TIOL-DDT 2767
18 01 2016
Monday

CBEC Member (L&J) Ananya Ray has issued instructions to the officers to avoid unnecessary litigations. She has frankly admitted the lapses of departmental adjudication and litigation mechanism. Her instructions are divided into 2categories, one remedial for actions taken in the past and the other preventive:

Remedial Action

1. Withdrawal of appeals filed by Department below the threshold limit prescribed by the Board in CESTAT & High Courts (See instruction F.No. 390/Misc/163 2010-JC dated 17.12.2015 in this regard).

2. Withdrawal of appeals in CESTAT and High Courts by the Committee of Principal Commissioners/Chief Commissioners following a Supreme Court decision which has been accepted by the department {See instruction F.No. 390/Misc/67-2014-JC dated 18.12.2015 in this regard).

3.

(a) CC's to assign cases of adjudication officer-wise on a monthly basis in personam for disposal and report sent to the respective Zonal Member by 5th of the following month with a copy to JS (Review).

(b) CC's to take up with the Chief Justices of their respective states to setup more benches to deal with taxation matters for quicker disposal.

Madam, there are a lakh of cases pending in the CESTAT. Why don't you start more CESTAT Benches and provide them infrastructure and Members?

And why don't you review all the pending cases in the High Courts and withdraw all the frivolous appeals and concede in all the legitimate appeals of the assessees and then maybe you can request the chief justices to allot a bench for a couple of months to throw out all the mindless litigation cases.

Preventive Action

2. Trade & CESTAT have repeatedly voiced concern about the non-observance of principles of natural justice, non-adherence to judicial discipline, lack of analysis/appreciation of the relevant facts, evidence and legal principles which force more appeals/litigation. A bimonthly conference at the level of Zonal Chief Commissioners/Pr. Commissioner to advice and counsel the respective adjudicating authorities/appellate authorities on how to pass good adjudication orders/ appellate orders, is being made mandatory. Persistent ignoring of such advice would render the officer concerned liable to strict action.

Madam, don't you think the Commissioners and other adjudicating authorities know all this? If you are serious about this strict action, do something to ensure that an adjudicating authority will tremble on passing an illegal order which invites censure from CESTAT.

I have seen a letter written by a Commissioner to his boss that the Commissioner (Appeals) was also helpful in meeting his revenue target. Doesn't this Commissioner know that the job of the Commissioner (A) is not to boost revenue targets?

I was told by a Chief Commissioner that during the revenue drive, he met the Chief Justice to request him to list high value cases which he thought were favourable to revenue. Is it fair for one of the litigating parties to go and meet the chief justice with regard to cases pending in the court? And remember this was part of target reaching action of the department.

3. National Academy (NACEN) to conduct regular training for all adjudicating authorities - former members of the CESTAT (The Appellate Tribunal) to be invitees to lecture the officers. Intensive training also to AR's in the act of advocacy, interpretation of statues, to be given. Similarly officers working in TRU as well as policy wings in the CBEC to be trained in proper drafting of laws, rules, notification, etc. so that there is little room for disputes arising due to ambiguity or misunderstandings.

NACEN should instil this at the very beginning. DDT has reported about adjudication by young Assistant Commissioners, like one Assistant Commissioner charged the assessee with not following principles of natural justice and another Assistant Commissioner refused to follow the decision of the jurisdictional High Court, because it was in the case of a different assessee! As for training the TRU guys, Board has to do it. If you can really start there, half the litigation can be avoided.

4. Adjudicating authorities to be suitably empowered/assured of the backing of the Board, so that they do not succumb to pressure from enforcement agencies like DRI, DGCEI etc. to confirm demands and levy penalties on all the accused. Similarly on non-adherence by the adjudicating authority to these directions, the review committees not to file appeal when it is not warranted.

So, it is an admitted fact that DRI and DGCEI put pressure on adjudicators and they succumb to it. Now that DRI is given the power to adjudicate, there is no pressure to succumb to. Why don't you ask DRI and DGCEI also to be a little fair in adjudication?

5. Pre show cause notice consultation with the Principal Commissioners and Commissioners is being made mandatory prior to issue of SCN in the case of demands of duty above Rs. 50 Lakhs (except for preventive/offence related SCN's).

