TIOL-DDT 736 · 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 size="2"><b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 736</font><font size="3" face="Verdana, Arial, Helvetica, sans-serif"></font><font face="Verdana, Arial, Helvetica, sans-serif"><br>
07.11.2007<br>
Wednesday</font></b> </font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Modus operandi circulars- exclusive power of DGCEI?</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nearly five years ago, the DGCEI issued a letter to the effect that <font color="#663399">Modus Operandi Circular shall be issued only by DGCEI. Of course Commissionerates can write to other Commissionerates for necessary follow-up action in specific case booked by them.</font></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But who can stop a Commissioner from issuing a modus operandi circular if he wants to, the Board and the DGCEI notwithstanding? The latest Board letter says,</font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">It was clearly pointed out that Commissionerates should not issue Modus Operandi circulars themselves and that such circulars shall be issued only by the DGCEI. </font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">However, it has been brought to the notice of the Board that in spite of clear instructions in this regard. Commissionerates are still issuing Modus Operandi circulars/ alert circulars. In one case, the Commissionerate had issued an alert circular on an issue involving interpretation of a notification. This issue was examined by the Board and the <b>concerned</b> Commissioner was directed to withdraw the circular since it was based on incorrect interpretation of the provisions of law. The Board has taken serious note of this issue. It is once again reiterated that Commissionerates or zones shall not issue such circulars themselves. They may send draft circulars regarding evasion cases detected by them to the DGCEI. DGCEI after examining the matter shall issue serially numbered Modus Operandi circulars. The Commissionerates can, however, write to other Commissionerates for necessary follow up action on a specific case booked by them.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is always better to have one centralised agency to confuse the field instead of a hundred Commissioners to do the job. Remember this very DGCEI issued an instruction in 2003 that interest should be realised when supplementary invoices are issued and the DGCEI letter was published as a Board circular by a leading publication and the poor Board is still searching for that circular as it believes that the circular was issued by it!</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=31&filename=notification/excise/2007/modusoperandi.htm" target="_blank">CBEC F.No. 213/19/07-CX-6 Dated : <st1:date ls="trans" Month="10" Day="4" Year="2007" w:st="on">October 4, 2007 </a></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Lost EP copy of the Shipping Bills and / or Bank Realisation Certificate </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has amended the HOP to deal with lost cases of EP copy of shipping bills and/or Bank Realisation Certificates.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In case where Original EP copy of Shipping Bill / original <st1:stockticker w:st="on">BRC has been lost, request for EODC, No BG / LUT condition under Advance Authorisation / DFIA scheme or endorsement of transferability under DFIA scheme can be considered subject to submission of following documents in lieu of those original documents: - </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) A duplicate / certified copy of concerned document issued by Customs Authority / Bank in lieu of original; </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) An application fee equivalent to 1% of duty saved amount. However, no fee shall be charged when such document is lost by Government agencies and a documentary proof to this effect is submitted; </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c) An affidavit by exporter about loss of document and an undertaking to surrender it immediately to concerned RA, if found subsequently; </font></p>
<p align="justify" class=MsoListParagraphCxSpLast style='text-align:justify;'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">d) An indemnity bond by exporter to the effect that he would indemnify Government for financial loss, if any, on account of duty free import entitlement availed / allowed against lost Shipping Bills / <st1:stockticker
w:st="on">BRC. Customs Authority, before allowing redemption of BG / LUT or clearance after endorsement of No BG / LUT condition or endorsement of transferability, shall ensure that no double benefit against such shipping bill has been availed. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, in case of submission of reconstructed copy of shipping bill in lieu of original shipping bill, conditions at b), c) and d) above shall not be applicable. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And DGFT has finally realised that MODVAT is now CENVAT. The word MODVAT appearing at Sl. No. 1(v) in PN No. 79 dated 2.1.06 shall be amended to read as MODVAT / CENVAT. </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=47&filename=notification/dgft/2007/dgft07pn079.htm" target="_blank">DGFT PUBLIC NOTICE NO. 79 (RE-2007)/2004-2009, Dated: <st1:date ls="trans" Month="11" Day="5"
Year="2007" w:st="on">November 5, 2007</a></u></font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:place
w:st="on"><st1:country-region w:st="on"><b><font color="#006600">India</font></b></st1:country-region><font color="#006600"><b> ranked <st1:metricconverter
