TIOL-DDT 2825
12 04 2016
Tuesday

SENIOR Advocates are required to pay the Service Tax themselves under the forward charge system with effect from 1.4.2016. At least three High Courts have stayed the tax on the senior advocates. In DDT 2820 05 04 2016, we asked, "Now, should each High Court stay these provisions? Can't we take the issue to the Supreme Court?"

And that is exactly what the CBEC has done.

In a letter to the Chief Commissioners, the Board states, "Delhi, Gujarat & Calcutta High Courts have stayed the levy of service tax on legal services provided by Senior Advocates. The Chairman CBEC has directed to engage the services of the Ld. Attorney General to get the stays vacated by moving the Hon'ble Supreme Court and requesting for aggregating the petitions filed in various courts in the country in this subject."

Board has asked the Chief Commissioners to send to the Board the relevant documents involving the issue in their zones pending in the High Courts so that Transfer Petitions can be filed before the Supreme Court.

The Attorney General himself is a 'Senior Advocate' and the Board's Budget exercises have made him also liable to the rigours of Service Tax Law. He has to now argue in the Supreme Court that he and several other senior advocates have been made liable to pay Service Tax under the forward charge system in public interest and it is absolutely legal.

If he wins the case, he loses as it will adversely affect him personally. If he loses, he personally wins, but his client (Union of India) loses, which is not all that good for a lawyer. A really difficult situation for a lawyer! What will the Board do if the Attorney General advises them that they have no case? Can they hire another lawyer?

CBEC F. No. 276/91/2016-CX.8A., Dated April 11, 2016

What is e-commerce?

GOVERNMENT has inserted a new para 9.17A in the Foreign Trade Policy 2015-2020 to define e-commerce.

e-commerce means buying and selling of goods and services, including digital products, conducted over digital and electronic network. For the purposes of Merchandise Exports from India Scheme (MEIS) e-commerce shall mean the export of goods hosted on a website accessible through the internet to a purchaser. While the dispatch of goods shall be made through courier or postal mode, as specified under the MEIS, the payment for goods purchased on e-commerce platform shall be done through international credit/debit cards and as per the Reserve Bank of India Circular (RBI/2015-16/185) [AP. (DIR Series) Circular No.16 dated September 24, 2015] as amended from time to time.

DGFT Notification No. 2/2015-2020., Dated April 11, 2016

Clarification regarding Waste Oil - Demand only within normal limitation period

VARIOUS units are engaged in re-refining of waste oil or used lubricating oil collected from the transformers, service stations of vehicles etc. A doubt has arisen on the excisability of re-refined used oil or waste oil. Used Oil contains impurities and contaminants such as moisture, diluents, sediments, metal particles and carbon. In refining units, waste or used oil undergoes various process such as dehydration-for removal of moisture, distillation-for removal of diluents, clay polishing- for removal of carbon by adsorption process, filtration-for removal of the clay and the dissolved carbon to render it usable. The oil so obtained from such waste or used oil is packed and sold as base oil, lubricating oil and transformer oil etc. to the consumers for further use.

Chapter note 4 of chapter 27 is a deeming fiction on manufacture and provides that:-

"In relation to the  lubricating oils and lubricating preparations of heading 2710, labelling or re-labelling of containers and re-packing from bulk pack to retail packs or the adoption of any other treatment to render the product marketable to the consumers, shall amount to manufacture"

The Board clarifies that for a re-refining unit, the test for levy of Central Excise duty is whether the lubricating oil (produced from the waste oil) has undergone any of the process listed in chapter note 4 of chapter 27. Where such process has been carried out, it would amount to manufacture and Central Excise duty would be leviable.

Board has further given a very important clarification in tune with its ‘ease of doing business' initiatives - The issue is interpretational in nature and therefore where a demand is raised pursuant to this circular, it should be raised for normal period of limitations only. SSI benefit, where admissible, should be extended.

