24 08 2015
Monday
THE CESTAT has notified that the CESTAT Registry will start functioning in Allahabad from 01.09.2015 (Please see DDT 2664). The Allahabad High Court is persistent. The Registrar of CESTAT and the Allahabad District Magistrate were asked to appear in the Court on 20.08.2015. They did and the High Court gave further directions and posted the case for 07.09.2015. The High Court observed that no concrete effort was made for establishing a Bench at Allahabad in the last two years. If some effort had been made, a Bench would have started functioning a long time ago. It also noted, "The notification dated 14.08.2015 makes it apparently clear that the regional Bench of Tribunal at Allahabad will start functioning from 01.09.2015. It necessarily means that not only registry of the Tribunal will start functioning at Allahabad from 01.09.2015, but the judicial functioning of the tribunal would also commence at Allahabad w.e.f. 01.09.2015. The Court has however, been informed that for the month of September, 2015 the Bench will function from 14.09.2015 to 18.09.2015 since previous notices have already been sent by the Tribunal. We, accordingly, permit the Tribunal to function for the period 14.09.2015 to 18.09.2015."
The High Court directions:
1. The Registrar, Tribunal will consider the suggestion given by the District Magistrate in his report with regard to feasibility of establishing the Tribunal temporary at the place suggested by the District Magistrate and will also consider the suggestion of the District Magistrate with regard to establishing a permanent Tribunal as suggested by him.
2. The Registrar, Tribunal will get in touch with the District Magistrate and take such assistance as required. The Registrar, Tribunal will consider the report of the District Magistrate and inspect the premises including the premises located in the campus of the Central Excise Department at Allahabad.
3. In this regard, the Commissioner, Central Excise Department, Allahabad will give necessary assistance to the Registrar, Tribunal.
4. The District Magistrate is further directed to submit another report indicating the existence and availability or non-availability of the land and building belonging to the State Government and/or the land belonging to the Central Government, which can be requisitioned, acquired or purchased for the purpose of housing the Tribunal either on temporary basis or permanent basis.
5. All the appeals, which are pending before the Tribunal at New Delhi relating to the State of Uttar Pradesh will stand automatically transferred to the regional Bench at Allahabad. It also follows that the filing of fresh appeals will now be made at Allahabad from 01.09.2015 onwards.
6. Registrar, Tribunal to ensure that notices are sent to the parties in pending appeals intimating them about the transfer of their appeals to the regional Bench at Allahabad.
7. The Registrar, Tribunal will issue an advertisement in the leading newspapers, which has a circulation in Delhi as well as in the State of Uttar Pradesh published in English and Hindi within 10 days from today intimating the public about the transfer of the pending appeals to the regional Bench at Allahabad and also with regard to the filing of fresh appeals under Central Excise Act, Customs Tariff Act, Finance Act and all other relevant laws with effect from 01.09.2015 onwards.
8. From the month of October, 2015 the Tribunal should function on a regular basis and not one week in a month, as directed by the Court earlier.
9. Action taken by the Registrar, Tribunal shall be indicated to the Court on the next date.
10. The Registrar, Tribunal will also indicate on the next date the progress with regard to the appointment of the Judicial Member and Technical Member, for which interview is stated to be scheduled on 22.08.2015.
11. In the meanwhile, steps shall be taken by the Registrar, Tribunal for appointment of the necessary staff at Allahabad.
12. List on 07.09.2015, on which date the District Magistrate will file a fresh report. The Registrar, Tribunal will file a fresh affidavit of compliance.
13. The District Magistrate and Registrar, Tribunal will also be present on the next date.
Most probably, the Allahabad Bench will start regular functioning from October, thanks to the persistence of the High Court.
May be the Benches at Hyderabad and Chandigarh will also start functioning if the respective High Courts, so direct.
From the Apex Court
THE Supreme Court delivered two important judgements on Friday.
