TIOL-DDT 2280
27.01.2014
Monday

PARVEEN Talha retired in 2004 as DG, NACEN to become a Member of UPSC. She was the first Muslim lady to join the Class I Civil Service in India. She is also the first Muslim lady Member of the UPSC.And the first IRS officer ever to adorn the post.

She recently wrote a book Fida-e-Lucknow.

Writer Khushwant Singh mentions her in several of his articles like she was not liberal in giving him scotch whiskey even though she was a Commissioner of Customs.

He mentions an airport incident - "I was returning from Singapore loaded with dutiable goods like a camera and transistor-radio and dreaded having to pay heavy customs duty. Unknown to me Parveen's parents were on the same flight. I came out ahead of them and was warmly received by Parveen. The customs officers looked the other way as I was hugging their boss." Khushwant certifies that Parveen makes the tastiest kababs.

As DG, NACEN, she made NACEN a Centre of excellence - she calls it the ‘grand finale' of her exciting career - and in the beginning, because she was a lady, they were not prepared to post her in a Division; she had to meet a Member of the CBEC to get a Division posting.

A Lucknow aristocrat - product of the famous Loreto Convent, after retirement from UPSC, she is back in her favourite Lucknow - writing books and maybe making kababs and in between winning the coveted Padma Sri award from the President of India. It is a proud moment for the Revenue Service in India that she has got the Padma Sri this year in the category of ‘civil service'.

TIOL heartily congratulates Parveen Talha on this great honour.

Change in procedure for PAN allotment - CBDT Instruction

SUBSEQUENT to notification S.O.No 3794(E) dt 23.12.2013, the procedure for PAN allotment process will undergo a change with effect from 03.02.2014.

From 03.02.2014 onwards, every PAN applicant has to submit self- attested copies of Proof of Indentify (POI) [perhaps what they mean is identity], Proof of Address (POA) and Date of Birth (DOB) documents and also produce original documents of such POI/POA/DOB documents for verification at the counter of PAN facilitation centres. List of documents of POI/POA/DOB is given in the Instructions part of Form 49A/49AA.

The copies of Proof of Identity (POI), Proof of Address (POA) and Date of Birth (DOB) documents attached with PAN application form, will be verified vis-a-vis their original documents at the time of submission of PAN application at PAN facilitation Centres.

Original documents shall not be retained by the PAN Facilitation Centres and will be returned back to the applicant after verification.

The fee for processing a PAN application shall be Rs 105/ - (inclusive of all taxes).

CBDT F. No. PAN/1/3/2003/Part,.Dated: January 24 2014

Anti Dumping Duty on Acrylonitrile Butadiene Rubber - extended after death

RESURRECTION of dead notifications is a regular practice with the CBEC and this is one practice in which DDT has miserably failed to wake up the babus before the expiry of anti dumping notifications. The anti dumping duty on Acrylonitrile Butadiene Rubber imposed by Notification No. 1/2009-Cus dated 02.01.2009, had expired on 01.01.2014 and now they have extended it till 01.01.2015 after being dead for 23 days.

Notification No. 06/2014-CUSTOMS (ADD), Dated: January 23, 2014

Anti Dumping Duty on Hexamine - Repeated Resurrection

THE Anti-dumping duty on Hexamine originating in, or exported from,Russiaand Saudi Arabia, was first imposed provisionally by Notification No. 74/2001 from 28 th June 2001. This was valid up to 27th December 2001, but they resurrected it and made definitive anti dumping duty from 27.03.2002. This definitive duty was to expire on 27th June 2006. But by Notification No. 65/2006-Cus., Dated 27th June,2006, the duty has been extended up to 27th June, 2007. So, the duty expired on 28th June 2007. Again, it was re-imposed for another period of five years from 25thJuly 2007 by Notification No. 89/2007 dated 27.07.2007

Was there no anti-dumping and injury to domestic industry during the period 28th June 2007 to 24th July 2007 when there was no anti-dumping duty on the product?

This new Notification was valid till 24.07.2012. Obviously, the Board was busy with other important things in the last week of July 2012 that they forgot about this notification and so it actually died on 25th July 2012. But Notifications in CBEC do not die or expire - even if they do, they can be resurrected. So, they have extended the validity of Notification till 24.07.2013 by Notification No. 38/2012-Cus (ADD) dated 06.08.2012 - thirteen days after it expired.

