TIOL-DDT 2524
23 01 2015
Friday

THE Supreme Court has decided to discontinue the practice of printing and rolling out hard copies of Judgments by the Editorial Branch of the Registry for contingent/miscellaneous requirements with effect from 1st February 2015. Previously eighty copies of Judgments used to be rolled out and printed. The number has been reduced to 14/16/18 depending upon the judgment being announced in civil/criminal or death case. With effect from 1st February, for purpose of contingent/miscellaneous requirements, if any, all Branches of the Registry as well as officials posted at the residential offices of the Judges should download the judgments from the official website of the Supreme Court of India and accordingly shall regulate their day-to-day function.

Just last week, the Supreme Court announced that with effect from 1st February, the practice of printing and rolling out of hard copies of Cause Lists, will be discontinued. The Cause Lists will be emailed to the advocates.

The other courts, especially our Tax Tribunals, ITAT and CESTAT should immediately follow this system; at least start with emailing the cause lists to the parties and advocates.

Supreme Court Circular F .No.4/SG/20 15., Dated: January 21, 2015

Customs - How to take Gold Abroad?

IN almost all our international airports, in the Customs arrival lounge, you can often see emotional women returning to India arguing with Customs officers about the gold jewellery they carry/wear (visibly). When they argue that the gold was taken out while going abroad, the Customs officers want proof that the gold was indeed of Indian origin.

DDT 2502, explained about the ‘export certificate' and the difficulty of getting it. There was actually a PIL in the Delhi High Court.

Now, the Delhi Airport Customs Commissioner has issued a detailed Public Notice on how to go about in getting that export certificate if you want to carry some ornaments abroad and bring them back when you return.

Here is the simple procedure:

1. Go to the Customs officer with four copies of a detailed packaging list giving all possible minute details of each item of jewellery like BIS No., purity, gross weight, net weight, value etc. (Did you ever bother to check these details of your jewellery?. Do it now)

2. You should have a valid passport with a return ticket. (Why the return ticket? Are they afraid I will abscond with my own jewellery? Will they not give me the facility, if I have not decided when to come back?)

3. Take two photographs - not of you, but that of each item of your jewellery. (all in a single frame or separate?)

4. Tell them why you want to go abroad and promise that you will bring back the same jewellery. (Hopefully they will not insist that the jewellery has to be brought back)

5. After a detailed examination and sealing, the sealed packet will be given to you with the signatures of the appraiser and sealing with Customs Seal.

6. Once you get the sealed package, YOU HAVE TO LEAVE THIS COUNTRY within 15 days.

7. When you reach the airport for your foreign sojourn, go and see the Customs officer who will verify the packet, photo and certificates and escort you to the security hold area.

8. While returning, you should get the jewellery verified by the Customs officer who will detain your jewellery and get them certified by an appraiser with whom your appointment will be arranged.

9. Lo and Behold!You have brought back your jewellery!

The Public Notice does not clarify what happens if you don't come back to India through the Delhi airport. Am I not allowed to enter my country through another airport, seaport or even a land route?

Will anyone go through all this tortuous procedure to take a little gold out of the country and bring it back? And see how many points of contact, when our effort is to be to reduce contacts? Will it not attract charges of corruption at various levels? Is it safe for Customs to detain the gold jewellery to be returned in a few days? What if some gold is missing? Will they also insist on women surrendering their ornaments like ‘mangalsutra/thali' and bangles, which carry religious and sentimental values for detention by Customs?Will the Customs strip every piece of jewellery from every passenger before allowing clearance? Is it practically possible?

And is this more Government or Governance? Is it worth all the trouble? The Government should consider enhancing the duty free eligibility. Why not allow a duty free allowance of Rs. 5 lakhs for a lady and Rs. 2 lakhs for a man, of jewellery worn on the person?

The Finance Minister should seriously consider this in this budget.

Commissioner of Customs, IGI Airport New Delhi, Public Notice No. 01/2015 Dated: January 06, 2015

CBDT - Media Communication - Board Instructions

CBDT informs the field formations that the CIT (M&TP) is responsible for effective communication with print/electronic media and for compiling the information prior to putting it in public domain with due consideration of its utility and confidentiality. The CBDT has so far not extended the operation of media guidelines at the level of the field formations. However, the CBDT is conscious of the fact that there may be issues of importance in the Field in respect of which the CCIT/CIT concerned feels the need of a press release/publicity through media. The issues may inter alia be pertaining to policy initiatives or significant achievements at the local level. It is, therefore, decided that whenever any field office feels the need of media coverage on some issue of importance, a suitable note may be sent to the CIT (M&TP), CBDT for necessary action in accordance with the extant Media Guidelines .

Revenue officers are not good in Public Relations. Whenever they do something bad, it gets wide publicity and when they do something good, they are too shy to tell the Press.

CBDT O.M in F.No.M &TP/CBDT/2014-15/55/318., Dated: January 22, 2015

FEMA - Foreign Remittance of salaries

RBI has been receiving queries whether remittance of salary outside India can be affected for employees on deputation to a group company in India and for employees of Limited Liability Partnership.

RBI clarifies:

1. the facility available to an employee of a company under Regulation 7(8) of Notification No. FEMA 10 (as amended from time to time) shall also be available to an employee who is deputed to a group company in India.

2. the term 'company' referred to in the said regulation will include 'Limited Liability Partnership' as defined in the LLP Act, 2008.

RBI Circular No.62/RBI., Dated: January 22, 2015

Overseas Direct Investments by proprietorship concern/unregistered partnership firm in India - RBI conditions

RBI has reviewed the policy framework for Overseas Direct Investments (ODI) by a proprietorship concern / unregistered partnership firm in India.