IFGL case affirmed, Mazagon Dock distinguished. In the IFGL case (2005-TIOL-103-SC-CX), the assessee had sold refractories to Visakhapatnam Steel Plant (VSP). VSP surrendered their advance licence they held for import of refractories. Against such surrender, the assessees were issued Advance Intermediate Licences for import of inputs. The assessee could thus import the inputs without payment of customs duty as well as get them at a lower price than what they would have paid had they purchased the same in India. The Department claimed that the benefit derived by the assessee under the Advance Intermediate Licence, issued to them as a result of surrender of licence by Visakhapatnam Steel Plant, was "additional consideration" towards the value of the goods and that this "additional consideration" formed part of the price for purposes of excise duty. the Supreme Court upheld the view of the Department.
The Supreme Court judgement was delivered on 09.08.2005.
Just a few days ago on 28.07.2005, the same Bench of the Supreme Court delivered another judgement in the case of Mazagon Dock (2005-TIOL-111-SC-CX). In this case, the assessee supplied rigs to ONGC. As per the policy of the Government the assessee was entitled to receive a subsidy of 20% from Government and 10% from ONGC. Department claimed that this 30% formed part of the price and excise duty was payable thereon The contentions of the assessee was that they had already included 10% (received from ONGC), and that 20% price received from the Government was not includible in the value.
The Supreme Court held,
In this case it is to be seen that the subsidy was as per the policy of the Government. The subsidy of 20% was paid by the Government, 10% was paid by the buyer. In our view the subsidy of 20% from the Government cannot be said to be additional consideration as it is not received from the buyer either directly or indirectly. Therefore, that would not be includable in the price of the goods for the purposes of excise. However, it is an admitted position that 10% subsidy was received by the Assessee from the buyer. It is therefore additional consideration received by the Assessee from the buyer. The fact that it is received under a policy of the Government does not detract from the above position. It is therefore includable .
In the case decided by the Supreme Court Friday, the assessee had supplied goods to a particular type of buyers at much lower price than the price charged from the general buyers in the normal course of trade as it had obtained the facility of invalidating of advance licences from such buyers and procured imported raw material (duty free) against such licences for manufacturing of finished goods. Commissioner confirmed the demand of differential duty.
Now, in the Supreme Court, the advocate of the assessee pleaded that IFGL needed a relook as the Mazagon Dock was contrary.
The Supreme Court did not agree and confirmed the Commissioner's order.
Ban on import of palm oil through the ports of Kerala upheld: Government had by a notification in 2007, banned the import of palm oil through the ports of Kerala. This was to protect the interest of the coconut farmers in the State. Even though coconut oil and palm kernel oil are not perfect or close substitutes, many consumers tend to substitute these oils in their use as edible oils.
The Supreme Court noted that the Government had two alternatives before it, either to increase the custom duty i.e. duty on the import of crude oil or to issue impugned Notification. Enhancing the import duty would have all India ramification, whereas the problem was Kerala specific. Therefore, instant step was taken. When a particular decision is taken in the interest of the said farmers which are marginalized section of the society, more so for their survival, this policy decision of the Central Government provides a complete rationale in support of the decision.
The Supreme Court had in another case observed, Wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the Constitution. In other words, it is not for the courts to consider relative merits of different economic policies and consider whether a wiser or better one can be evolved. For testing the correctness of a policy, the appropriate forum is Parliament and not the courts.
We bring you these cases today.
Please see Breaking News.
Delay in Settlement of drawback - Customs Clarifies
IN a recent Trade Facilitation meeting in the JN Customs, an importer raised this issue:
As per the requirement of Customs exporters submit negative statement to the customs in support of drawback claims. Even after submitting the negative statement, Customs comes out with XOS statement as per RBI, and asks for BRCs, even cases pertaining to 2003, 2004 which are very old, and puts the exporters into alert, thereby, denying the drawback claims. Suggest, customs must follow one procedure for settlement of claims (say BRCs, rather than asking for negative statements, certificates etc.)
The Department replied:
Where an amount of drawback has been paid to an exporter but the sale proceeds in respect of such export goods have not been realised within the time allowed under the Foreign Exchange Management Act (FEMA), 1999, such drawback amount is to be recovered. If the exporter fails to produce evidence in respect of realization of export proceeds within the period allowed under the FEMA, 1999 or as extended by the Reserve Bank of India (RBI), the Assistant/Deputy Commissioner of Customs shall issue a notice to the exporter for production of evidence of realization of export proceeds, failing which an order shall be passed to recover the amount of drawback paid to the claimant. Thus, the drawback payment is ultimately linked to the realization of export proceeds.