Now they have again imposed anti dumping duty on the product with effect from 23.01.2014for a period of five years. Was there no dumping between 25.07.2013 and 22.01.2014?

Notification No. 08/2014-CUSTOMS (ADD), Dated: January 23, 2014

Anti Dumping Duty imposed on DiaminoStilbeneDisulphonic Acid (DASDA)

GOVERNMENT has imposed definitive anti-dumping duty on imports of 4, 4 DiaminoStilbene 2, 2 Disulphonic Acid (DASDA) originating in, or exported from, the People's Republic of China for a period of five years (as of now)

Notification No. 09/2014-CUSTOMS (ADD), Dated: January 23, 2014

What happened to Anti Dumping Notification No. 7/2014?

GOVERNMENT has issued Customs Anti Dumping Notification Numbers 6,8 and 9 of 2014 on 23.01.2014. Notification No. 7 is missing. It will make its appearance (hopefully) soon.

Central Excise - Divergent practices of assessment with respect to compounded levy scheme applicable for smokeless tobacco products - CBEC Clarifies

UNDER the compounded levy scheme, excise duty is chargeable with respect to deemed production based on the number of packing machines in the factory of the manufacturer. There is a doubt whether excise duty can be re-determined based on the speed of the packing machine and actual production thereof, which may be higher than the deemed production.

The mandatory compounded levy scheme is applicable to Pan Masala, Gutkha and chewing tobacco manufactured with the aid of packing machine & packed in pouches. The factor relevant to the production on which excise duty is leviable has been notified to be the number of packing machines in the factory of the manufacturer under the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 and the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 read with section 3A (2) and (3) of the Central Excise Act, 1944.The monthly deemed production per operating machine per month is prescribed based on the average speed of packing machines and average working hours of a factory. Excise duty is chargeable at the rates notified on the basis of Retail Sale Price (RSP) slabs on per machine basis (notification No.42/2008-CE dated 01.07.2008 and notification No.16/2010-CE, dated 27.02.2010 refer). In order to minimize the element of subjectivity and to ensure certainty and objectivity, the number of packing machines installed in the factory has been notified to be the only factor relevant to the production of the notified goods under the said rules.

Board clarifies that the duty payable under notification No.42/2008-CE dated 01.07.2008 and notification No.16/2010-CE, dated 27.02.2010 may be determined based on deemed production with respect to the number of operating packing machines in the factory during the month and the Retail Sale Price printed on the pouches and not on the basis of actual production by a unit.

CBEC Circular No. 980/04/2014-CX., Dated: January 24, 2014

Pan Masala/tobacco products - Rate of Duty enhanced

GOVERNMENT has increased the ‘Per Packing Machine' rate of excise duty payable on Pan Masala/tobacco products of different MRP. Notification No. 42/2008-CE dated 01.07.2008 and Notification No.16/2010-CE, dated 27.02.2010 are amended.

Notification No. 01/2014-CE., Dated: January 24, 2014 and Notification No. 02/2014-CE., Dated: January 24, 2014

Pan Masala/tobacco products - Capacity Determination Rules Amended

GOVERNMENT has also amended the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 and the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010.

In DDT 1841 dated 23.04.2012 we pointed out a flaw in distribution of the duties among various heads and suggested correction of the ratios. The present Notification adopts the ratios as suggested by DDT nearly two years back. Better late than never.

Notification No. 03/2014-CE NT., Dated: January 24, 2014 and Notification No. 04/2014-CE NT., Dated: January 24, 2014

CENVAT Credit of Sugar Cess - Entitled - Rules High Court

THE Karnataka High Court in a recent landmark judgement held that the assessee was entitled to claim CENVAT credit in respect of the cess paid as additional duty (CVD) on raw sugar imported under the Sugar Cess Act of 1982 read with Section 3 of the Customs Tariff Act, 1975.

The High Court held that Sugar Cess is a tax and to be precise it is DUTY OF EXCISE and not a fee. The High Court examined the provisions of the Constitution and observed, "The cess collected under the Act invariably goes to the Consolidated Fund, which ultimately is utilized for all public purposes. Therefore, there is no quid pro quo between the cess levied and collected and the services rendered for such payment. On the contrary, the proceeds are credited to the Consolidated Fund of India, which is meant to be utilized for all public purposes, may be including the purpose contemplated under the Sugar Development Fund Act, 1982. In the light of the aforesaid statutory provisions, the cess imposed under the Act is a duty of excise or a tax."

