TIOL-DDT 2427
01.09.2014
Monday

BOARD's Circular No. 18/2006-Cus dated 05.06.2006 clarified that the SAD is payable by the importer on the imports made under DEPB scheme. The said circular was challenged before the High Court of Gujarat, which vide its order dated 25.07.2012 quashed the said Circular dated 05.06.2006. The SLP filed by Department against the said order of High Court was dismissed by the Supreme Court vide their order dated I5.02.2013.

Board received a proposal from the Commissioner of Customs, Ahmedabad for filing of Review Petition against order dated 15.02.2013 passed by the Supreme Court. The matter was examined by Board and the case was referred to the Ministry of Law & Justice regarding feasibility of filing Review Petition.

The ASG has opined against filing of Review Petition in the matter stating that no purpose will be served by filing the Review as the Supreme Court will not entertain this matter.

In an identical case, the ASG has opined as under:

"Even otherwise, I am unable to understand what purpose will be served by filing a review petition in a case where the Hon'ble Supreme Court has dismissed a SLP in limine without assigning any reasons. An in limine dismissal merely means that the Hon'ble Supreme Court did not find it an appropriate case to consider the matter. Such an order does not amount to law declared under Article 141 of the Constition of India (Kunhayammed Vs State of Kerala - 2002-TIOL-50-SC-LIMITATION)" [The spelling of Constitution is as given in the Board letter - as pointed out by DDT, the CBEC does not have a mechanism to check spellings]

The Board got its straw from Kunhayammed.

Now, the Board feels that since the Department have(?) prima facie a strong case on merit in its favour, field formations should take up all such cases (involving aforesaid issue) for filing of Appeal before the Courts/Tribunal.

Is it such a big issue involving hundreds of crores that they have to flog a dead horse? And is this what Modi wants from his babus? Is this an attempt to keep the Commissioners busy to justify the great cadre review?

And if the Department has (have) a strong case, why was it not able to convince the Gujarat High Court and what makes it believe that the Gujarat High Court judgement will not be followed by other High Courts and Tribunal? And what will happen if the same issue reaches the Gujarat High Court again? The Department lost because of its poor drafting skills - in fact the Gujarat High Court called the department's contention a legal fallacy.

The Board's letter is addressed to all Chief Commissioners and DGs of DRI and CEI. Maybe the super sleuths will now pounce upon anyone who had imports under DEPB.

A copy of the letter is also marked to the JS, Drawback with a request to consider suitable amendment in the relevant provisions, to safeguard revenue.

They should also convince Arun Jaitley to make the amendment retrospective.

Maybe the Board should try for a constitution amendment to remove the jurisdiction of High Courts and the Supreme Court on tax matters. The Under-Secretary in the Board should be the final authority on all matters pertaining to taxes.

CBEC Letter in F.No, 276/125/2012-CX,8A,CUS., Dated: August 25, 2014

Don't keep your assessees waiting - CBDT tells its officers

CBDT has instructed its officers:

It has been brought to the notice of the Board that some of the officers are issuing notices to the taxpayers/witnesses/representatives etc. indicating a standard time of appointment. Thus, many persons called for hearing etc. on a day by an officer are given the same time for appearance. Naturally the persons are made to wait for their turn. Such actions, apart from causing avoidable inconvenience to the taxpayers/witnesses/representatives etc. cause great embarrassment to the Government.

All the officers, are therefore, advised to strictly maintain the appointment schedule in spirit with the Citizen's Charter, 2014 of the Department which specifically provides that we (in the Department) endeavour "to adhere to the schedule of appointments with taxpayers". All the Supervisory officers, i.e. the CCsIT, CsIT and the Addl. CsIT are requested to ensure that officers reporting to them strictly comply with this instruction and avoid fixing multiple appointments at the same time. Instances of disregard to these instructions may be viewed seriously.

Unfortunately many officers exhibit their power by making people wait outside their offices. Some even brag, “I made him wait for two hours”. This is only a sick sense of power. I have seen an Additional Commissioner making a retired Board Member wait outside his office, just for the ego of it. I told the Additional Commissioner that his prestige would have been enhanced if he had gone out and escorted the retired Board Member to his room. Many officers call assessees and their advocates for hearing and are many a time not available and they don't bother to inform the assessee that they are not available. Even when they are available, they attend to phone calls from their family members, friends and bosses. Without the slightest hesitation, they leave the visitors and go when a boss calls them- they don't tell the boss that they are in a hearing.

Of course fortunately everybody is not like this. When I sent my card to meet a Commissioner, the Commissioner himself came out and told me that he is in a meeting with an assessee and asked if I could wait for ten minutes. Such officers are rare and becoming part of an extinct community.

The CBEC should also issue such instructions and there should be a system to ensure that the instructions are followed.

