TIOL-DDT 964 · 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 964</font><br> 03.10.2008<br> Friday</strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Education Cess - Stainless Steel Patta Patti or Aluminium Circles under the Compounded Levy Scheme – CBEC clarifies</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chief Commissioner of Central Excise, Jaipur has pointed out that certain units manufacturing stainless steel patta and aluminium circles and working under the compounded levy scheme have objected to the levy of education and higher education cess under the said scheme, citing the Board instructions issued vide <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2007/fno81.htm">F.No. 81/17/2007-CX.3 dated 19th December, 2007</a></strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2007/fno81.htm">.</a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board clarifies that the above instructions were issued for compounded levy scheme for Pan Masala or Pan Masala containing tobacco. While determining the total amount of compounded levy in this case, quantum of education and higher education cess was taken into account. Accordingly it has been clarified that no education or higher education cess will be leviable over and above the amount paid under the compounding scheme.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Compounded levy scheme for stainless steel patta patti and aluminium circle under Rule 15 of the Central Excise Rules, 2001 was notified vide notification No. 34/2001-CE, dated 28th June, 2001. Education Cess has been levied vide Finance Act, 2004 and Higher Education Cess vide Finance Act, 2007. Since these levies were not there at the time of introduction of compounded levy scheme for stainless steel patta patti and aluminium circles the same was not a part of the amount of payable under this scheme. TRU has clarified that increase in amount payable under the compounded levy scheme subsequently is on account of increase in price of stainless steel and aluminium and not because of inclusion of any other levy within the scheme.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Therefore, Board clarifies that the rate of duty under the optional compounded levy scheme for stainless steel patta patti and aluminium circles vide notification No. 17/2007-CE, dated 1st March 2007 covers only basic excise duty and does not include the education cess and higher education cess, which are payable over and above the rate of basis excise duty notified by the said notification.</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=31&filename=notification/excise/2008/levy.htm" target="_blank">F.No. 27/16/2008- CX.1 Dated: August 28, 2008</a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff Value of Brass Scrap and Poppy seeds reduced</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has reduced the Tariff Value of Brass Scrap from 4216 US Dollars to 4146 and the Tariff Value of Poppy Seeds from 6844 Dollars to 6724 Dollars. There is no change in the Tariff Values of other items.</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_112.htm" target="_blank">Notification NO. 112/2008 – Cus (N.T) Dated: October 01, 2008</a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A litigant is expected to be vigilant and diligent. A party who sleeps over his rights and does not act diligently cannot be shown undue indulgence – Bombay High Court dismisses 37 Revenue appeals</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It was just a month ago we reported the Bombay High Court while dismissing a large number of Revenue appeals directing the Board to issue instructions to the Department to file appeals within the time stipulated by Law. See </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=51&filename=legal/hc/2008/2008-TIOL-433-HC-MUM-IT.htm" target="_blank"><strong>2008-TIOL-433-HC-MUM-IT</strong></a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In another batch, the Revenue has lost 37 cases. The High Court came down heavily on the Government's casual approach, observing:-</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“No particulars whatsoever are furnished in the affidavit to enable this Court to hold that sufficient cause has been shown for condonation of delay in filing of the appeal. In all the cases filed by the Department, barring change in the dates, the format is the same and grounds are identical. We are alive to the fact that the Government departments need some time to process the matter and take a decision in regard to filing of appeals. Taking a lenient view though the reasons assigned were not very convincing, we have condoned the delay wherein the period of delay was less than one year. In the present matters, the delay ranges from the period of one year to five years. The very purpose of laying down limitation in a statue is to obtain finality to the order passed. Uncertainty must come to an end. The more the delay the better the explanation for condonation would be expected. We do not expect that every days delay ought to be explained. The courts are expected to take a pragmatic view than a pedantic. However, it cannot be lost sight of that on pronouncement of a judgment and after expiry of the period of limitation as provided under the statute, rights accrue in favour of the other side and the said rights cannot be very easily destroyed if the delay is unexplained and caused on account of inaction and/or negligence on the part of a party applying for condonation of delay. A litigant is expected to be vigilant and diligent. A party who sleeps over his rights and does not act diligently cannot be shown undue indulgence. In all the appeals filed by the Department, the delay has not been satisfactorily explained. No details are furnished which could enable the court to examine accountability. Vague averments are made in the affidavit with no particulars and no proper explanation. The affidavits in these Notices of Motions to the extent they relate to the department are stereotype, and filed in most casual manner”.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Filing an appeal in the High Court seems to be more a skin saving device than anything else. For some officers in the field, it has also become a favourite pastime. There is a tendency amongst these officers to disregard every order from the appellate authority (Tribunal) that has gone in favour of the assessee and wouldn't care a damn even if the law is settled by the Supreme Court; they go about filing appeals in the High Courts and Supreme Courts against such orders.</font></p> <p align="justify"><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><font size="2">See</font><strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=51&filename=legal/hc/2008/2008-TIOL-479-HC-MUM-IT.htm" target="_blank">2008-TIOL-479-HC-MUM-IT</a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>VAT - Authority for Clarification and Advance Ruling under TNVAT Act mooted – Already 1509 clarifications given</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under the TNGST Act, clarifications were issued by the Commissioner of Commercial Taxes under Section 28-A of the Act. Though, there is no similar statutory provision under TNVAT Act, to remove the difficulties faced by the dealers in understanding the provisions of VAT Act, Rules and Schedules in the transitional period, clarifications are issued by the Commissioner of Commercial Taxes administratively. So far 1509 clarifications have been issued.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, 20 months have passed after the introduction of VAT. Most of the transitional issues have been settled and clarifications have been issued clearing almost all the doubts regarding rate of tax and other procedural aspects of the Act and Rules. However, letters seeking clarification on frivolous matters are continued to be received by the Commissioner, Commercial Taxes. Most of the clarifications sought now are of the following nature:-</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Clarification already issued to the same commodity, but the dealer wants to have a clarification issued in his name.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Clarifications seeking confirmation of Entries in the Schedule.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Clarification on the same commodity to enable to have an interpretation in favour of the petitioner.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) Clarification on the assessment procedure.