TIOL-DDT 903 · the untouched capture
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<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT
903</font><br>
08.07.2008<br>
Tuesday</strong> </font></div>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Export
Duty on clearances to SEZ – CBEC, PLEASE Clarify!</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Board’s silence is deafening! The Field is thoroughly confused –
both officers and assessees. A Commissioner in Hyderabad has given a written
clarification that no export duty is payable for clearances of the steel products
from the DTA to the SEZ. But the DRI is not impressed, at least not in Hyderabad!
They are merrily summoning manufacturers and persuading them to pay the export
duty. “What about the Commissioner’s clarification?”, asks
the innocent manufacturer. DRI seems to be not bound by it. Has the Commissioner’s
clarification provoked the DRI? Now whose dictum is the assessee to follow?
- The jurisdictional Commissioner’s or the DRI sleuths’?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There
is a concept that the Government should speak with one voice. If the DRI and
the Jurisdictional Commissioner don’t agree on an issue, shouldn’t
they first resolve the issue before attacking the trade?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now
it is almost confirmed that export duty has to be paid, notwithstanding the
brave stance taken by the Commerce Ministry and SEZ Development Commissioners,
but the moot question is who should pay it and when?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
export duty is to be paid at the port of export, not at the factory of manufacture
and it is to be paid by the person filing the export documents like Shipping
Bill or whatever other document is prescribed or accepted.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So
duty is payable just before the goods enter the SEZ and the Revenue Department
has not kept an officer at the gate of the SEZ to collect export duty. Even
the wildest allegations of the DRI cannot charge the manufacturers with smuggling
– after all the goods have been properly presented before a Customs Officer
for entry into the SEZ. If export duty was leviable, he should have ensured
its collection and should not have allowed entry into the SEZ without payment
of the export duty.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For
the confusion within the Department, can the poor trader be held responsible?
At least at this late hour, the Board should come out with a clarification as
to whether export duty is payable on clearances to SEZ and if so, the mechanism
to pay that duty.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today
we are carrying another <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7545" target="_blank">Netizen’s Editorial</a></strong> on the subject</font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Grant
of benefits under Served From India Scheme (SFIS) – DGFT Clarifies</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As
per para 5.4 (v) of EPCG Scheme - FTP RE2007, “Foreign exchange counted
towards fulfilment of EO (over and above the average) shall not be eligible
for incentives / rewards under promotional measures / schemes”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This
clause has been deleted in FTP RE2008.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT
now clarifies that so far as Service Providers are concerned, Para 5.4(v) of
FTP RE2007 applies to foreign exchange earned during 1.4.2007 till 31.3.2008
and does not apply to foreign exchange earned prior to 1.4.2007 or after 31.3.2008.
Service Providers have to first utilize foreign exchange earned during 1.4.2007
till 31.3.2008 for fulfilment of pending EO under EPCG Authorisations (over
and above the average, if any) and SFIS would be entitled only on any additional
foreign exchange earned during 1.4.2007 till 31.3.2008 thereafter.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So
now the DGFT wants RAs to undertake a special drive to cross check and if excess
benefit had been granted, to recover it.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similar
Clarification has been issued in respect of export of goods also.</font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2008/dgft08cir015.htm" target="_blank">DGFT
Policy Circular No 15</a> and <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2008/dgft08cir016.htm" target="_blank">16
(RE-2008)/2004-2009 Dated: July 4, 2008</a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Google
says Income Tax website may harm your computer!</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Try
logging on to <a href="http://www.incometaxindia.gov.in" target="_blank">www.incometaxindia.gov.in</a>
and if you are Google protected, you get a message </font></p>
<p align="justify"><font size="4"><strong><font color="#FF0000" face="Verdana, Arial, Helvetica, sans-serif">Warning</font></strong></font>
<font size="2" face="Verdana, Arial, Helvetica, sans-serif">-
<strong><font size="3">visiting this web site may harm your computer!</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And
if you click on their <a href="http://www.google.com/safebrowsing/diagnostic?site=http://www.incometaxindia.gov.in/" target="_blank">Safe
Browsing diagnostic page</a>, you get a message</font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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/google.jpg" alt="Legal Corner Icon" width="1296" height="626" hspace="5" border="0" align="center"></b></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Safe
Browsing</strong></font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Diagnostic
page for www.incometaxindia.gov.in/</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What
is the current listing status for www.incometaxindia.gov.in/?</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Site
is listed as suspicious - visiting this web site may harm your computer.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Part
of this site was listed for suspicious activity 2 time(s) over the past 90 days.</font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What
happened when Google visited this site?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Of
the 300 pages we tested on the site over the past 90 days, 59 page(s) resulted
in malicious software being downloaded and installed without user consent. The
last time Google visited this site was on 07/07/2008, and the last time suspicious