Madam, do you think consultation with the Commissioner or Principal Commissioner (in more than 50 lakh cases) will make the Show Cause Notices any better? Madam, as of now such Show Cause Notices are issued and signed by the Principal Commissioners or Commissioners. They have only to consult themselves! Remember the days when Show Cause Notices were to be approved by Chief Commissioners?

6. Re-examination of all exemption notifications and withdrawal of the same wherever possible. Exemption notifications are a major cause of litigations amongst the trade.

Major cause of litigation is officers - not the law - when the Tribunal and High Courts are able to understand an exemption notification, why can't a departmental officer? As,officers are major cause of litigation - Re-examine their performance and remove THEM - not the notifications.

7. Adjudicating authorities should be made accountable for the quality of orders passed by them. With about 70 to 80% of the orders passed by the departmental officers at the level of Commissioners and Commissioner (Appeals) being set-aside by the CESTAT, speaks poorly about the quality of adjudications and the appellate orders. Revenue bias is clearly evident in most of the case. This adds to litigation.

Periodic review of the orders set-aside by the CESTAT should be undertaken by the Zonal CCs of the adjudicating authorities posted under him/her, if the orders are found to be bad in law, a mention of the same made in their APAR's be considered.

Madam, the field has successfully frustrated every effort of the Board to improve the quality of adjudication, review and appeal. A mind set has to be developed that an order in favour of revenue by itself is not welcome and that an order against revenue will not land the adjudicator in trouble. There should be data on every order passed by an officer with the ultimate decision. If more than half his orders are set aside, in a period of ten years, he should not be eligible for a promotion.

Please note all the words marked in red. If they had an English teacher in the Board, she would have told them that an apostrophe is not used for plural as AR's don't mean ARs. And training on 'interpretation of statues' is not really a good idea as they should be trained in statutes and that 'advice' is a noun.The para numbers above are as in the Board's letter.

CBEC Member's instruction in F.No. 1080/09/DLA/MISC/15/757., Dated: December 21, 2015

Income Tax - refunds up to Rs. 5000 - No Adjustment against arrears

THE CBDT has directed that in order to provide relief to the small taxpayers, refunds up to Rs. 5,000/- and refunds in cases where arrear demand is up to Rs. 5,000/- may be issued without any adjustment of outstanding arrears under section 245 of the Act during FY 2015-16.

As on 09.01.2016, there are 64,938 cases of refunds below Rs.5,000/-involving Rs.1,148.14 Crore in non-CASS cases for AYs 2013-14 and 2014-15 pending in AST. Board wants the Assessing Officers to issue these refunds without any adjustment of arrears under Section 245. Similarly, the non-CASS cases for these assessment years where the refund amount is more than Rs.5,000/- but the outstanding arrear is Rs.5,000/- or less may also be processed for issue of refund without any adjustment under Section 245.

CBDT wants the above exercise to be completed before 31st January, 2016 and a compliance report to be sent to the Member (Revenue).

CASS = Computer Assisted Scrutiny Selection

AST = Assessment Information System

CBDT Office Memorandum in F. No. 312/109/2015-OT., Dated: January 14, 2016

Regulations for Export of Goods and Services from India

RESERVE Bank of India has issued new regulations called Foreign Exchange Management (Export of Goods and Services) Regulations, - 2015

Declaration of exports: - In case of exports taking place through Customs manual ports, every exporter of goods or software in physical form or through any other form, either directly or indirectly, to any place outside India, other than Nepal and Bhutan, shall furnish to the specified authority, a declaration in one of the forms set out in the Schedule and supported by such evidence as may be specified, containing true and correct material particulars.

Exemptions:- Certain exports like export of trade samples, personal effects of travellers, ship's stores, aircrafts or aircraft engines and spare parts.. are exempted from filing the declaration.

Indication of importer-exporter code number:- The importer-exporter code number allotted by the Director General of Foreign Trade under Section 7 of the Foreign- Trade (Development & Regulation) Act, 1992 (22 of 1992) shall be indicated on all copies of the declaration forms submitted by the exporter to the specified authority and in all correspondence of the exporter with the authorised dealer or the Reserve Bank, as the case may be.

