TIOL-DDT 2047
18.02.2013
Monday
DDT 1318 - 15.03.2010 observed, ¶FOR setting up an EOU in India, you need two things. One is LOP from the Development Commissioner and the other is a Master's in Mathematics from a reputed University. The former is required for carrying the operations as EOU and the latter for computing the duties payable on DTA clearances and the CENVAT Credit against such clearances¶
In the Sarla Polyesters case 2008-TIOL-985-CESTAT-AHM, the CESTAT held that the third time cess is payable.
The High Court (2008-TIOL-516-HC-MUM-CX) set aside the CESTAT order and remanded the matter to the Tribunal.
On remand, as per the directions of the Bombay High Court, Tribunal served notice to the general public so that all the parties who are interested may also apply as interveners. After hearing the appellants, the interveners and the departmental representative, the CESTAT held, ¶What is required for the purpose of proviso to Section 3 of Central Excise Act, 1944 is to arrive at aggregate of customs duties and once we take a view that education cess is part of the customs duty and is an enhancement, the question of adding it again does not arise¶. (Sarla Performance Fibres Ltd v CCE, Vapi - 2010-TIOL-408-CESTAT-AHM)
In spite of this, Show Cause Notices and Adjudication Orders are being issued in almost all Commissionerates. In fact 10 months after the tribunal order, Board issued a clarification that education cess had to be paid a third time. (Please see DDT 1584 - 06.04.2011). Utter contempt for CESTAT Orders!
While this confusion was in full swing, the Delhi Bench of the CESTAT did not agree with the decision in Sarla Performance and referred the issue to the Larger Bench - 2011-TIOL-1180-CESTAT-DEL
Revenue also appealed against the Sarla case in the High Court. The Gujarat High Court dismissed the Revenue appeal on the ground that the appeals were not maintainable before the High Court as it was a question of rate of duty and the appeal had to be made to the Supreme Court. 2012-TIOL-359-HC-AMH-CX
Revenue was perseverant, as they always are, in matters of perpetual litigation - and took the matter to the Supreme Court. The Supreme Court on Friday dismissed the Revenue appeal on the ground of delay.
Any chance of litigation ending with the matter still pending in the Larger Bench, from where it can still go to the Supreme Court? Does the Revenue Board work only to fill the pockets of the lawyers?
DDT raised this issue in DDT 48 07 02 2005 eight years ago and the matter stands today exactly where we started!
This is a very simple issue which the Board can easily solve, but they wouldn't.
Also see the following well researched articles published by TIOL on this contentious issue:
Education cess payable by EoUs on DTA sale : Will this Budget clarify?
Setback for EOUs: CESTAT rules Education Cess is payable on DTA clearances in addition to duties computed under relevant Notifications
And
1. DDT 1318 15 03 2010
2. DDT 1354 07 05 2010
3. DDT 1584 06 04 2011
4. DDT 1690 12 09 2011
5. DDT 1855 11 05 2012
No Education Cess on Imports under DEPB - SC Dismisses Revenue Appeals
IN Gujarat Ambuja Exports vs Government of India - 2012-TIOL-546-HC-AHM-CUS , the Gujarat High Court had held that no Education Cess was payable on imports under DEPB and the Board Circular 5/2005-Cus dated 31.01.2005, clarifying that it was payable was quashed to that extent and set aside.
The High Court followed the precedent in Adani Wilmer vs UOI - 2012-TIOL-832-HC-AHM-CUS.
The persistent Revenue took both the cases to the Supreme Court. The Supreme Court on Friday condoned delay, but dismissed both the appeals.
Please see 2013-TIOL-15-SC-CUS and 2013-TIOL-16-SC-CUS
Customs - Tariff Value of Brass Scrap, Gold and Silver slightly reduced
GOVERNMENT has changed the Tariff Values. The existing and revised values are as follows.
S. No. | Description of goods | Tariff value |
| | Existing
USD(Per MT) | Changed
USD(Per MT) |
(1) | (3) | | (4) |
1 | Crude Palm Oil | 815 | 848 |
2 | RBD Palm Oil | 860 | 896 |
3 | Others - Palm Oil | 838 | 872 |
4 | Crude Palmolein | 867 | 909 |
5 | RBD Palmolein | 870 | 912 |
6 | Others - Palmolein | 869 | 911 |
7 | Crude Soyabean Oil | 1219 | 1229 |
8 | Brass Scrap (all grades) | 4077 | 4074 |
9 | Poppy Seeds | 4395 (i.e. no change) | 4395 |
S. No. | Description of goods | Tariff value |
| | Existing USD | Changed USD |
(1) | (3) | | (4) |
1 | Gold, in any form, in respect of which the benefit of entries at serial number 321 and 323 of the Notification No. 12/2012-Customs dated 17.03.2012 is availed | 545 per 10 grams | 535 per 10 grams |
2 | Silver, in any form, in respect of which the benefit of entries at serial number 322 and 324 of the Notification No. 12/2012-Customs dated 17.03.2012 is availed | 1018 per kilogram | 1003 per kilogram |
The rates were changed last by Notification No. 16/2013-Cus NT dated 31.01.2013
Notification No. 21/2013-Cus.,(N. T.), Dated: February 15, 2013
What is BUDGET?
