TIOL-DDT 819 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span lang=EN-US style='font-family: "Verdana","sans-serif";'><font color="#663399" size="3">TIOL-DDT 819</font></span></b><br>
<strong>06. 03. 2008<br>
Thursday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">
This category of Medicament manufacturers have been left high & dry! </font></strong></p>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A
Netizen sent us this mail.</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Through
this portal, I would like to make a humble plea to the Finance Minister.</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">In
respect of Medicaments, the Central Excise duty has been halved to 8% ad valorem
& the industry is going gaga. </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">But,
Sir, you have inadvertently missed out one more category of medicaments manufacturers
& who are out of the purview of Central Excise – they are medicaments
containing alcohol, opium, Indian hemp & other narcotic drugs.</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">As
per chapter note 5 to Chapter 30 of the Central Excise Tariff, these goods are
covered by the Medicinal & Toilet Preparations (Excise Duties) Act, 1955.</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Pursuant
to the Union Budget 2003-04, when the excise duty rates were reduced from 20%
Ad Val to 16% Ad Val, a notification no. 2/2003-M&TP dated 01.03.2003 was
also issued simultaneously to prescribe a 16% adv. duty in respect of the Medicinal
preparations (excluded from coverage under Chapter 30 of the CETA’85)
containing alcohol, opium etc.</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">However,
this year’s Union Budget has not seen issuance of a similar notification
bringing down the rate of duty under the M & TP Act to 8% leading to a discriminatory
policy.</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">I
hope that needful will be done in the quickest possible time.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Budget
obviously has many loose ends. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">And
what about Naphtha?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yet
another Netizen wrote in:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vide
notification 23/2006 -CE dt. 1/3/2006, the effective rate of excise duty on
Naphtha was set at 16% adv. In the budget of 2008, although the FM has
made a statement that rate of excise duty is reduced to 14%, we do not see any
amendment to the above notification reducing the rate to 14% and therefore it
appears that Naphtha continues to remain excisable at 16%. For your information
although there is no specific heading for Naphtha in the Central Excise Tariff
Act, Naphtha is classified under Chapter 2710 of the<br>
Central Excise Tariff Act.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We
would be obliged if your experts could confirm that Naphtha continues to remain
excisable at 16%.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So
is Naphtha taxable at 16% or 14%. Any views? </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Writing
off of arrears – please don’t bother Chief Commissioner (TAR)</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Kanpur Central Excise Commissioner had written a letter to the Board through
his Chief Commissioner on 25.04.2005 his proposal to write off arrears to the
tune of Rs 5 Crores pertaining to M/s Kanpur Cigarettes Ltd. & Others. By
his letter dated 15.02.2008, he has also informed the Chief Commissioner, TAR
about the same. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now
the Chief Commissioner, TAR has written to the Board and the Commissioner, Kanpur
and all the Chief Commissioners that:-</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">We
may humbly state that abandonment/write off proposal for penalty, fine and for
duties more than Rs.15 lakhs in each case needs to be routed through directly
by Zonal Chief Commissioner to CBEC as such cases will fall within the competence
and jurisdiction of the CBEC only. The Laws, Rules and Procedures as laid
down by CBEC is already well known to Zonal Chief Commissioners. Perhaps
the Chief Commissioner (TAR)</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
should not be burdened for examining the proposal of write off falling within
the competence of Board once the same has already been vetted by Chief Commissioner
of the concerned Zone.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Well,
this is how Government works and nobody knows what happened to the proposal
of the Commissioner submitted in 2005!</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/suggestion.htm">C.No.
