TIOL-DDT 925 · 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 925</font> <br> 07.08.2008 <br> Thursday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No Outsourcing/Sub-letting/Transfer of Operations by CFS/ICD – CBEC wants Commissioners to take action </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board clarifies that the approval of the Government for setting up an ICD/CFS is given to the person who had applied for the same and hence, trading in custodianship, in full or in part, is against the principle of custodianship vested on the person to whom approval for setting up of an ICD/CFS and Letter of Intent was given. Hence, transfer of custodianship by way of lease, gift, sale or transfer in part or in full is not permissible. However, activities such as aggregation of cargo at ICD / CFS by bulk buyers abroad or segregation or similar operation, provision of forklifts and other material-handling equipments, cleaning and housekeeping etc. which do not take away the primary responsibility of a custodian and the chain of custody of goods shall be permissible to be outsourced subject to prior approval of the jurisdictional Commissioner of Customs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board further clarifies that the jurisdictional Commissioner of Customs is the competent authority to decide in a specific case whether subletting/ outsourcing of any of the functions of CFS/ICD should be permitted and to give approval or reject the same after taking into account the concerns of the revenue for safeguarding the duty on imported goods and ensuring that the custodian duly appointed by the Commissioner on the approval of Inter-Ministerial Committee (IMC) continues to be held responsible for proper discharge of his functions including the ones that have been outsourced with prior permission. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As such, cases of subletting/sub-contracting/outsourcing/gift or lease of any of the services of CFS/ICD have to be dealt by the jurisdictional Commissioner of Customs concerned and Board wants them to verify the existing position in various CFS/ICDs under their jurisdiction and initiate necessary action against the erring CFS/ICD accordingly under the Customs Act. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2008/cus_inst450.htm" target="_blank">CBEC F.No.450 /105/2008- Cus.IV Dated the 25th July, 2008. </a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Ban on export of maize not to apply to exports for UN Relief </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has notified that “Ban on export of maize shall not be applicable to export of 25000 MTs of maize to be exported by M/s Emmsons International, New Delhi under United Nations' World Food Programme to Kenya, Somalia and Burundi and is meant for United Nations' humanitarian relief operations in these countries.” </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2008/dgft08not028.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Notification No. 28 (RE-2008)/2004-09, Dated: August 5, 2008 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Trading of Currency Futures – RBI instructions </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Persons resident in India have a menu of over-the-counter (OTC) products, such as currency forwards, swaps and options for hedging their currency risk. In the context of liberalisation of the capital accounts, as also continued development of the financial markets, wider hedging opportunities could enhance the flexibility for the residents to manage their currency risk dynamically. International experiences have also established that the exchange traded currency futures contracts facilitate efficient price discovery, enable better counterparty credit risk management, wider participation, trading of standardized product, reduce transaction costs, etc. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As a part of further developing the derivatives market in India and adding to the existing menu of foreign exchange hedging tools available to the residents, it has been decided to introduce currency futures in recognized stock exchanges or new exchanges recognized by the Securities and Exchange Board of India (SEBI) in the country. The currency futures market would function subject to the directions, guidelines, instructions issued by the Reserve Bank and the SEBI, from time to time. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Persons resident in India are permitted to participate in the currency futures market in India subject to directions contained in the Currency Futures (Reserve Bank) Directions, 2008 [Notification No. FED.1/DG(SG)-2008 dated August 6, 2008] </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Necessary amendments to Foreign Exchange Management (Foreign Exchange Derivatives Contracts) Regulations, 2000 (Notification No. FEMA.25/RB-2000 dated May 3, 2000) (Regulations) have been notified in the Official Gazette vide G.S.R. No 577(E) dated August 5, 2008. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2008/rbi08cir005.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI Circular No. 05/RBI., Dated: August 6, 2008 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Audit's “Imported” objection </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Netizen sent us this mail informing us of a mind boggling AG Audit objection. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Here it goes- The assessee avails the benefit of Nil rate of duty in terms of Notification 6/2006- CE, Sr.No.91 in respect of goods supplied against International Competitive bidding. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is a condition no.19 appended to this notification which reads – </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“19. If the goods are exempted from the duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under Section 3 of the said Customs Tariff Act when imported into India .” </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee satisfies this condition and clears the goods at Nil rate. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, comes the question of CENVAT Credit which he avails in respect of these goods which are also cleared on payment of duty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee points to Rule 6(6)(vii) of the CCR, 2004 and says that he is not required to either reverse any credit or pay any amount because the said sub-rule reads thus – </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“(6) The provisions of sub-rules (1), (2), (3) and (4) shall not be applicable in case the excisable goods removed without payment of duty are either- </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> X x x </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vii) all goods which are exempt from the duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under section 3 of the said Customs Tariff Act when imported into India and supplied against International Competitive Bidding in terms of [notification No. 6/2002- Central Excise dated the 1st March, 2002 or notification No. 6/2006- Central Excise dated the 1st March, 2006, as the case may be.]” </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the above scenario, the mighty Audit [in its objection taken in the year 2006] had this to say – </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“As per Rule 6(6), the provisions of sub-rules (1), (2), (3) and (4) (of the said rule 6) shall not be applicable in case the excisable goods removed without payment of duty are either, interalia, all goods which are exempt from the duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 and the additional duty leviable under section 3 of the Customs tariff Act when imported into India and supplied against International Competitive Bidding in terms of Notification 6/2002 or 6/2006. Thus the provisions of Rule 6(3) (b) shall not be applicable only if the goods cleared without payment of duty, under Notification no. 6/2006, are <strong>imported </strong> into India and supplied against International Competitive Bidding.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rest assured that the assessee has been presented with a bouquet of demand notices running into Crores of rupees. </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>We are bewildered! </strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"></font><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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><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></strong></font></b><strong><font color="#663399">Trade Mark </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Mere filing of a trade mark application cannot be regarded as a cause of action for filing a suit against another person using that trade mark: Supreme Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mere filing of a trade mark application cannot be regarded as a cause of action for filing a suit for passing off since filing of an application for registration of trade mark does not indicate any deception on the part of the respondent to injure business or goodwill of the appellants; filing of an application for registration of a trade mark does not constitute a part of cause of action in a suit for passing off. The appellants cannot file the suit in the High Court of Madras seeking an injunction to restrain the respondent from passing off his goods using the trade mark A- ONE, based only on the claims made in the trade mark application of respondent filed before the Trade Mark Registry, since the necessary requirements of an action for passing off are absent. </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>No material evidence to suggest that CHA abetted the offence – CHA not required to verify authenticity of declarations made by exporter: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>COMMON </strong>salt became an important object in India 's freedom movement with Bapuji leading a march to Dandi. That incident heralded the beginning of the end of British Empire in India . This priceless noble substance, which is an essential ingredient for every recipe to taste good, became a tool for a fraudulent exporter to claim higher drawback. To know more about this read on: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This incidentally is also another case where the Tribunal held that the CHA is not responsible for the mis-declarations of the exporters and set aside the proceedings initiated by the Department against the CHA. </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="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Settlement: returns filed, but neither assessed, nor notice issued – assessment is pending; a proceeding for assessment shall be deemed to have commenced on first day of AY and concluded on date on which assessment is made; whole of application need not be declared ‘invalid' if proceedings for assessment are pending for some of years – Settlement Commission Full Bench </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If in this composite application for five years, proceeding for certain assessment year are pending but are not pending for other years, whether the application can be admitted for those years for which proceedings are pending and held as “invalid” for other years if the same has to be held as “invalid' in totality for the years? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Decision: </strong> whole of the application need not be declared ‘invalid if proceedings for assessment are pending before the Assessing Officer for some of the years and not for other years. The settlement Application can be proceeded with for those years for which proceeding for assessment are pending before the assessing Officer. </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#FF6666">Until Tomorrow with more <strong>DDT</strong> </font></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>