content was found on this site was on 07/05/2008.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Malicious
software includes 60 scripting exploit(s), 40 trojan(s), 2 exploit(s). Successful
infection resulted in an average of 4 new processes on the target machine.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Malicious
software is hosted on 7 domain(s), including <a href="http://www.google.com/safebrowsing/diagnostic?site=qqcc123.cn" target="_blank">qqcc123.cn</a>,
<a href="http://www.google.com/safebrowsing/diagnostic?site=o7o8gm.cn" target="_blank">o7o8gm.cn,
lokriet.com.</a> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5
domain(s) appear to be functioning as intermediaries for distributing malware
to visitors of this site, including <a href="http://www.google.com/safebrowsing/diagnostic?site=j8j8hei.cn" target="_blank">j8j8hei.cn</a>,
<a href="http://www.google.com/safebrowsing/diagnostic?site=kiiss117.cn" target="_blank">kiiss117.cn</a>,
<a href="http://www.google.com/safebrowsing/diagnostic?site=qq117cc.cn" target="_blank">qq117cc.cn.</a></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Has
this site acted as an intermediary resulting in further distribution of malware?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Over
the past 90 days, www.incometaxindia.gov.in/ did not appear to function as an
intermediary for the infection of any sites.</font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Has
this site hosted malware?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No,
this site has not hosted malicious software over the past 90 days.</font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">How
did this happen?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
some cases, third parties can add malicious code to legitimate sites, which
would cause us to show the warning message.</font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Next
steps:</font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.google.com/interstitial?url=http://www.incometaxindia.gov.in/" target="_blank">Return
to the previous page.</a> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If
you are the owner of this web site, you can request a review of your site
using Google <a href="http://www.google.com/webmasters/tools/" target="_blank">Webmaster
Tools</a>. More information about the review process is available in Google's
<a href="http://www.google.com/support/webmasters/bin/answer.py?answer=45432" target="_blank">Webmaster
Help Center</a>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT
should immediately rectify this problem. This gives a very bad image to the
premier tax collecting agency of India.</font></p>
</blockquote>
<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"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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">Central
Excise </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Provisions
of Chapter VII of the erstwhile Central Excise Rules 1944 have no effect after
the omission of the Rules – CESTAT Larger Bench.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It
was only on 3rd July we reported the Chennai Petroleum case </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2008/2008-TIOL-1040-CESTAT-MAD.htm" target="_blank">2008-TIOL-1040-CESTAT-MAD</a></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> wherein
a reference was made to the Larger Bench with the following questions:</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a)
Whether the special provisions for refineries laid down in Chapter VII of the
erstwhile Central Excise Rules, 1944 can be considered to have continued to
be in force under the Central Excise (No.2) Rules, 2001 and the Central Excise
Rules, 2002; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b)
Whether, after 30.06.2001, the respondents are entitled to the benefit of the
special scheme for refineries provided under Rule 143A of the erstwhile Central
Excise Rules, 1944. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
above reference was made only 13.5.2008 and the Larger Bench has answered reference
very quickly epitomising a faster justice delivery system. Vide their order
dated 30.6.2008, the Larger Bench answered the reference in negative and in
favour of the revenue. </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>Service
Tax paid on GTA services - TR-6 challan has to be considered as valid duty paying
document for availment of credit during the period 01.01.2005 to 15.06.2005
– Issue no longer res integra: Tribunal</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
assessee was availing CENVAT credit on inputs, capital goods, input services
including the service tax paid on the GTA services. They had availed CENVAT
credit of the Service Tax paid on GTA services during the period 01.01.2005
to 15.06.2005 on the basis of the TR-6 challan. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This
was objected by the jurisdictional authorities on the ground that it was only
by notification 28/2005CE(N.T) dated 07.06.2005 [w.e.f 16.06.2005] that such
“TR-6 challans” evidencing Service Tax payment on GTA services were
notified as cenvatable documents. </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>Declaration
for withdrawal of exemption claim is mandatory but time-limit to do so before
due date of filing of return is only directory; Assessee cannot be disadvantaged
even if it exceeds time limit but files it before framing of assessment: High
Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">SECTION
</font></strong>10B of Income Tax Act, 1961 allows exemption to 100% EOU which
can avail the same for any five consecutive years in a block of eight assessment
years. What is in dispute in this case is <strong>whether the requirement of
Section 10B(7) that a declaration for withdrawal of exemption under Section
10B(1) read with Section 10B(3) of the Act should be filed before the due date
of furnishing the return of income under sub-section (1) of Section 139 of the
Act is directory or mandatory? And the Delhi HC has come to the conclusion that
there are two limbs to this issue, and the first one related to filing of a
declaration for withdrawal of a claim of exemption is mandatory whereas the
second limb relating to the time period prescribed for filing the same before
the due date of filing the return is only directory.</strong></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="vijaywrite@taxindiaonline.com" target="_blank">vijaywrite@taxindiaonline.com</a><br>
</font></p>
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