CBEC has notified the Exchange Rates for imported goods and export goods for April 2011.

CBEC Notification No. 24/2011-Cus.,(N.T.), Dated: March 29, 2011

Delay in remission of duty and destruction of goods rendered unfit for consumption or for marketing - CBEC Clarifies

BOARD has noticed that there is considerable delay in the disposal of applications for remission of duty under Rule 21 of the Central Excise Rules, 2002 and destruction of excisable goods claimed as unfit for consumption or for marketing, by the field formations. Such avoidable delay causes inconvenience to the assessees by way of risk of contamination and infection apart from occupation of valuable storage space.

Board clarifies that “The procedures for remission of duty and, the manner of destruction of excisable goods rendered unfit for consumption or for marketing, are contained in Part-I of Chapter 18 of CBEC's Central Excise Manual of Supplementary Instructions, 2005. The permission for destruction and remission is to be granted by the competent authority, depending upon the amount of duty sought to be remitted and subject to such conditions as may be imposed by him. Where only physical verification is required, the same has to be conducted by the remission granting authority and upon his satisfaction, destruction of goods and remission of duty can be allowed. In case of doubt, sample has to be drawn and tested by the specified laboratories. Ordinarily, the claim of the assessee that the goods are rendered unfit for consumption or marketing, should be accepted and the permission for remission and destruction should be granted within a period of 21 days or earlier. Where samples are required to be tested, for reason to be recorded in writing, such permission should be granted within a period of 45 days. There should not be inordinate delay in destruction of the goods under the supervision of the proper officer, once the permission for destruction and remission is granted.”

Board reiterates the above instructions to ensure that the prescribed time limits are adhered to by the field formations and there is no unreasonable delay in granting permission for remission of duty and physical destruction of the goods on which duty has been remitted by the proper officer.

We had reported a case where the Department did not reply to the assessee for over a year and when the assessee destroyed the goods, slapped it with a Show Cause Notice and demand. Please see 2009-TIOL-809-CESTAT-BANG.

CBEC Letter in F. No. 201/03/2010-CX.6; Dated: February 15, 2011

RTI - There is no absolute ban on disclosure of IT returns - the noise of motivation behind seeking the information falls upon deaf ears - the Act does not aim to judge motivation or reason behind seeking certain information – CIC

A person involved in a dowry case asked the Income Tax Department for the IT returns of his father-in-law, which was promptly rejected by the CPIO and he is before the CIC.

The CIC observed,

Unfortunate as it may seem, the noise of motivation behind seeking the information falls upon deaf ears as far as the Act is concerned. Section 6(2) of the Act clearly states that the Applicant shall not be required to give any reason for requesting the information. Thus, the Act does not aim to judge the motivation or the reason behind seeking certain information, as each applicant may have a different line of reasoning, each one being equally passionate and emotionally driven.

It is not the case of the Respondents that objection to disclosure of the documents is taken on the ground that it belongs to a class of documents which are protected irrespective of their contents, because there is no absolute immunity for documents belonging to such class.

There is no absolute ban on disclosure of IT returns.

CIC directed the CPIO to furnish the information pertaining to the net taxable income of the father-in-law.

Now can Justice Balakrishnan's IT returns be obtained under RTI?

Please CLICK HERE for the CIC Order.

Tribunal cannot review its own order in garb of rectification - Supreme Court

THE Supreme Court yesterday in a Sales Tax case reiterated that the Tribunal cannot review its own order in the garb of rectification: It is now an established proposition of law that review is a creature of the statute and such an order of review could be passed only when an express power of review is provided in the statute. In the absence of any statutory provision for review, exercise of power of review under the garb of clarification/modification/correction is not permissible. Power is vested on the authority to rectify an obvious mistake which is apparent on the face of the records and for which a re- appreciation of the entire records is neither possible nor called for.

We bring you this order today. Please see Breaking News

IRS v IRS- Indian Railway Service v Indian Revenue Service - Transport of Goods by Rail - Yet another Extension?

