TIOL-DDT 776 · the untouched capture
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<p><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 776 </font><font color="#663399" size="2"></font><font size="2"><br>
07.01.2008 <br>
Monday </font></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Justice SN Jha takes over as President of CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><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/guest/sn_jha.jpg" alt="Legal Corner Icon" width="78" height="103" hspace="5" border="0" align="left"></b></strong></b></font></b></font></b></font></b></font></b></font></b></font></strong></font></strong>Born
on June 16, 19 45, Justice Jha obtained his degree in Law from Patna Law
College and started practice in the Patna High Court in 1969. In July 1990
he was appointed Judge of the Patna High Court. He was elevated as Chief
Justice of High Court of Jammu and Kashmir on February 4, 2004. From 12.10.2005
to 15.6.2007, he was the Chief justice of the Rajasthan High Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On Friday, 4.1.2008, he took over as the new President of the celebrated CESTAT. The Government deserves all praise for appointing a new president within less than a month of the retirement of the previous President, Justice Abichandani . There was a lot of rumour that Justice Abichandani was trying for an extension. <strong><font color="#FF6633">DDT</font> </strong> asked him whether it was true. He called his wife and asked her to tell us if it was true. She told <strong><font color="#FF6633">DDT</font> </strong> in no uncertain terms that even if he was offered an extension, he would not accept it. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The new President is taking over a grand edifice built with high quality judicial cementing legal and technical expertise. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">DDT</font> </strong> called up the new President to welcome him to his new assignment on behalf of all our esteemed netizens and to find out about his agenda. He was too modest and said that he is too new to lay out an agenda. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">While technically and judicially, the Tribunal is very strong, it needs better infrastructure.</font> </strong>Having a former Chief Justice as President certainly adds respect to the stature of the institution and let us hope the new President would be able to influence the Revenue Department to provide better facilities to the Members who are all equal in rank to Additional Secretaries to the Government of India. They sit in rooms which are smaller than rooms occupied by Assistant Commissioners in the field. Some of them are provided with old rickety Maruti 800 cars – the lucky ones that is – many of them don't have even that! And recently the Chief Justice of the Madras High Court remarked that while the High Court often dealt with petty cases, the CESTAT was always dealing with matters of high importance involving huge revenue! This is certainly not the way to treat judges who decide issues worth Crores of rupees every day. They should get a decent car, (with no questions on where they go in that – we are told that there was an RTI question on how the former President used his car!), a steno at home, office facilities at the residence, domestic help, good furniture, library, software etc,. The quality of high value judgements should not be sacrificed at the altar of government's petty parsimony. If the government can't find money to fund the Tribunal, it can increase the fee for appeals and make the CESTAT a self funding organisation. This is a very important area in which the new President can perhaps bestow his attention. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Justice Jha is not exactly new to Customs and excise litigation. The Judge seems to have a lot of respect for the executive's expertise as he observed in a Customs case, </font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">There can be no doubt that while considering the question as to whether the officer had reason to believe that the goods are contraband and liable to confiscation and seizure the Court cannot sit as an appellate authority not can it go into the sufficiency of reasons for holding the belief. In the instant case, trade opinions of the local traders having been abandoned, the visual inspection and smell by Sri K.R.C. Pillai remain as the basis of seizure besides the information received from the Assistant Security Commissioner, R.P.F. It may be stated that although in the grounds of seizure, commercial in the counter affidavit, certain cuttings in paper etc. are also mentioned; they were not referred to during the course of hearing. The Collector of Customs (Prev.) Patna, in his letter dated 8th June, 1993 (supra) has said “the basic problem is that once a particular spice is successfully smuggled and introduced in the local market its identification as a foreign product becomes difficult.” It is, therefore, doubtful that the seized goods could be identified as of foreign origin on the basis of visual inspection and smell. The Assistant Commissioner, R.P.F. had merely informed about movement of articles. The seizure thus really rests not on the basis of identification of the goods as being of foreign origin but on the basis of a general belief that the spices are not grown in the North-Eastern States, and, therefore, any spice coming from that region must be said to be smuggled. Thus, it is not a case where the court should go by the experience and expertise of the Customs officials. The reason for formation of the belief having been spelt out it is open to the court to consider whether the reasons exist or not. And the test would be whether a reasonable, prudent person on the basis of materials relied upon would hold the same belief. Sufficiency of reasons or grounds is not justifiable by the existence of the reasons and the ground certainly is. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the case of <em>Baljnath Singh Vs. The State of Bihar and Other </em>- Civil Writ Jurisdiction case No.6752 of 1996, Justice Jha observed, </font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">While making judicial review of administrative decision, the court is not supposed to sit as Appellate Authority, and substitute its own findings in place of findings recorded by the authorities. As is often said, the court while making judicial review has to see the correctness or otherwise of the decision making process and not the correctness of the decision itself. Where the court finds that there were materials available before the authority, on the basis of which the impugned decision could be arrived at, it is not supposed to go into the question of adequacy of the material. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However when the Customs Department alleged that <font color="#FF6633">“ It is confirmed that these trade and transactions are being conducted in collusion with the Forest Department who are looking their own State revenue, legalise the illegal import, supported by the documents”, </font>he was quick to state,<font color="#FF6633"> “ A particular officer may be in collusion but it is too much to say that the whole Government is acting in collusion with smugglers and, thus, acting against national interest.”</font> </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We welcome Justice Jha to the exciting world of indirect taxes litigation and wish him all the best in his new assignment. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Anti dumping duty on PHPG DS – resurrection again? </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The anti dumping duty on D(-) Para Hydroxy Phenyl Glycine Methyl Potassium Dane Salt (PHPG DS), originating in, or exported from the People Republic of China was provisionally imposed by Notification No. 124/2002–Customs, dated the 11th November, 2002, which was confirmed by Notification No. 117/2003-Customs, dated the 24th July, 2003 and which had actually expired by 10 th November 2007. Now the Government has extended it till 10th November, 2008. Now what is the position between 11 th November 2007 and 2 nd January 2008, when the notification was resurrected? Can they bring back to life a notification which died in November 2007? Well, they have done it and this kind of resurrection has found judicial approval too! Any mistake by the babu is a punishment for the assessee! </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/2008/ctariff08_002.htm" target="_blank">NOTIFICATION NO. 02 / 2008-Cus., Dated: January 3, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Same for Singapore </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Anti Dumping Duty on on D(-) Para Hydroxy Phenyl Glycine Methyl Potassium
Dane Salt (PHPG DS),originating in, or exported from Singapore would have
expired on 10th day of November, 2007 and because the babus forgot to extend
it, it will now be valid till the 10th November, 2008. But what about the
period from 10.11.2007 to 03.01.2008? babus' mistakes are exempted! </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/2008/ctariff08_003.htm" target="_blank">NOTIFICATION NO. 03/ 2008-Cus., Dated: January 3, 2008 </a></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Latest TRU Circular Opens Up A Pandora's Box </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tax Research Unit of the Ministry of Finance has issued a highly controversial Circular No. 98/1/2008-ST on January 4, 2008 . This circular meant to clarify issues related to renting of immovable property services and works contractor's services, has instead, managed to open up a Pandora's box. In a brazen and blatant attempt to deny Cenvat credit benefits to a service provider under “Renting of Immovable Property” service, the clarificatory Circular would seem to have raised a big question mark on the leviability of service tax on “Renting of Immovable Property” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Immediately after the Circular was issued we asked our domain expert Natarajan for his comments which we carried on Friday in our Special column. We will bring you expert opinion from another expert in the field Sivakumar tomorrow. As Natarajan says, Board has been mean and as Sivakumar says Board is wrong, <strong><font color="#FF6633">DDT</font> </strong> has nothing to add except to agree with our experts. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font> <font color="#FF6633" size="5">tiol </font> – <font color="#006600">Monday's cases </font></strong><strong><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><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><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></b></font></b></font></b></font></b></font></strong></font></strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Is value of DEPB licence attributable to 'direct cost' of trading exports? - Is it eligible for deduction u/s 80HHC of Income Tax Act? - Tribunal clears clouds over the issue </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">IT is not only the Ministry of Commerce which is struggling to sculpt a perfect substitute for the most popular exports incentive scheme of DEPB, even the Income Tax Department has been breaking its head against multiple possibilities as to how to treat the value of DEPB. And the very same question came before the Tribunal in a recent case. The merchant exporter had computed its Sec 80HHC benefits by taking into consideration the DEPB income whereas the A.O. did not consider DEPB income as eligible for deduction u/s. 80HHC of the Act. Let's take a quick stroll through the various arguments and the recent judicial pronouncements which enabled the Tribunal to form a concrete opinion on this contentious issue. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Show cause notice issued for recovery of erroneous refund without reviewing order of refund is valid: Tribunal </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">TIOL often advises the netizens to make their offspring take up legal profession. With a promising number of disputes on various issues traveling up and down the judicial hierarchy, and judgments by single member, two members, benches of different sizes often with diagonally opposite views, the field is interesting and has enormous potential. Let us go into the details of a case where the dispute relates to the duty payable and the refund pertaining to the assessments of around 22 years back – latest order to be passed by the CESTAT in 2007. </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Welding Electrodes used for maintenance are eligible inputs for Cenvat Credit: Tribunal </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MULTIPLE endings refer to a case in entertainment where the story could end in different ways, depending on the actions of the characters. Audience interactivity is usually an important factor in determining which ending to use. Usually, more than two possible endings exist; if there are two endings, the situation is more commonly described as an alternate ending. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Tomorrow for the judgements </strong></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 time. </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to <a href="mailto:vijaywrite@taxindiaonline.com"></a></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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