TIOL-DDT 684
23.08.2007
Thursday Regarding the compounding of offences, the field has two doubts which the Board is clarifying. i) Where in a single case where there are several persons liable for prosecution, whether compounding can be allowed to few applicants who are applying under the Customs (Compounding of Offences) Rules, 2005. ii) Clarification of the phrase “Up to twenty percent of market value of the goods or Rupees ten lakhs whichever is higher” mentioned in Rule 5 of the said Rules. Board's answers: i) Since the filing of application under compounding rules is the individual option of the person to avoid prosecution, other persons involved in the case/ offence and who have not filed the application would not be given immunity from prosecution. In such situation, remaining persons would face regular proceedings of the department for adjudication/ prosecution/ appeal. (Recently the Tribunal observed, if an accused has been acquitted of murder, co-accused cannot be held guilty of conspiracy to murder) ii) the Compounding Authority, after taking into account the contents of his application, may prescribe the compounding amount which may be Rs. Ten lacs or any amount upto 20% of the market value of goods, whichever is higher. Thus wherever 20% of the market value of the goods is higher than Rs. 10 lacs, the compounding authority may prescribe the compounding amount anywhere between 10 lacs to 20 % of the market value of the goods. The determination of compounding amount would, interalia, take into account the gravity of offence and the degree of involvement of the applicant. For detailed stories on the Compounding scheme, see our stories, 1. MoF notifies Compounding of Offences Rules for Customs & Excise; A lot of discretion given to Chief Commissioners ) 2. Compounding of offences - A curse in disguise? 3. Compounding of offences - the first case reaches HC - DRI alleges denial of natural justice against Chief Commissioner - Revenue writ dismissed CIRCULAR NO. 29/ 2007-Cus., Dated: August 21, 2007 Rule of origin – Chile- India - notified The Government has notified the Rules of Determination of Origin of Goods under the Preferential Trading Agreement between the Republic of India and the Republic of Chile Rules, 2007. This notification states that it was issued on 17th August 2007, but it was not made public till yesterday. In fact the next notification, Notification No. 85 was carried by us yesterday. Some sections of the Board are very touchy about making the notifications public. Member, Customs may like to find out why important Customs notifications find it hard to leave the hallowed portals of North Block into public domain. NOTIFICATION NO. 84/2007- Cus., (N.T.), Dated: August 17, 2007 Clearance of imported metal scrap – ICD Tughlakabad As was reported by us, imported metal scrap will not be allowed through the Capital's ICD, Tughlakabad, but will be allowed from ICD Loni, Ghaziabad instead. In tune with the DGFT Public Notice No. 19/16.07.2007, CBEC has issued a circular clarifying that transitional arrangements as per para 1.4,1.5 of Foreign Trade Policy will apply to the changes made in the Public Notice no. 19 of 16.07.2007. Accordingly the Commissioner of Customs, ICD Tughlakabad may allow clearance of goods where irrevocable letter of Credit is established before the date of above change. CBEC CIRCULAR NO. 28 /2007-Cus., Dated: August 14, 2007 DFCE and TARGET PLUS - clarifications DGFT has clarified that 1. a shipment shall be taken into account of applicants' export performance only if export proceeds are received in free foreign exchange by applicant directly from overseas. 2. Under DFCE, supplies from one status holder to another is not eligible for entitlement. Representation have been received from FIEO that supporting manufacturers who happen to be status holders and are manufacturing goods on behalf of applicant exporter, are being treated as ‘suppliers' leading to making such exports ineligible. The issue has been examined and it has been decided that ‘suppliers' and ‘supporting manufacturers' are distinct categories and cannot be clubbed together. Hence goods manufactured by supporting manufacturer cannot be made ineligible, although supporting manufacturer may happen to have a status certificate. 3. Once the above conditions are satisfied, applicant can count a shipment in his export performance and the same would be entitled for benefits under the reward schemes. Chartered Accountants/Cost Accountants/Architects are professionals, but still liable to pay Service Tax – Supreme Court In a landmark judgement delivered just day before yesterday, the Supreme Court upheld the validity of Service Tax on these professionals. The lucid judgement of the Apex Court is a collector's item worth preserving and reading and re reading whenever one can. We bring you this latest judgement today. See our Breaking News. FIXED TENURE FOR CADRE POSTS OF IAS The Central Government has issued notifications on 24th August 2006 amending the Indian Administrative Service (Cadre) Rules, 1954, Indian Police Service (Cadre) Rules, 1954 and Indian Forest Services (Cadre) Rules, 1966 to provide for minimum tenure, in consultation with the State Governments concerned, of all or any of the cadre posts specified for the State concerned, in item 1 of the Schedule to the Indian Administrative Service (Fixation of Cadre Strength) Regulation, 1955, Indian Police Service (Fixation of Cadre Strength) Rules, 1955 and Indian Forest Services (Fixation of Cadre Strength) Rules, 1966. All the State Governments are yet to agree to this according to the Minister of State in the Ministry of Personnel, Public Grievances and Pensions in a reply in the Lok Sabha yesterday. CBI under-staffed and so is India's Defence While the CBI is at the receiving end, for incompetent handling of the Bofors and Shibu Shoren cases, the Minister informed the Lok sabha yesterday that the premier investigation agency is grossly understaffed with over 22% of the posts vacant. As against the sanctioned strength of 5959 in the CBI, the number of vacant posts is 1341.
