TIOL-DDT 893 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!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>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 893 </font><br>
24.06.2008 <br>
Tuesday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Deemed exports – no refund of CENVAT Credit – Board communicates TIOL case law </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We
have been immodestly claiming that the best way to win legal battles is by
logging on to TIOL. Now the wise government also seems to have realised this.
A case reported by us, <em>Refund of unutilized CENVAT credit – Deemed Exports
are not physical exports - Since the appellant has not physically exported
the goods but merely supplied the goods to 100% EOU , the provisions of Rule
5 of Cenvat Credit Rules, 2004 are not applicable </em>- CCE , Pune II Vs
Quality Screens reported in </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2008/2008-TIOL-296-CESTAT-MUM.htm" target="_blank">2008-TIOL-296-CESTAT-MUM</a></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">,
has caught the attention of the Department. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Board clarifies that the provisions of Rule 5 of the CENVAT Credit Rules, 2004 are not applicable. The remedy lies in claiming refund of terminal excise duty from the Ministry of Commerce as per the Foreign Trade Policy and the provisions in the Handbook of Procedures (Vol. 1). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants the field to take note of the CESTAT order. </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=31&filename=notification/excise/2008/deemed_export.htm" target="_blank">CBEC 's F. No. 267/124/2007 CX 8 Dated : March 24, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Exemption from excise duty under S. No. 10 of notification No. 30/2004 the Raymond case – Board reacts </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please recall yesterday's <strong><font color="#FF6633">DDT</font> </strong> story, <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7479" target="_blank">Fear of arrest costs an assessee Rs 16 Crores</a> – </strong>Now the Board wants to know if there are similar issues elsewhere. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board letter states, “The exemption from excise duty under this S. No. 10 is available if the staple fibres are procured from outside and subjected to carding, combing or any process required for spinning.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has been brought to the notice of Board that there are units who procure "polyester tow " falling under heading 5501 and manufacture Tops falling under Heading 5506 using the tow-to-top process and are wrongly availing exemption from excise duty under S. No.10 of notification No. 30/2004- CE dated 9.7.2004. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, Board wants details from the field about units which are procuring "polyester tow" and manufacture "Tops'' under heading 5506 and are availing exemption from excise duty under S. No.10 of notification No. 30/2004- CE dated 9.7.2004. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The field can also cite the sad case of Raymond ending up paying Rs. 8 Crores! </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=31&filename=notification/excise/2008/exemption.htm" target="_blank">CBEC 's F. No. 332/19/2008- TRU Dated : June 20, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Assault on customs corruption </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Jamaica Chamber of Commerce ( JCC ) has assured its support to the new Commissioner of Customs Danville Walker, helping him to clean up an extremely corrupt Customs system. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The JCC wants those involved in corruption to be made to suffer the full extent of the law, with no exceptions. This must include the forfeiture of all assets gained through these illegal activities. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ineffectiveness of Customs enforcement, the inadequacy of the punishment and the inability to publish names of offenders are only some of the issues that need to be addressed in fixing the "very broken system". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Despite the JCC 's many attempts to provide the Customs Department with information regarding these offences, little or nothing has happened over these past three years”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Walker, who took up the post of Commissioner of Customs a few weeks ago, has met resistance, particularly from Customs brokers, to his attempts to clean up the Customs system. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">JCC strongly feels that the threat of continued corruption of our import system cannot go unaddressed, as it poses a threat to the national treasury, national security and all legitimate businesses. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The JCC says,"This thrust to clean up Customs must not only be seen as a fight to stamp out corruption, but as a first step toward lowering taxes in the near future. A simplified tax system will reduce the incentive that promotes corruption.” </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What can a wig cover? A kg of cocaine </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs officers in Norway were fascinated by the bulging wig of a 32 year old British woman, last week. The wig concealed a 1 kg bag of cocaine glued to her head. The cocaine was glued so firmly to the woman's real hair that police had to take her to the local hospital to have it removed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The woman is arrested and the cocaine with the container is seized – the container is the wig and not the woman's head. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Jurispruden<font color="#FF6633" size="5"> tiol</font> – Tomorrow's cases </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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 color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"></b></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></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>Loss in whatever way or form is a loss referred to in Section 35B – appeal to tribunal not maintainable – Revenue does not know where to file the appeal </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Remedy lies in filing a revision application before the Central Government in terms of section 35EE of the CEA '44 – time spent during pendency of appeal before Tribunal to be excluded – Tribunal cannot on its own transfer appeal to Central government. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Here is a case of the Revenue approaching the wrong forum. If the Revenue Administration does not know where to file the appeal, can you blame the assessee? </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>Even if services provided are indirectly connected with C & F operations of some other person, those services would be included in definition of C & F Agent – Tribunal orders pre-deposit of Rs.3.71 Cr and advises that early hearing application may be moved. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">THE</font></strong> Appellant has been saddled with a massive Service Tax liability of Rs.21.74 crores , equivalent penalty u/s 78 and other penalties on the ground that the activity that they undertake is falling within the ambit of the Service category “ Clearing and Forwarding Agent” whereas it is the contention of the appellant that they are liable to pay Service Tax “Business Auxiliary Service” from 16.06.2005 and not earlier. </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>Imported Cars eligible for depreciation: ITAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Depreciation on imported cars would be permissible if cars are used for providing transportation services to tourists. This legal position would not change if transportation services are provided as part of package tour for tourists since the tourist who opts for package tour agrees to pay for a number of services including the use of car. </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 <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>