BOARD Circular No. 58/2001–Cus dated 25.10.2001 prescribed detailed guidelines for examination and testing of food item prior to its testing and clearance by Customs officers under the provisions of Prevention of Food Adulteration Act, 1954 (PFA Act, 1954).

To consolidate the laws relating to food and to provide for a systematic and scientific development of Food Processing Industries, the government has enacted ‘The Food Safety and Standards Act, 2006' (FSS Act, 2006). Under the Act, the Food Safety and Standards Authority of India (FSSAI) has been established to lay down standards and regulate/monitor the manufacturing, import, processing, distribution and sale of food.

The FSSAI has taken over PHO functions at select ports such as Nava Sheva and Mumbai with effect from 13.09.2010 with the stipulation that the existing rule and procedures will continue to be followed without any change till FSSAI regulations are notified. Thus, FSSAI has replaced PHO with its authorized officers at abovementioned ports in terms of section 47 (5) of the FSS Act, 2006.

In view of these changes, Board has prescribed a modified procedure:

a) All consignments of high risk food items, shall be referred to Authorised Representative of FSSAI or PHOs, for testing and clearance shall be allowed only after receipt of the test report.

b) All consignments of perishable items like fruits, vegetables, meat, fish, cheese, etc., will continue to be handled in terms of the guidelines contained in Para 2.3 of the Board's Circular No.58/2001-Customs dated 25.10.2001.

c) In respect of food items not covered under (a) and (b) above, the following procedure would be adopted in addition to the general checks prescribed under Para 2.1 of the Circular No. 58/2001–Cus, dated 25.10.2001:

(i) Samples would be drawn from the first five consecutive consignments of each food item, imported by a particular importer and referred to Authorised Representative of FSSAI or PHOs, as the case may be, for testing to ascertain the quality and health safety standards of the consignments.

(ii) In the event of the samples conforming to the prescribed standards, the Customs would switch to a system of checking 5% - 20% of the consignments of these food items on a random basis, for checking conformity to the prescribed standards.

(iii) In case, a sample drawn from a food item in a particular consignment fails to meet the prescribed standards, the Customs would place the import of the said consignment on alert, discontinue random checking for import of such food items and revert to the procedure of compulsory checking. The system of random sampling for import of such food items would be restored only if the test results of the samples drawn from the 5 consecutive consignments re-establish that the food items are in conformity with the prescribed standards.

Board has clarified that at certain ports / airports / ICDs / CFSs where Port Health Officers (PHO) under PFA, 1954 or Authorised officers under FSS Act, 2006 are not available, the samples will be drawn by Customs and the same may be got tested from the nearest Central Food Laboratory or a laboratory authorized for such testing by DGHS or FSSAI.

CBEC Circular No. 03/2011-Cus.,Dated: January 6, 2011

Customs Measures to Strengthen Air Cargo Security - WCO and US Government Initiative

SECRETARY General of the WCO, Kunio Mikuriya, and US Department of Homeland Security Secretary, Janet Napolitano, met at WCO headquarters yesterday to discuss international efforts – in particular those of the Customs community – to ensure the security of air cargo and the global aviation supply chain following recent unsuccessful attempts late last year to use air cargo as a delivery mechanism for explosive devices and as a medium for spreading terror.

WCO will be working closely with ICAO (International Civil Aviation Organization) and IATA (International Air Transport Association) in seeking ways in which air cargo, an important link in the global trade supply chain, can be further secured from future threats.

“Global trade is the foundation of global prosperity and any attempt to compromise or disrupt the global trading system requires a swift and concerted response from all international stakeholders: The International Customs community will be doing all it can to secure air cargo through a combination of measures including enhanced risk management, strengthened cooperation, wider intelligence and information sharing, further research, and supportive capacity building activities,” Mikuriya said.

Secretary Napolitano's visit to WCO headquarters took place after earlier meetings with top officials from the European Commission and several Members of the European Parliament. Her meetings in Belgium follow stops in Ireland, Afghanistan, Qatar and Israel in which air cargo security was on the agenda.

About 25 percent Senior Posts Vacant in Income Tax Department

NEARLY a quarter of the posts from Assistant Commissioner to Chief Commissioner are lying vacant in the Income Tax Department as on 29.12.2010.

The details are:

This information was given by the CBDT under the RTI recently.

If so many posts are kept vacant, what is the justification to continue them? If they are not needed, why can't they simply abolish these posts? Keeping them vacant is certainly bad HR management. When nearly 600 Deputy Commissioners are waiting to get promotion, just imagine their frustration, when they don't get what is due to them? And all these posts from JC to CC are filled by promotion only from within the Department. You don't need to go through a difficult recruitment process. If 25% of the posts are vacant, it also means that 25% of your top layer officers are frustrated and unhappy. And you expect them to collect Revenue for you!

The position must be equally bad in CBEC.

Whenever a Departmental officer talks to TIOL, usually the first questions he asks us is, “any news on promotion?”

F.No.A.34011/RTI-118/2010-Ad.VI - Dated : December 29, 2010

Central Excise Offices Are Far Better - Claims Chief Commissioner

IN DDT 1520-03 01 2011, we had carried an item, “Infrastructure – facilities : Income Tax Better Than Customs”. You don't need the FM to tell you this – anyone who has any remote connection with both the Departments will know this, but Mr. BR Tripathi, Chief Commissioner, Lucknow thinks otherwise. He is very angry with us for our report and has sent us a scathing mail in which he says that posting of uniformed officers in front of offices ensures faster means of communication!. Here is the text of his mail as such – that is how he wanted us to publish it.

