TIOL-DDT 653 · the untouched capture
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<p align="justify"><font size="2"><b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 653</font><font face="Verdana, Arial, Helvetica, sans-serif"><br>
10.07.2007<br>
Tuesday</font></b></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Exemption from Anti-dumping duty to goods imported by EOUs</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Notification No. 5/94-Cus., dated 18.1.94, goods imported by 100% EOUsare exempted from Anti-dumping duty. Now certain conditions are added to the Notification to the effect that the exemption will not be available if the goods are cleared, as such to the DTA by the EOU or even if the final products manufactured using the imported goods, are cleared to the DTA. DTA does not include SEZ or EOUs. </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=23&filename=notification/custom/2007/ctariff07_084.htm" target="_blank">Serial No. 1 of Notification No. 84/2007-Cus., Dated July 6, 2007</a></u></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Exemption
to re-import of goods exported under drawback, rebate or under bond </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Notification No. 94/96-Cus., dated 16.12.1996, re-import of exported goods is allowed subject to repayment of the export benefits. Now this Notification is amended to stipulate that if the value of the exported goods was counted towards fulfillment of export obligations, the duty payable on the duty-free inputs obtained from the nominated agencies, should also be payable.</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=23&filename=notification/custom/2007/ctariff07_084.htm" target="_blank">Serial No. 2 of Notification No. 84/2007-Cus., Dated July 6, 2007</a></u></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Import
of gold/silver/platinum by nominated agencies, status holders - Status
changed</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Notification No. 56/2000-Cus., dated 5.5.2000, import of gold/silver/platinum etc., by nominated agencies and status holders is exempted under the "export against supply by foreign buyer" scheme. Under the notification, status holder was a one, two, three, four or five star export house recognized by the DGFT. Now the status holder is an importer recognized as </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Export House (EH)</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Star Export House (SEH)</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Trading House (TH)</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) Star Trading House (STH)</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) Premier Trading House (PTH)</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=23&filename=notification/custom/2007/ctariff07_084.htm" target="_blank">Serial No. 3 of Notification No. 84/2007-Cus., Dated July 6, 2007</a></u></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Exemption to goods imported by EOUs - SION to be fulfilled</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Notification No. 52/2003-Cus., dated 31.3.2003, the EOU has to pay, on demand, if the proper officer is not satisfied that the goods imported are used for production of export goods or cleared for home consumption within a period of three years. Now a condition is added that the proper officer has to be satisfied that the production is in accordance with the Standard Input Output Norms (SION) as notified by the DGFT. What happens if there is no SION? The kind department will allow 2% as wastage. What happens if the waste is beyond 2% and goods other than those given in the SION are used? Use of the goods will be allowed on the basis of self-declared norms and Development Commissioner will fix <i>ad hoc</i> norms within three months and the Board of approval will fix the norms finally. The definition of status holder has also been changed as given above. </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=23&filename=notification/custom/2007/ctariff07_084.htm" target="_blank">Serial No. 5 of Notification No. 84/2007-Cus., Dated July 6, 2007</a></u></font></p>
<h1 align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - Refunds delay worries the Board</font></h1>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Complaints from claimants, condemnation from courts and the liability to pay interest - all good enough reasons for the Board to be concerned. This time it is really the '<b><font color="#006600">concerned</font>'</b> Board! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now Board wants to </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.ensure expeditious disposal of Customs duty refund applications</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.enhance transparency in refund disbursement</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. bring alertness among the officers</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And so wants the field to follow a prescribed procedure:-</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Receipt of application:</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.Give a receipt immediately on receipt of the application</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.At this stage make it clear that the application has not been srutinised for its completeness.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3.Give a proper acknowledgement if the application is found complete. Do this within ten days. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4.If any deficiency is found in the application or any document is required by the department, the same shall be informed at this stage of initial scrutiny itself within ten working days of the initial receipt.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.No piece-meal queries please - all objections in one go.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Processing and disposal: </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Process the applications on 'first-come-first served' basis</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. If refund is due, pass an order of refund.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. If the claim is to be rejected, a speaking order has to be given.<b> <font color="#663399">(Has the Board forgotten Show Cause Notice? Or is it another invitation for litigation?)</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The order should also contain the findings of adjudicating authority on the documents produced in support of the claim and the basis for determining the amount as either refundable to the claimant or payable to the Consumer Welfare Fund or the claim not being admissible.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Issue of Cheque:</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Pay the refund within three days of passing the order.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Make payment by cheque</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Send the cheque the claimant or hand it over to him when he visits you.<b><font color="#663399"> (Why can't it be credited to his account?)</font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Audit:</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. All applications involving a refund of duty and/or interest of Rs. 5 lakhs or more shall be subjected to pre-audit.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Random post audit for refunds below Rs. 50,000/- and compulsory post audit of refunds between 50,000 and 5 Lakhs.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Where pre-audit is involved the action should be completed at the earliest so that the disposal of refund applications is not unduly delayed<b>.<font color="#663399">(what does this mean? Why can't they fix a time limit for this also?)</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">CVC's instructions: Post the status on your web site</font>. </b>These instructions, <i>inter alia</i>, require that status of individual applications / matters should be made available on the organisation's website and should be updated from time to time so that the applicants remain duly informed about the status of their applications. <b><font color="#663399">(Easier said than done)</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Online
