TIOL-DDT 638 · the untouched capture
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<p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 638</font></b><font size="2"><b><br>
19.06.2007<br>
Tuesday</b></font></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Duty on Jute twine? Fire ignited and Jute Industry likely to be engulfed soon </font></b></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Fire extinguished – exemption notified – DDT salutes a responsive government</b></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=bnews_detail.php3&newsid=5525" target="_blank">TIOL-DDT 621 25.05.2007</a></u><b><u>,</u></b> mentioned about an inadvertent omission which made jute twine dutiable all of a sudden. Extracts from the DDT</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">This is a classic example of how unintended actions can be disastrous to the trade and industry. Jute goods have been enjoying exemption for quite some time and twine is no exception.</font></b> <font color="#663399">To eliminate the hassles of even exemptions, the Tariff rate itself is made NIL in the Central Excise Tariff. But in the maze of amendments to the Central Excise Tariff from 6 digit to 8 digit and consequential amendments to the related exemption Notifications, a small error is now snowballing into huge demands and going to be another gold mine for the consultants. </font></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Jute twine is classified under the Chapter sub heading 5607.10 of the erstwhile Central Excise Tariff attracting NIL rate in the Tariff itself.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">With effect from 28.2.2006 the eight digit tariff has replaced the six digit tariff and jute twine was classifiable under Chapter sub heading 5607.1010 with NIL rate of duty. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">The tariff heading have undergone another change in 2007 and from 1.1.2007, when the sub headings 5607.1010 and 5607.1090 were omitted from the tariff. But no mention was made about jute twine etc., Since there is a residuary entry in the Chapter, jute twine stand shifted to Chapter sub heading 56079090 under “others”. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">But, unfortunately chapter sub heading 56079090 does not attract NIL rate in the Tariff and the rate of duty is 8%. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">It cannot be construed as a conscious levy as all other jute products continue to attract NIL rate. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">The error is more glaring since no duty is levied on jute yarn and fabrics and it is highly improbable that government wanted to levy tax only on twine. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">DDT has learnt that demand notices are already flying in <st1:place w:st="on">West Bengal</st1:place> where majority of jute mills are located and the fire is fast spreading. Unless the Government attempts to stop it in the beginning, it is bound to be a big forest fire. </font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are very happy to report that the Government has very graciously understood the problem and has stopped the big forest fire. Now they have issued a notification whereby Twine of jute or other textile bastfibres of heading 5303, is exempted from the whole of the duty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This brings a lot of cheer to the harassed jute manufacturers of Kolkotta and other places. Reports have reached us that after seeing our flash yesterday, dancing assessees have gone to Central Excise offices and distributed sweets. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
CBEC deserves all praise for correcting this inadvertent lapse, but there
is another problem.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is now exempted; but what about the last five and a half months when there was no exemption? <b><font color="#663399">The Government has to give a Section 11C notification and they will ultimately give it. May be after hundreds of Show Cause Notices are issued and many consultants have made enough money! Why can’t they do it now and save this country some paper and a lot of time of the department and the rest of us. Already a Central Excise officer called us up and informed us that this exemption only proves that duty had to be paid till now and he is going to issue Show Cause Notice immediately even alleging suppression and intent to evade duty! </font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We will be happy to report as soon as possible that the exemption is with retrospective effect from 1.1.2007.</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=30&filename=notification/excise/2007/etariff07_28.htm" target="_blank">NOTIFICATION NO.</a></u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2007/etariff07_28.htm"><u> 28/2007-Cex., Dated: June 15, 2007</u></a></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Flavoured Milk of <u>animal origin</u> exempted – what other milk is dutiable?</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government has exempted flavoured milk of animal origin. Is there any other milk which is flavoured and sold? Milk has to be animal, human or plant. Nobody seems to be selling flavoured human milk or plant milk. Where do they sell flavoured rubber milk? Ah but there is soya milk and may be other nuts milk. Soya milk attracts a nil rate of duty in the tariff. Pray what could be this milk of origin other than animal? With all the milk of compassion from the government, I have no clue.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally the following goods falling under heading 8523 51 00 are also exempted:- a) Microprocessor for computer, other than motherboards; (b) Floppy disc drive; (c) Hard disc drive; (d) CD-ROM drive (e) DVD Drive/DVD Writers; (f) Flash memory (g) Combo drive </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=30&filename=notification/excise/2007/etariff07_28.htm" target="_blank">NOTIFICATION NO.</a></u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2007/etariff07_28.htm"><u> 28/2007-Cex., Dated: June 15, 2007</u></a></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Two advocates trade charges against each other before Tribunal – matter referred to Bar Council of Delhi</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Here is an interesting story. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In an order passed on 26.2.2007, the CESTAT ordered pre deposit and noted in the order <font color="#663399">that the learned counsel appearing for the applicant, had stated that, a sum of Rs. 30 lacs (in addition to already deposited Rs. 20 lacs) could be deposited, if waiver of rest of the duty and penalty was ordered against them. Considering the facts and circumstances of the case, Tribunal directed that the applicant will deposit Rs. 30 lacs over and above Rs. 20 lacs within six weeks.</font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Now an application is filed for rectifying the order dated 26.02.2007 on the ground that, the learned counsel, who had appeared in the matter, was not authorized to give an undertaking to make the deposit of Rs. 30 lacs. That he had in utter disregard of the instructions given to him and without any proper authorization given an undertaking to deposit Rs. 30 lacs. This ROM was filed by another advocate.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since serious allegations were made, against the first counsel, a notice was issued to him to meet the allegations. He appeared before the Tribunal, filed an affidavit and stated that</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.he had made the statement for depositing Rs. 30 lacs over and above Rs. 20 lacs on proper instructions.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. the statement to agree to deposit Rs. 30 lacs as against earlier order of deposit of Rs. 80 lacs had been made under the instructions of his client only for which discussions had already been held with him in his office before the hearing.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. the present application was moved without his consent and without his knowledge through some other Advocate who had not taken his 'No Objection'.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. It is further stated in the affidavit that, stringent and deterrent measures were required to be taken against the counsel who moved this application without taking his consent and also against the appellant for moving such application stating totally wrong facts.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Mr. ManojRatnakar Jain, Director of the Appellant, had told him that he had not drafted the present application and that he had not filed the same under his instructions. (He also filed an affidavit of Mr. ManojRatnakar Jain)</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal rejected the ROM application without prejudice to any action that may be initiated against the applicant for making a wrong statement. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Forwarded a copy of the order to the President of the Bar Council of Delhi for necessary action as may deem fit, in view of the serious allegations made by the learned counsel against the other counsel.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#FF0000">Why are the advocates always referred to as </font></b><font color="#663399"><b>learned?</b></font><b> </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> You can get the full text of the case 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/2007/2007-TIOL-807-CESTAT-DEL.htm">2007-TIOL-807-CESTAT-DEL</a></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u></u><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2007/2007-TIOL-799-CESTAT-DEL.htm"> </a></strong></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Healthy <st1:place w:st="on"><st1:country-region
w:st="on">India</st1:country-region></st1:place> – Do visit the site</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> It is a wonderful site designed with pleasing pictures and colours – with your health as the main concern. The site recently launched by Public Health Foundation of India and the Union Ministry of Health and Family Welfare to provide useful information about the growing burden of life style disease in India. Through this website they target the major causes of majority of the diseases in <st1:country-region
w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region> and scientifically prevent them. Additionally, the section on hygiene will help prevent many of the communicable disease/infectious diseases that plague the everyday lives of people today. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An officer of the Health Ministry requested us to publicize the site. We are happy to do so. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please spend some time with <a href="http://www.healthy-india.org">www.healthy-india.org </a>and after sometime if you are in better health, don’t forget to thank DDT.</font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">From our Legal Corner – tomorrow’s cases</font><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></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u><font color="#FF0000">ITAT</font></u></b></font></p>
<p align="justify"><font color="#663366" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>The requirement of law is that it is the Assessing Officer who has to be satisfied in the course of any proceedings under the I.T. Act that the assessee has concealed its income or furnished inaccurate particulars of the income.; The satisfaction is thus of the Assessing Officer and not that of the Tribunal; This is the jurisdictional defect going to the root of the matter which cannot be cured subsequently; Therefore even in a case where the assessment has been confirmed by the Tribunal it is the satisfaction of the Assessing Officer that the assessee has concealed his income or furnished inaccurate particulars thereof that is relevant or material. </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b> </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#FF0000"><u>CESTAT</u></font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Televisions supplied for exclusive use in hotel industry – assessment under Section 4A of the CEA'44 is right. </b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Central Excise officer charged with abetting smuggling - He was not in charge of the Range and was working in a place 110 kms away - charge not proved - penalty set aside</b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u>See our columns tomorrow for the judgements</u></b></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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