TIOL-DDT 897 · 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 897 </font></strong><strong></strong></font><font face="Verdana, Arial, Helvetica, sans-serif"><font size="2"><strong><br>
30.06.2008 <br>
Monday </strong></font></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Export Duty on Steel Products – applicable for clearances to SEZ – Confusion continues </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> left
hand not knowing what the right hand is doing is a hallmark of babudom .On
10.5.2008, the Government introduced export duty on several steel products.
Immediately a doubt was raised whether the export duty is payable for clearances
to SEZ.<strong> DDT </strong> asked a Chief Commissioner
whether the issue was discussed in the conference of Chief Commissioners.
The Chief Commissioner said, “what is there to discuss ?, we are clear that
export duty is payable!” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Commissioner issued a clarification that no such duty is payable. The CBEC and the Revenue Departments are <strong><font color="#FF0000">SILENT</font></strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the meantime, the Commerce Ministry issued a Circular stating that, “While this Ministry has taken up this matter with DOR & Ministry of Law, you are requested to allow supply of steel products to SEZs on submission of a Bond and a Bank Guarantee in case the duty will be finally payable/chargeable.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, now the Commerce Ministry has introduced a bond and bank guarantee. Tax has to be collected by AUTHORITY OF LAW and not by bonds and bank Guarantees. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Based on the Commerce Ministry's Circular, the SEZ , Vizag has issued a Circular stipulating that:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The SEZ Developers and Units are advised to submit an undertaking on Rs.100 /- Non-judicial Stamp Paper to the Specified Officer/Authorized Officer for clearance of the Steel procured by them for undertaking the authorised operations. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The Specified Officers and Authorized Officers of the SEZs are advised to obtain an Undertaking on Rs.100 /- Non-judicial Stamp Paper from the SEZ Developers and Units in respect of the export duty payment alongwith the interest if any leviable at a later stage and clear the steel procured by the SEZs Developers and Units for undertaking the authorized operations. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Customs officers posted in Vizag SEZ are in a dilemma. Should they follow the directions of the Development Commissioner and the Commerce Ministry's Circular and ask for a bond or follow the Revenue opinion that duty has to be collected or follow the benign Commissioner of Central Excise who has held that no duty is payable? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It's not even Catch 22; is there a Catch 33? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why can't the CBEC issue an urgent clarification and put an end to the controversy? Should Government always look like an adversary? </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=260&filename=sez/sez_instructions/2006/sez06ins010.htm" target="_blank">Commerce Ministry's F. No. 6/2/2008 - SEZ Dated 23rd May, 2008</a> and <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=260&filename=sez/sez_instructions/2006/sez06ins009.htm" target="_blank">Vizag SEZ No.9 / SEZ /Misc/2008- Dated 02.06.2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC notifies exchange rates for July </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC has notified the Exchange Rates for Imported Goods and Export Goods with effect from 1 st July 2008. </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=24&filename=notification/custom/2008/cnt08_079.htm" target="_blank">Notification NO.79 /2008 (NT)-CUSTOMS , Dated: June 25, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>India-Danish
Double Taxation Avoidance Convention (DTAC ) - suspension of collection
of taxes during Mutual Agreement Procedure – CBDT Instruction</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In order to avoid the unintended hardship to the taxpayers, as well as for efficient management of collection of revenue, the Competent Authorities of India and Denmark have signed a Memorandum of Understanding ( MOU ) regarding suspension of collection of taxes during the pendency of MAP (Mutual Agreement Procedure ) . The MOU is applicable in case of a taxpayer who- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) is a resident of Denmark , or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) an Indian resident entity in cases involving transfer pricing, and in whose case MAP is invoked through the Danish Competent Authority and has been admitted by the Indian Competent Authority. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On receipt of a formal request in terms of this MOU from a taxpayer being a resident of Denmark or an Indian resident entity (referred to in paragraph 2 above) in a case where MAP has been invoked through the Danish Competent Authority and the same has been admitted by the Indian Competent Authority, the Assessing Officer (AO) concerned is required to keep the enforcement of collection of outstanding taxes, including any related interest or penalties, in abeyance in respect of such taxpayers for the assessment years which are the subject of
