26 02 2015
Thursday
THERE is no limit to the extent of ingenuity that the Revenue department can conceive in order to deny the refund due to the taxpayer.
See this interesting case.
The importer is the Bangalore Metro Rail Corporation. They were importing goods and happily paying the Customs duty manually. E-payment of duty was made mandatory from 17.09.2012.
On 27.09.2012, the importer made e-payment of Rs.82.79 lakhs. But the payment status in ICEGATE showed "yet to pay". They approached ICEGATE helpdesk at New Delhi for matching the payment made on 27/9/2012 but were informed by helpdesk that they have to pay duty once again since there was no possibility of matching the first payment to the referred bill of entry. Considering the urgency of consignment which was required for the Bangalore Metro Project, the importer once again made payment of Rs. 83,50,132/- online on 8/10/2012. Thus, due to the system error 3, the duty payment made first time has not been matched/linked to the Bill of entry. Therefore, the importer filed refund claim of the duty paid first time, which would not be adjusted by the system.
In a rare instance of fair adjudication, the Original Adjudicating Authority, taking note of the fact that double payment of duty happened because of the system error in ICES and the importer has made the second payment because of the advice given by ICEGATE helpdesk, after considering the issue relating to unjust enrichment and detailed facts and circumstances, sanctioned the refund.
The Commissioner would not tolerate such impudence on the part of a mere first adjudicating authority. So, the Revenue took the matter in appeal to the Commissioner (Appeals).
The learned Commissioner (Appeals) was a seasoned adjudicator and he set aside the impugned order thereby rejecting the refund already sanctioned. The rejection has been made on the ground that it is for the claimant to prove that incidence of duty has not been passed on to any other person and the claimant has to prove beyond any doubt that the incidence of duty has not been passed on to any other person. He has observed that the appellant is in charge of execution of Metro Rail Project running into several hundred crores of rupees. Unless it is proved that incidence of duty was not passed on to the client, refund will be barred under the provisions of unjust enrichment .
And the Metro Rail rolled into the Tribunal in appeal.
At the outset, the Tribunal observed that this was a matter which should not have travelled to this Tribunal at all.
The Tribunal noted:
1. It has to be noted that refund claim has been made immediately and refund received within the financial year and therefore, question of showing it as expenditure would not arise at all.
2. It cannot also be shown as receivable since the original adjudicating authority sanctioned the refund on 14/12/2012. The importation took place on 7/9/2012.
3. The second payment was made on the advice of department and because of the helplessness of the department to connect payment earlier made to the Bill of entry and make the computer system facilitate clearance of goods.
4. In such a situation, requiring the appellant to prove unjust enrichment is against the spirit of law.
5. Learned Commissioner (Appeals) observed that the assessee has to prove that there was no unjust enrichment beyond any doubt. Even in murder cases, an offence is required to be proved only beyond reasonable doubt when a person can be hanged for the offence committed.
6. Here the Commissioner is requiring an importer to prove beyond any doubt that there is no unjust enrichment when there is a clear case of double payment and the problem that has arisen in the computerized system of the department and inability of the department to help an importer not to make second payment.
7. No importer would be happy to make the second payment and claim refund.
8. For three months, more than Rs. 80 lakhs have been with the Government for which no interest is payable.
The Tribunal found absolutely no justification to uphold the impugned order. The appeal is allowed with consequential relief, if any, to the appellant.
What can poor Modi do when he has to run the country with such officers? Didn't the Commissioner who reviewed the order in original and the Commissioner (Appeals) not know that there was not even a remote chance of passing on the duty incidence, when the double payment happened because of the incompetence of the department? They should have been ashamed that because of their inefficiency, the importer (and that too a public service organisation engaged in making India) had to pay duty twice. They should have congratulated the dynamic Assistant Commissioner who granted the refund. Instead of that one Commissioner reviews that order and another Commissioner quashes it. As you grow in age and seniority, do you lose a sense of proportion and do you forget the basic law? Aren't such officers a great burden on the system?