The High Court observed that once it is established that what is paid is excise duty or in other words, a tax, then under Rule 3, the assessee is entitled to the CENVAT Credit.

This judgement has far reaching consequences and CENVAT Credit may have to be allowed even on the cess paid on indigenous sugar.

Though this Order is dated 6th August 2013, it was made available only last week and we bring you this judgement today.

Please see Breaking News. Today's Breaking News also has a very important Service Tax order pertaining to taxability of water supply projects.

Jurisprudentiol - Tuesday's cases

Service Tax

Table Space provided by Automobile Dealers for accommodating representatives of Financial Institutions -maybe renting - not BAS - CESTAT LB

THE following issue was referred to the Larger Bench by the Single Member Bench in the case of Pagariya Auto Center (2013-TIOL-289-CESTAT-MUM):

"Whether the table space provided by the Automobile dealers to financial institutions fall under Business Auxiliary service or not?"

Income Tax

Whether in case of TDS default by assessee, criminal prosecution can be launched independent of recovery proceedings - YES: HC

THE assessee is a registered company engaged in the business of operating passenger air lines in India. Revenue had filed case before the Economic Offences Court against assessee for the FYs 2009-10, 2010-11 and 2011-12 for the offences punishable u/s 276-B read with Section 278-B. A survey on the premises of assessee u/s 133-A. During survey, it was noticed from the records available that assessee had deducted TDS and failed to remit the same to the Government account for the FYs 2009-10, 2010-11 and 2011-12 to the tune of Rs.400,56,08,659/-. During verification of records, at the time of survey and in the subsequent proceedings after the survey it was detected that assessee company had deducted TDS on various payments and failed to remit the same to the Government accounts. Assessee company, its principal officer and the authorized representatives admitted the liability of TDS and failed to pay the same.

The issues before the Bench are - Whether in case of TDS default by the assessee, the criminal prosecution can be launched independent of the recovery proceedings; Whether the pendency of recovery proceedings is a legal impediment to the launch of criminal prosecution in case of TDS default and Whether quantification of sum for the initiation of prosecution is necessary. And the verdict goes against the assessee.

Central Excise

Rule 8(3A) of CER, 2002 - Default in payment of CE duty - whether payment through CENVAT is permissible during period of default - whether penalty is imposable u/r 25 of CER r/w s.11AC of CEA, 1944 for fraud committed although not invoked - Difference of opinion - Matter referred to Third Member: CESTAT

THIS is a case of default in payment of Central Excise duty of Rs.88.80 lakhs. The demand stands confirmed against the appellant for violation of provisions of Rule 8(3A) of the CER, 2002. Out of this amount, Rs.16.70 lakhs was paid by debit in the CENVAT account and the balance by cash. Revenue does not agree with this mode of payment. Interest is directed to be paid and a penalty of Rs.5000/- has been imposed u/r 27 of the CER. The appellant is before the CESTAT.

The Member (Judicial) observed that since the appellant has late deposited the duty, they are liable to pay interest but since the same is not quantified, the Revenue was directed to quantify the same and the appellant was directed to pay the same within 8 weeks. In the matter of payment of Rs.16.70 lakhs through the CENVAT account, the Member(J) viewed that the stand of the department that the same should be deposited in cash does not find favour in view of the decisions in Solar Chemferts P. Ltd. - (2011-TIOL-1968-CESTAT-MUM) and Baba Viswakarma Engg. Co. (P) Ltd.- (2011-TIOL-2010-CESTAT-DEL) wherein it has been held that deposit through CENVAT credit during the period of default would only result in confirmation of interest to the Revenue as that is the only loss to the Revenue. In the matter of penalty imposed, the Member(J) upheld the same citing the Gujarat High Court decision in Saurashtra Cement Ltd .(2010-TIOL-889-HC-AHM-CX) and directed the appellant to deposit the same and report compliance.

The Member (Technical) concurred with the view taken by the M(J) in the matter of interest but had a differing view in the matter of payment made through CENVAT and penalty.

See our Columns Tomorrow for the judgements

Until Tomorrow with more DDT

Have a nice day.

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