database on refunds:</font></b> All Commissioners of Customs shall establish
a mechanism for maintenance of a comprehensive database in their respective
websites, indicating the receipt, acknowledgement, action taken for disposal
(either payment or rejection) of refund applications and those pending
at the end of the month. This shall be implemented with in a period of
three months time and a report of the same may be sent to the Board and
DG (Inspection). <b><font color="#663399">(Board will at best get compliance
reports, but websites will not show anything. And we will report the
fact to you)</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Monitoring</font> </b>Chief
Commissioners/ Directorate General of Inspection (DGI) is to review the position
of refunds in their respective zones/select zones, to check on the timely
sanction of refund applications. If any refund application is pending for
long period, the reasons for the same may be identified by the <b><font color="#663399">concerned</font></b> Chief
Commissioner and action initiated for their disposal by reference to the <b><font color="#663399">concerned</font></b> Commissionerate. <b><font color="#663399">(here
both Chief Commissioner and commissioner are like the Board - <u> concerned</u> Chief
Commissioner and <u>concerned</u> Commissioner, not the Chief Commissioner
or Commissioner concerned - really a <u>concerned</u> department)</font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Why the instructions? </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They are being issued so that an administrative arrangement is made on a permanent basis to deal with refund of customs duty, an important aspect of tax administration which needs to be given due importance in view of the prompt disposal as per legal provisions and their revenue implications. Accordingly, the Commissioners of Customs and Chief Commissioners of Customs <b><font color="#663399">concerned</font></b> may ensure for proper implementation of these instructions of the Board. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Does the Board know that its instructions are flouted with impunity? Will the Board tell the taxpayers how many disobedient commissioners are there and how the Board is going to reward them? </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>And don't these instructions apply to Central Excise and Service Tax refunds?</b></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/cuscir07_24.htm" target="_blank">CBEC Circular No. 24/2007-Cus., Dated July 2, 2007</a></u></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Service Tax on renting - High Court admits writ</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The <st1:City
w:st="on"><st1:place w:st="on">Bombay</st1:place></st1:City> high court has admitted a petition challenging the levyof service tax on rents from immovable properties. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The petitioner's argument is that when a landlord rents his property out, it involves a 'transfer or right' and does not constitute a 'service'. Leasing or renting out any premise creates and destroys rights. Hence, such transactions cannot be termed as 'services' rendered by the landlord to a tenant. Therefore, service tax should not be levied on such transactions</font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>The e-court</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>Let me unfold the scenario. A litigant comes with his national ID to the e-Court Service Centre in a District Court with all the documentary evidence which he possesses. E-Court Service Centre helps electronically to identify a civil lawyer to present his case. The lawyer files the case with a prescribed format in the e-Court. Once the case is filed, the e-Court web service agent crawls across the state and central e-governance grid and collects the relevant land records registry and gets the encumbrance certificate details of the litigants and the defendants. If necessary, it also collects the credit history of the parties from the banking grid, criminal record if any from the police grid, litigation records if any from the other courts, property tax and <b><font color="#663399">service tax</font></b> payment data for the particular disputed land from the State e-governance grid, legal heir verification from the Registrar of Deeds and classification and conversion details of the particular land from the district e-governance grid. The judicial officer now has the documentary evidence submitted by the litigant and defendant and the certified and authentic documentary evidence collected from various government units which have relevance to this case on the fly in front of him. This will enable the judicial officer to apply his or her mind objectively with optimal examination and cross-examination of the witnesses leading to taking a fast decision in the particular case.</i></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>From
the President's address at the launch of computerization of courts, yesterday. </i>Assuming
the President writes his own speeches, one thing is sure, he, like most
of us, does not know Service Tax Law. And that perhaps makes him a people's
president. Today we bring you a power point presentation that the President
gave at the function attended by the legal luminary of <st1:country-region w:st="on"><st1:place
w:st="on">India</st1:place></st1:country-region>. Even the President calls
the judges, honourable justices and it is simply superb that the honourable
judges call all of us lawyers as <b><font color="#663399">learned!</font></b></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>From our Legal Corner - tomorrow's cases<br>
</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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></font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax</strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Mixing of different kinds of tea does not amount to manufacture.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No!
There is no mix up of excise and income tax cases. This was really an Income
Tax case. For a change, the Supreme Court was dealing with the meaning of <b><font color="#663399">manufacture</font> </b>under
the Income Tax Act. And the Central Excise definitions and cases came in
handy. The assessee would be entitled to weighted deduction under section
35B(1A) of the Income Tax Act in case the goods exported were <b><font color="#663399">manufactured</font></b> or
produced in small scale industrial undertaking.</font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Goods removed for export destroyed due to unavoidable reasons - Accident caused to lorry - not deemed to have been removed from factory gate in terms of Sec 5 of CST Act as sale has not been completed - Demands cannot be raised : Tribunal </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">IS</font> </strong>remission available if goods cleared for export are destroyed before they reach the port? This was the question before the Tribunal. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Under Central Excise Law, partnership is not a distinct entity - all partners of even a dissolved firm are liable : Tribunal Larger Bench </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">THE</font> </b>issue before the Larger Bench is whether outgoing partners are liable to pay excise duty assessed against a registered partnership firm, which was dissolved. Be careful before entering into a partnership with somebody to manufacture excisable goods. Even if you leave the partnership, you may be stuck with excise liabilities. </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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