TIOL-DDT 920 · the untouched capture
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<!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 bgcolor="#FFFFFF"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 920 </font><br> 31.07.2008 <br> Thursday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>The Vacant Space! </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nature abhors vacuum, not a vacancy. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If you think, the Customs and Central Excise (Service Tax added) Department is flooded with officers, you are mistaken. In 2002, in the name of cadre review, they promoted anybody they could find, but after that there was a lull and now in almost all cadres starting from Assistant to Chief Commissioner there is a large number of vacancies which the CBEC/Chief Commissioners are not able to fill. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The <em>ad-hoc </em> promotion is continuing merrily in all the Group A cadres and now they want to make even Commissioners <em>ad-hoc</em>. Even before one batch of <em>ad-hoc </em> officers are confirmed another <em>ad-hoc </em>promotion is proposed in the cadre of JCs with a few seats reserved for appraiser promotees, which it appears, had been shot down by the DOPT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The major item of work for all the senior officers in the Department seems to be transfers and promotions and even with this full time commercial activity, they are not able to fill up the vacant slots. So many officers waiting in the wings for that much elusive promotion are just doing that– waiting! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chairman, CBEC had mentioned in our Vizag seminar about the difficulty of recruiting new hands– He had mentioned that it takes about three years to get inspectors recruited. And that is exactly what has happened. Yesterday, CBEC had released a list of about 200 candidates selected as Inspectors by the Staff Selection Commission in the Graduate Level Examination, 2005. Even now the selection is not complete – they have to undergo a physical test including cycling! That will take another six months! That means a graduate who took the test in 2005 will get his job in 2009–after four years! And the Government expects him to be unemployed for these four years to grab the great opportunity of becoming a Central Excise Inspector. Obviously these boys and girls who passed the SSC examination are quite intelligent and by this time they must be employed in lucrative jobs and it is a safe bet that many of them will not join. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government should realise that days have changed and nobody is going to wait for four years to get that great government job. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, Direct Recruitment is a slow and painful process, but why can't you fill up the vacancies by promotion? There are Superintendents in the Department who have completed 31 years in the Department, eagerly waiting for their second promotion in life–there are vacancies, but they are not being promoted! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There are senior Commissioners, not serious with their jobs, because they are expecting a promotion any moment–this any moment may be a couple of years. There are additional Commissioners planning their transfer strategy with an eye on promotion–like now you go to Timbuktu, hoping that you will become a Commissioner in a few months and you can come back to the main stream – you are stuck in Timbuktu, for the DPC is not held or you have just missed the bus! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With so many stakes in transfers and promotions, it is a miracle that they have time for other activities like issuing Show cause Notices. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They got sanctioned about 92 post of Commissioners (Appeals) on the plea that more Commissioners (Appeals) means more Revenue, as if the trade was just waiting for the orders from the Commissioners (Appeals) to stand in queue outside the Designated Banks to pay up the demands confirmed by these Commissioners (Appeals). Anyway they got their posts, but then nobody was prepared to work as Commissioner (Appeals). Today there are more than 70 vacancies in the cadre of Commissioners and most of them are that of Commissioners (Appeals)! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today the Chief Commissioner, Customs, Bangalore Mrs. Heera Radhakrishnan is retiring and with her retirement, four posts become vacant. She was the Chief Commissioner also of the much publicised Bangalore LTU. Incidentally they were never able to post full-time Chief Commissioners for the LTUs. Now after her retirement, the posts held by her will be given as additional charge to some other Chief Commissioner. And this additional charge can be really crazy – A Bangalore officer holds additional charge of Kochi , while a Chennai based officer holds an additional charge in Bangalore , an Ahmedabad officer holds additional charge of Hyderabad – you have the airlines clogged with all these additional charge officers flying to and fro–and demanding up-gradation on-flight! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the process, review by the Committee of Chief Commissioner and Commissioners has become a joke–already the CBEC Member is under summons by the Kolkata CESTAT–the issue is live in all other Zones! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Where are we headed to? If 20 posts of Chief Commissioners, 70 odd posts of Commissioners and hundreds of posts of JCs and ACs can be kept vacant and still the Revenue grows, can't we simply abolish all these vacant posts? There is something terribly wrong with the Human Recourses Management in this vitally important Revenue Department! </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Breakdown of WTO talks: FIEO Analysis </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The President of the Federation of Indian Export Organisations–FIEO, GK Gupta has analysed the breakdown of the WTO talks as:- </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Reasons: </strong></font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) Real issue was difference in perception of developed and developing countries. The former eager to promote “commercial prosperity” as against question of subsistence of millions of farmers in latter countries </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b)The deal broke down ostensibly over the proposal to protect farmers in developing countries from a surge in imports. The compromise paper proposed that countries can go above Uruguay Round level( Bound Rates) only if imports go up by more than 40% over the average of preceding three years. India rejected the offer rightly as in such a scenario action can be taken after farmers are ruined. In respect of products like apple, the applied rate of duty is 50% while UR rate is 55%. Similarly in dairy products, applicable duty is 30% while UR rate is 40% and thus give very little flexibility to protect domestic producers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) The real reason was the issue of agriculture subsidy particularly cotton subsidy amounting to US$ 3.5 billion which US was not willing to negotiate despite requests by four African cotton producing nations. Since cotton issue is politically sensitive in US which will have Presidential Election in November, US has no choice. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) The talks exposed once again the faultlines running through the European Union, as French President Nicolas Sarkozy rallied opposition to an emerging deal even as European Trade Commissioner Peter Mandelson was trying to negotiate it. </font></p> </blockquote> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IMPLICATIONS: </strong></font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) It has damaged the credibility of the multilateral system and will encourage greater reliance on regional trade deals. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) There will be no immediate impact on trade flows, given the long implementation periods for the measures under discussion-typically five years for developed countries and 10 for developing countries. But this month's failure could damage business sentiment. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) It may encourage protectionist behaviour, an important factor in the Great Depression with its accompanying mass unemployment? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) The talks reflected the changing balance of economic power as emerging nations in Asia and Latin America grow in influence. India is set to assume the leadership of 100 odd LDCs and developing countries. Developing countries will have greater say in future talks. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(e) India will gain in Services Negotiations in further round of discussions due to concessions already offered by US and EU. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A new administration taking over next year in Washington after November's election, changes next year in the European Union's executive Commission could also set new priorities for trade. </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5"> tiol</font><font color="#006600">– Tomorrow's cases </font></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>Income Tax </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Sale of jewellery declared under VDIS– AO is not only competent to go into the genuineness of the transaction, but duty bound to do so to ensure that the scheme is not misused – ITAT Special Bench </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In an order running into 185 paras in 141 pages containing more than 61000 words, the FIVE Member Special Bench of the ITAT held that <strong><font color="#FF6633">the immunity given by Section 68 of the Finance Act, 1997 incorporating VDIS is limited to the extent that the existence of jewellery stands accepted and the amount credited in the books of the declarant to the extent of value of the jewellery so declared cannot be assessed as income of the declarant for any assessment year under any provision of the Income-tax Act including the provisions of Section 68. This immunity, however, stops there and there is no provision in the scheme to extent the same further, either expressly or even by implication, to cover the sale of jewellery declared under VDIS also. </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">The AO is not only empowered to go into the genuineness of the transaction of sale of jewellery declared under VDIS. but he is duty bound to do so in order to ensure that the scheme is not misused by the declarants for any more benefits than what were intended to be given under the scheme</font></strong><font color="#FF6633">;</font> it is thus open to the department to go into the genuineness of the transactions of sale of jewellery declared under VDIS and examine the same in accordance with the relevant provisions of Income-tax Act. </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>Discharge of export obligation certified by DGFT - Bond and bank guarantee cancelled by Customs - Commissioner's order for demand of duty, confiscation and penalty not sustainable: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> story continues. DGFT certifies the export obligation, Deputy Commissioner of Customs cancels the bond and bank guarantee as a token of fulfilling the export obligation by the assessee but the Commissioner of Customs is not impressed. The appellants were issued a show cause notice by the Commissioner alleging that they have not fulfilled the export obligation. </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>When issue concerns valuation of goods, it is not proper on part of adjudicating authority to shirk from dealing with excisability of product – Commissioner(A) has rightly decided this primary issue – O-in-A does not travel beyond SCN: Tribunal </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue is aggrieved with the Order passed by the Commissioner(Appeals) who, as per Revenue's say has travelled beyond the demand notice inasmuch as he had mis -directed himself in deciding the excisability issue, when the fact remains that the demand notice was issued alleging undervaluation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The short facts are that the assessee is pulverizing polyethylene into powder form and clearing the same to their Madras Unit on payment of Central Excise duty. It is the department's contention that the said pulverized powder has been undervalued and hence differential duty was demanded. </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="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Day. </font></p> <p align="justify"><font color="#FF6633" 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>