Accordingly, henceforth, the following revised terms and conditions are required to be complied with for considering the proposal of ODI, by a proprietorship concern / unregistered partnership firm in India, by the Reserve Bank under the approval route:

(a) The proprietorship concern / unregistered partnership firm in India is classified as ‘Status Holder' as per the Foreign Trade Policy issued by the Ministry of Commerce and Industry, Govt. of India from time to time;

(b) The proprietorship concern / unregistered partnership firm in India has a proven track record, i.e., the export outstanding does not exceed 10% of the average export realisation of the preceding three years and a consistently high export performance;

(c) The Authorised Dealer bank is satisfied that the proprietorship concern/ unregistered partnership firm in India is KYC (Know Your Customer) compliant, engaged in the proposed business and has turnover as indicated;

(d) The proprietorship concern / unregistered partnership firm in India has not come under the adverse notice of any Government agency like the Directorate of Enforcement, Central Bureau of Investigation, Income Tax Department, etc. and does not appear in the exporters' caution list of the Reserve Bank or in the list of defaulters to the banking system in India; and

(e) The amount of proposed investment outside India does not exceed 10 per cent of the average of last three years' export realisation or 200 per cent of the net owned funds of the proprietorship concern / unregistered partnership firm in India, whichever is lower.

RBI Circular No.59/RBI., Dated: January 22, 2015

Petrol more expensive than ATF

IN spite of deep fall in the International crude prices, Petrol in India remains quite expensive thanks to the steep and frequent excise duty hike. Though we should be happy that the prices have come down sharply in the last few months, more than half the price of every drop of petrol that you buy go into the Finance Minister's kitty - and States are also reaping the benefits with higher VAT.

But in all this celebration, what is not much noted is that in India Jet Fuel or Aviation Turbine Fuel (ATF) costs less than Petrol.

The Prices of Petrol and ATF in major cities are:

Jurisprudentiol-Tuesday's cases

Customs

Valuation - Import of Digi beta tapes/video tapes - payment to Singapore entity was made for rights to distribute service and has nothing to do with goods imported - appellant paying ST on distribution fees under ‘Broadcasting services' - Commissioner mis-directed himself in including value of taxable service rendered in India in value of goods imported: CESTAT

THE appellant imported 72 consignments of Digi beta tapes/beta tapes/video tapes by courier through CSI airport, Mumbai, during June to December, 2007, by declaring the value of the medium and paying duty accordingly. Investigations conducted revealed that the appellant had entered into an agreement with MSM Satellite Singapore Pvt. Ltd. called Programme Acquisition and Service Agreement. As per the said agreement, the Singapore entity is engaged in broadcasting of channels from Singapore and they regularly send foreign movies, programmes and other contents acquired by them to appellant for the purpose of distribution to channels. For the said services rendered, appellant remitted to the Singapore entity a sum of Rs.19.76crores towards their share of distribution fees collected.

Revenue is of the view that the said distribution fee is a condition of sale of the digibeta/beta masters and, therefore, the same is includible in the AV under Rule 10 (1) (c) of the CVR as royalties/licence fees for the goods supplied.

Income Tax

Whether papers suo motto called for by first appellate authority for disposing of appeal is to be construed as additional evidence under Rule 46A - NO: ITAT

ASSESSEE is a partnership firm doing the business of chitty. The assessee filed its original return of income along with audit report u/s 44AB. A search was conducted at the business premises as well as the residences of its partners and no search was conducted in the business premises of the assessee's sister concerns i.e. M/s Edassery Ceramics, ET Devassy & Sons Edassery Jewellers, St Francis Clay Works, St Francis Clay Décor Tiles and St Francis Tile Industries on the same date. The AO discovered that the funds of the assessee firm were intermingled and thus, issued notice of section 153A. During assessment proceedings, the AO made certain additions on account of investment in chitty purely on the basis of estimate.

On appeal, the CIT(A) after calling for certain documents held that the additions were made on the basis of estimate without referring to any seized document was not permissible. Before the Tribunal, the DR pointed out that CIT(A) had exceeded his jurisdiction by accepting additional evidences from the assessee.

The issue before the Bench is - Whether documents suo motto called for by the first appellate authority for disposing of appeal can be termed as additional evidence in terms of rule 46A. NO is the answer.

Central Excise

Goods removed from factory for export - Goods destroyed in fire as the truck met with an accident - No remission u/r 21 of CER can be allowed on goods destroyed after removal: CESTAT

THE appellant are a 100% EOU engaged in manufacture of handicrafts. On 08/11/07, they cleared a consignment consisting of 72 bags of handicrafts for export which was to be made through the gateway port of Mumbai. The goods were dispatched in a truck. However, on 10/11/07, the truck met with an accident in which due to fire, not only the truck but the goods loaded in the truck were totally destroyed. The appellant, filed an application for remission of duty on the goods in terms of Rule 21 of the Central Excise Rules, 2002 before the Jurisdictional Additional Commissioner, Central Excise. The Additional Commissioner rejected the application for remission of duty and the Commissioner (Appeals) upheld the Order-in-Original. The assessee is before the Tribunal.

From plain reading of Rule 21, it is clear that remission of duty in respect of the goods lost or destroyed due to natural causes or by unavoidable accident is permissible only when this loss or destruction has taken place "at any time before removal" - point of time when the loss or destruction should take place is the time before the "time of removal" and it cannot be read as "at any place before the place of removal"; they have to be read as "at any time before the time of removal"

Happy Republic Day

See our Columns Tuesday for the judgements

Until Tuesday with more DDT

Have a nice extended weekend.

Mail your comments to vijaywrite@tiol.in