As per the CBEC Circular no.05/2009 dated 02.01.2009, the exporters are required to furnish the BRCs/negative statement in the prescribed Annexure in respect of all the Drawback Shipping Bills. Once the exporter submits the negative statements/certificates issued by the Authorised Dealers/Chartered Accountants, the BRC section scrutinizes /verifies the negative certificates and updates the system using the BRC entry module. Upon updating the system, if any BRC pendency is noticed in respect of any Drawback Shipping Bill upto 30.06.2014, the IEC alert is not revoked until the BRC pendency is cleared.
Presently, the BRC entry module gives three options for entering the details of foreign exchange realization:
1. If the exporter furnishes the BRCs as a proof of foreign exchange realization, the officer chooses option (1) and enters the specific shipping bill numbers and dates. Such shipping bills are deleted by the system from the list of shipping bills pending for realization of export proceeds.
2. If the exporter produces a “negative statement” for a specified period from the AD/Chartered accountant that no foreign exchange is pending realization from the exporter in the given period, the officer chooses option (2). The system automatically displays the S/Bs pertaining to the given period on screen and once the officer approves, all such shipping bills are deleted from the pendency list.
3. If the negative statement furnished by the exporter gives the list of S/Bs, for a particular period, for which foreign exchange has not been realized (and by implication foreign exchange has been realized for all other S/Bs), then the officer chooses option (3). This option allows the officer to enter the S/Bs for which the BRCs are pending. Thereafter, all S/Bs except such pending S/Bs are deleted from the list.
From the above, it is clear that the exporter has the option to submit the BRC (Shipping Bill wise)/Negative statements from the Authorised Dealers/Chartered Accountants and both are being considered by the BRC section for updating the BRC pendency. Updating the BRC details as per the Negative Statements is much faster as compared to the shipping bill-wise updation (as per the BRCs) which can at times be very time consuming.
Thus the suggestion from the trade that the Customs must follow one procedure for settlement of claims by way of BRCs is already made available to the exporters. In fact, the concept of submission of negative statements was brought out as a measure of simplification and trade facilitation as expecting the exporters to submit the Drawback shipping bill-wise BRCs would sometimes result in delays and hardships.
CBEC - How many Chief Commissioners are there?
CBEC had notified the cadre review on 18.12.2013, by which 14 posts of Principal Chief Commissioner in the apex scale of Rs. 80,000/-, 38 posts of Chief Commissioner in the scale of Rs.75,500-80000 (HAG+) and the existing Chief Commissioners were re-designated as Principal Commissioner in the scale of Rs. 67000-79000 (HAG).
After this on 13.1.2014, 19.3.2014, 25.04.2014, they promoted some Commissioners as Chief Commissioners in the grade of Rs. 67000-79000 (HAG). They should have been actually promoted as Principal Commissioner, not Chief Commissioner.
The next promotion for the Commissioners was on 26.09.2014, when they promoted some Commissioners as Principal Commissioner in the scale of Rs. 67000-79000 (HAG). This year also several Commissioners were promoted as Principal Commissioners.
On 10th august 2015, CBEC published a seniority list of Chief Commissioners as on 1.4.2015. This list has 14 names out of whom 2 have retired, six have become Members of the Board and that leaves just 6 Chief Commissioners in the country.
In the transfer order dated 20.08.2015, CBEC made several Principal Commissioners to hold additional charge of the posts of Chief Commissioner.
Today CBEC is organising a conference of Chief Commissioners. Who are they?
There is total confusion as to who is a Commissioner, Principal Commissioner, Chief Commissioner.
And have they appointed Principal Chief Commissioners?
Indian Bureaucracy has a worldwide reputation - And that's no compliment
PETER R. Lavoy, Special Assistant to US President and Senior Director for South Asian Affairs at the National Security Council said in an interview,
"I have never seen any Indian government make such quick progress on so many issues, in such a short time. So it is truly remarkable.
That said your bureaucracy has a certain worldwide reputation. I think, it has its own standards that are really unparalleled worldwide."
Until Tomorrow with more DDT
Have a nice day.
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