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) Clarifications seeking confirmation of the method of filing return/calculations.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vi) Petitions seeking intervention of the provisional assessment proceedings.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vii) Clarifications sought from STPs, Accountants, Auditors and Advocates.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Proposals have been sent to the Government for creating an Authority for Clarification and Advance Ruling under TNVAT Act. In the meanwhile, till necessary amendment is made to the Act, it has been decided to forward the letters seeking clarification received in the Commissioner's office to the Territorial Joint Commissioners concerned. Joint Commissioners in turn will forward the same to the assessment circles concerned and instruct the Assessing Officers to give necessary clarification based on the provisions of the TNVAT Act & Rules, Government Notifications and the earlier clarifications.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If the dealer is not satisfied with the clarification given by the Assessing Officer, they may be further clarified by the Territorial Joint Commissioners. Even then if the dealers are not convinced of the clarification issued by the Territorial Joint Commissioner, they may seek clarification with Principal Secretary/Commissioner of Commercial Taxes.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, the Territorial Joint Commissioners are directed to convene monthly meeting of dealers' associations of their jurisdiction at zonal/district level to redress their grievances.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Can the Central VAT Department think of something like this?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/cir_23.htm" target="_blank">Commissioner, Commercial Taxes, Chennai Circular No.23 Dated: September 29, 2008</a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>UN chief calls for more aid to landlocked developing countries</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">UN Secretary-General Ban Ki-moon yesterday called on the international community to provide more assistance to the world's 31 landlocked developing countries (LLDCs). He said,</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Many countries, however, continue to struggle with the daunting challenges they face on their development path. Many remain marginalized from the world economy with limited access to global markets and to the sea for external trade.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The lack of domestic resources makes it challenging for Governments to adequately respond to the challenges they face. Let's not forget that more than half of the landlocked developing countries belong to the least developed countries category.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As we attempt to find long-term solutions to their plight, external investment is critical in enabling landlocked developing countries to substantially mitigate their unfavourable geographical locations.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Foreign direct investment has a great potential as contributor to growth and development. It can bring capital, technology, management know-how and access to new markets. In comparison with other forms of capital flows, it is also more stable, with a longer-term commitment to the host economy.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We have an obligation to keep our promise to achieve the Millennium Development Goals in all countries. Half-way towards 2015 we need to accelerate progress, particularly in the 31 landlocked developing countries. These countries require our collective special attention.</font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Compulsion to pay any unjust dues per se would cause hardship: Supreme Court</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Income Tax Department in a raid, seizes some share certificates – The assessee requests the Department to sell the shares and appropriate the proceeds to realise the tax payable. The Department does not act on this request, but later demands interest from the assessee. When he pleads for waiver, the AO states he is very rich and has property in a posh area worth Crores.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is a rich man not entitled to the benefits of Law?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed, “A genuine hardship would, inter alia, mean a genuine difficulty. That per se would not lead to a conclusion that a person having large assets would never be in difficulty as he can sell those assets and pay the amount of interest levied. The ingredients of genuine hardship must be determined keeping in view the dictionary meaning thereof and the legal conspectus attending thereto. For the said purpose, another well-known principle, namely, a person cannot take advantage of his own wrong, may also have to be borne in mind. However, another principle should also be borne in mind, namely, that a statutory authority must act within the four corners of the statute. Indisputably, the Commissioner has the discretion not to accede to the request of the assessee, but that discretion must be judiciously exercised. He has to arrive at a satisfaction that the three conditions laid down therein have been fulfilled before passing an order waiving interest.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court also observed, <strong>“It was probably in the interest of the revenue itself to realize its dues.”</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>But Government does not run on sound commercial principles.</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you today this judgement delivered on 1st October 2008.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <strong><a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7955" target="_blank">Breaking News</a></strong><a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7955">.</a></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">– Monday's cases</font></strong></font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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></strong></font>Service Tax</strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Shifting or transportation of raw materials, waste materials and finished products from one place to another – not cargo handling: CESTAT</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> service provided should be relating to or in relation to cargo handling by a cargo handling agency. The service provided should be integrally or inseparably connected with handling of cargo or attributable thereto without being a mere activity of transportation of such cargo since transport service independent of cargo handling is an exception under the scheme of levy by Section 65 (23) of the Act.</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>Depreciation disallowed based on statement of supplier before Settlement Commission – cross examination not permitted - IT authorities are bound to accede to request for cross-examination and if they do not do so, addition cannot be sustained: ITAT</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CROSS</strong> examination of witness is must before the department places reliance on the statement of witness for making the addition. Hon'ble Supreme Court in case of <strong>Kishan Chand Chelaram</strong> had also categorically held that any evidence/statement used against the assessee without giving any opportunity to cross-examination and to controvert the same, such evidence would not be admissible in support of the addition. It was specifically held that IT authorities are bound to accede to the request for cross-examination and if they do not do so, the addition cannot be sustained.</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>Merely because toothpaste is a notified item cannot make it assessable u/s 4A of CEA '44 - Aquafresh Toothpaste supplied to Glaxo Smithkline for free supply with Horlicks under sales promotion schemes is to be valued in terms of section 4 and not S 4A: Tribunal</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>UNLESS</strong> there is an element of sale, as contemplated in section 2(v), Rule 6(1)(f) will not be attracted.</font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements</font></strong></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice weekend.</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>