paid up money like this and told the Supreme Court – pressure! </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We will bring you this interesting case tomorrow.</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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