Nodal/TAR/Delhi/10/2007/999/19.2.08 of the Chief Commissioner (TAR)</a></strong></u></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Jurispruden <font color="#FF6633" size="5">tiol</font> – Tomorrow's cases</font></strong></p>
<p align="center"><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"><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"><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"><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"><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"><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"><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"><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></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></b></font></b></font></b></font></b></font></b></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income
Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income
Tax liability of foreign employee of Indian Company – tax proposed to
be recovered from Indian Company’s guarantee – company can file
appeal against assessment order against the employee – Notice not served,
assessment annulled : ITAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
appellant as a person, who is likely to be saddled with the tax liability should
be permitted to pursue the appeal. More so, when he is aggrieved by the additions
made by the assessing officer and consequent denial of liability to be assessed.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
evidence of dispatch of notice does not contain the full address of the assessee.
It was well within the knowledge of the assessing officer that the assessee
was not at the address to which the notice dated 13/4/1999 under section 143(2)
of the Act was sent by him. In the above circumstance, the assessing officer
cannot seek to rely on the presumption of service of notice. There is no evidence
on record to show that there was a service of notice on JMH within the statutory
period laid down in the proviso the section 143(2) of the Act. The Delhi High
court held that defective postal receipt evidencing dispatch of notice under
section 143(2) cannot give rise to any presumption of valid service of notice.
In the case of CIT Vs. Lunar Diamonds 143 Taxman 691 ( Del.) It has been held
that the failure of the Revenue to prove service of notice under section 143(2)
within the time would result in annulment of the assessment framed as bad in
law. In the facts and circumstance of the present case, we are of the view that
there was no proper and valid service of notice within the time laid down in
the proviso to section 143 (2) of the Act. Therefore, the assessment is liable
to be annulled and the same is accordingly annulled.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central
Excise </font></strong></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Forged
CT-3, forged re-warehousing certificates and diversion of raw material procured
by 100% EOU – duty liability quite clearly on the perpetrator, not supplier
and so is the case with penalty: Tribunal</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE
appellant, a 100% EOU, were availing the facility in terms of Notification No.1/95-CE,
dt.9.1.95 as amended & was procuring the duty free indigenous raw material
against CT-3 certificate for use in the manufacture of final product to be exported
so as to fulfill the export obligations.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On
a visit by C.Ex. officers who conducted various checks and verifications, it
was seen that the said appellant was not maintaining any statutory record required
to be maintained by a 100% EOU. Further investigations conducted revealed that
the CT-3 certificate against which duty free raw material was received by them
were forged inasmuch as the same were prepared by the Excise Clerk of the unit
and was signed by CMD of the factory. Statements of various company personnel
revealed that the said duty free raw material procured against forged CT-3 certificate
never reached their factory nor was the same utilized by them; signature of
the Superintendent of Central Excise in-charge of the factory was forged by
them; that AR-3A were never presented to their jurisdictional Central Excise
officers; that re-warehousing certificate were also forged and sent to the supplier
of the material. </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Motor
cab – seating capacity – NCCD – Registration certificate from
Motor Vehicles Authority should have been relied upon instead of opinion of
the manufacturer : Supreme Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
finding that they manufacture bodies for user thereof for maxi cabs with seating
capacity of 12 persons excluding the driver is a finding of fact. Only because
the manufacturers of chassis had classified them under Sub-Heading 8702.90,
the same having regard to the independent manufacturing activities carried on
by the respondent, was not decisive. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
question in regard to the payability of duty would furthermore depend upon the
registration certificates in respect of the vehicle in question. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It
is a statutory document granted under the provisions of the Motor Vehicles Act,
1988. Such a certificate is issued upon an inspection of the vehicle by the
authorities of the transport department. What is relevant was the terms of the
contract entered into by and between the respondent and their customers. On
a chassis classifiable under Sub-Heading 8706.29, the manufacturer can make
a body thereupon having regard to the nature of orders placed by their customers.
In a given case, it may be of sixteen seating capacity but it may be more or
less than the same in some other cases. What is, therefore, relevant is the
seating capacity for which the registration certificates had been granted and
not the opinion of the manufacturer of the chassis.</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 color="#0000FF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></u></font></p>
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