TIOL-DDT 82 · the untouched capture
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<html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body bgcolor="#FFFFFF"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#0000CC" size="3">TIOL-DDT 82</font><br> 28 03 2005<br> Monday</b></font></p> <p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>LDO Credit – Board accepts Supreme Court order</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With effect from 1.3.2003, the cenvat credit facility on LDO had been withdrawn. On 31.3.2003, Board by circular No. 704/2003 clarified that the credit taken on LDO lying in stock as on 28.2.2003 has to be reversed. Naturally the assessees resisted such a move and the natural corollary was Show Cause Notices. At least one assessee challenged the circular in the High Court and the Karnataka High Court quashed the circular. The government took the matter in SLP before the Supreme Court.<br> <br> By Circular No. 784/2004 dated 30.4.2004, the Board informed the field that an SLP has been filed and cases where the Show Cause Notices were yet to be adjudicated, were to be kept pending till the SLP was finally decided. In other cases Show Cause Notices were to be issued to protect Revenue. <br> <br> The Supreme Court dismissed the SLP on 16.7.2004 and for about eight months after the Supreme Court decision, Board was silent on the issue. Now Board says that the Supreme Court order has been <b>accepted</b> by the Board! Has the Board a choice? Can they reject the Supreme Court order? This concept of Board accepting the Supreme Court order is a surprising phenomenon in the department. Many officers in the field would often ask the question, “has it been accepted by the Board?” before giving effect to a Supreme Court order. Do they think that the Board is superior to Supreme Court? The general understanding is that the Supreme Court order is binding law in the country – but in Customs and Central Excise, it is binding law only when the Board is kind enough to accept the Apex Court’s order. Any way in this case the Board has kindly accepted the Supreme Court order and the issue is settled – nearly nine months after the Supreme Court order. Board has now withdrawn Circular No. 784/2004 and wants the field to adjudicate pending cases on the basis of the SC order. <br> <br> But why should they be adjudicated now? Why can’t all Show Cause Notices be withdrawn and why can’t Revenue concede the case in all the appellate stages? Should not the unwanted litigation initiated by Board end more peacefully? <br> <br> This LDO issue had its funny sidelights too. An assessee who had not reversed the credit was visited by a preventive party and threatened with dire consequences if they did not reverse. They were told that they will impose a hefty penalty and interest. The assessee paid up – under protest. So a Show Cause Notice was still issued to them. While the Show Cause Notice was pending adjudication, the Karnataka High Court judgement came and the assessee filed a refund claim. Then came the Board circular informing about the SLP in Supreme Court. Now the department could not adjudicate the Show Cause Notice, nor could they grant the refund. But refund has to be granted in three months. They could not reject the refund on the ground of SLP! So they issued another Show Cause Notice! Now both these are to be adjudicated!<br> <br> <b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2005/excircular812.htm">CBEC CIRCULAR NO. 812/9/2005-CX, Dated: March 22, 2005</a></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006633">ITC ordinance- Mockery of law?</font></b><br> <br> The now infamous ITC Ordinance is ready to die, but why? Corporate India was aghast that the President would issue an ordinance to recover some amounts from a company when the Supreme Court said they were not recoverable. But the President did exactly that! The ordinance stated that<br> <br> <b>President is satisfied that circumstances exist which render it necessary for him to take immediate action;</b><br> <br> So the Government had convinced the President that certain amendments were required to be made in the Central Excise Act, Rules and some notifications retrospectively and these could not wait till Parliament reassembled and so having been convinced that circumstances existed for him to take urgent action, he promulgated the Ordinance. And alas! The Ordinance is about to lapse! So much for presidential satisfaction! <br> <br> But, NO! Look at the positive side. Here is a government that is responsive to public opinion and in true democratic traditions bowed to public opinion and let the ordinance lapse. Commendable gesture indeed!<br> <br> Is the twenty-year old dispute finally settled? Is the Government going to refund to ITC instead of demanding from them? Newspapers report that Government is likely to discuss with ITC! What? After they have won in the Supreme Court?<br> <br> In this whole episode there was one mature confident party – ITC itself. They did not comment about the ordinance while the rest of India screamed! They neither challenged the ordinance nor paid up the money that they were required to under the ordinance! Did they know that the ordinance was going to lapse? <br> <br> <font color="#FF0000"><b>Until Tomorrow with more of DDT<br> <br> Have a Nice Time<br> <br> Mail your comments to</b></font> <b>vijaywrite@taxindiaonline.com </b></font></p> </body> </html>