TIOL-DDT 933 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 933 </font><br>
20.08.2008 <br>
Wednesday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>'Late Cuts' and 'short Cuts' - Last date of filing of application for Duty Credit Scrips – DGFT clarifies</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Para 3.23.10 of the <strong>HOP </strong> to the <strong>FTP </strong> 2008-09,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Last date of filing of application for Duty Credit Scrips: </strong> Application for obtaining Duty Credit scrip shall be filed within a period of twelve months from date of exports or within six months from date of realization, or within three months from date of printing/release of shipping bill, whichever is later, in respect of shipments for which claim is being filed. For <strong>SFIS</strong>, last date shall be 31st December.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has now amended this to read as,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Applications for obtaining Duty Credit Scrip shall be filed within a period of twelve months from the date of export or within six months from the date of realization or three months from the date of printing/release of shipping bill, whichever is later, in respect of shipments for which claim is being filed. <font color="#FF6633">Further, for shipments already made prior to the inclusion/modification of the items/markets in relevant appendices by various Public Notices issued from time to time; the last date for filing applications shall be six months from the end of the month of the relevant Public Notice that included/modified the items/markets, or the time period permitted in the first sentence of this Para, whichever is later. For SFIS, the last date shall be 31st December, 2008.</font>” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has further clarified that, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Regarding <strong>VKGUY</strong>, <strong>FMS </strong> and <strong>FPS </strong> Schemes under Chapter 3 of FTP, it has been decided that:</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. For exports made from 1-4-2006 till 31-3-2008 that have already been realized up to 31-3-2008, the last date for filing the application for obtaining benefits under Chapter 3 of the Foreign Trade Policy will be 30.11.2008, and if the realization is after 31.3.2008, then the last date for filing the application will be as per the provisions of Para 3.23.10 of HBP Vol.1 (RE-2008) as amended vide Public Notice No. 64 (RE-2008)/2004-2009 dated 14.8.2008.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Further, it is clarified that <strong><font color="#FF6633">late cut</font></strong>, in terms of Para 3.23.2 HBP Vol.1 (RE-2008) read with Para 9.3 of HBP Vol.1 (RE-2008), shall be applicable for applications filed after the prescribed last date as above, even for exports made from 1.4.2006 till 31.3.2008.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> is fond of shortcuts and no term is fully used! They also have a <strong><font color="#FF6633">late cut</font></strong><em>. </em>If applications are filed within six months after the last date, there is a cut of 2% and after six months but within a year the cut is 5%.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the shortcuts</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. <strong>HOP - </strong>Hand Book of Procedures</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. <strong>FTP - </strong>Foreign Trade Policy</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <strong>SFIS - </strong>Served from India Scheme</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. <strong>VKGUY </strong> - Vishesh Krishi and Gram Udyog Yojana</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. <strong>FMS </strong> - Focus Market Scheme</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. <strong>FPS - </strong>Focus Product Scheme</font></p>
</blockquote>
<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/dgft08pn064.htm" target="_blank">PUBLIC NOTICE No.64(RE-2008)/2004-2009, Dated: August 14, 2008</a> and <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2008/dgft08cir027.htm" target="_blank">DGFT Policy Circular NO 27 (RE-2008)/2004-2009 Dated: August 14, 2008</a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import of Roller Drawer Sliders (Telescopic/Ball Bearing Type) – Delhi Customs valuation study </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Delhi ICD Customs Commissionerate has conducted a study of valuation in respect of Telescopic/Drawer Channels on the basis of NIDB data and it is observed that the said goods are being assessed at different value at different ports and there is no uniformity in the assessment. The NIDB data shows that the said goods are being assessed @ Rs.1.25 per inch to Rs.2.06 per inch. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The study revealed that in January 2004 the average international price of raw material i.e. C.R. Coils was around US$ 520 per MT, which has gone up to US$ 750 per MT in February 2008.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Extensive market survey by the Customs that the whole sale prices of drawer channels varies from Rs. 3/- per inch to Rs. 6/- per inch depending upon the per inch weight of channel which varies from 40 grams per inch to 80 grams per inch. Similarly, MRP varies from Rs. 4/- per inch to Rs . 8/- per inch for weight of channel from 40 grams per inch to 80 grams per inch. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the basis of price of raw material and MRP the Commissionerate has come to conclusion that the following minimum bench mark value for different size(s) of channels are reasonable and fair for assessment of goods. </font></p>
<div align="justify">
<table width="450" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td width="185"><p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Size of channel </strong></font></p></td>
<td width="247"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Proposed Ass. Value per set (in Rs.) </strong></font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10" </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">29.50 </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">12" </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">35.40 </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">14" </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">41.30 </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">16" </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">47.20 </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">18" </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">53.10 </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">20" </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">59.00 </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">22" </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">64.90 </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">24" </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">70.80 </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">26" </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">76.70 </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">28" </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">82.60 </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">30" </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">88.50 </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">32" </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">94.40 </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">34" </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">100.30 </font></p></td>
