TIOL-DDT 732 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"
"http://www.w3.org/TR/html4/loose.dtd">
<html>
<head>
<title>Untitled Document</title>
<meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1">
</head>
<body>
<p><font face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 732</font></b><font size="2"><b><br>
01.11.2007<br>
Thursday</b> </font></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>Now Board is convinced and issues clarification</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In TIOL-DDT 604 -01.05.2007, we highlighted an important issue as follows</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are told of a letter addressed by DGAD to <st2:stockticker u1:st="on"><st2:stockticker
w:st="on">TRU</st2:stockticker> 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 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>
<table width="450" border=1 align="center" cellpadding=3 cellspacing=0>
<tr>
<td width=54 valign=top class="Normal"> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a.</font></p></td>
<td width=507 valign=top class="Normal"> <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>
</tr>
<tr>
<td width=54 valign=top class="Normal"> </td>
<td width=507 valign=top class="Normal"> <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>
</tr>
<tr>
<td width=54 valign=top class="Normal"> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b.</font></p></td>
<td width=507 valign=top class="Normal"> <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>
</tr>
<tr>
<td width=54 valign=top class="Normal"> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c.</font></p></td>
<td width=507 valign=top class="Normal"> <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>
</tr>
<tr>
<td width=54 valign=top class="Normal"> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">d.</font></p></td>
<td width=507 valign=top class="Normal"> <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>
</tr>
</table>
<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">But it's time that either DGAD/and or the CBEC issues a public clarification on the issue.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the CBEC has issued a clarification, "the Anti-Dumping Duty imposed vide notification No.138/2002-Customs dated 10.12.2002 does not apply to the parts/components of CFL. In view of the above, you are requested to finalise all the pending assessments, if any, accordingly."</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGAD had given the clarification on 1<sup>st</sup> May, 2006 and it took the Board more than a year and a half to confirm the DGAD's clarification. In the meantime, demands, seizures, notices, penalties and litigation had a festive time! Even we pointed this out six months ago, when harassed importers brought it to our notice. Anyway, better late than never and the Board deserves our thanks for putting an end to litigation at least at this late stage! Again as usual, this important communication is not a public circular but a private letter from the Board to the Chief Commissioners. It beats logic, why the Board is shy to put its messages in the public domain!</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=25&filename=notification/custom/2007/cusinsfile07_528.htm" target="_blank">CBEC <u>F.No.528</u>/53/2007-<u>Cus.(TU</u>) Dated 25th October, 2007.</a></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Procedure to be followed for destruction of drugs imported from un-registered sources under the Advance Authorisation Scheme</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the existing instructions, in the event of failure to export the resultant product, such material shall be re-exported or can be used to manufacture and export any other finished product utilizing such inputs irrespective of the foreign buyers. Unregistered raw material under any circumstances shall not be allowed to be diverted for domestic consumption within <st2:place u1:st="on"><st2:country-region
w:st="on">India</st2:country-region></st2:place> and the advance licence cannot be regularized even on payment of applicable customs duty. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, on a request from the trade DGFT prescribes the following</font></p>
<p align="justify" style='text-align:justify;'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. It is reiterated that unregistered raw material under any circumstances shall not allowed to be diverted for domestic consumption within <st2:country-region u1:st="on"><st2:place u1:st="on"><st2:country-region
w:st="on"><st2:place w:st="on">India</st2:place></st2:country-region> . </font></p>
<p align="justify" style='text-align:justify;'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. However, the authorisation holder has the option either to use the imported raw material for production of other export products for export or to re-export the imported raw material and the export obligation against advance authorisation shall be deemed to have been discharged to that extent. </font></p>
<p align="justify" style='text-align:justify;'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The Customs Authorities shall ensure that the raw material so exported should be the same raw material, which was imported earlier against the particular licence / authorisation. </font></p>
<p align="justify" style='text-align:justify;'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. In addition, the aforesaid facility would be available irrespective of the foreign buyer and can be exported to any other foreign buyer. </font></p>
<p align="justify" style='text-align:justify;'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. If the export obligation period is not valid at the time of export of other finished product/re-export of raw material, then the authorisation holder shall be required to pay necessary composition fee for extension in export obligation period as per provisions of Policy and the Procedure laid there under. </font></p>
<p align="justify" style='text-align:justify;'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. The authorisation holder shall also have the option to destroy such inputs or the finished product made out of it , in the presence of Jurisdictional Excise Authority subject to payment of applicable customs duty with interest.</font></p>
<p align="justify" style='text-align:justify;'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. Documentary evidence to that effect would be required to be submitted to the concerned Regional Authority.</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=46&filename=notification/dgft/2007/dgft07cir018.htm" target="_blank">DGFT Policy Circular No. 18 (RE-07)/2004-2009 <u>Dated:October</u> 30, 2007</a></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>DEPB rates announced for certain items</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGFT has announced DEPB rates for Brass Cages for Ball and Roller Bearings, Pressed Ball Bearing Cages, Pressed Taper Roller Bearing cages and Cefeclor.</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=47&filename=notification/dgft/2007/dgft07pn078.htm" target="_blank">DGFT <u>PN</u> No. 78 (RE-2007) /2004-2009, Dated: <st2:date ls="trans" Month="10" Day="30" Year="2007" u1:st="on"><st2:date
