TIOL-DDT 745 · the untouched capture
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<p class=MsoNormal><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 745</font><br>
21.11.2007<br>
Wednesday</b> </font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Darling, I lost the data! <st1:country-region w:st="on"><st1:place w:st="on">UK</st1:country-region> Customs Chief resigns </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Confidential records for 25 million Britons who receive child benefit payments are lost, <st1:PersonName
w:st="on">Chancellor <st2:GivenName w:st="on">Alistair</st2:GivenName> <st2:Sn
w:st="on">Darling</st2:Sn> told a stunned British parliament yesterday. Darling told the Parliament that two data discs containing records for 7.25 million families, including names, addresses, dates of birth and bank account details are lost.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"I regard this as an extremely serious failure by HMRC in their responsibility to the public," he said, about Her Majesty's Revenue and Customs department which was responsible for the loss.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is not the first time that HMRC has lost data. Earlier this month they lost data in a CD sent to the National Insurance. Last month they lost a laptop containing vital data. In April 2007, BBC found on the street a VAT return of a man in <st1:place
w:st="on"><st1:City w:st="on">Norwich, which showed how much he paid for the November 2005 to May 2006 period and his name and address.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An embarrassed Chief of HMRC, <st1:PersonName w:st="on"><st2:GivenName
w:st="on">Paul</st2:GivenName> <st2:Sn w:st="on">Gray</st2:Sn> put in his papers. In a letter to his staff, <st2:GivenName w:st="on">Gray</st2:GivenName> said, "I am announcing today that I will be standing down as HMRC Chairman as a result of a substantial operational failure in the Department. This is not the way I would have planned to organize my departure from HMRC."</font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>One Crore worth Diamonds lost in Chennai Customs?</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While it is data that is lost by the British Customs, in far away Chennai, the Customs seems to have lost diamonds worth over a Crore of Rupees.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sources say that the diamonds seized in 1990, kept in the warehouse have been replaced with polished stones, which was detected early this year. It seems the Department has complained to the <st1:stockticker w:st="on">CBI.</font></p>
<p class=MsoNormal align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Paperless clearance - <st1:City w:st="on"><st1:place w:st="on">Dubai Customs initiative </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Speaking at a conference yesterday on the "role in enhancing the performance and building the capacity to move from the normal clearance to the paperless environment of the e-clearance", Dubai Customs Director General, <st1:PersonName
w:st="on"><st2:title w:st="on">Mr.</st2:title> <st2:GivenName w:st="on">Ahmed</st2:GivenName> <st2:middlename w:st="on">Butti</st2:middlename> <st2:Sn
w:st="on">Ahmed</st2:Sn> said,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Dubai Customs, as a government agency, has a task in securing the supply chain, since a disrupted supply chain has a direct effect on the economy and risks the lives of citizens.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Dubai Customs are enhancing the performance and capacity building for the purpose of moving from normal clearance to the paperless environment while establishing a real partnership between Dubai Customs and the private sector based on the common responsibility and cooperation contributing in common goals achievements and consolidating the economic growth of Dubai.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Customs are now using modern technology which can provide the possibility to rapidly pick up information from their databases while providing eligible customers with a level of service which recognizes their past record and future intention to remain compliant with Customs requirements .By alleviating Customs involvement in low risk transactions, it also allows Customs resources to concentrate on transactions of higher, or unknown, risk.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ We are keen to organize our customers' transactions by presenting a wide range of services in conformity with our legal framework to assure a mutual benefit for both parties, helping them to reach their common goals and assuring their voluntary compliance to the Common Customs Law which is working on opening channels of cooperation between Customs and UAE business sector</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The whole world is now thinking of "Supply Chain" - the continuous linking of activities that take place for the systematic movement of goods from the place of origin to the place of destination.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Where are we?</font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Paying Taxes 2008</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tax reforms that make it easier for firms to pay taxes can increase government revenues by broadening the tax base. <i>Paying Taxes 2008 is </i>the second report in an annual series by the World Bank, <st1:stockticker
w:st="on">IFC, and PricewaterhouseCoopers covering 178 countries worldwide. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The time to comply with the tax system in <st1:country-region w:st="on">Brazil</st1:country-region> is some 2,600 hours; the equivalent measure in <st1:country-region w:st="on"><st1:place
w:st="on">India</st1:country-region> is 271 hours. This puts <st1:country-region
w:st="on">India</st1:country-region> on a par with the average hours to comply in both the G8 (254 hours) and EU (257 hours) but leaves <st1:place w:st="on"><st1:country-region w:st="on">Brazil</st1:country-region> at the bottom of the world ranking on this measure alone.</font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>India's ranking in Doing Business 2008 - India - Compared to Global Best / Selected Economies</b></font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:place w:st="on"><st1:country-region
w:st="on">India</st1:country-region> is ranked 120 out of 178 economies. <st1:place w:st="on"><st1:country-region
w:st="on">Singapore</st1:country-region> is the top ranked economy in the Ease of Doing Business.</font></p>
<table width="450" border=1 align="center" cellpadding=3 cellspacing=0 bordercolor="inherit" class=MsoTableGrid>
<tr>
<td width=227 valign=top><p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Rank</b></font></p></td>
<td width=151 valign=top><p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Doing Business 2008</b></font></p></td>
</tr>
<tr>
<td width=227 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ease of Doing Business </font></p></td>
<td width=151 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">120</font></p></td>
</tr>
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<td width=227 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Starting a Business</font></p></td>
<td width=151 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">111</font></p></td>
</tr>
<tr>
<td width=227 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dealing with Licenses</font></p></td>
<td width=151 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">134</font></p></td>
</tr>
<tr>
<td width=227 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Employing Workers</font></p></td>
<td width=151 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">85</font></p></td>
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<td width=227 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Registering Property</font></p></td>
