TIOL-DDT 879 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <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"><strong><font color="#663399" size="3">TIOL-DDT 879 </font><br> 04.06.2008 <br> Wednesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Issue of pre-authenticated CT-3 to EOUs in textile and chemical sector –CBEC relaxes </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">EOUs procuring duty free inputs get them under a CT-3 Certificate. The pre-authenticated certificates are issued by the Range Superintendents. By circular No. 84/2001- Cus dated 21.12.2001, the CBEC directed that the Range Officers can issue these pre-authenticated booklets, except in case of textile and Chemical sectors, for which the certificates would be issued by the Assistant Commissioner/Deputy Commissioner. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By circular No. 66/2002-Cus dated 08.10.2002, the Board stipulated that, “The Assistant Commissioner/Deputy Commissioner of Customs/Central Excise may examine all cases of request from EOUs/EPZ/SEZ units on merits and delegate the powers of issuing procurement certificate and CT-3 to the Range Officers.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Representations have been received that the existing procedure is causing difficulties to these two sectors. After examination, the Board has decided to extend the facility of issuing pre-authenticated CT-3 form booklets to EOUs in textile and chemical sector as well subject to certain additional safeguards as follows:- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the unit has achieved Net Foreign Exchange/ export obligation wherever applicable; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the unit has not been issued a show cause notice or a demand confirmed, during the preceding 3 years, on grounds other than procedural violations, invoking penal provision and/or on account of fraud or collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of the Customs Act, the Central Excise Act, the Finance Act, 1994 covering Service Tax, the Foreign Trade (Development & Regulation) Act, 1992, the Foreign Exchange Management Act, 1999 or any allied Acts or the rules made thereunder. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why the special treatment to these two sectors? Huge evasion and misuse! Why the relaxation? The lobbies are apparently powerful! </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/cuscir08_08.htm" target="_blank">CBEC Circular No. 8/2008-Cus., Dated: June 2, 2008 </a></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff Value of Brass scrap and poppy seeds increased </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff value of brass scrap has been increased from 4468 US Dollars to 4479 dollars and Poppy seeds from 4658 US Dollars to 4861 dollars. There is no change in the Tariff Values of other items. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2008/cnt08_067.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 67/2008-Customs(NT) , Dated the June 3, 2008 </font></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">LTU , Delhi – yet another Jurisdiction Notification </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yet another Notification is issued to specify the jurisdiction of Delhi LTU. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2008/exnt08_27.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 27/2008-CX.,(NT.), Dated: June 2, 2008 </font></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DEPB for cement export – issued yesterday – withdrawn today. </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday's DDT carried an item, “ Export of cement; eligible for DEPB - The DGFT has amended the HOP of the FTP to stipulate that, “Export of Cement shall be entitled for DEPB benefit under Sl. No. 22D of the Misc. Product Groups with immediate effect.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is <strong>DDT's</strong> singular pride that it is able to report that a DGFT PN had no shelf life beyond 24 hours. DGFT yesterday issued another PN that the PN issued on 2 nd June stands withdrawn from 2 nd June itself. MEANS NO DEPB FOR EXPORT OF CEMENT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Imagine the plight of the Prime Minister running the administration of the country with such bureaucrats! Only God can run this Country! </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2008/dgft08pn024.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 24 (RE-2008) /2004-09, Dated: June 3, 2008</font></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Inauguration of LTU in Delhi postponed – Petro douses LTU </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday afternoon, we received an invitation for the inauguration of the Delhi LTU on 4 th June by the Finance Minister and we deputed our best reporter to cover the event. By evening, we received a communication that the invitation is cancelled. We appreciate the kind gesture of the Ministry in informing that the function has been cancelled. But why was the function cancelled? We understand that there is an important cabinet meeting today to decide on the petro price hike and the FM cannot obviously go round inaugurating LTUs when the Petro hike issue is burning! The Left lobbyists do not want the price to be hiked, but with the Oil Companies losing about Rs. 20/- on every litre sold, the Government has tough decisions to make; unfortunately with elections not too far away. The helpless government will increase the price by Rs. 5 or 10 and all the political parties will go hammers and tongs against it. With inflation hitting the roof and petro price hike inevitable, it certainly is not the best of times for the Government. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">See You in Mars with APJ Abdul Kalam </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“On Tuesday, 27 May 2008, I was addressing the students of Meerut Institute of Engineering and Technology. While interacting with the students, I asked them, how many of them would like to become doctors, engineers, teachers, and political leaders. I saw the number of students opting for political leadership was only 4 or 5. There were 100s for other professions in the team of 800 students. While I asked how many of them wanted to go to Mars, I saw over 500 students lifting their hands. I have seen the same pattern of expectation from millions of youth I have been meeting during the last few years. I am sharing this expectation of the youth with this important group of ISRO scientists, as you are in the process of preparing the vision for the next 50 years. I told them, I will see them in Mars. I am sure, Chairman ISRO will definitely facilitate realization of the dreams of our youth and <strong>mine</strong> . “ </font></p> <p align="right"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dr. APJ Abdul Kalam , addressing the ISRO scientists. </font></strong></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></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"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><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></font></strong></font></strong></font><font color="#663399">Income Tax</font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">The words "no action" are wide enough to include in its sweep "assuming jurisdiction by formation of belief as well as to complete the reassessment; Proviso to section 147 does not have the effect of curtailing the limitation period for passing the order u/s 147 as prescribed u/s 153(2); Loss arising from the purchase and sale of shares is speculation loss; Mere rejection of assessee's claim would not be sufficient to hold the assessee to be guilty of concealment. – ITAT Special Bench </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For making an assessment for escaped income, there are various stages. Initially an opinion is to be formed vis-a-vis Explanation 2, then a notice for reopening the assessment is to be issued u/s 148, and a time limit is to be seen as provided in section 149 for issuing the notice, section 150 deals with "provisions for cases where assessment is in pursuance of an order of the appeals etc.", section 151 'deals with "sanction for issue of notice", section 152 deals with rates of tax to be charged on escaped the assessment and certain other specific provisions and lastly, the assessment is to be made within time limit provided under section 153 for completion of assessment or reassessment. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Speculative loss:</strong> The assessee being a company its loss as relates to purchase and sale of shares would be on speculation account because of the specific provision of Expl. to Section 73 of the Act unless it falls in the exception provided in the Explanation to section 73 of the Act. The loss arising from the purchase and sale of shares was therefore rightly held to be speculation loss. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Penalty:</strong> It is a trite law that concealment proceedings are penal in character and under the substantive provisions of section 271(1)(c), it is for the department to prove that the assessee had concealed the particulars of his income or furnished inaccurate particulars thereof to bring the case of the assessee within the mischief of the main provisions of section 271(1)(c) of the Act. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Penalty cannot be levied by AO on a new ground discovered by CIT(A):</strong> penalty proceedings u/s.271 are to be initiated in the course of any proceedings under the Act, either by Assessing Officer or CIT(A) or the CIT. Here in the present case they were initiated by the Assessing Officer and were initiated in the cause of reassessment proceedings for the disallowance of loss as capital loss. That ground of disallowance was not accepted by the CIT(A) as correct and therefore the entire edifice crumbles and falls down. The penalty initiated on that ground cannot fructify and, therefore, cannot also be levied. </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"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Valuation of physician samples matter goes to larger bench in view of bringing the medicaments under the provisions of Section 4A </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">VALUATION of Physician samples seems to be a subject matter of never ending dispute. Since there is no sale involved and the samples are distributed free, the transaction value under Section 4(1)(a) is not applicable. Therefore the value has to be arrived as per the provisions of the Central Excise Valuation (Determination of the Price of Excisable goods) Rules 2000. Even under the valuation rules, there was a dispute whether the value has to be arrived on the basis of cost of production or as per the provisions of Rule 4 of the valuation rules. </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>Law does not countenance a situation where the person is rendered remediless – Matter remanded, to Commissioner(A) for passing fresh order on merits in accordance with law, by Tribunal. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The best part of this order is where the Tribunal asks the Departmental Representative as to what would be the remedy available to the appellant in the present case. <em><strong>Needless to mention, he remained tightlipped. </strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The case goes thus – Intending to set up another plant, the appellant approached the jurisdictional Commissioner seeking permission to shift the plant/equipments involving modvat/cenvat credit on capital goods to the tune of Rs 16,51,800/- as well as for transfer of accumulated cenvat credit lying in the excise records. Correspondence took place between the appellant and the authorities and, finally, the impugned communication was made in terms of which <em><strong>the appellant was advised</strong> </em> by the lower authorities that they can remove the capital goods only on payment of cenvat credit taken on the said capital goods. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee was not pleased with this communication went in appeal before the Commissioner(A) who dismissed the same as being non maintainable by holding that the <em><strong>communication was advisory in nature and no direction had been issued to the appellant</strong>. </em></font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns tomorrow for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more<strong> DDT </strong></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> </body> </html>