TIOL-DDT 900 · 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 900</font> <br>
03.07.2008 <br>
Thursday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Private Bonded Warehouses – EOUs – Who should give permission – CBEC clarifies. </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Board's Circular No. 68/95-CUS., dated 15.06.1995, the requests for grant of licenses for private bonded warehouses will be considered and decided at the level of Commissioners without making any reference to the Board. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the Board's Circular No.132/95-CUS ., dated 22.12.1995 the requests for grant of in-bond Manufacture facility u/s 65 of the Customs Act, 1962 will henceforth be considered and decided at the level of Commissioners without making any reference to the Board. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">EOUs are Private Bonded Warehouses and they also manufacture in bond under Section 65 of the Customs Act. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Representations have been received from the trade and field formations regarding applicability of the Board instructions to the 100% EOUs and regarding competent authority for Appointment/Licensing of Public/Private Bonded Warehouses u/s 57 and 58 and grant of permission for in-bond manufacturing facility u/s 65 of the Customs Act, 1962 as provided under the instructions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As ascertained by the Board from the field formations, different practices are being followed and in case of 100% EOUs , the licensing u/s 58 and grant of permission for in-bond manufacturing facility u/s 65 of the Customs Act, 1962 is generally considered and decided by Assistant Commissioner of Customs or Deputy Commissioner of Customs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, CBEC has now clarified, for the purpose of ensuring uniformity in practice and also to prevent misuse of the facility, that the aforesaid instructions issued vide Board's Circular No.68/95-CUS ., dated 15.06.1995 and Circular No.132/95-CUS ., dated 22.12.1995 regarding entrusting the specified functions to the Commissioners are being reiterated. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, in case of 100% EOUs , the licensing u/s 58 and grant of permission for in-bond manufacturing facility u/s 65 of the Customs Act, 1962 shall continue to be considered and decided by Assistant Commissioner of Customs or Deputy Commissioner of Customs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Means THERE IS NO CHANGE IN PROCEDURE. </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_09.htm">CBEC Circular NO 9/2008 Dated: June 25, 2008 </a></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC appoints Commissioners for specific Adjudication </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board has appointed certain Commissioners as Adjudication Authorities for certain specified DRI cases. </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_081.htm" target="_blank">Notification Nos 81</a><strong>, </strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2008/cnt08_082.htm" target="_blank">82</a><strong>, </strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2008/cnt08_083.htm" target="_blank">83</a><strong> and </strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2008/cnt08_084.htm" target="_blank">84/2008 – Cus NT Dated 27 June, 2008 </a></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Focus Products Scheme – Glass Inners for Vacuum Flasks </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Glass Inners for Vacuum Flasks or for other vacuum vessels are entitled to FPS benefits on exports w.e.f 1.4.2008. The DGFT has amended Table 11 in Appendix 37D </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=47&filename=notification/dgft/2008/dgft08pn037.htm" target="_blank">DGFT Public Notice No. 37 (RE-2008)/2004- 2009,Dated : July 1, 2008 </a></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT
validates all old Public Notices, Circulars etc - is it correct? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government has amended the Foreign Trade Policy 2004-09 to insert a new para 1.4A which reads as, </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">“The earlier Public Notices, Policy Circulars, Notifications or Decisions will also be deemed to be in force as if promulgated under the current policy to the extent they are not inconsistent with the provisions of the present policy and procedure.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is it permissible? By a Notification, the Government now says that all the old circulars and Public Notices are deemed to be issued under the present policy. And that too four years after the FTP was brought in. What happens for the period from 2004 to 2008? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">The Foreign Trade Policy itself is invalid</font> </strong>. Why? Read on:- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The heading of Chapter II of <strong><font color="#FF6633">The Foreign Trade (Development and Regulation) Act, 1992</font></strong> reads as </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Power of Central Government to make Orders and Announce<font color="#FF6633"> Export and Import Policy </font></font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 5 of the Act reads as follows:- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>5. <font color="#FF6633">Export and Import Policy:</font> </strong>The Central Government may, from time to time, formulate and announce by notification in the Official Gazette, the <font color="#FF6633"><strong>Export and Import Policy</strong></font> </a>and may also, in like manner, amend that policy. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So it is section 5 of the Act which gives the Government the power to announce the <strong><font color="#FF6633">Exim Policy</font></strong> by notification and the Government is also given the power to amend the <strong><font color="#FF6633">policy</font></strong><font color="#FF6633">. </font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In exercise of these powers the Government had announced the Exim Policy 2002-07 . Para 1.1 of the Exim Policy 2002-07 reads as:- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>1.1 In exercise of the powers conferred under Section 5 of The Foreign Trade (Development and Regulation Act), 1992 (No. 22 of 1992), the Central Government hereby notifies the Export and Import Policy for the period 2002-2007. This Policy shall come into force with effect from 1st April, 2002 <font color="#FF6633">and shall remain in force up to 31 st March, 2007</font> and will be co-terminus with the Tenth Five Year Plan (2002-2007). However, the Central Government reserves the right in public interest to make any amendments to this Policy in exercise of the powers conferred by Section-5 of the Act. Such amendment shall be made by means of a Notification published in the Gazette of India .</strong> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the 2002-2007 policy announcement by notification stipulated that the policy shall remain in force up to 31 st March 200 7 . Of course the Government's right to amend the policy by notification as stipulated in Section 5 was reiterated in the policy too. Unless this para is amended by notification, the Exim Policy 2002-2007 is valid till 31 st March 2007. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">How was the Foreign Trade Policy 2004-09 brought in? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Para 1.2 of the Foreign Trade Policy announced on 31 st August 2004 reads as </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In exercise of the powers conferred under Section 5 of The Foreign Trade (Development and Regulation Act), 1992 (No. 22 of 1992), the Central Government hereby notifies the <strong>Foreign Trade Policy</strong> </a>for the period 2004-2009 incorporating the Export and Import Policy for the period 2002-2007, as modified. This Policy shall come into force with effect from 1 st September, 2004 and shall remain in force upto 31 st March, 2009, unless as otherwise specified. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This means a new policy called <strong>Foreign Trade Policy</strong> </a>has been announced and the Government claims the power to flow from Section 5. But Section 5 as was seen gives power to announce <strong>Export and Import Policy , not Foreign Trade Policy. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The new Foreign Trade Policy has incorporated the Exim Policy. But the Government has power to amend the policy, not to incorporate it into some other policy. Therefore in the absence of any amendment to the Exim Policy 2002-07, para 1.1, that policy was valid till 2007. Even assuming that the Government has the power to incorporate (may be power to amend includes power to incorporate) the Exim Policy into the Foreign Trade Policy, the fact remains that section 5 of the Act gives the Government the power to announce the Exim Policy not the Foreign Trade Policy . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now what happens to the incorporated Exim Policy? Does it merge with the Foreign Trade Policy or does it still stand as a part of the Foreign Trade Policy valid till 2007? </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And what if people do not obey the directions of the policy? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Section 11 of the Act:- </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. Contravention of provisions of this Act, Rules, Orders and Export and Import Policy: </font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (1) No export or import shall be made by any person except in accordance with the provisions of this Act, the rules and orders made thereunder and the Export and Import Policy for the time being in force. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (2) Where any person makes or abets or attempts to make any export or import in contravention of any provision of this Act or any rules or orders made thereunder or the Export and Import Policy , he shall be liable to a penalty not exceeding one thousand rupees or five times the value of the goods in respect of which any contravention is made or attempted to be made, whichever is more. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) xxxx </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4) xxxx </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5) Where any contravention of a provision of this Act or any rules or orders made thereunder or the<font color="#FF6633"> <strong>Export and Import Policy</strong></font> </a>has been, is being, or is attempted to be made, the goods together with any package, covering or receptacle and any conveyances shall, subject to such requirements and conditions as may be prescribed, be liable to confiscation by the Adjudicating Authority. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So only the contraventions of the <strong><font color="#FF6633">Export and Import Policy</font></strong> are punishable and not the<strong> <font color="#FF6633">Foreign Trade Policy</font></strong><font color="#FF6633">.</font> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The obvious conclusions are </font></p>
<div align="justify">
<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The Government has no power to make the Foreign Trade Policy under section 5 of the Act.
