TIOL-DDT 896 · the untouched capture
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<p align="justify"><font size="3" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">TIOL-DDT 896 </font></strong><strong></strong></font><font face="Verdana, Arial, Helvetica, sans-serif"><font size="2"><strong><br>
27.06.2008 <br>
Friday </strong></font></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax – Government exempts supply of transport vehicles to GTA </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this year's budget, services provided in relation to supply of tangible goods for use, without transfer of possession and effective control, has been made as separate taxable service and this service has come into force w.e.f. 16.05.2008. Consequently, supply of goods carriage to the GTA , without transfer of possession and effective control, for using the goods carriage for transport of goods by road becomes leviable to service tax. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Representations have been received from the All India Confederation of Goods Vehicle Owners' Associations and also from the All India Motor Transport Congress requesting to provide relief on account of levy of service tax on supply of goods carriage to GTA for use in transport of goods. It has been stated that GTAs often provide services in relation to transportation of goods by road using the goods carriage obtained on rent or hire basis. The relief has been sought on various grounds inter alia that the service tax paid on renting / hiring of goods carriage, without right of possession and effective control, could not be taken as input credit for payment of service tax towards GTA service. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Normally the Government is quick to react to representations from the Transport sector, for they can literally take to the roads. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Government has exempted the <em>taxable service of supply of a goods carriage, without transferring right of possession and effective control of such goods carriage, referred to in sub-clause (zzzzj) of clause (105) of section 65 of the Finance Act, provided by any person to a goods transport agency for use by the said goods transport agency to provide any service, referred to in sub-clause (zzp) of clause (105) of section 65 of the Finance Act, to a customer in relation to transport of goods by road in the said goods carriage, from the whole of the service tax leviable thereon under section 66 of the Finance Act. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The exemption is applicable from 26.06.2008, but the levy was from 16.05.2008. Now what about the forty days when there was no exemption? Government will give a retrospective exemption after about five years and protracted litigation! </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=40&filename=notification/servicetax/2008/stnot08_029.htm" target="_blank">Notification No. 29/2008-Service Tax Dated: June 26, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Duty on DTA clearances from EOU – Education Cess twice or thrice? </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Our recent breaking news story on <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7483%20" target="_blank">Education Cess payable by EOUs</a> has evoked response on expected lines. A Netizen sent us this mail: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sir, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Legally speaking, the analysis in your news report appears doubtful for the following reasons. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) For DTA clearances from EOU, duties are payable in accordance with proviso to Section 3(1) of Central Excise Act. This proviso mandates levy of excise duty under the Central Excise Act equivalent to the aggregate duties of Customs under the Customs Act leviable on like goods if imported into India . <br>
<br>
(ii) Under proviso to Section 3(1), only measure of duty is prescribed but the duty leviable is under the Central Excise Act. The purpose of this levy is to impose equivalent duties of customs when paid by EOU for DTA clearances, as they are getting their all inputs without payment of duties and this is how it is equated with the aggregate duties of Customs leviable on like goods if imported into India . <br>
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(iii) There are several duties which are not levied under the Central Excise Act <strong><font color="#FF6633">but</font> </strong> levied under the Finance Act. These levies are always applicable for the given situation <strong><font color="#FF6633">over and above the levies</font> </strong> under the Central Excise Act. <br>
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In order to avoid the <strong><font color="#FF6633">double duties</font> </strong> on EOU clerances to DTA, Government has been issuing notifications exempting these duties right from 1984 and currently the notification applicable is 24/2003-CE dated 31.03.2003. This notification was issued rescinding the earlier Notification No. 125/84, 127/84 & 55/91. <br>
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The above aspect of double duty is elaborately explained in CBEC Circular No. 23/84 dated <strong><font color="#FF6633">29.05.1984</font> </strong> issued from File No. 202/12/84-CX-6. This circular was also published in CBEC Bulletin of April - June 1984. <br>
