TIOL-DDT 1520
03.01.2011
Monday
THE Finance Minister started the New Year with a meeting with senior Revenue officers of Eastern Zone at Kolkata. The meeting was attended by Revenue Secretary Sunil Mitra, CBEC Chairman, S D Mazumder, CBDT Member M C Joshi and Commissioners and Chief Commissioners of Income Tax, Customs, Central Excise and Service Tax.
One of the issues noted was the income tax department reporting that there was a spurt in income tax collections from the services sector, but strangely the CBEC counterparts did not notice any commensurate growth in Service Tax. The Central Excise Department is likely to transfer many of its officers to the Service Tax wing to accelerate the Service Tax revenue.
The Finance Minister explained to his senior officers the state of Indian Economy and his road-map and he requested the co-operation of his officers in generating enough money for all the plans he has.
Infrastructure - facilities: Income Tax Better Than Customs
THE Finance Minister stressed the need for providing all facilities and good infrastructure for the Revenue Departments. He observed that they are better in the Income Tax Department and while several proposals from the Income Tax Department are cleared, several demands are pending. He observed that there are no proposals from the Customs and Excise Department. Obviously the Central Excise Department does not believe in spending government money. They have less than 90 days left in this fiscal year - let them spend all the money allocated to them and try to get some more to spend.
What the FM had observed, is open for any one to see. Just visit any Income Tax Office and Central Excise and Customs office - you will know the difference. It will be surprising to note that they are both under the same Department of the Government. The CBEC's field offices can go for better offices, with enough rooms and toilets for everyone including visitors; they should enhance their technical knowledge and subscribe to TIOL, ELTetc,. And they should take a few tips from their cousins in the Income Tax Department on how to spend money.
While on spending, the Department can also seriously think of cutting down on certain wasteful expenditure. In all the main buildings of the Customs and Excise Department, you find a control room with a uniformed Inspector and a dozing sepoy to assist him. Inspectors are posted round the clock for these control room duties. And what they do is anybody's guess. Are they receptionists? Are they security guards? This is not the work that you recruit inspectors and this work can be outsourced at half the cost and for a more efficient work. You also find Superintendents and Inspectors posted for ‘house keeping'. What is their expertise in house keeping? Is it because you have so many officers that you don't know what to do with them?
IEC Applications Online - DGFT's New Initiative
AT present, Importer Exporter Code (IEC) applications are to be filed manually with the Regional Authority of DGFT. The applications are filed in hard copy in the prescribed proforma with stipulated documents.
Effective 01.01.2011, DGFT has provided for the additional facility of filing IEC applications online. The existing system of filing the IEC application manually would simultaneously continue till further orders i.e. the applicant will have an option to prefer his application either manually or “on-line” as per his/her convenience.
Filing of online applications for obtaining IEC will reduce the transaction cost and time for the applicant, would ensure easy, flexible filing of application and reduce human interface and paper work in the process.
Exchange Rates for DECEMBER Notified
CBEC has notified the Exchange Rates for imported goods and export goods for January 2011.
CBEC Notification No. 102/2010-Cus.,(N.T.), Dated: December 29, 2010
Tariff Value of Brass Scrap and poppy Seeds increased
GOVERNMENT has increased the Tariff Value of Brass Scrap from US Dollars 4189 to 4320 per MT. The tariff value of poppy seeds is increased from 3215 to 3445 US Dollars. There is no change in the tariff value of other items.
NOTIFICATION NO.103 /2010-CUSTOMS (N.T.) Dated:December 31, 2010
Madurai Airport becomes Customs Airport
MADURAI Airport has been appointed as a Customs Airport for ‘Unloading of baggage and the loading of baggage'
NOTIFICATION NO.104 /2010-CUSTOMS (N.T.) Dated:December 31, 2010
Airport Security - Guns Allowed, not Nail Clippers!
A story is doing the rounds that an American soldier returning from Afghanistan was intercepted by Airport Security at Indianapolis airport and his nail clippers confiscated. He and 329 other soldiers in the plane were carrying weapons – machine guns – not loaded of course. This particular soldier was carrying a pistol in addition to the machine gun.
The security person objected to the nail clippers, because they could be used as a weapon. The soldier pointed out that he was allowed to carry a gun and a pistol, but the security guy was not impressed.
While officials are denying the story, some newspapers have reported it to be true as it is too absurd to be made up.
Even if it is true, there is a point here. The rules permitted carrying of the gun by the soldier, but not nail clippers and if the security man had allowed nail clippers, he would have been accused of negligence!
Jurisprudentiol – Tuesday's cases
Central Excise
Central Excise - Removal of Capital Goods as such Payment of duty on depreciated value, correct - no reversal of credit taken question of law correctly decided by Tribunal; No question of Law - High Court
THE Commissioner of Central Excise is the appellant. The questions of law, read as under:
1. Whether the expression "as such" appearing in Rule 3(4)(C) of the Cenvat Credit Rules, 2002 would cover used as well as unused capital goods or not?
2. Whether the assessee is required to reverse credit equivalent to credit taken when used capital goods are removed from the factory or not?
Income Tax
Sec 55 - Whether sum paid for transfer of on-going business can be treated as payment for technical knowhow or consideration for goodwill, taxable as LTCG - It is a case of transfer of goodwill: Madras High Court
THE issue before the High Court is -Whether the sum paid for transfer of an on-going concern can be treated as payment of technical knowhow or consideration for goodwill, taxable as long term capital gains. Whether when the claim of the assessee is held to be the payment for goodwill by the Tribunal, it is a case of tax evasion. And the verdict goes against the assessee.
Customs
Customs - EOU - No demand without Development Commissioner's recommendation ; Board Circulars binding: duty could be demanded on warehoused goods only on their removal from the warehouse - demand premature : CESTAT
MBPL was issued with Private Bonded Warehouse Licence (PBWL) and IBM sanction order on 30.3.2000 by the Deputy Commissioner of Customs, Bangalore for warehousing non-duty paid goods for in-bond manufacture. MBPL had obtained the goods under the EOU scheme. In the statement dated 22.2.2004, Shri Shashi Kumar, Manager (Finance) of SSPL admitted that under APA made on 31.12.2003, SSPL had taken over all the assets including bonded premises of MBPL and that they were in the process of obtaining approval of STPI and the Customs authorities. They were carrying on software development in the bonded warehouse.
See our columns Tomorrow for the judgements
Until Tomorrow with more DDT
Have a nice Day.
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