CBEC Circular No. 1024/12/2016-CX., Dated: April 11, 2016

Courier Agencies abroad refusing to book gift consignments to India due to Customs Embargo

CBEC has received representations regarding problems faced by Indians abroad who wish to send gift items to India by means of courier. It seems that courier agencies abroad are refusing to book bona fide gift consignments for export to India citing non-clearance and embargo imposed on such gift-parcels by Indian Customs. Board wants any such incidence to be brought to its notice.

Board advises the Chief Commissioners that the existing instructions on import of bona fide gift items through Post/Courier should be scrupulously followed.

Only yesterday, DDT praised the Board to the skies for a precise and clear circular. Here is a circular which is typical of instructions from the top - as vague as possible. Board wants extant instructions to be followed; they don't say what those extant instructions are.

CBEC Instructions in F.No.450/179/2015-Cus.IV., Dated: April 11, 2016

Pre-deposit by Non-Assessees - ??

A very senior and respected advocate practicing indirect taxes mailed me:

One of the main problems faced by the Appellants is with regard to the Mandatory Deposit (7.5% or 10% as the case may be) required to be made in terms of Sec 35F of the Central Excise act 1944.

In the case of Appellants who are not Central Excise Assessees from whom duty is demanded for the first time due to a classification dispute or in cases where a penalty is imposed on a person who is not an Assessee, they are not able to deposit the Mandatory Deposit (7.5% or 10% as the case may be) online in a Notified Bank for want of a Head of Account or Accounting code for depositing the said amount.

Earlier this problem was not there, because such deposits were made under TR-6/GAR Challans in a Notified Bank.

Enquires made by the Appellants in different Commissionerates were unable to get any guidance from the Commissionerates concerned, as to how the said deposit is required to be made.

Could you give some guidance or throw some light in the DDT Column which would help the Appellants and the procedure that is required to be followed for making such Mandatory Deposits in Notified Banks?

Alternately would you be good enough to highlight this problem through your column (DDT) in you esteemed website, so that necessary instructions would be given by the CBEC?

He also informed me that no officer in the department from Superintendent to Chief Commissioner was able to offer any solution.

I brought to his notice the provisions in CBEC Circular No. 919/09/2010-CX, dated March 23, 2010 and Circular No. 956/17/2011-CX, dated: September 28, 2011.

(c) Non-Assessee

1. This category of registration is given in ACES to any individual, firm or company which requires to transact with the Central Excise or Service Tax Department, though not an assessee such as

(a) merchant exporter,

(b) co-noticee,

(c) refund applicant,

(d) persons who have failed to obtain CE/ST registration as required under the law and against whom the Department has initiated proceedings and

(e) persons who are required to tender any payment under CE/ST Act /Rules. The Non-Assessees are not required to file any tax returns.

xxx

xxxxx

4. A Non-Assessee registration can also be done by the designated officer of the Commissionerate, on behalf of the Non-Assessee.

The senior advocate wrote back to me:

Thanks for giving me the reference of CBEC Circular dated 23.3.2010, which has been updated on 28.9.2011.

There is a separate Para 3(C) which deals with Non-Assesses.

Though it is complicated to a person who is not familiar with operating and uploading E- Documents through the computer, still it solves the problem.

I am grateful to you for educating me.

I wish the Departmental Officers will also familiarize themselves with the procedure so that they can guide the Assessees and Non- Assessees.

As per the Board Circulars, Non-Assessee registration can also be done by the designated officer of the Commissionerate, on behalf of the Non-Assessee., but the officers in the Commissionerates are not even aware of a concept called Non-Assessee registration. How will they do the registration? How will they assist the assessee? And how will these people administer GST?

Please also see Reconciling mandatory pre-deposit and mandatory e-payment  

Attack on CBI Officers -Habeas Corpus in High Court?

IT is reported that two habeas corpus petitions have been filed in the Madurai Bench of the Madras High Court accusing the police of keeping in illegal custody the wives of two accused Central Excise officials.

Until Tomorrow with more DDT

Have a nice day.

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