Authority to whom declaration is to be furnished and the manner of dealing with the declaration:-

A. Declaration in Form EDF

(1) (i) The declaration in form EDF shall be submitted in duplicate to the Commissioner of Customs.

(ii) After duly verifying and authenticating the declaration form, the Commissioner of Customs shall forward the- original declaration form/data to the nearest office of the Reserve Bank and hand over the duplicate form to the- exporter for being submitted to the authorised dealer.

B. Declaration in Form SOFTEX

(i) The declaration in Form SOFTEX in respect of export of computer software and audio/video/ television software- shall be submitted in triplicate to the designated official of Ministry of Information Technology, Government of India- at the Software Technology Parks of India (STPIs) or at the Free Trade Zones (FTZs) or Special Economic Zones- (SEZs) in India.

(ii) After certifying all three copies of the SOFTEX form, the said designated official shall forward the original directly- to the nearest office of the Reserve Bank and return the duplicate to the exporter. The triplicate shall be retained by the- designated official for record.

Manner of payment of export value of goods: - Unless otherwise authorised by the Reserve Bank, the amount representing the full export value of the goods exported shall be paid through an authorised dealer in the manner specified in the Foreign Exchange Management (Manner of- Receipt and Payment) Regulations, 2000 as amended from time to time.

Period within which export value of goods/software/ services to be realised:- The amount representing the full export value of goods / software/ services exported shall be realised and- repatriated to India within nine months from the date of export.

Advance payment against exports: - Where an exporter receives advance payment (with or without interest), from a buyer / third party named in the- export declaration made by the exporter, outside India, the exporter shall be under an obligation to ensure that the shipment of goods is made within one year from the date of receipt of advance payment;

Project exports: - Where an export of goods or services is proposed to be made on deferred payment terms or in execution of a turnkey project or a civil construction contract, the exporter shall, before entering into any such export arrangement, submit the proposal for prior approval of the approving authority, which shall consider the proposal in accordance with- the guidelines issued by the Reserve Bank of India from time to time.

Form EDF: To be completed in duplicate for export from non EDI ports.

Form SOFTEX: To be completed in triplicate for declaration of export of software otherwise than in physical form, i.e.- magnetic tapes/discs, and paper media.

The regulations do not mention about online submission of Softex.

RBI Notification 23(R)/2015-RB, Dated: January 12, 2016

Trade Data for Service Exports - DGFT wants exporters to take IEC

AS of now, the data on services trade is managed by RBI; but the present reporting system is inadequate in many respects. Since there is little voluntary compliance of reporting of trade statistics relating to export/import of services, data reporting system needs a major improvement. The Department of Commerce is undertaking an exercise of collection of data/ statistics relating to import and export of services.

As per the Section 7 of FTDR Act, no person can export/import merchandise without getting an Importer Exporter Code (IEC). But such a requirement is not mandatory for an exporter/importer of services unless an exporter wants to take any benefit under FTP.

All data on import/export of merchandise are IEC based. Similarly, the Department of Commerce would like to capture Services trade data on the same line. In the absence of IEC for most service exporters, the services trade data as of now in not comprehensive. As any policy intervention by the Government of the day requires authentic data and its analysis, it is felt that all services exporters should have IEC at least for the purpose of comprehensive data collection.

DGFT requests:

all those exporters of services who do not possess IEC to voluntarily obtain IEC from Regional Authorities of (RAs) of DGFT.

All trade and industry chambers to impress upon their members (exporters of services) to voluntarily obtain IEC and use it while effecting export /import of services so that trade statistics relating to export/import of services can be captured effectively.

DGFT Trade Notice No.13/2015-20., Dated January 15, 2015

Excise Duty on Petrol and Diesel hiked

GOVERNMENT  has hiked the excise duty on petrol and diesel with effect from 16th January 2016

Notification 02/2016-CE., Dated: January 15, 2016

Slight Changes in Tariff Value

GOVERNMENT  has decreased the Tariff value of brass scrap, increased that of gold and silver's. Oils also see minor changes in tariff values.

Notification No. 13/2016-Customs (NT), Dated: January 15, 2016

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