TIOL-DDT 2173
21.08.2013
Wednesday

YESTERDAY, in DDT 2172 , we reported -

"In the RajyaSabha yesterday, a copy of the Ministry of Finance (Department of Revenue) Notification No. 84/2013-Customs (N.T.), dated the 19th August, 2013, seeking to further amend Notification No. 30/98-Customs (N.T.), dated the 2nd June, 1998, so as to disallow import of "Flat Panel (LCD/LED/Plasma) Television"as part of free baggage allowance, along with Explanatory Memorandum, under Section 79 of the Customs Act, 1962 (52 of 1962), was laid on the Table of the House.

In the days to come, we would get to read televisions being smuggled into the country. Fortunately, they cannot be hidden in undergarments or body parts! So, they are right royally brought in without paying proper duty even by Customs officers.

But,  where is the notification?  - CBEC is yet to make it public."

The notification arrived yesterday afternoon. Suffice to say that Flat Panel (LCD/LED/Plasma) Television cannot be imported as part of free baggage allowance from August, 26, 2013 .Fortunately, there is ample time for travellers to bring into the country these pricey television sets and make burgeoning profits simply because they have not been caught off-guard. On 19 th August, 2013, this ban was announced in the Press and on websitesand there was frenetic activity amongst a few. Travel tickets for onward and return journeys to countries other than Nepal, Bhutan, Myanmar or China were booked with alarming speed. After all, the Baggage Rule 3 read with clause (a) in column (1) of the Appendix ‘A' mandated that the benefit of free baggage is available to - "All passengers of and above 10 years of age and returning after stay abroad of more than three days."

So, what can one make of this notification which was issued to prop up the rupee which fell below Rs.64 against the US dollar. It is rumored that in the coming days the rupee may breach even what Goldman Sachs announced and would be racing towards setting new records.

After all, there is nearly a week to go before the ban comes into effect! And would this ban be reversed if and when the rupee value climbs?

Notification 84/2013-Cus (NT), dated August, 19, 2013

Flat Panel (LCD/LED/Plasma) Television not free baggage - What is the effect?

THE Indian Government's decision to disallow Flat Panel TVs under Baggage Rules has caused a ripple in the Gulf where TV sellers feel that there would be a 20 percent fall in sales. Now - a - days every passenger, a NRI or Indian Tourist coming from any part of the world brings in a Flat Panel TV, which is promptly cleared by a liberal Customs - for a consideration of course.gulf news.com reported yesterday that a NRI told them, "even if somebody takes a television to India, it may not benefit the government. A corrupt customs official could take a bribe to avoid the import duty."

Khaleej Times reported, "The availability of cheap television sets in the UAE, Thailand and Singapore had created a huge market from India as tourists took advantage of the price difference due to the baggage allowance……. The LCD and LED TV sets by major brands like Samsung, LG and Sony are priced almost 30 to 40 per cent cheaper in the UAEmarket….. Every day, more than 3,000 flat-screen TV sets land at Indian airports. The number increases to almost 10,000 during the sale season and Dubai Shopping Festival (DSF) when special offers are provided to retail customers."

Perhaps almost everybody who needs a Flat Panel TV has already got one - the Government has only unleashed the dog after the thief has bolted.

Identical quality Flat TV sets are available in India - at a slightly more price - but those who can afford to go abroad crib when they have to pay a small duty, get clearance by bribing the Customs officers and then tell the whole world that Indian Customs is awfully corrupt!

CAD - Increase in Duty rates of Gold is not the answer

AS the Government went on increasing the duty on Gold imports, the Current Account Deficit did not show any better health. Only smuggling has increased. Gold is landing by tons in all our ports while the Government is merrily transferring sincere and honest officers. Even in a remote airport like Vizag which became an international airport only recently, 1.5 kgs of gold was seized yesterday.

Are we back to pre 1991 days?

Falling Rupee, deplorable deficit, incorrigible inflation - Where are we going?

THE rupee seems to be having a free fall - the next stage is expected to be at 70. The CAD is 5 percent of GDP. Inflation is out of control and the Babus are to get a 10 percent hike in their salaries due to the inflation in six months - of course they may still not be able to afford onions.

What is wrong? India is run by the same team which took us out of the 1991 crisis. Why are they not able to do it now. Maybe there is one person missing - an old man who was notorious for not taking decisions - who happened to be the Prime Minister at that time!

Jurisprudentiol - Thursday's cases

Central Excise

Appellant entering into two agreements, one for installation and commissioning of oxygen plant and another for operation and maintenance of plant - Credit taken of ST paid on Installation & Commissioning sought to be denied on the ground that Oxygen Plant is an immovable property - CESTAT not discussing this issue at all but ordering pre-deposit of 25% - order set aside and stay application restored - CESTAT to hear application expeditiously: High Court

THE impugned order directs the appellant to pre-deposit 25% of Rs.1.61 crores on the basis that there are two different agreements and therefore, credit taken under one agreement cannot be utilized in discharge of service tax payable under another agreement. This was after stating in Para 4 of the impugned order that revenue wants to deny credit on the ground that oxygen plant is an immovable property. However, thereafter this issue is not discussed at all in the impugned order.In view of the above we set aside the impugned order and restore the application for dispensing with pre deposit of service tax and penalty for hearing before the Tribunal.

Income Tax

Whether special audit is warranted u/s 12A(b) when assessee has failed to report related party transactions in audit report and assessee is involved in relatively large number of transactions - YES: High Court

IN view of the fact that the Special Audit under Section142(2A), in the present facts is warranted, no prejudice is caused to the assessee. The absence of a Special Audit in the present facts could have brought the exemption enjoyed under Section 11 by assessee in jeopardy. This is because the Audit as required under Section 12A (1)(b) is not found satisfactory then it is the special audit which would determine the correct position. Therefore, no prejudice is caused to the petitioner by subjecting its accounts to special audit.

Customs

Cus - Notfn. 21/2002-Cus - Electronic paver finisher (with sensor device) for laying bituminous pavement 7m size and above - whether it is the capacity of the machine to lay a pavement 7m size width and above that determines exemption or whether it should be the paver machine that should have a width 7m size and above - since a different view has been taken by the Co-ordinate Bench, matter referred to Larger Bench: CESTAT

AS per the notification it is not the machine which is having width of 7 meters and above but the capacity of the machine whether the machine is able to lay down pavement of 7 meters and above or not. The catalogue which is produced by the respondents clearly shows that maximum pave width is 10 meters. Therefore, in our opinion, the  respondents are entitled for the benefit of the above said Notification. As there is a different view taken by the Coordinate Bench of this Tribunal in the case of Gammon India Ltd. (supra), therefore it would be in the interest of justice to refer the matter to the Larger Bench of this Tribunal.

See our Columns tomorrow for the judgements

Until Wednesday with more DDT

Have a nice day.

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