TIOL-DDT 728 · the untouched capture
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<font color="#663399" size="3">TIOL-DDT 728</font><br>
26.10.2007<br>
Friday </b></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Ban
on export of rice – worried traders and partial relief from DGFT </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st2:City w:st="on"><st2:place w:st="on">Kakinada</st2:place></st2:City>
is a minor port in <st2:PersonName w:st="on"><st1:GivenName w:st="on">Andhra
<st1:Sn
w:st="on">Pradesh</st2:PersonName> which accounts for the largest export of
rice which is a source of good income for a large number of millers, plastic
bag manufacturers, farmers and a horde of officers. But suddenly everything
has come to a standstill with the DGFT’s banning of export of rice
announced by Notification No. 38 dated 15.10.2007 but with effect from 9.10.2007.
Huge stocks of rice are held up in the port with Customs not allowing the
export, exporters are not able to pay the millers and the millers in turn
are not able to pay the farmers. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
millers of rice rich <st2:PersonName
w:st="on"><st1:GivenName w:st="on">Andhra <st1:Sn w:st="on">Pradesh</st2:PersonName>
met the Chief Minister with an <st2:stockticker w:st="on">SOS</st2:stockticker>
message. The Hon’ble CM does not understand much of economics or commerce
but promised to help. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some
seven lakhs tons of rice is waiting at various ports and ships are also
waiting and the exporters will face several liabilities like Demurrage and
detention charges for vessels and international arbitration proceedings
for shipment default.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
a country that produces around 900 lakh tons of rice a year, this 7 lakh
tons will hardly make any difference but it will kill a few exporters and
farmers! </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now
in partial relaxation of the ban from 9.10.2007, the DGFT has amended Notification
No. 38/15.10.2007 to add a rider that “However, rice brought into
the port godowns for export till 10.10.2007; as certified by port authorities;
shall be allowed to be exported.” </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A
great relief at least so far as the goods lying in ports are concerned but
there is still an another category – that which have been handed over
to the exporter by the millers but which might not have reached the Customs.
This rice will have to be now returned to the millers – a huge loss
of at least transport charges!</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=45&filename=notification/dgft/2007/dgft07not043.htm" target="_blank">DGFT
NOTIFICATION NO. 43 (RE – 2007)/2004-2009 , Dated: <st2:date ls="trans" Month="10" Day="24" Year="2007" w:st="on">October
24, 2007</st2:date></a></u><b><u><st2:date ls="trans" Month="10" Day="24" Year="2007" w:st="on"></st2:date></u></b></font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Bar
not to apply to export to <st2:place w:st="on"><st2:country-region w:st="on">Maldives</st2:country-region></st2:place></font><st2:place w:st="on"><st2:country-region w:st="on"></st2:country-region></st2:place></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Exports
of rice to <st2:country-region
w:st="on"><st2:place w:st="on">Maldives</st2:place></st2:country-region> under
bilateral Trade Agreement between Government of India and Government of
Maldives are exempted from the ban on export of rice.</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=45&filename=notification/dgft/2007/dgft07not042.htm" target="_blank">DGFT
NOTIFICATION NO. 42 (RE – 2007)/2004-2009 , Dated: <st2:date ls="trans" Month="10" Day="23" Year="2007" w:st="on">October
23, 2007</st2:date></a></u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2007/dgft07not042.htm"><u><st2:date ls="trans" Month="10" Day="23" Year="2007" w:st="on"></st2:date></u></a><u><st2:date ls="trans" Month="10" Day="23" Year="2007" w:st="on"></st2:date></u></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Export
of Basmati rice – scope enlarged</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though
export of ordinary rice is banned, that of Basmati rice is freely allowed.