<td width=151 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">112</font></p></td>
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<td width=227 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Getting Credit</font></p></td>
<td width=151 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">36</font></p></td>
</tr>
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<td width=227 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Protecting Investors</font></p></td>
<td width=151 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">33</font></p></td>
</tr>
<tr>
<td width=227 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Paying Taxes</font></p></td>
<td width=151 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">165</font></p></td>
</tr>
<tr>
<td width=227 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Trading Across Borders</font></p></td>
<td width=151 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">79</font></p></td>
</tr>
<tr>
<td width=227 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Enforcing Contracts</font></p></td>
<td width=151 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">177</font></p></td>
</tr>
<tr>
<td width=227 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Closing a Business</font></p></td>
<td width=151 valign=top><p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">137</font></p></td>
</tr>
</table>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:stockticker w:st="on"><b><font color="#006600">AIR Drawback for HSD</font></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has announced the All Industry Rate of Drawback of Rs. 1160/- per MT for both HSD and Furnace Oil, supplied by Domestic Oil Companies under various Schemes as contained in Chapters 4, 6 and 8 of the Foreign Trade Policy, with effect from 1.04.2007 and until further orders.</font></p>
<p ><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/dgft07pn082.htm" target="_blank">DGFT PUBLIC NOTICE NO. 82 (RE-2007)/2004-09, Dated: <st1:date ls="trans"
Month="11" Day="16" Year="2007" w:st="on">November 16, 2007</a></u></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Huge seizure of Heroin by <st1:stockticker
w:st="on">DRI</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The <st1:stockticker
w:st="on">DRI has seized 12 kgs of heroin valued at Rs. 12 Crores on <st1:City w:st="on"><st1:place w:st="on">Delhi-Haryana
border yesterday. And there is a heroine in the case. The carrier was
a Naga girl. The poor girl will perhaps spend the rest of her life in
jail. Is this a social or economic problem?</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:PersonName w:st="on"><st2:GivenName
w:st="on"><b><font color="#FF9966">CS</font></b></st2:GivenName><font color="#FF9966"><b> <st2:Sn w:st="on">Lewis</st2:Sn> once wrote that the greatest wrongs are not done by people from "sordid dens of crime" but are conceived and ordered in clean, carpeted offices "by quiet men with white collars and cut fingernails".</b></font></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>From our Legal Corner - tomorrow cases</b></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span class="style4"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><strong><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></strong></b></font></b></font></span></b></font></p>
<p align="justify"><font color="#FF3366" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>
Customs</b></font></p>
<p align="justify" ><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Demurrage charges - Regulations framed cast a duty upon <st1:stockticker w:st="on">IAAI to charge demurrage for period of detention of goods - <st1:City w:st="on"><st1:place w:st="on">Delhi HC dismisses appeal of importer</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The <st1:stockticker w:st="on">IAAI who is an independent statutory corporation although is an approved custodian under Section 45 of the Customs Act, exercises their independent power and jurisdiction in demanding payment of the demurrage charges which a party incurs for various reasons. Regulations framed also cast a duty upon the <st1:stockticker
w:st="on">IAAI to charge demurrage for the period of detention of the goods and, therefore, in our opinion demurrage charges shall be payable and at this stage in the appellate proceedings we are not required to ascertain as to whether the Customs Department was at fault or not.</font></p>
<p align="justify" ><font color="#FF3366" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Settlement - Central Excise </b></font></p>
<p align="justify" ><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Settlement Commission has power to grant immunity from payment of interest - HC can interfere with order of Settlement only if order is contrary to any provisions or suffers from bias, fraud or malice : High Court</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The sole overall limitation upon the Commission thus appears to be that it should act in accordance with the provisions of the Act. The scope of enquiry, whether by the High Court under Article 226 or by the Supreme Court under Article 136 is also the same- whether the order of the Commission is contrary to any of the provisions of the Act and if so, apart from ground of bias, fraud and malice which, of course, constitute a separate and independent category , has it prejudiced the petitioner/ appellant. In such a case, this Court is "concerned with the legality of the procedure followed and not with the validity of the order". The learned Judge added " judicial review is concerned not with the decision but with the decision making process"......."</font></p>
<p align="justify" ><font color="#FF3366" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Settlement - Income Tax </b></font></p>
<p align="justify" ><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Income Tax - Settlement Commission - Full and true disclosure is a onetime activity : Bombay High Court</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is no right in the assessee to invoke the Commission's jurisdiction even while he continues with his dishonest conduct.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A person who seeks to invoke the jurisdiction of the Commission must come and disclose the true facts.</font></p>
<p align="justify" ><font color="#FF3366" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Central Excise</b></font></p>
<p align="justify" ><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Removal of capital goods - whether reversal of credit availed is warranted only when they are removed "as such" or on all occasions like after use - Tribunal refers matter to Larger Bench</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#FF9966">IT </font></b>was only a week ago that <u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=6367" target="_blank">DDT - 741</a> <strong>&</strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=6373" target="_blank">742</a></u> carried an interesting piece of information about the ups and downs of the modvat/cenvat provisions relating to removal of capital goods on which credit was availed - the reason being the latest notification 39/2007CE(N.T) dated 13.11.2007.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By the way, what did this notification achieve - nothing more except that it filled the void that was caused by an absence in the cenvat provisions concerning removal of capital goods that were removed after use, of course for probable future use by the consignee. No doubt, the Cenvat Credit Rules, 2004 meticulously lays down as to what should be done when the cenvatted capital goods are removed "as such" or when they are cleared as 'waste and scrap', but the aforesaid absence was left to be tackled by the Tribunals - after the Audit and the CERA had had a sumptuous feast.</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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