TIOL-DDT 802 · the untouched capture
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<p><font size="2"><strong><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 802 </font><font size="3" face="Verdana, Arial, Helvetica, sans-serif"></font><font face="Verdana, Arial, Helvetica, sans-serif"><br>
12.02.2008 <br>
Tuesday </font></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax – list of records (in duplicate) </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Notification No 45/2007 dated 28.12.2007, among other things, a provision was made that the assessees should, while filing the first return or by 31.01.2008, whichever is later, submit a list in duplicate of all the records maintained by the assessee. I received at least a hundred calls, including from our own accounts department and from some of the top business houses, wanting to know what this is all about. <strong>(<a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=6587" target="_blank">Please see DDT 772 – 01.01.2008</a>) </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board has informed the field that these amendments have been made in the service tax rules to enable the duly authorised offices to carry out audit or scrutiny as may be necessary to safeguard the interest of revenue. However, it may be ensured that only such records are demanded which are necessary for conducting such audit scrutiny or verification. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The list is to be furnished in duplicate. What does the Superintendent do with two copies of the list? Now it has been clarified. The Superintendent is supposed to send one copy to the Audit section. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A new rule 5A has also been incorporated in the Rules to prescribe that an officer authorised by the Commissioner shall have access to any premises registered under the Service Tax Rules for the purpose of carrying out any scrutiny, verification and checks as may be necessary to safeguard the interest of revenue and that the assessee shall provide, on demand, the specified records including trial balance or the equivalent. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board clarifies that this rule does not envisage issue of any notification by a Commissioner for such authorisation of officers. The requirement of authorisation could be fulfilled by issue of an office order. <font color="#FF0000">How will the assessee know that the officer wanting to have access to the premises is authorised by the Commissioner? Can he ask for the authorisation? </font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board also directs that </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The audit team or any other officer authorised by the commissioner to visit the registered premises of an assessee shall give prior intimation to the assessee along with the list of documents that he requires for the purposes of scrutiny, verification or audit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The taxpayer shall provide the records as required by the authorised officer within a period of fifteen days from the date of request. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. In case, the taxpayer is unable to produce any of the records called for within the stipulated time, he shall intimate the same along with reasons for non-production of records, and the officer may also grant further time for production of such records keeping in view the overall facts into account. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Keeping in tune with the Board's recent habit of hiding important instructions from public view, these instructions are also not made public. The babu should know that he is a servant of the citizen and he has no duty to suppress vital information from his master. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What prevents you from making your solemn pronouncements public? </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=41&filename=notification/servicetax/2008/maintenance_Furnishing.htm" target="_blank">Board's F. No. F.No . 137/26/2007- CX.4 Dated : January 1, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Prohibition on export of non basmati rice – CBEC communicates DGFT notification </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC has communicated a copy of DGFT's Notification No. 77(RE-2007)/2004-09 dated 7.2.2008 where under any export of non-basmati rice, under Transitional Arrangements under Para 1.5 of Foreign Trade Policy, 2004-2009 has been prohibited. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board wants Chief Commissioners to instruct the field formations under their jurisdiction for taking necessary action in the matter urgently. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGFT has by the notification prohibited with immediate effect any export of non-basmati rice, under the Transitional arrangements under Para 1.5 of Foreign Trade Policy, 2004-2009. </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/2008/cs-instrc528.htm" target="_blank">CBEC
F.No . 528/5/2007- Cus.TU Dated : February 8, 2008 </a><strong>and </strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2007/dgft07not077.htm" target="_blank">DGFT
NOTIFICATION NO. 77 ( RE-2007)/2004-2009 Dated 7th FEBRUARY,