The budget is not merely a statement of financial receipts and expenditure of the government. It is a significant political statement of government policy and its priorities for the economy. The budget reflects the country's economy and shapes the direction in which the government of the day wants to take it as per its policies and priorities. It is also a government's plan for raising revenues through taxation, borrowing and incurring expenditure under the relevant heads. The government channelizes its financial resources thus raised in the various sectors of the economy and government. Given the finite nature of financial resources, budget making is an exercise in achieving a fine balance between competing objectives and priorities of the government, within the budgetary constraint. The Constitution of India does not use the term ‘budget' but only refers to Annual Financial Statements. As per Articles 112 and 202, the Union Government and State governments are constitutionally mandated to prepare and present ‘budgets', which are financial statements of receipts and expenditure, both current and capital. |
THAT was Vice President Hamid Ansari explaining the Budget while inaugurating the K. M. Mani Centre for Budget Studies, Cochin University of Science & Technology. KM Mani is perhaps the longest serving legislator in India, being an MLA continuously for the last 48 years from the same constituency and has a record of presenting ten budgets in the Kerala Assembly. The record for presenting the maximum number of budgets is with former AP Finance Minister, now Tamil Nadu Governor K. Rosaiah who had presented the State budget in the Andhra Pradesh assembly 16 times, including 7 times in a row.
Since appeal itself was disposed of in year 2006, there was no question of granting any extension of Stay
FRIVOLOUS applications are not always being filed by the Revenue. On occasions, the assessees too do it. Needless to mention, all such applications are required to be listed for hearing and heard by the Bench and all this consumes valuable time and energies of the Bench and Registry.
In the present case, the assessee filed a Miscellaneous Application in the year 2012 seeking a Stay of the order granted by the CESTAT in the matter of appeal filed by them in the year 2000.
When the matter was listed for hearing the appellant did not show up.
The Bench went through the case papers and found that the Appeal itself had been disposed of in the month of April, 2006 and since there was no appeal pending, there was no question of extension of the Stay order.
The application was accordingly dismissed.
(See 2013-TIOL-313-CESTAT-MUM)
No farewell Please - retiring High Court Judge
WHEN a High Court Judge retires, usually a meeting is held in the Court of the Chief justice where all the judges of the High Court would be present and the Advocate General would make a farewell speech followed by photo session, high tea and maybe a dinner in a five star hotel.
But a Judge of the Madras High Court wants this farewell ritual to be put an end to. Justice Chandru who is retiring next month has written to the Chief justice requesting him not to order the farewell ritual for him. It seems the last time a judge declined a farewell function was in 1929, when Justice Jackson told the Advocate General, ¶I have done my job; where is the question of a farewell for me?¶
Justice Chandru is a different Judge - he has a record of over one Lakh cases disposed of by him; he does not use the services of a mace carrying court employee escorting him; he does not have a gun toting security man; does not have official servants at home; does not approve lawyers calling him “my lord”. The Madras High Court website which carries the bio data of the judges has no link to Justice Chandru's details.
Jurisprudentiol – Tuesday's cases
FERA
It is only when deposition goes through fire of cross-examination that Court or Statutory Authority may be able to determine and assess its probative value. Using a deposition that is not so tested, may therefore amount to using evidence, which party concerned has had no opportunity to question: SC
THE question, however, is whether failure to permit the party to cross examine has resulted in any prejudice so as to call for reversal of the orders and a de novo enquiry into the matter. The answer to that question would depend upon the facts and circumstances of each case. It is evident from Rule 3 of the Adjudication Rules framed under Section 79 of the FERA that the rules of procedure do not apply to adjudicating proceedings. That does not, however, mean that in a given situation, cross examination may not be permitted to test the veracity of a deposition sought to be issued against a party against whom action is proposed to be taken.
Income Tax
I-T - Whether when assessee acquires corporate membership of Golf Club for limited period, any payment made in this regard brings any 'enduring benefits' to be treated as capital expenditure - NO: HC Larger Bench
ASSESSEE had obtained corporate membership of Golf Club, Chandigarh on payment of Rs.6lacs. Rs.16,945/- was paid towards services and facilities used during the relevant AY. During assessment, the AO disallowed such expenses for the reason that the same were personal expenses of the MD and other employees and, thus, added back to the income of the assessee. On appeal, CIT(A) set aside the said disallowance holding that club membership was in the nature of an advantage in the commercial sense and not in the capital field. The CIT(A) also considered the remand report, wherein it was observed that the payment was for acquisition of Club Membership, therefore, it was a capital expenditure. On further appeal, the Tribunal affirmed the findings recorded by the CIT(A) and observed that the membership of the club had been acquired by the assessee for the use of its personnel.
Central Excise
S.4 of CEA, 1944 - Valuation - Related person - Argument that the applicant and L&T Ltd. do not have any mutuality of interest is debatable and needs to be examined in depth at the time of regular hearing - applicant has not produced any data/details at the time of hearing to buttress their contention that they have also made clearances to buyers other than L&T Ltd. - Prima facie applicant does not have a case for complete waiver of pre-deposit on merits - SCN issued on 03.02.2011 is prima facie hit by limitation – duty demanded in SCN 04.05.2011 is within time – pre-deposit ordered of Rs.1.80 Crores: CESTAT
THE applicant is engaged in the manufacture of Fills, Welding Powder Alloys, Flux for welding, coated welding electrodes and coated/uncoated gas welding rods falling under chapters 38 and 83 of the first schedule of the Central Excise Tariff Act, 1985. Prior to 01.07.2006 the applicant was paying Central Excise duty on the goods purchased by M/s L&T Ltd. with reference to the price at which the latter sold the goods viz. the selling price of M/s L&T. However, vide letter dated 21.06.2006 the applicant informed the jurisdictional Assistant Commissioner of Central Excise that, from 01.07.2006 the Central Excise duty on all clearances of final product to M/s L&T will be discharged on the transaction value contracted between them i.e. the duty will be paid with reference to the applicant's selling price to M/s. L&T.
See our Columns Tomorrow for the judgements
Until Tomorrow with more DDT
Have a Nice Day
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