SINCE 2009, the Finance Ministry had been trying to levy Service Tax on transport of goods by Rail, but Madam Mamata Banerjee had been scuttling their efforts. We were told that a CBEC Member called on a Railway Board Member to work out the details of collecting the tax. The Railway Board Member told him, “we don't recognise this tax”. And he was right! His Minister got the tax put on hold. The exemption for this tax was to expire on 31 December 2010, which means that from 1 January 2011, the Railways were to pay this tax.

But the Railways were in no mood to pay. DidiMamata met Dada Pranab and got an extension of the exemption till 31 March 2011. The FM is known to be a very obliging person and he cannot certainly turn down the request of his illustrious colleague with whom his party had to face an election in his home state soon. And so it was extended till 31 st March 2011, which is unfortunately staring at our face tomorrow. If this is not further extended, goods transport by rail would be taxable from 1 st April 2011. But the FM cannot afford to displease Didi with elections just a few weeks away. So it is bound to be extended. The moot question is “will they do it tomorrow?”

Please see

1. DDT 1180 – 21.08.2009

2. DDT 1187 – 01.09.2009

3. DDT 1188 – 02.09.2009

4. DDT 1387 – 14.06.2010

5. DDT 1512 – 22.12.2010

CBEC Gr. A Transfer Policy - No Cap on posting to DRI?

AS per Para 7.2 of the ‘Transfer/ Placement Policy For Group 'A' Officers of
The Indian Revenue Service (C & CE)', “The maximum length of tenure in the Directorates of Revenue Intelligence, Central Excise Intelligence and Vigilance will be three years, subject to the condition that no officer shall spend more than six years in these Directorates during his entire service career.”

It seems that because of this cap of six years, Board is finding it difficult to find suitable officers to be posted in DRI, DGCEI and Vigilance.

Now it is learnt that the FM has given his nod to do away with this clause and officers can be posted to DRI and the other two Directorates for more than six years.

Jurisprudentiol – Thursday's cases

Central Excise

Valuation of goods - provisions of CAS-4 will apply not only prospectively but also for period prior to issue of Board Circular dated 13.02.2003 since it only lays down principle of computing cost of production in case of captive consumption: CESTAT

SINCE the assessee had not included in the assessable value the expenses on account of corporate head office, advertising, marketing and financial costs , the department was of the view that they have under valued the products and accordingly differential duty to the extent of Rs.1,23,63,238.66 is liable to be recovered on the clearances of automobile parts for the period from December 1997 to June 2000 and, accordingly, a show-cause notice dated 2.1.2003 was issued to the party invoking the extended period of time.

Income Tax

Whether when company's Board Resolution allows wife of Managing Director to accompany him on foreign tour to take care of reciprocity in international business, Revenue can sit in judgement and disallow it as not incurred for business purposes - NO, rules High Court

THE key questions before the High Court are - Whether, as per the provisions of the I-T Act, business expenditure is limited to the expenditure incurred for an employee only; Whether when Board Resolution allows the wife of the managing director to accompany him on his official foreign tour so that reciprocity of international business is taken care of, Revenue can sit in judgement of such a decision and disallow the same as not incurred for business of the company and Whether when the company's Board Resolution is silent on spending for foreign tour of the wife of Dy MD, even then such expenditure can be claimed as allowable. The final verdict partly goes in favour of the assessee.

Service Tax

Service Tax paid on Banking and Other Financial Services being advisory and placement charges in connection with private placement of preferential equity shares is an activity related to business and is an Input Service – Prima facie case – Stay ordered: CESTAT

WE are prima facie of the view that the services of banking and other financial service received by the party in respect of their private placement of preferential shares for raising the capital is an activity related to the business and, hence, eligible for Cenvat credit as per the definition of input service given in the Cenvat Credit Rules, 2004. We are of the view that merely because the invoice has been raised on the head office, the credit cannot be denied to the factory of the assessee in the instant case. Thus, a prima facie case has been made out by the assessee for stay of the recovery of the demands towards Cenvat credit, interest and penalty…

See our columns Tomorrow for the judgements

Until Tomorrow with more DDT

Have a Nice Time.

Mail your comments to vijaywrite@taxindiaonline.com