ls="trans" Month="10" Day="30" Year="2007" w:st="on">October 30, 2007</st2:date></st2:date> </a></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Anti dumping duty on Vitamin A Palmitate - resurrected</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provisional Anti dumping Duty was imposed on Vitamin A Palmitate originating in, or exported from, <st2:country-region u1:st="on">Switzerland</st2:country-region> and the People's Republic of <st2:country-region u1:st="on"><st2:place u1:st="on">China</st2:place></st2:country-region> vide Notification No. 47/2007-CUSTOMS, dated the 28 th March, 2007, which by the Notification itself had prescribed its demise date as 27th September, 2007. Now more than a month later, Government has imposed the anti dumping duty and it has the cheeks to say that it is effective from the first date of provisional imposition that is 28.3.2007.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The period 27<sup>th</sup> September to 29<sup>th</sup> October 2007, when the government was in deep slumber is regularised. Remember the days of "the King can do no wrong"</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=23&filename=notification/custom/2007/ctariff07_112.htm" target="_blank">Notification No 112/2007-Cus., Dated: October 30, 2007</a></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Lies, white lies and statistics - the Ghutka story</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is a nationwide drive for revenue from <i>Gutka</i> and <st2:PersonName u1:st="on"><st1:title u1:st="on"><st2:PersonName
w:st="on"><st1:title w:st="on"><i>Pan <st1:Sn u1:st="on"><st1:Sn
w:st="on">masala</i></st2:PersonName> units. It all started a few months ago and instructions were issued to keep a<font color="#663399"> <b>close watch</b></font> on the units. What is a close watch? An officer quipped that means: <b><font color="#663399">Keep a constant watch so that the unit will close functioning</font></b><font color="#663399">.</font> Well, now after three months, it is time to check the result of these intensive controls on the units.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is learnt that the Board has called for the revenue per machine after the drive and before the drive period. Board vide Circular dated <st2:date Year="2007" Day="7" Month="9" ls="trans" u1:st="on"><st2:date
ls="trans" Month="9" Day="7" Year="2007" w:st="on">September 7, 2007</st2:date></st2:date> ordered for sealing the machines which are not working. So now after the drive has been launched, the denominator automatically goes down and the Board will get a magnificent report from the field that the revenue per machine is increasing! </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is how it may look like:</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If the revenue from a Gutka unit having 20 machines was Rs 2,00,000/- per month during the pre-drive period, the revenue per machine per month was Rs 10,000/- Now, after the drive, let us assume 10 machines of the unit which are not working are sealed by the department as per the Board's directions, the revenue will be the same Rs 2,00,000 from 10 machines and thus for each machine, it will be Rs 20,000/- </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, revenue of Rs 10,000 per machine has doubled to Rs <st2:metricconverter ProductID="20,000 a" u1:st="on"><st2:metricconverter
ProductID="20,000 a" w:st="on">20,000 a</st2:metricconverter></st2:metricconverter> machine, which indeed is a great achievement. That's why they say <b><font color="#663399">Statistics are like bikinis</font></b>. What they reveal is suggestive, but what they conceal is vital. </font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>CESTAT Silver jubilee in Chennai today</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Indirect Taxes bar Association and the Revenue Bar Association are celebrating the Silver Jubilee of the South Zonal Bench of the CESTAT, today at Chennai. Chief Justice AP Shah of the Madras High Court is the <st2:PersonName u1:st="on"><st2:PersonName
w:st="on">Chief <st1:Sn u1:st="on"><st1:Sn w:st="on">Guest</st2:PersonName></st2:PersonName>.</font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>From our Legal Corner - Tomorrow's cases</b></font><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 size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b><font color="#FF0000">Income Tax </font></b></font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Irrecoverable amounts can be written off, even if dispute is pending in civil court - Interest accrued on loan written off, not to be added to income; Expenditure for court case for recovery of amounts written off, not business expenditure : ITAT</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The AO was not justified in rejecting the claim of the assessee merely on the ground that it was premature to write-off the debts in question. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Can Tribunal re-hear a matter on which oral orders have already been pronounced? - loss in trading of shares was a speculation loss : ITAT</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Supreme Court had held that <b><font color="#663399">unless the order of the Bench was signed by all Members constituting it and was dated, it was not an order of the Tribunal. It was also observed that the signed and dated order had to be communicated both to the assessee and to the Commissioner.</font></b></font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Customs</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Allowing Cenvat Credit on duty debited in DEPB no way changes position with regard to non-levy of interest on goods cleared beyond warehousing period : Tribunal</font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>IT</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> is settled law that when the duty payable on the goods cleared from a warehouse is nil, there cannot be any levy of interest. In case of M/s Pratibha Processors Vs UOI, the Supreme Court held that "Calculation of interest is always on the principal amount. The "interest" payable under Section 61(1)(2) of the Act is a mere "accessory" of the principal and if the principal is not recoverable/payable, so is the interest on it. The interest provided under Section 61(2) has no independent or separate existence.</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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Difference between 'consumables' and 'raw materials' - Tribunal had not considered dominant ingredient test in regard to cost variation - matter remanded : SC</font></b></font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>APPELLANT-COMPANY</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b> </b>is 100% EOU who claimed partial exemption from duty in terms of Notification NO.8/97-CE dated 1.3.1997 in respect of goods sold in Domestic Tariff Area (in short 'DTA'), which stipulated conditions that the goods have been manufactured wholly from the raw materials produced or manufactured in India. According to the company it procured the raw materials from domestic manufacturers in India and also imported (1) Carboxymethyle Cellulose which is used for sizing of single yarn to give strength to the yarn during weaving after which the woven towels are washed to remove completely the sizing materials and (2) Ultra fresh N.M. which is used for anti bacteria and anti fungus treatment of terry towels. The Commissioner (Appeals) had confirmed the demand of duty on the ground that the sizing materials imported by the company is raw material and as imported raw material has been used, the benefit of Notification No.8/97-CE is not available.</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>
</body>
</html>