ProductID="39 in" w:st="on">39 in a new World Bank survey of countries' capacity to ship goods.</b></font></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#FF9966">"Connecting to Compete: Trade Logistics in the Global Economy,"</font></b> a study based on a world survey of freight forwarders and express carriers, indicates that making it easier to connect firms, suppliers and consumers is crucial in a world where predictability and reliability are becoming more important than costs. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Being able to connect to global markets is fast becoming a key aspect of a country's ability to compete, grow, attract investments, create jobs and reduce poverty," said <st1:PersonName w:st="on"><st2:GivenName w:st="on">Danny</st2:GivenName> <st2:Sn w:st="on">Leipziger</st2:Sn>, the bank's vice president for poverty reduction and economic management.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:country-region w:st="on"><st1:place
w:st="on">China</st1:country-region>'s economy generates billionaires by the dozen. Among the seven most industrialized nations in the survey, Germany was third, Japan sixth, Britain ninth, Canada 10th, the United States 14th , France 18th and Italy 22nd out of a total of 150 countries covered.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The bank said there are also significant differences among developing countries with similar incomes. <st1:country-region w:st="on">China</st1:country-region> and <st1:country-region w:st="on"><st1:place w:st="on">Chile</st1:country-region> rank 30th and 32nd, respectively while countries in higher income groups, such as oil producers tend to perform below their potential.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Another finding of the survey is that developing countries where trade has been made central to their economy perform better than others with similar incomes. This includes South Africa, 24, Africa's top performer, Malaysia 27 and Turkey 24, among upper middle income countries, China, 30, and Thailand, 31, among the lower middle income and India, 39 and Vietnam, 53 among the lower income countries. <st1:country-region w:st="on"><st1:place w:st="on">Pakistan</st1:country-region> is ranked 68<sup>th</sup> but that was before the emergency.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The bank said the survey was the first comprehensive cross-country assessment of logistics performance by 150 countries based on replies from 800 professionals in the field.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In fact <st1:country-region w:st="on">India</st1:country-region> ranks at the top among Low Income countries where <st1:country-region w:st="on">Vietnam</st1:country-region> is a close second and <st1:country-region w:st="on"><st1:place w:st="on">Pakistan</st1:country-region> is 7<sup>th</sup>. We are grouped with countries like <st1:country-region
w:st="on"><st1:place w:st="on">Somalia</st1:country-region> and Afghanistan.</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><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>
Income Tax</b></font></p>
<p align=justify ><font color="#FF9966" 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">The
Tribunal noted the decisions of the Supreme Court and had held that <b><font color="#FF9966">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="#FF9966">Merely walking through 'red channel' does not mean that concealed goods were not smuggled - COFEPOSA detention upheld : <st1:City w:st="on"><st1:place w:st="on">Bombay HC</font></b></font></p>
<p align="justify" ><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>HAVE</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b> </b>you ever heard of a person who was released on bail approaching a court to cancel his bail bond? Why should any sane person do that? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But here is a case where exactly that happened. But why?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After he was released on bail, (he was absconding) a COFEPOSA detention order was issued against him. The only way he could avoid COFEPOSA was to go back to jail after getting his bail cancelled. But the Courts saw through the game and did not buy his arguments. </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"><st1:stockticker w:st="on"><b><font color="#FF9966">CHA and Steamer Agent cannot be classified under Business Auxiliary Service : Tribunal</font></b></font></p>
<p align="justify" ><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>THIS</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b> </b>appeal
arises from Order-in-Appeal confirming Service tax on the Custom House Agent
on the ground that they are rendering services of arranging shipment of the
export cargo and negotiating the same with shipping lines on behalf of their
clients under the category of 'Business Auxiliary Services' with effect from <st1:date ls="trans" Month="1"
Day="7" Year="2003" w:st="on">1-7-2003. The appellant's contention is that
the activity carried out by them is not covered under 'Business Auxiliary
Services'. However, their plea has been rejected Commissioner (Appeals).</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="#FF9966">Revenue wins Rs 2.6 Cr case; Tribunal satisfied that assessee had suppressed vital information - since their conduct not clean, revenue neutrality cannot be advanced to support claim of bona fide : CESTAT</font></b></font></p>
<p align="justify" ><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>''WE</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b> </b>are unable to understand as to why the appellants undertook repacking and re-labelling of goods when the entire goods were transferred to their sister unit and the appellants' Consultant could not reply to the specific query put forth by us on this account." These observations of the Tribunal are enough indication as to why the appellant lost their case, <b><font color="#FF9966">at least as of now!</font></b></font></p>
<p align=justify ><font color="#FF9966" 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>