By now, your web had attained much reliability and respectability because of so many factors-in the community and fraternity of Tax payers, advocates, consultants, senior officers of the Department of Revenue, Government of India i.e. with those who belong to CBEC and CBDT. I do read it everyday, if not entire contents then atleast the headlines the spicy news/ views as well. Somehow, I perceive that at times your observations, opinions and comments are too caustic, personalized, imbalanced and at times not based on facts and figures or with backing materials. For want of same, many perceives these to be scandalous in nature, loaded with bias hence creates unwarranted jealousies, unhealthy competition and at times, it is treated distorted if not altogether as rubbish. Your readers expect a balanced view, representing both sides of picture. Therefore the opinions must be backed up by reliable and trust-worthy facts, figures and materials.

2. I went through your publication under heading- “Infrastructure- facilities: Income Tax Better Than Customs” published dated 4-5/01/2011. It has been observed as if on behalf of Hon'ble FM that the Customs and Central Excise Department does not believe in spending Government's money. Let them spend all money allotted to them and try to get some more to spent that “you will know the difference while visiting any Income Tax office and Customs and Central Excise Office”. To the observations of the assesses and of general public, on All India basis, I can say with confidence that, the Offices of the Central Excise and Customs Department are far far better, in lay out of the offices, in working environment, space, infrastructure and look etc. The regularity and punctuality and upkeep of the offices of ours are rather 2nd to none in the country. The officers are also highly technically informed and are knowledgeable and they are subscribing to your Tax India online, ELT and other Journal periodical.

3. Your advice that they should learnt from their cousins in Income Tax department and how to spend the money, is uncalled for. The TIO is perhaps not holding the brief for Income Tax Department. Your observations are highly misplaced.

4. On the other hand you are convasing for cutting down of certain wasteful expenditure. The example quoted are about the functioning of the control room and about ‘dosing of sepoys' and as to whether, they are working as receptionists. Whether such job of housekeeping could be out-sourced from expert house-keepers. I am sure these observations have been mailed, without understanding the functioning of the Central excise and Customs department, without knowing what is the supposed to be a premium on quality of such enforcement agencies, dealing in Tax evasion, being historically in uniform cadre upto the level of AC. That for proper discipline, protocol as well as for felicitation to trade and industry, the functioning of a control-room is a must for the establishment of like ours where the is job of enforcement, which is round the clock. Today when the Government buildings are to be secured, the visit of touts and fixers has to be eschewed, the presence of uniform officers like sepoy and inspectors at front of the inside of the building, can't be considered as wasteful expenditure. It ensures faster means of communications, liasioning, coordination and fast dissimination of informations, the presence of uniform officer at the gate of Government building or by way of control-room cannot and should not be under-estimated. A distant and casual observation, having no concern and no knowledge about the functioning of the department, will make such un-called and non-subscriber observations and comments.

Only yesterday, DDT mentioned about the amusingly angry outbursts by some officers at the slightest hint of criticism. We respect and will protect at all costs his right to express his opinion. An editorial colleague suggested that we should run an SMS poll on the Chief Commissioner's views.

If you remember, in a rejoinder to us, some time back, this Chief Commissioner had commented about Judicial Terrorism and “that it is unwarranted on the part of the Hon'ble High Court to entertain such a WP” [Please see DDT 1359-14-05-2010]

Onion Diplomacy - Cross Border Tears - Pakistan Bans Export to India

OIL prices may go up, but who is worried when onions are more expensive than oil? Onions can bring out more tears from the eyes of politicians than housewives. The spiraling Indian Onion price has improved the onion economy of Pakistan with huge export orders to India. But worried with its domestic onion price shooting up, Pakistan has banned export of onions to India through the land route and over 300 truckloads of onion were stopped at the Wagah border, which will ensure that onion prices in India will further go up. The poor Government seems to be under attack from all sides.

Jurisprudentiol – Monday's cases

Customs

Machinery for use in road construction - Notification no. 21/2002-Cus does not have any post-importation conditions to ensure fulfillment of terms of undertaking: CESTAT

PRIMA facie, the notification has only pre-importation conditions requiring an undertaking to be given at the time of import and also a certificate to be produced from the authorized government officials. The undertaking is required for use of the goods exclusively for the construction of roads and also not to sell or otherwise dispose of the goods for a period of five years. The offer made by the ld. counsel to pre-deposit an amount of Rs.22 lakhs against the machinery which is not in the control of the appellants and which was parted with by the appellants to the bank appears to be acceptable for the purpose of hearing the appeal.

Income Tax

Sec 69 - Whether where Tribunal's direction to AO while remanding matter is to examine evidence produced before CIT(A), AO is free to insist on submission of fresh evidence - NO, says ITAT

THE issue before the Tribunal is - Whether where Tribunal's direction to AO while remanding matter is to examine evidence produced before CIT(A), AO is free to insist on submission of fresh evidence. NO is the Tribunal's answer. The second question is - Whether where the assessee company has proved the identity and creditworthiness of the shareholders, the assessee has discharged its onus. Yes is the answer.

Service Tax

Investigation has various shades of meaning and investigation in context of insurance claims cannot make service provided by appellants into security services – Appellant classifying their service as ‘insurance auxiliary service' proper - Matter remanded: CESTAT

THE lower appellate authority has not applied his mind, has not dealt with the issue and the points raised by the appellants and has not passed a speaking order. The appellants were clearly providing insurance auxiliary services to their clients who are insurance companies. The same cannot be categorized as security services by any stretch of imagination. The lower appellate authority brands the services provided by the appellants as security service because of a single word “investigation” appearing in the contract. He has failed to appreciate that investigation has various shades of meaning and investigation in the context of insurance claims cannot make the service provided by the appellants into security services.

See our columns Monday for the Judgements

Until Monday with more DDT

Have a nice Weekend.

Mail your comments to vijaywrite@taxindiaonline.com