TIOL-DDT 2177
27.08.2013
Tuesday

THE CBI was conducting an investigation on the petitioner's assets disproportionate to his known sources of income to the tune of over Rs. 5 crores. The petitioner is charged with offering a bribe of Rs. 2 lakhs to the CBI Inspector investigating the case and he was caught red-handed while offering the bribe. At that time the petitioner was Deputy Commissioner, Central Excise and Customs at Surat. On 26.9.2004, the petitioner Customs Deputy Commissioner went to the house of the CBI Inspector and handed over the money when he was caught red-handed. Charge sheet was framed and he was arrested on 27.9.2004 and was released on bail on 8.10.2004. Subsequently he filed a discharge application which was rejected by the Trial Court in February 2010. Against the rejection, he is before the High Court which last week refused to interfere.

So the trial is back in the trial court after nine years. It is back to square one for the IRS officer.

Click Here for the High Court Order.

FTP - Import policy of Worked monumental or building stone (except slate) and - Amendment

GOVERNMENT has amended the policy conditions for import of Worked monumental or building stone (except slate) and articles thereof, other than goods of heading 6801; mosaic cubes and the like, of natural stone (including slate), whether or not on a backing; artificially coloured granules, chippings and powder, of natural stone (including slate), from "Import permitted freely ” to "Import permitted freely provided cif value is USD 80 & above per square metre. ”

Notification No. 38(RE-2013)/2009-2014., Dated: August 26, 2013

FTP - Import policy of Rough Marble and Travertine Blocks for the Financial year 2013-14

GOVERNMENT has amended the policy conditions for import of Rough Marble and Travertine blocks for the year 2013-14. It has now been notified with a quota of 6 lakh MT and an MIP of USD 325 per MT .

Notification No. 37(RE-2013)/2009-2014., Dated: August 26, 2013

FTP - Import policy of Rough Marble and Travertine Blocks for the Financial Year 2013-14

GOVERNMENT has amended the policy conditions for allocation of quota for import of Rough Marble Blocks by Indian companies investing abroad in marble mining. It has now been notified with an annual quota of 1 lakh MT.

Notification No. 36(RE-2013)/2009-2014., Dated: August 26, 2013

Panchi Gujaram Notified as ICD

GOVERNMENT has notified Village-Panchi Gujaram - District Sonepat in Haryana as an ICD.

Notification No. 88/2013 - Customs (N.T.)., Dated: August 26, 2013

Exchange Rate Changed for Swedish Kroner

GOVERNMENT has notified new rate of exchange for Swedish Kroner from today.

Notification No. 89/2013 - Customs (N.T.)., Dated: August 26, 2013

Tax Administration Reform Commission Set up - Of Former Babus

IN his Budget Speech 2013-14 in the Parliament on 28.02.2013, the Finance Minister had announced:

"An emerging economy must have a tax system that reflects best global practices. I propose to set-up a Tax Administration Reform Commission to review the application of tax policies and tax laws and submit periodic reports that can be implemented to strengthen the capacity of our tax system."

The Government has now set up the Tax Administration Reform Commission (TARC) headed by Dr. Parthasarathy Shome in the rank of Minister of State.

The Members of the Commission are:

Full- Time Members: 2

1. Mr.Y.G. Parande

2. Ms.Sunita Kaila

Part-time Members: 4

1. Mr.M.K. Zutshi

2. Mr. S.S. N. Moorthy

3. Mr.M.R. Diwakar

4. Mr. S. Mahalingam

Two are former Members of the CBDT and CBEC, two are former Chairmen and two are from the trade. They are to review the existing mechanism/policy and to recommend measures for:

1. appropriate organizational structure for tax governance with special reference to deployment of workforce commensurate with functional requirements, capacity building, vigilance administration, responsibility and accountability of human resources, key performance indicators, assessment, grading and promotion systems, and structures to promote quality decision making at the highest policy levels.

2. tax governance best suited to Indian context.

3. dispute resolution covering time and compliance cost

4. capacity building

5. deepening and widening of tax base and taxpayer base.

6. better tax compliance - by size, segment and nature of taxes and taxpayers

7. improved taxpayer services and taxpayers education programme.

8. strengthening of Database and Inter-agency information sharing, not only between Central Board of Direct Taxes (CBDT) and Central Board of Excise and Customs(CBEC) but also with the banking and financial sector, Central Economic Intelligence Bureau (CEIB), Financial Intelligence Unit (FIU), Enforcement Directorate etc.

9. research inputs to tax governance.

10. to enhance predictive analysis to detect and prevent tax/economic offences.

The life of the Commission is 18 months - the present Government does not have that much time left. It is doubtful whether the new Government would want recommendations from this Commission - maybe they hope to come back to power. Four out of the six members of the commission are retired Revenue officers and are we expecting to learn from the wisdom acquired by them after retirement?

Jurisprudentiol - Thursday's cases

Central Excise

Modvat- Deemed Credit - Assessee not responsible if supplier had not paid correct duty; Assessee not expected to verify with Department whether supplier had paid duty - Supreme Court

IT is perceivable from the factual matrix that the only allegation is that at the time of MODVAT verification it was found that the supplier of the inputs had not discharged full duty liable for the period covered under the invoices. This lapse of the seller is different and not a condition or rather a pre-condition postulated in the notification. The proviso postulates and requires “reasonable care” and not verification from the department whether the duty stands paid by the manufacturer-seller. When all the conditions precedent have been satisfied, to require the assessee to find out from the departmental authorities about the payment of excise duty on the inputs used in the final product which have been made allowable by the notification would be travelling beyond the notification, and in a way, transgressing the same. This would be practically impossible and would lead to transactions getting delayed.

Income Tax

Whether when Revenue had issued notice for reassessment on ground that Sec 10B deduction had resulted in underassessment of income, and deduction on account of deferred revenue expenditure was inadmissible, it amounted to tangible material which had live link to validate formation of opinion - NO: Delhi High Court

THE assessee company is engaged in the business of manufacture and sale of optical and magnetic storage media. The assessee had two units in Noida and Greater Noida, both of which were export oriented units and eligible for deduction under section 10B. The assessee had claimed deduction under section 10B in respect of the profit derived from its unit in Noida, but not claimed any such deduction in respect of its Greater Noida unit on account of the unit being in loss.

THE issue before the Bench is - Whether when Revenue had issued notice against the assessee for reopening of assessment on the ground that deduction under Section 10B had resulted in underassessment of the assessee's income, and the deduction on account of deferred revenue expenditure being expenditure on technical know-how, was inadmissible and should have been disallowed, it amounted to tangible material which had live link to validate a legitimate formation of opinion. And the verdict goes against the Revenue.

Service Tax

Franchisee Service - CESTAT upholds demand against Delhi Public School Society under normal period of limitation: CESTAT

THE appellant, The Delhi Public School Society is engaged in entering into agreements with different entities interested in establishing schools in different areas. As per the agreements, named as ‘Education Joint Venture', the appellant (assessee) permits, allows and grants a revocable license to the party to the agreement to use the name DPS, its Logo and motto for the purpose of the school to be established. The school shall be established, managed and run by a Board of Management (BOM) consisting of members nominated by the assessee and the parties. The parties are required to pay the consideration, in advance commencing from the year the school starts functioning.

It is the case of revenue that the consideration received by the appellant is taxable under the category of Franchisee service and confirmed the demands under extended period. The appellant are before the CESTAT challenging the demands.

Tomorrow is a holiday - Janmashtami

See our Columns Thursday for the judgements

Until Thursday with more DDT

Have a nice day.

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