2008</a> </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"> – Tomorrow's cases </font><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"><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></strong></font></strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise/Customs/IT/ any law </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Once an issue is decided by the Supreme Court, the department is bound to <em>suo moto </em> apply the ratio in every case that comes before it: Bombay HC </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong>Customs Department got it again from the High Court. The litigation loving department, which clogs our courts, for the simple reason that it has no respect for the judiciary, is once again at the receiving end of the Court's wrath. But the Department is lucky that most often, the courts are very kind to this irresponsible department. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue in this case before the High Court is really not that important, but the observations of the High Court are. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Once the law was declared and the judgment of this Court was upheld by the Supreme Court, it is the duty of the respondents in every matter which came up before them and to which the judgment applied to have suo-moto applied the same without driving the party to move this Court.” </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>Contractors, switches and control box used for defence vehicles are not parts of vehicles but fall under chapter 85 : Supreme Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">THE</font> </strong>appellant, engaged in the manufacture of excisable goods filed classification list of their products with effect from 20.12.1996 claiming classification under Chapter Heading 8710 of the Schedule to the Central Excise Tariff Act, 1985. The goods in the classification list were described as parts of tanks and other armoured and motorized fighting vehicles under Chapter Sub- Heading 8710.00 of the Tariff Act. It is the contention of the appellants that the said goods are manufactured for Government of India, Ministry of Defence and are used in the tanks and armoured fighting vehicles. These goods are strictly manufactured as per drawing and design supplied by the customer i.e. Ministry of Defence. Since the goods are manufactured for use solely and principally for fitting into the tanks in armoured fighting vehicles of the Defence Department, the correct classification would be under Chapter sub-heading 8710.00. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the other hand, the adjudicating authority relied upon Note 2(f) to Section XVII which excludes the goods i.e. electrical machinery and equipment falling under Chapter 85 and since the appellants' manufacture goods such as contractors, switches, control box etc. and are used for switching/protecting electrical circuits or for making connections to or in electric circuits, these are parts of electrical equipments falling under chapter sub- heading 8536.90. </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>Settlement Commission – Chairman has power to constitute Special Benches – ‘invalid' means ‘ non est ' : Bombay High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE petitioners are husband and wife. The petitions have been filed pursuant to the rejection of their Applications by the Settlement Commission. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The power to constitute a Special Bench is conferred on the Chairman of the Commission under Section 245BA ( 5A ). It is, therefore, not a case of non-existence of power. The question is whether the petitioners can contend that because of the constitution of a Special Bench any prejudice has been occasioned to them. The only contention as urged is that the reasons for constitution of the Bench and the material relied upon for that purpose has not been disclosed. On a consideration of Section 245BA ( 5A ) of the Income Tax Act it is clear that power is conferred on the Chairman for disposal of a particular case to constitute a Special Bench. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax paid on outward transportation - Liquid Oxygen, Nitrogen and Medicinal gas delivered to customers in transport vehicles maintained at sub-zero temperatures – Cenvat Credit – As matter referred to Larger Bench, pre-deposit totally waived on Modification application : Tribunal </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the earlier version of this case, we had mentioned, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Incidentally,
none of the aforesaid Tribunal decisions found any mention in this order & probably
this was the reason that although the matter has been referred to the Larger
Bench, pre-deposit was ordered contrary to the Tribunal decision in Capital
Paper Mills (P) Ltd, [</font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2002/2002-TIOL-384-CESTAT-DEL.htm" target="_blank"><strong>2002-TIOL-384-CESTAT-DEL</strong></a></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">]
.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Not that we would not like to take any credit but the fact is that the company filed a Miscellaneous Application seeking a modification of the Tribunal's order ordering a pre-deposit and argued on the above lines & guess what – they succeeded! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal after hearing the appellant has held thus – </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Since there are conflicting decisions of the Co-ordinate Benches of the Tribunal on the subject matter and the issue has been referred to the Hon'ble President for constituting the Larger Bench for resolving it, <strong><font color="#FF6633">it is appropriate that pre deposit of the Service Tax demanded in the instant case, where the issue involved is identical, is totally waived pending the outcome of the decision by the Larger Bench of the Tribunal. </font></strong>Therefore, the pre-deposit of the Service Tax demanded is totally waived of in modification of the Stay Order dated 25.10.2007 passed by this Tribunal, by which the applicants were directed to pre deposit Rs.1.25 lakhs within eight weeks. Ordered accordingly.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Okay, so we would like to blow our trumpets – what's wrong – after all <strong><font color="#FF6633">it makes sound sense to be a member of the TIOL family! </font></strong></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 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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