MAP proceedings- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i) after obtaining a confirmation regarding pendency of MAP from the Foreign Tax & Tax Research Division of Central Board of Direct Taxes; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii) on receipt of a Bank Guarantee in the model draft format annexed to the MOU for an amount calculated in accordance with the manner indicated therein. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The effect of the Memorandum is that the furnishing of the bank guarantee should be treated as sufficient arrangement to qualify for exercising discretion by the A.O. for extension of time limit for payment of taxes. The extension however, shall subsist until the case is resolved under MAP . In case the Competent Authorities agree that there is no resolution possible, intimation to this effect shall be given to the A.O., who shall, thereafter be entitled to invoke the guarantee in case the tax payer fails to pay the demand. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In cases where a resolution of dispute is arrived at by the Competent Authorities after mutual consultation, the guarantee furnished shall be invoked in the following circumstances:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the taxpayer does not give his acceptance to the MAP resolution, or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the taxpayer gives its acceptance to the MAP resolution and fails to pay the demand determined by the Assessing Officer in terms of the MAP resolution as per the procedure laid down in Rule 44H of the Income-tax Rules, 1962, and indicated in the revised notice of demand sent to the tax payer. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Assessing Officer will, however, before invoking the guarantee seek the consent of the Indian Competent Authority, which shall grant the same after intimating its counterpart in Denmark . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Assessing Officers, as well as the Joint Commissioners of Income-tax/Joint Directors of Income-tax/ Additional Commissioners of Income-tax/Additional Directors of Income-tax/Commissioners of Income-tax/ Directors of Income-tax, are advised to keep a close watch on the limitation of the guarantee furnished under the MAP . </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=67&filename=notification/cbdt/2008/instruct0807.htm" target="_blank">CBDT Instruction No. 7/2008 Dated 24 June, 2008 </a></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> –</strong> <strong>Tomorrow's cases </strong></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>CBEC's failure to appoint Committee of Chief Commissioners to review order of Commissioner - Board Member asked to appear before Tribunal: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It goes without saying that before we can decide the prayer for Condonation of Delay in filing the present appeal by the Department, it is absolutely necessary to hear and ascertain the reasons of delay from the Authority who has caused the delay, which apparently in this case is the Board as it appears it did not carry out its statutory obligation to constitute the Committee of the Chief Commissioners. Hence, we direct the Board through its Member (Personnel) to file a proper affidavit explaining the reasons for delay in constituting the Committee of Chief Commissioners and also to explain the modality it has adopted to ensure that such delays do not recur in the future jeopardizing huge amount of Public Revenue as appears to have happened in this case. As already directed in the open court, such affidavit shall be filed on or before the next day of hearing on 8/7/ 2008 . We further direct that the Member (Personnel) of the Board be present at the time of hearing to explain any further queries that the Bench may have in regard to delays taking place in fulfilling the statutory obligation of appointing the Chief Commissioners to the Committee as also what arrangement the Board had made to meet the revised time limits proposed in the Finance Bill, 2007 and enacted by the Finance Act, 2007 with effect from 11.05.2007. </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Appeal against an Interim order of Stay passed u/s 35F of the CEA '44 by Commissioner(Appeals) is not maintainable before Tribunal </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong>this case, the appellant had filed a Stay application before the Commissioner( A) who in exercise of powers conferred in terms of section 35F of the CEA '44 granted Stay subject to the assessee making a pre-deposit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant is aggrieved with this order and files an appeal before the Tribunal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Before the Bench, the SDR submitted that the appeals are not maintainable as the provisions of Section 35B (1)(b) permits an aggrieved person to appeal to the Appellate Tribunal against an order passed by the Commissioner(Appeals) under section 35A of the CEA '44 and not the ones passed in terms of section 35F of the CEA '44 . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal agreed with this submission and <strong><em><font color="#FF6633">dismissed the appeals as not maintainable. </font></em></strong></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>Block assessment - limitation starts from date of second search, not the first: ITAT Special Bench by Majority </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The date on which the search was concluded is by law to be taken according to the recording made in the last panchnama . In the present case, in the panchnama prepared on 16.4.1999, it has been recorded that the search proceedings were finally concluded on that date. Since this panchnama has been issued in both the names of "Sh. Subhash Verma and Smt. Krishna Verma" the date on which the search was concluded as per this panchnama should be 16.4.1999 in both the cases. Therefore, if an uncomplicated view of the facts is taken, there should be no difficulty in holding that the Assessing Officer could complete the block assessments on or before 30.4.2001. </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></font></p>
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