Now the description is changed to <st2:PersonName
w:st="on"><st1:GivenName w:st="on">Basmati <st1:Sn w:st="on">Rice</st2:PersonName>
including Dehusked (Brown), semi milled, milled both in either par-boiled
or raw condition.</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=45&filename=notification/dgft/2007/dgft07not040.htm" target="_blank">DGFT
NOTIFICATION NO. 40 (RE – 2007)/2004-2009 , Dated: <st2:date ls="trans" Month="10" Day="22"
Year="2007" w:st="on">October 22, 2007</st2:date></a></u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2007/dgft07not040.htm"><u><st2:date ls="trans" Month="10" Day="22"
Year="2007" w:st="on"></st2:date></u></a><u><st2:date ls="trans" Month="10" Day="22"
Year="2007" w:st="on"></st2:date></u></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Export
of onions – bar not to apply to NOCs given till 4.10.2007 </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Another
tear jerking ban on export was that of onions. Now the condition is relaxed
to allow exports in those cases where exports are undertaken against No
Objection Certificates (NOCs) issued by designated canalizing agencies (STEs)
till 4.10.2007.</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=45&filename=notification/dgft/2007/dgft07not041.htm" target="_blank">DGFT
NOTIFICATION NO. 41 (RE – 2007)/2004-2009 , Dated: <st2:date ls="trans" Month="10" Day="23"
Year="2007" w:st="on">October 23, 2007</st2:date></a></u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2007/dgft07not041.htm"><u><st2:date ls="trans" Month="10" Day="23"
Year="2007" w:st="on"></st2:date></u></a><u><st2:date ls="trans" Month="10" Day="23"
Year="2007" w:st="on"></st2:date></u></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Dhoni
keeps CM waiting – for Income Tax Commissioner </font></b> </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st2:PersonName w:st="on"><st1:GivenName
w:st="on">Jharkand <st1:middlename
w:st="on">CM <st1:Sn w:st="on">Madhu</st2:PersonName> koda, his cabinet colleagues
and top civil and police officials of the State were kept waiting for
an hour by cricket hero Dhoni – because Dhoni was kept waiting
by the Income Tax Commissioner. “Commissioner was busy at a meeting
and that is why I got delayed”, explained Dhoni. Proves that he
is not only a shrewd Cricketer but also a wise assessee, for the Chief
Minister may go in a couple of years, not Income Tax. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Many
bureaucrats get a sort of vicarious pleasure in making people wait. I was
told by a retired Board Member that junior officers who worked with him
and to whom he was perhaps harsh while in service, invariably make him wait
outside their offices, just for the fun of it and he does not feel even
slightly offended – let the babu feel his importance! </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There
is of course another problem – the gatekeepers. The PA or PRO or whoever
is supposed to protect the boss from invading visitors don’t tell
the boss that somebody is there to meet him. They decide that the boss is
busy and so can’t be disturbed. Perhaps if the Commissioner was told
that Dhoni was waiting for him, he would have granted an appointment –
but nobody has the guts to go and tell the boss that the Nation’s
top celebrity is waiting to meet him. And the waiting man was one who had
already paid nearly a Crore of Rupees as Income Tax! Even as a tax payer,
he deserves respect and the Commissioner should have cut short his meeting
to meet his bread giver! </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Indian
Civil servants are neither civil nor servants!</font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>From
our Legal Corner – Monday’s cases</b></font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><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></b></font></strong></font></b></font></strong></font></p> <p align="justify" ><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Central
Excise </b></font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>First
impact of SC decision in Jayanti Food Processing case - pesticides cleared
in pack of 50 ml to Mahyco seeds for being supplied free to farmers along
with BT Cotton seeds to be assessed u/s 4 and not Sec 4A of Excise : Tribunal</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">SEVEN</font> </strong>months ago, we reported a similar decision concerning the present
company <b>[</b><a
href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2007/2007-TIOL-324-CESTAT-MUM.htm"><font size="1">2007-TIOL-324-CESTAT-MUM</font></a><b>]
</b>where the Tribunal had held that merely because Pesticides were notified
in terms of Section 4A, that itself would not mean that all clearances of
pesticides should be assessed on the basis of MRP. The case was that
the company was manufacturing and clearing the product TATA MIDA 17.8SL
in 50 ml bottles on payment of duty and the assessable value was arrived
on the basis of contract rates as per the purchase order without declaring
the MRP price on the bottles of 50 ml, the reason being that these 50 ml
bottles were meant for free distribution by M/s Mahyco Seeds Limited to
farmers along with seeds, which is their own product sold by them to farmers.
This was objected by the department who wanted the goods to be assessed
on MRP basis and the matter had reached the Tribunal where the assessee
was granted relief.</font></p>
<p align="justify" ><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Service
Tax </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Revision
order passed by Commissioner after two years - Tribunal cannot review its
own order : CESTAT</font></b></font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HERE
is a strange situation. As per section 84 of the Finance Act, 1994, the
Commissioner can review any order passed by any subordinate and pass a revision
order. This revision order is appealable to the CESTAT. But there is a condition
that the Commissioner cannot pass a revision order after two years of the
original order.<O:P></O:P></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><O:P></O:P></strong></font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Income
Tax </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Relief
for Siemens; A fresh interpretation of laws, based on same set of facts,
without anything more, by succeeding AO does not constitute adequate 'reason
to believe' for reopening assessment u/s 147 : Bombay HC</font></b></font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong>the Income Tax Department, there is one Section which is invoked
thoughtlessly and, sometimes, mindlessly is the Section 147 - reopening
of completed assessment order. The insertion of 'Reason to believe' was
believed to be one statutory move which was expected to cut down the reckless
use of the re-assessment provisions. But it has not! In the latest case
decided by the Bombay High Court, the issue was : <b><font color="#663399">Can a different interpretation
of the provisions of law by a succeeding AO be regarded as adequate 'reason
to believe' or a mere change in the opinion?</font></b> And the High Court has
emphatically said that if an interpretation is attempted based on the same
set of facts which were made available to the predecessor AO to complete
the assessment and the accounting system followed by the assessee is the
same, such interpretation will amount to mere change of opinion.</font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u>See
our columns Monday for the judgements</u></b></font></p>
<p align="justify" ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until
Monday with more DDT</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have
a nice weekend.</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></td>
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