With effective use and deployment of existing personnel, the vacancies have not affected the performance of the CBI adversely, according to the minister. In order to attract officers to join CBI, the Government has introduced a Special Incentive Allowance to all the officers from Constable to Director level in the CBI. The Recruitment Rules of various posts are also amended, as and when necessary to ensure that vacancies are filled up speedily. Equally bad is the vacancy position in the Indian Army Navy and Air Force where also there is a more than 20% shortage. But for some strange reason, there seems to be no shortage of Revenue officers in the country – they are all over the place. From our Legal Corner – Tomorrow's cases Central Excise Supreme Court delivers landmark decision on Section 4A of the CEA'44 – Assessees rejoice and the department mourns. Another first from TIOL. Bringing to you the latest and only the latest. The Apex Court disposed of 15 appeals concerning Section 4A valuation on 22nd and we bring it to you tomorrow. Important and mind boggling orders on Section 4A – names like Jayanti Food Processing, ITEL, Electrolux Kelvinator, KITKAT are familiar to students of Central Excise Law as they all had landmark decisions on the applicability of MRP valuation. Now the Supreme Court has solved all these problems with a masterly order. You will have to wait till tomorrow for the judgement. Income Tax DTAA with USA : Evidence indicating PE found subsequent to hearing - No bar on Revenue to plead admission of additional evidence under Rule 29- Issue remanded to AO : ITAT FOR taxing a non-resident company doing business in India, the issue of PE (Permanent Establishment) is central to virtually all the disputes. Even in this case, if a PE in India is proved, the non-resident company will have to shell out tax at 48% rate. If no PE, the income completely escapes from the clutches of Indian tax authorities. The second and perhaps the most important issue in this case is about the admission of additional evidence. Customs Whether amendment carried out by DGFT, whether right or wrong, can be subject matter of scrutiny and challenge by Customs – Matter referred to Larger Bench by CESTAT DGFT has powers to amend the licence including the revalidation (obviously referring to a situation where validity has expired) and, as such, amendment would be retrospective in nature. The second question as to whether the amendment carried out by DGFT, whether right or wrong, can be the subject matter of scrutiny and challenge by the Customs authorities had been answered by the Tribunal in the case of Rama News Prints & Paper Ltd. vs. CC, Kandla holding that licensing authority has the jurisdiction and power to relax the conditions of the policy and amend the licence retrospectively to validate the import of goods already shipped or arrived and it is not open to Customs authorities to question the licensing authority's discretion exercised in issuing or amending a licence by contending that it is arbitrary or not in accordance with the Policy. However, since a contrary view was expressed by the Tribunal in the case of Square D Textiles Exports Ltd. vs. Commissioner of Customs, Trichy & which was relied upon by the adjudicating authority, the Tribunal felt that the matter ought to be resolved by Larger Bench. See our columns tomorrow for the judgements Until Tomorrow with more DDT Have a nice day. Mail your comments to vijaywrite@taxindiaonline.com |
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