It is appalling that the concept of ‘unjust enrichment' can be taken to such ridiculous levels. Were the two Commissioners planning to somehow retain over 80 lakhs belonging to the importer in the name of revenue collection? They had no business to hold it even for a day. In their anxiety to collect revenue by any means - fair or foul, they have not only caused serious damage to Revenue, but have also ruined the very basis of tax collection, justice and governance, bringing disrepute to and loss of confidence in the entire tax administration. As one of the speakers in our TIOL Tube's Simply Intaxicating said, it is surprising that not only there is no accountability, but also that such actions do not even go against these officers for their promotion to still higher cadres. What would be the image of this country if this importer was a foreigner - will he ever recommend India as an investment destination. And this is certainly not what the Law demands or the Government desires.
Let us hope the Department does not take this case to the High Court.
Please see 2015-TIOL-411-CESTAT-BANG
Control Room Duty for Central Excise Inspectors
AN extract from DDT 1218 - 19.10.2009 :(This is the scenario in any Central Excise office housing a few Commissioners and Chief Commissioner.)
CONTROL ROOM
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There is a Control Room situated on the ground floor. On one side facing entry towards the building, there is a window of the Control Room with the board "Reception". Whereas, on another wall inside the building, there is a board "Control Room". The Inspector posted in Control Room has to perform both duties, i.e. as a Receptionist and as a Control Room officer! There is round the clock posting of Inspectors in Control Room. Around One lakh rupees per month is being spent towards salary of the Inspectors posted at Control Room.
It was noticed that Inspectors posted at Control Room were not in uniform and spending time on telephone or talking with their colleagues. So a strict higher officer has issued several office orders regarding Control Room. Some of the salient features are as under:
++ Inspectors posted at Control Room must wear proper uniform and they have to give proper respect (i.e. salute) to their higher officers when they take entry or exit to/from the building. (There is large number of officers of higher cadres than the cadre of Inspector. However, it was verbally informed that Control Room Inspector should salute at least to the Chief Commissioner, Commissioners and Additional Commissioners. There is one Chief Commissioner, six Commissioners and twelve Additional/Joint Commissioners sitting in the building.) There was much protest from Inspectors because it is not always possible to immediately come out from the Control Room to give respect, i.e. salute, these officers. There may be other reasons also. However, finally it was decided that Control Room officer, can express their ‘respect' from inside the Control Room also!
++ Gate Pass for each and every visitor should be prepared by the Control Room officer himself.
++ A register containing particulars of the visitors has to be maintained.
++ The baggage of the visitors should be checked by the Sepoys posted at Guard duty under supervision of the Control Room officer.
Advocates appearing for the Hearings have expressed their protest against the system of taking Gate Pass by standing in queue with common men. Therefore, now there is a separate register for Advocates and they are not required to obtain Gate Pass.
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For quite some time, Inspectors have been demanding that they should not be made to do the Control Room duties. Now the offices are full of Commissioners, Assistant Commissioners and Superintendents. There is hardly any Inspector around. But still three to four inspectors are posted every day for this control room duty. Their plea is that they are meant for better jobs and they are not qualified to do reception and security jobs, which could be handed over to private agencies.
On a representation from the Inspectors Association, the Hyderabad Chief Commissioner in a letter issued yesterday states,
Since our service is not just a security service, suddenly some technical/legal issue may come any time therefore the availability of Inspector round the clock is absolutely necessary particularly during the night times. Night duty Inspector is not just a security guard. He is an all-rounder and caretaker, advisor in the event of some untoward incident and can coordinate with the senior officers. Therefore Control Room duty cannot be avoided.
Since, during daytime PRO and other officers are available, the Control Room duty for Inspectors during day time is not warranted and therefore PRO /Sepoys can attend the Control Room duty work. The Night duty however should be continued exempting lady officers.
And the designation PRO is misleading; he is not there to assist the public - he is purely a private relations officer meant to attend to the needs of the bosses.
'Cooperative federalism' and Central Excise Day
SPEAKING at the Central Excise Day function at New Delhi on 24th February 2015, the Minister of State for Finance, Jayant Sinha said the day was also historic for the reason that the 14th Finance Commission had recommended unprecedented hike in the States' share of Central taxes by 10 percentage points from 32% to 42%, which is a move in the direction of "cooperative federalism" strongly advocated by the Prime Minister Narendra Modi himself.
The Revenue Secretary Shaktikanta Das wanted the officers to focus on three F's i.e. firmness, fairness and friendliness. Dr. Jyotsna Suri, President, FICCI was the special invitee.
Finance Commission's Report is linked to GST. See our ST se GST Column.
Until Tomorrow with more DDT
Have a nice day.
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