CBDT F.No.Dir(Hqrs.)/Ch.(DT)/29/2013, Dated: August 22, 2014

Tariff Value of Gold, Silver marginally reduced - steep reduction in oils

THE  Government has decreased the Tariff value of Gold from 426 USD to 420 USD per 10 gms. The tariff value of Silver has decreased from 650 to 645 USD per kilogram. Tariff Values of oils have been reduced. Tariff value of Brass scrap has been decreased. However, the Tariff value of Poppy Seeds is increased and there is no change in areca nuts. The Tariff values as on 14.08.2014 and with effect from 29.08.2014  are as under:

Notification No. 73/2014-Customs (NT), Dated: August 29, 2014

Abhishek Verma gets the Arjuna Award-2014 for Archery

PLEASE see DDT 2426-29.08.2014, in which we reported about the Arjuna Award for Abhishek Verma, the Archery champ who works as a tax assistant in the Income Tax Department.

Abhishek Verma received the coveted Arjuna Award from the hands of the President of India on 29th August at a function in the Rashtrapati Bhavan.

It is a great honour to the Income Tax Department that an Arjuna Award winner is their employee. The Department should use such celebrity employees as brand ambassadors and pay them some good money.

Justice Hurried is Justice Buried

IN a recent order the Bombay High Court had some strong words for the CESTAT. The High Court observed,

We find and repeatedly that the Tribunal in undue haste and uncalled hurry proceeds to pass the orders which have to be often set aside by this Court . This Court has repeatedly reminded the Tribunal that it is the last fact finding authority and which the Assessee and the Revenue approaches so as to have complete adjudication on facts and law. In these circumstances it was bounden duty of the Tribunal to have referred to the findings of the Adjudicating Authority and in their entirety. It may be that in all matters and in all cases the Tribunal is not required to pass a lengthy order. It is also equally true that on some occasions few words speak the entire truth. It could be that an efficient and experienced Judicial Officer does not require many words to say something which is very obvious and clear. However, that alone does not permit brushing aside the record. If after reference to the entire record the precise point for determination is framed and adjudicated or the ultimate decision and conclusion rests only on the same, then, one can understand a short order being passed. However, when various issues are raised and going to the root of the case, then, the Tribunal is required to apply its mind and to all facets of the matter. Even if a lengthy order is necessitated the Tribunal must not fail to deliver it. Eventually justice is not only to be done, but must be seen to be done .

We bring you this order today.

See Breaking News.

Jurisprudentiol - Tuesday's cases

Service Tax

Appellant providing "Advertising services" by placing advertisements on behalf of clients in various print & electronic media - On volume discounts, rate difference and amounts written back, demands under BAS cannot be sustained in law: CESTAT

THE appellants were engaged in providing advertisement services to clients. Investigation by service tax authorities revealed that they did not pay service tax on amounts which were written back as rate difference in media costs and the discounts received from the media for volume of work, which resulted in demand of service tax on the same. Service tax was also demanded on coordination cost paid to overseas entities.

Income Tax

Whether provisions of Sec 43A will apply even if FCNR loan is taken not for acquisition of capital assets but to repay debentures - NO: High Court

THE assessee Climate Systems Pvt Ltd had issued 15% Unsecured Redeemable Non-convertible Debentures carrying interest @15% per annum. In order to repay the debentures, the assessee borrowed money. The loan was taken against Foreign Currency Non Resident Loan Account [FCNR(B) Loan]. The advantage was that the loan was availed at a lower rate of interest as compared to interest payable on the normal loan account. In order to hedge against foreign exchange fluctuations, the assessee had entered into forward contracts with banks in India. The assessee incurred loss of Rs. 49,98,072/- on account of foreign exchange fluctuation on account of FCNR(B) Loan. The said amount was paid during the previous year relevant to the assessment year.

In the Assessment Order under Section 143(3), income of the assessee was assessed at Rs.2,76,29,016/- as against return income of Rs.2,46,94,573/-.No enquiry or questions were raised regarding expenditure of Rs.49,98,072/- during the original assessment proceedings.

The issue before the Bench is - Whether provisions of Sec 43A will apply even if FCNR loan is taken not for acquisition of capital assets but to repay debentures. And NO is the answer of the High Court.

Central Excise

Clearance of Sugar under "Levy Sale" which later was treated as "Free Sale" by the Directorate of Sugar - Government paying differential amount of price but appellant not intimating department - extended period of limitation rightly invoked: CESTAT

THE appellant is a manufacturer of sugar, molasses and ethyl alcohol.

The Directorate of Sugar, New Delhi issued release orders dated 30/09/1997 & 27/10/1997 in favour of the appellant for clearance of 15,681 quintals of sugar under the levy sale sugar quota.

Accordingly, the appellant cleared the said quantity of sugar during November 1997 to December 1997 paying the concessional rate of duty applicable to levy sale sugar @ Rs.52/- per quintal. Subsequently, the sale was treated as sale from "Free Sale Sugar" vide Directorate of Sugar, New Delhi letter F. NO.1-5/97 SC-II dated 20/10/1997. Thereafter, the said Directorate vide letter No.8-45/98CC/34/3573 to 3579 dated 11/12/1998 paid the differential amount of price between levy sale sugar and free sale sugar amounting to Rs.46.17 lakhs which was received by the appellant in January 1999.

However, the assessee did not pay the differential duty of Rs.5,17,473/- on the clearances of 15,681 quintals of sugar.

See our Columns Tomorrow for the judgements

Until Tomorrow with more DDT

Have a nice day.

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