AIRCRAFT, parts, radars, machinery, equipment, computer hardware and software and several other goods imported for the Airborne Early Warning and Control (AEW&C) System Programme of Ministry of Defence, are exempted by Sl. No. 31 of the Table to the Notification No. 39/96-Cus dated 23.07.1996. But this exemption is valid only till 31st December 2011. Now, the Government has extended it till 4th day of April 2014.

Notification No. 110/2011-Customs Dated: December 19, 2011

IRS v IRS - Transport of Goods by Rail - exempted exemption - Will they continue beyond 2011?

SERVICE Tax Notifications 7/2010, 8/2010 and 9/2010, after several postponements are to come into force with effect from 01.01.2012, bringing in Service Tax on transport of goods by rail.

Will the Indian Railways accept the power of Indian Revenue to levy taxes?

Please see

• DDT 1180 – 21.08.2009

• DDT 1187 – 01.09.2009

• DDT 1188 – 02.09.2009

• DDT 1387 – 2 4.06.2010

• DDT 1495 26.11.2010

• DDT 1512 – 22.12.2010

• DDT 1579 – 30.03.2011

• DDT 1630 – 15.06.2011

Central Excise and Service Tax Officers fail in expanding base, registration, scrutiny - CAG

THE CAG conducted a performance audit on working of Commissionerates, Divisions and Ranges on

++ Measures to broaden the service tax base;

++ Monitoring mechanism for registration of assessees;

++ Receipt and scrutiny of returns;

++ Internal audit process; and

++ Issue of show cause notices

Their sample comprised 46 Commissionerates, 95 Divisions and 204 Ranges.

Some of the findings from the Report released yesterday:

++ 17 out of 35 Commissionerates informed that they had not carried out the procedures as prescribed by DGST in its action plan for broadening the tax base.

++ CAG had earlier identified 1959 service providers who were not registered. Department could only register 151 out of them.

++ CAG found delays in issuing registration certificates and in acceptance of surrender certificates.

++ Detailed scrutiny of Central Excise and Service Tax Returns were being done only in very few ranges or divisions.

++ The work of maintenance of assessee master file had not been completed by the audit wings of most of the Commissionerates.

++ In ten Commissionerates, non-mandatory units were audited at the cost of mandatory units.

++ There was no centralised record of all the cases, which required issue of Show Cause Notices.

EPCG - DGFT equally bad - CAG

THE CAG also conducted a performance audit on the ‘Export Promotion Capital Goods Scheme' (EPCG) to evaluate the adequacy of the provisions of Foreign Trade Policy, Customs Act and related instructions and to assess their proper implementation in issue of authorisation under the scheme.

CAG found:

++ Under EPCG Scheme, the licences issued have to be monitored over an eight year period through many prescribed checks. We observed that authorisations were issued without complete set of documents prescribed and post verification of declarations was usually not done by Regional Licencing Authorities (RLAs) in violation of DGFT's instructions.

++ Post Issue Audit Wings (PIAW) were not operational in most places except Mumbai.

++ Many cases of incorrect fixation of specific export obligation due to calculation mistakes.

++ Authorisations were issued against refusal orders by granting abeyance orders by RLAs without authority.

++ Neither the RLAs had instituted any system to monitor the receipt of installation certificates of the imported capital goods nor the Customs department initiated any address verification in most of the locations.

++ There was lack of monitoring at the redemption stage. The RLAs were not tracking the receipt of redemption applications on the due dates i.e. on completion of eight years from date of issue of licence.

Arvind Kejriwal's Resignation Accepted - He paid up Dues

IT was TIOL which first broke the news that while being a very important member of Team Anna, Arvind Kejriwal continued to be an IRS officer. [Please see Is Arvind Kejriwal still an IRS officer? DDT 1683 01 09 2011]

On 3rd November, he paid up over Rs. 9.27 Lakhs, he owed to the Income Tax Department and wrote a letter to the Prime Minister asking him not to harrass six IIT friends who gave him interest free loans to clear his dues. Kejriwal strongly resisted the Income Tax Department's efforts to realize the dues, but had to relent finally.

The CBDT Notification dated 20.12.2011, states, “The President of India is pleased to accept the resignation of Shri Arvind Kejriwal, IRS (IT:92069) from Central Government Service with effect from 20th February, 2006.”

A copy of the notification is sent to the Officer concerned (obviously, Kejriwal). Is he still an officer?

Income Tax Inspector saves Constable; gets shot

FIFTY year old New Delhi is not safe – no, not even for a cop. It seems two men in a Santro car rammed the bike of a constable and then started hitting him. An Inspector of Income Tax Rajesh Sharma who was taking a post dinner walk in his colony saw the policeman being attacked and tried to save him. Then one of the attackers shot Sharma in his jaw. Sharma is undergoing treatment in AIIMS and it seems the Cop could not get a bed in the hospital!

The Delhi Police will reward the Income Tax Inspector – maybe around Rs. 500/-. The tax fraternity should be proud of him.

Jurisprudentiol – Thursday's cases

Customs

Gold mountings and findings being items as jewellery are outside purview of Notification No. 62/2004-Cus; Board Circulars are binding only when they are in accordance with Law: CESTAT

WHILE the Board under Section 151 (a) of the Customs Act, can issue clarifications with regard to classification of a product or scope of an exemption notification, by such clarifications, the Board cannot expand the scope of an exemption notification issued by the Central Government under Section 25 (1) of the Customs Act, 1962 as the Board is after all an office, subordinate to the Government of India. Constitutional Bench of the Supreme Court in the case of CCE, Bolpur vs. Ratan Melting & Wire Industries reported in (2008-TIOL-194-SC-CX-CB) has held that Circulars of the Board are binding only when the same are in accordance with the law.

Income Tax

Whether, for full and true disclosure of information, onus is on assessee to ensure that vital information for AO are not hidden in documents furnished with return - YES, rules Bombay HC

THE mere production of account books or other evidence from which material evidence could with due diligence have been discovered by the AO does not necessarily amount to a disclosure within the meaning of the first proviso to Section 147. The nature of the material produced and the circumstances in which it was produced assumes some significance.

Service Tax

There is nothing in law which requires that input services ought to have been used in factory where credit is taken - Stay granted: CESTAT

INPUT Service – Stay/Waiver of Pre-deposit -  Denial of CENVAT credit on the ground that the appellant had received ISD invoices from Head Office pertaining to input services not used in or in relation to manufacture of goods at Borivali plant is not warranted in law - till the time rule 7 is amended only two conditions have to be satisfied for distribution of credit - first is that the credit should not exceed the amount of service tax paid and second restriction is that the credit should not be attributable to services used in the manufacture of exempted goods or exempted services - Pre-deposit waived and recovery stayed.

See our columns Tomorrow for the judgements

Until Tomorrow with more DDT

Have a Nice Day.

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