TIOL-DDT 2067
18.03.2013
Monday

IN the much-stagnated lower executive cadres of Inspectors and Superintendents of Central Excise, there are lots of anomalies and imbalances. Every day we get mails from frustrated officers who have not got a second promotion in 35 years of service. A 1992 Inspector is still an Inspector - a 1992 Superintendent is still a Superintendent. Central Excise officers complain that appraisers junior to them by 25 years have become their bosses. There are cases pending at all possible levels of litigation from Tribunal to Supreme Court. The bone of contention is the ratio among the three feeder cadres - Superintendents of Central Excise, Superintendents of Customs and appraisers of Customs. The ratio was 6:2:1 and this was not appreciated by all the feeder cadres. Twelve years ago, the Supreme Court in All India Federation of Central Excise vs. Union of India had held that the Supreme Court was not the forum to change the formula and any one aggrieved with the quota should convince the Government about the need to change the rules.

In August 2011, the Supreme Court directed the Government to alter the ratio after hearing representations from the Staff Associations and to give promotions accordingly (2011-TIOL-74-SC-MISC). Somehow the Court directions came to be interpreted as if the new formula had to be given retrospective effect. On this assumption, certain associations/officers filed contempt petitions in the Supreme Court against the then Revenue Secretary Gujral and CBEC Chairman Goel. The CBEC had changed the ratio to 13:1:2, but with prospective effect.

The Supreme Court last week dismissed the contempt petitions against both and clarified that its earlier order had no direction to apply the quota retrospectively. So, now the new ratio is applicable only prospectively.

Please see 2013-TIOL-19-SC-MISC

Refund of Terminal Excise Duty - DGFT Clarifies

IT has come to the notice of the DGFT that some RAs of DGFT and the Offices of Development Commissioners of SEZ are providing refund of Terminal Excise Duty (TED) even in those cases where supplies of goods, under deemed exports, is ab-initio exempted.

2. There are three categories of supplies where supply of goods, under deemed exports, is ab-initio exempted from payment of excise duties. These are:

(i) Supply of goods under Invalidation letter issued against Advance Authorisation [Para 8.3(c) of FTP]; [Now, which Central Excise Notification gives ab initio exemption to goods cleared under an invalidation letter?]

(ii) Supply of goods under ICB [Para 8.3(c) of FTP]; and

(iii) Supply of goods to EOUs [Para 6.11(c) (ii) of FTP]

DGFT clarifies that:

1. Prudent financial management and adherence to discipline of budget would be compromised if refund is provided, in cases, where exemption is mandated.

2. In fact, in such cases the relevant taxes should not have been collected to begin with. And if, there has been an error/oversight committed, then the agency collecting the tax would refund it, rather than seeking reimbursement from another agency.

3. Accordingly, in respect of supplies, as stated above, no refund of TED should be provided by RAs of DGFT/Office of Development Commissioners, because such supplies are ab-initio exempted from payment of excise duty.

DGFT Policy Circular No. 16/(RE-2012)/2009-14, Dated: February 15, 2013

Customs - Tariff Value of Gold, Silver and other items - Changes

GOVERNMENT has changed the Tariff Values. The existing and revised values are as follows.

The rates were changed last by Notification No. 26/2013-Cus NT dated 01.03.2013

Notification No. 30/2013-Cus.,(N.T.), Dated: March 15, 2013

Customs and CX Offices to be open on last three days of March

DURING the last week of March 2013, there are a number of holidays for the Central Government Offices.

26.03.2013 - Tuesday - Holika Dahan - Restricted Holiday

27.03.2013 - Wednesday - Holi - Holiday

29.03.2013 - Friday - Good Friday - Holiday

30.03.2013 - Saturday - - Holiday

31.03.2013 - Sunday - - Holiday

CBEC feels that the bulk of the Revenue is received at the end of the month. The Revenue Department has proposed to the Department of Financial Services to issue instructions to have the banks open for longer hours on 26th, 28th and 30th March 2013 so that the collections of revenue and the efforts of the two departments are reflected appropriately. It has also been proposed to have the banks opened for at least half day on the above holidays and on 31st March (Sunday).

So, the Board has requested the Chief Commissioners to keep their offices open on 29th, 30th and 31st March and also to issue Trade Notices for the information of the Trade.

CBEC F. No. 296/42/2013-CX.9; Dated March 15, 2013

Income Tax Offices also to be Open

CBDT has issued an order under Section 119(1) of the Income Tax Act to the effect that all the Income Tax offices throughout India shall remain open and the receipts counters will also work during normal office hours on 30th and 31st of March 2013.

Board wants special arrangements to be made by opening additional receipt counters, wherever required on 30th and 31st March 2013 to facilitate filing of return of income and other related work of taxpayers.

Board wants wide publicity to be given to these instructions.