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(iv) On introduction of Education Cess in the <strong> <font color="#FF6633">Finance Act 2004</font> </strong> and Secondary and Higher Education Cess in the <strong><font color="#FF6633">Finance Act 2007</font> </strong>, issues have been taken up by the EOU Units as well as Industry with <strong><font color="#FF6633">DG-Export Promotion</font> </strong> as well as <strong><font color="#FF6633">TRU</font> </strong>. Both sections in MOF are fully seized of the matter as to the imposition of Education Cess and SHE Cess <strong><font color="#FF6633">third time</font> </strong> on DTA clearances from EOU but for reasons known only to them, they are not amending Notification No.24/2003-CE. <br>
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It appears MOF is not considerate towards existence of EOU which are the creation of MOC and hence reluctance in even <strong><font color="#FF6633">correcting the anomalies of taxation</font> </strong>. <br>
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(v) Your reference to Notification No. 23/2003-CE also does not appear to be correct, as in this notification exemption of certain duties are granted which are leviable under the Central Excise Act. The levies under Finance Act are independent of Central Excise Act though for levy and collection, provisions of the Central Excise Act are extended. In other words, <strong><font color="#FF6633">charge</font> </strong> is created under the Finance Act and not under the Central Excise Act. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The EOU Units will not have any relief until the <strong><font color="#FF6633">double levies</font> </strong> are exempted by amending the notification 24/2003-CE. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thank you very much Sir for taking pains to share your views with us. We do agree that, though the duties payable as are measured as if the goods are imported, the nature of duty is excise duty only and is levied under Section 3. But Notification 23/2003 CE exempted duties levied under Section 3 <strong><font color="#FF6633">in excess of the amount payable under the Notification. </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If we call one cess as inside Section 3 Cess (included in the aggregate duties of customs) and the other as outside Section 3 Cess, then by virtue of Notification 23/2003, all amounts in excess of the duty payable under Notification 23/2003 CE are exempted and thus the inside Cess stands exempted. But the “outside Section 3 Cess” is payable on the total duty payable under Notification 23/2003 CE. Therefore we reported that there is no double levy as the “inside Section 3 Cess” stands exempted and only one cess is payable, i.e cess leviable under the Finance Act 2004. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
fact, this was the view expressed by the Larger Bench 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/2002/2002-TIOL-282-CESTAT-DEL-LB.htm" target="_blank">2002-TIOL-282-CESTAT-DEL-LB</a></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">,
while dealing with exemption Notification 2/95-CE which is the old avatar
of 23/2003 CE. The Larger Bench held that whatever may be the duty leviable
under Section 3 of the Central Excise Act for DTA clearances, the amount
payable in excess of the amount mentioned the Notification stands exempted
. Actually the Notification exempted duty in excess of 50% of the duty leviable
under Section 12 of the Customs Act. When the assessees stared paying only
50% of the BCD on DTA clearances ( without paying any CVD ), the revenue
objected and demanded CVD also. The Larger Bench held that though the CVD
is leviable under Section 3 of the Central Excise Act, since the amount in
excess of 50% of the BCD is exempted , the entire CVD stands exempted. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification 24/2003 CE has no relevance to the facts of the case as the same is not applicable if the goods are cleared in DTA. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CESTAT President S N Jha appointed Chairman of Bihar Human Rights Commission </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">President of CESTAT and former Chief Justice of Rajasthan High Court, Justice SN Jha has been appointed as the first chairman of the Bihar State Human Rights Commission. As Chairman, he would have a five year tenure and have the status of a Cabinet Minister. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Last month the Patna High Court had asked the Bihar Government to constitute the state human rights commission by June 30, 2008 and report it to the court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The committee comprising Chief Minister Nitish Kumar, Deputy Chief Minister Sushil Kumar Modi, Assembly Speaker Uday Narayan Chaudhary, Legislative Council Chairman Arun Kumar, leader of opposition in the assembly Rabri Devi and the leader in the Council Gulam Gaus failed to reach a consensus on the names of the panel chairman and its members despite several rounds of talks. So the state cabinet had recently authorised the chief minister to nominate them. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now will the President abdicate the CESTAT for the more prestigious HRC? Will Bihar's gain be India 's loss? CESTAT is really in bad times. Judicial indiscipline and indiscretion are on the rise and it badly needs a powerful leader now. At this moment if the CESTAT is headless, it will cause irreparable damage, but then you can't expect the President to sacrifice a great opportunity for the sake of being in CESTAT for a couple of years. If Justice Jha now decides to go to Bihar HRC, it will take at least six months for the Government to find a new President for CESTAT, but if he doesn't go, it is back to square one for the Bihar Government to find a new Chairman. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Our selfish interest would be for Justice Jha to continue in CESTAT, but he has an incomparable offer from the Bihar Government. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We didn't want to embarrass Justice Jha with questions about his decision. So we didn't even ask him, but we wish, he continues in CESTAT. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Who said that Department is not properly represented in CESTAT? </font></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TIOL in the Court!</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is often the grouse of the department that the interest of the department is not properly represented in CESTAT. It is also widely felt that the SDRs posted in CESTAT benches are not properly equipped to handle the effective arguments put forth by the opposite side and often they lack in infrastructure. But, we are happy to note that TIOL has reached even the Court room of CESTAT. G. Natarajan, Advocate from Chennai reports that for the SDRs in Chennai, the day opens only after an update from TIOL. The picture below, would show the SDR, religiously browsing the TIOL - for his Daily Dose of Taxation - Right in the Court room, TIOL is flashing on the SDR's table and any case law reported in TIOL, would be relied upon by the SDR, the next moment, literally. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If you want to win cases, log on to TIOL. </font></p>
<p align="center"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><b><img src="http://www.taxindiaonline.com/RC2/image/stories/gnatarajan.jpg" alt="Legal Corner Icon" width="320" height="240" hspace="5" border="0" align="center"></b></strong></strong></strong></strong></strong></strong></strong></font></p>
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<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Jurispruden <font color="#FF6633" size="5">tiol</font> – Monday ' s cases</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><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></strong></strong></strong></strong></strong></strong></strong></font><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>CESTAT rapped for hotchpotch manner in deciding case without application of mind, and without examining entire record, from appropriate standpoint; Tribunal directed to dispose appeals expeditiously, but not to adopt any slipshod method, under garb of expeditious disposal: High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A look at the order of the learned Tribunal shows an entirely sorry state of affairs; the matters have been decided by the learned Tribunal in absolute hotchpotch manner, without application of mind, and without examining the entire record, from the appropriate standpoint, to arrive at an ultimately reconcilable conclusion, of the whole scenario. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The impugned judgment is set aside whole hog, and the matters are remanded back to the learned Tribunal, for deciding the appeals afresh, bearing in mind the observations made above, obviously, the natural consequence of setting aside will flow. Since the matter is already very old, it is expected, that the Tribunal will decide the appeals expeditiously, but shall not adopt any slipshod method, under the garb of expeditious disposal. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Anti-dumping duty is payable during the interregnum, after the provisional duty lapsed but before the definitive duty was notified; Larger Bench decision binding on division benches - CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is quite often seen that the Government imposes Anti Dumping Duty on a provisional basis for six months and then forgets about it, allows it to lapse but later wakes up and issues a definitive anti dumping duty, effective from the original date of provisional notification. There is often a gap between the end of provisional duty and the beginning of the definitive notification. For example in the instant case, provisional anti dumping duty was imposed on C FL on 21.12.2001 and it was to be effective till 20.6.2002. Definitive anti dumping was imposed on 10.12.2002, that is six months after the provisional anti dumping lapsed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the question is “can anti dumping duty be levied during the period 21.6.2002 to 9.12.2002?” </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Settlement Commission is not a forum to enable dishonest taxpayers to continue his dishonest conduct and still claim benefit: Madras HC </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">TO arrest a growth in mounting tax arrears the Govt has provided assessees the choice of settling their disputes, and one can file an application for the same before the Settlement Commission. But it is not without a condition. The settlement option is not available to - what the Madras High Court has held in the latest decision - dishonest assessees. The Bench observes that an application to the Commission is not intended to enable a dishonest assessee to continue his dishonest conduct and still claim benefit which can be conferred by the Commission if the Commission were to ultimately make an order of settlement. An assessee is not allowed to approach the Commission without disclosing full and true income and such true, full and honest disclosure is a pre-condition for invoking the Commission's jurisdiction under section 245C of the Income Tax Act, 1961. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#663399">See our columns Monday for the judgements </font></font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more DDT </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Weekend. </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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