</tr>
</table>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, the raw material used in manufacturing of said goods may also be considered before finalizing assessment of goods. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner suggests that the other formations should also use the results of his study. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>C.No.VIII/ICD/6/TKD/SHB/89/08 Dated: July 10, 2008 of the Commissioner of Customs, ICD, TKD, New Delhi. </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What is NIBD? </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today, we are into short-cuts! NIBD is not a National Institute, but the National Import Data Base. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Indian Customs Valuation Database Project, known as National Import Data Base (NIDB) Project was initiated to develop a real time electronic data base in respect of goods imported at all customs stations in India. The idea is to provide instant access to the combined data, duly analyzed and flagged by the Directorate of Valuation (DOV), to all assessing officers for their use as an effective tool to check under-valuation and valuation fraud so as to safeguard customs revenue.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The import data is captured on a daily basis in a specially devised format by the individual customs stations immediately after assessment. In cases where electronic data processing is in vogue (EDI), the inputs required are already available in the computer system. The required data is retrieved by special software and transmitted to a central server in the Valuation Directorate through a dedicated Intranet called ICENET. In case of non-EDI assessment, the required input data is entered manually at the customs stations and transmitted to the Valuation Directorate on a daily basis. For remote customs stations not on ICENET, the required data is sent to the Valuation Directorate via email. This data is analyzed on a weekly basis in DOV with the help of intelligent software. This software calculates unit values, the weekly weighted averages for sensitive commodities and percentage deviations of each import from weighted average. An interface with international price information is also being provided progressively along with analyzed data.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The analyzed data is transmitted to all customs stations every week by electronic means, i.e. via ICENET to major customs stations and via email to other stations. Weekly transmissions are consolidated at Custom stations and stored in MS access format with easy search and retrieval facilities. This data is made available to assessing officers at custom stations on LAN. When the declared value is found to be below 10% the weighted average, the consignment is flagged as an outlier. The customs stations examine the outliers pertaining to them, to determine whether the declared values in such cases are genuine or not in consultation with the importer and causing inquiries as appropriate. Any customs officer in the country, duly authorized with username and password, can access the National Imports Data Base (NIDB) from anywhere, anytime. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The database also helps Customs officers and investigative agencies, like Directorate of Revenue Intelligence (DRI), to conduct risk analysis and item profiling to target goods or consignments, which are sensitive to valuation fraud. </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Be careful, big brother is watching! </strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><br>
<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>Customs </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Non usage of words 'used', or word 'second-hand' in Bill of Entry does not entail misdeclaration by importer - Evidence on record in form of Chartered Engineer's certificate not taken note of: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TIME </strong>and again we witness peculiar positions adopted by the Revenue and this one is no different. The importer imported second hand machinery and their suppliers dispatched the entire lot in multiple consignments. Unfortunately, for the importer the smaller consignment which contained components of the main machinery arrived first and got stuck with the Customs for the reason that they did not have valid license for importing the same. The Customs authorities held back the consignment worth USD 7500 while clearing the second consignment worth USD 122,500 without much fuss. The importer pleaded with the lower authorities that they had placed a single purchase order for second hand machinery worth an FOB of USD 133,000 and the machinery being huge, the suppliers for logistic reasons split the consignments into two and shipped them accordingly. </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>Factory closed down ten years ago but refund application made now - no question of refunding amounts lying in PLA and MODVAT account: Tribunal </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant was registered with the Central Excise department, was availing modvat credit and was discharging appropriate excise duty on the final products manufactured. Somewhere in the year 1996 bad times fell upon the manufacturer and the unit closed down. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nothing happened thereafter till the year 2005 when the said manufacturer realized that he had some balance in his PLA/Account Current and so also in the MODVAT account. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He filed a claim before the jurisdictional Assistant Commissioner seeking refund of the said amounts of Rs.1454/- and Rs.1,04,302/- respectively. He was a generous and a kind hearted human being. He felt that the refund claim was proper and sanctioned the same. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue was not pleased by this action as it felt that emotions play no part but the rule book has to be followed. An appeal before the Commissioner (A) and the Revenue won. </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>Contract was executed offshore, payments made outside India and final delivery was also taken offshore – no tax - ITAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MERE</strong> signing of agreement of supply did not give rise to any income – The normal trade warrantees could not be mixed up and taken as right of repudiation or right of disposal of equipment with the buyer or with the seller - The delivery of goods, document and receipt of substantial part of sale consideration did take place outside India where the sale took place and income accrued, such income could only be taxed outside India and not under Indian Law. </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#FF6633">Mail your comments to</font> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></font></p>
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