</font> </p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. If the <strong><font color="#FF6633">Foreign Trade Policy</font></strong> is the Export and Import Policy, it should be clearly mentioned.
</font> </p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. In the absence of amendment to the <strong><font color="#FF6633">Export and Import Policy</font></strong>, it was valid till 2007.
</font> </p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. If there is a separate Foreign Trade Policy, there is no provision under the Act for any penalty for contravention of the Foreign Trade Policy as the Act does not recognise the Foreign Trade Policy. </font></p>
</blockquote>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What's in a name? That which you call <strong><font color="#FF6633">Export and Import Policy</font></strong> will be equally good as<strong> <font color="#FF6633">FOREIGN TRADE POLICY</font></strong><font color="#FF6633">.</font> Or will it be? </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=45&filename=notification/dgft/2008/dgft08not020.htm" target="_blank">DGFT Notification No. 20 (RE-2008)/2004-2009, Dated: July 1, 2008 </a></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">NFE – Exports
prohibited/restricted – five year period to be extended </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per para 6.5 of the Foreign Trade Policy, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">EOU / EHTP / BTP / STP unit shall be a positive net foreign exchange earner except for sector specific provision of Appendix 14-I-C of Handbook, where a higher value addition shall be required. NFE Earnings shall be calculated cumulatively in blocks of <strong><font color="#FF6633">five years</font></strong>, starting from commencement of production. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now it is stipulated that, “Whenever a unit is unable to export due to prohibition/restriction imposed on export of any product mentioned in LoP , the five year block period for calculation of NFE earnings may be suitably extended by BoA .” </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=45&filename=notification/dgft/2008/dgft08not021.htm" target="_blank">DGFT Notification No 21 (RE-2008)/2004-2009, Dated: July 1, 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></font><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> – Tomorrow's cases</font></strong></p>
<p align="justify"><strong><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><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p>
<p align="justify"><strong><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Computers are capital goods and hence for recovery of credit, provisions of rule 57U would come into play and not rule 57I of CER'44 – No cause for imposition of penalty u/r 57U (6) and interest u/r 11AB : Tribunal </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants had availed modvat credit on computers imported by them in August 1998 and after availing of credit as capital goods, the said computers were put to use for some time. After a couple of months, it was found that the computers had turned out to be faulty and accordingly the same were returned to the supplier but without preparing any duty paying documents. </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Once an order is reviewed by the Commissioner, proper recourse should be to file appeal – but not issuing a show cause notice: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">THIS</font></strong> case highlights the sad state of affairs in one of the largest revenue earning departments next only to Income Tax. Where the words “table posting”, “filed posting”, “cooling off period” “ sensitive” “ non sensitive” are officially recognized, the sections like Tribunal / Appeal are given least preference and are not given the due importance it deserves, though they work in head quarters office right under the no( i )se of the Commissioner. </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Now, looking back in the chain of events, it is strange that such a simple issue could not be realized by one Commissioner (Appeals) who just confirmed the order in original, one Additional Commissioner who just confirmed the Show cause notice issued, one Joint Commissioner who just issued the notice even (with?)/without realizing that the same would not be sustainable on plain reading of Section 35E , one Commissioner who reviewed the order of finalization, but could not see that the appeal is filed within sixty days from 21.2.2006. Should the department waste the valuable time of the Tribunal just to know such simple issues? </strong></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"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">SBI's MICR centre providing managerial services to Banks – Payment to SBI liable for TDS : ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">State Bank of India was managing and clearing of the cheques through MICR Centre by rendering managerial services which falls within the definition of technical services. The definition of "fees for technical services" is very wide. It covers within its ambit any managerial, technical or consultancy services rendered by a person. Since other banks pay to the State Bank of India charges for the MICR facilities regarding identifying, reading and clearing cheques through its special kind of machines, the same is in the nature of fees for technical services and, therefore, will be liable for TDS . </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>