CBDT F. No. 226/45/2013-ITA.II; Dated March 13, 2013.

Four Hours to Clear Customs in US

WITH severe staff crunch in US Customs, air passengers arriving in US airports are subject to unusually long waits of 3 to 4 Hours. Yelling passengers show their ire at the few Customs officers present who are simply helpless. This is the result of a major spending cuts imposed by US Treasury to salvage the economy. Poor Americans!

Commissioner (A) has no knowledge how to deal with appeals filed before him

A comment as scathing as this should make one hang his head in shame. But then, when were such observations of the CESTAT taken in the right spirit by the lower formations - the best they do is offer some weak justification! At least, the NACEN should incorporate the guidelines given in this order as a part of its curriculum.

Be that as it may, in the present case, the adjudicating authority had imposed a penalty under rule 26 of CER, 2002 on the appellant and the same was challenged before the Commissioner (Appeals) by filing an appeal and also an application for waiver of pre-deposit. Instead of disposing of the stay application first, the Commissioner (Appeals) heard the stay application as well as the appeal together and dismissed the appeal for non-compliance of Section 35F of the Central Excise Act.

And this is what the CESTAT held -

“4. In this case the appellants have challenged the adjudication order before the Commissioner (Appeals) wherein penalties were levied on the appellants. They also sought waiver of pre-deposit of the penalties imposed on them during the pendency of the appeal before the Commissioner (Appeals). The Commissioner (Appeals) without considering the stay application passed the impugned order. In fact the Commissioner (Appeals) has taken stay application as well as appeal together and thereafter he dismissed the appeal for non-compliance of Section 35F of the Central Excise Act. In these circumstances, I find that the Commissioner has no knowledge how to deal with the appeals filed before him. In fact, the first duty of the Commissioner (Appeals) is to dispose of the stay application and if he is not satisfied with the arguments advanced for waiver of pre-deposit, he may ask for pre-deposit but while considering the stay application along with appeal together, he has no power to dismiss the appeal for non-compliance of Section 35F of the Central Excise Act.”

With these observations, the order was set aside and the matter remanded to the Commissioner (Appeals) to consider the stay application filed by the appellants and thereafter to decide the appeal.

But why do these things happen? Is it that a Commissioner (Appeals) does not know that he should dispose of the Stay Petition before disposing of the main appeal? Was he under orders to help boost up Revenue?

See 2013-TIOL-463-CESTAT-MUM

Jurisprudentiol – Tuesday's cases

Service Tax

Service charges paid to foreign lessor for procuring aircrafts - appellant is liable to pay service tax as service recipient u/s 66A of FA, 1994 - Pre-deposit Ordered: CESTAT

THE appellant procured aircrafts for which they got equipment lease financing and for which payment was made by the appellant to various entities abroad, connected with lease finance. They also kept a deposit with the International Finance Corporation, lessor towards maintenance reserve. The department was of the view that the appellant is liable to discharge Service Tax in respect of the above activities undertaken under the category of ‘Banking and Financial Services¶ namely, finance leasing. As regards the maintenance reserve, the department was of the view that they are liable to pay Service Tax under the category of ¶Management, Maintenance and Repairs¶.

Income Tax

Whether TDS benefit can be denied to deductee for fault of deductor - NO: HC

THE issues before the Bench are - Whether when it is admitted by the CBDT that the data uploaded in the CPC database by the Department has serious errors, it is necessary for the assessees to file applications for correction of such errors; Whether AOs are required by law to suomoto carry out corrections and upload the data again so that refunds could be issued in genuine cases; Whether before making adjustment of refunds the onus is on the AO to issue an intimation to the assessee; Whether interest can be disallowed to the assessee even though the Revenue admits that it made wrong uploading of data at CPC; Whether when AO makes adjustment in the returned income, it is necessary to issue intimation u/s 143(1); Whether the onus to show that intimation was communicated, is on the Revenue and Whether TDS benefit can be denied to the deductee for the fault of deductor. And the HC lambasts the Revenue.

Customs

Notfn. 21/2002-Cus - contract did not mention M/s Gammon as sub-contractor - there is no logic and reason for deeming appellant as sub-contractor of M/s GICL - notification refers to pave width of equipment and not of extensions that can be attached to equipment to increase same - there is no room for any intendment or presumption: CESTAT

THE appellant imported a consignment of ¶Electronic Sensor Paver Vogetel model super 1800-2 with AB 600-2 TC screed¶ for laying bituminous pavement upto 9 M width along with accessories and claimed duty exemption under notification No. 21/2002-Cus dated 1-3-2002 vide Sl. No. 230 of the Table annexed to the said notification. The assessing officer denied the benefit of exemption.

¶In a taxing statute one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.¶

See our Columns Tomorrow for the judgements

Until Tomorrow with more DDT

Have a Nice Day

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