TIOL-DDT 2359
23.05.2014
Friday

TRANSFERS of all IRS officers starting from Assistant Commissioner are approved by the minister chota or bada. Is it fair or ethical for a minister in an election, sure not to return to power or his Government having lost an election or just when a new Government is about to take office, to effect large scale transfers in his department?

Just yesterday the CBEC gave posting orders to 104 promoted Assistant Commissioners. Just a few days before that they gave posting orders to Additional Commissioners who returned from deputation mostly as private secretaries to ministers who have all lost the 2014 elections.

Just four days ago the CBDT gave posting orders to 11 Commissioners of Income Tax in important places like Mumbai, Hyderabad and Jaipur. They even posted three Commissioners to Modi's Ahmedabad!

And a few days before that they posted 148 Joint Commissioners.

Every body knows that a new Government is taking charge on 26th - what, then is the hurry in transferring all these officers just before the new Government takes over?

In 2004, Arjun Singh as HRD Minister simply dismissed over 300 officers appointed by Murli Manohar Joshi - of course there are courts in this country and the likes of Arjun Singh cannot always get away.

It is atrocious for a Government that was rejected by the people to make some last minute transfers and favours and it is unfortunate that it has happened in a ministry headed by the distinguished and honourable Palaniappan Chidambaram!

Anti Dumping Duty on 'Methylene Chloride' - Resurrected

GOVERNMENT had imposed provisional anti dumping duty on Methylene Chloride falling under Chapter 29 originating in, or exported from the European Union, United States of America and Korea RP by Notification No. 24/2013-Cus (ADD), dated 21.10.2013.

While reporting this in DDT 2215 dated 23.10.2013, we had mentioned,

The anti-dumping duty imposed under this notification shall be levied for a period not exceeding six months (unless revoked, amended or superseded earlier).

So, this lapses on 20.4.2014 - and the Government is sure to forget that day. What will happen? They will retrospectively extend it.

This is exactly what happened.

And we reminded them on 22.04.2014 in DDT 2337.

Now, one month after the provisional imposition notification had its natural death, the Government has resurrected it and imposed a definitive anti dumping duty.

The notification also stealthily inserts the words also known as "Dichloromethane" which was missing from the main body of the earlier notification 24/2013-Cus (ADD) but was found in the Table.

With a new Government in North Block soon, let us hope there would be an end to this kind of fraud by Government.

Notification No.24/2014-Customs (ADD), Dated: May 21, 2014

GST can boost India's economy by two percentage points - Assocham

ASSOCHAM has outlined an action plan for the new Government. It wants the new Government to expedite land acquisition and environmental clearances for mega projects by setting up a joint task force comprising central ministries like environment, finance, administrative along with the States which can take decisions with a specific time-frame, cutting delays.

Implementation of Goods and Services Tax (GST) can boost India's economy by up to two percentage points and replace existing state and central levies with a uniform tax, boosting revenue collection while cutting business transaction costs.

The Chamber wants cut in excise and Service Tax rates, restoration of the SEZ policy to its original form and greater tax incentives in case of demerger or amalgamation of companies. It also wants the Government to remove tax uncertainty in the minds of foreign investors.

India - a giant economic mediocrity?

THE Economist in its 24th May 2014 edition has Narendra Modi on its cover page. The magazine says, "India, a giant economic mediocrity, is cursed by having too many economists. Its outgoing prime minister, Manmohan Singh, has a doctorate from Oxford, ran the central bank in the 1980sand led the liberalisation programme that India put in place in 1991 after a currency crisis. Yet as Prime Minister, Mr Singh had little grip or public support, serving at the pleasure of Sonia Gandhi, the populist leader of the Congress party.

Having run Gujarat well, Mr Modi now faces the far harder task of running India. He has big advantages-administrative competence, control over his party and a majority in Parliament-that should ease decision-making.

Sitting at his desk in Gujarat, Mr Modi said that when he first took charge of the state's economy, "I thought: the sky is the limit." A similar ambition today would serve India well."

Central Excise Registration Certificate costs Rs. 15,000 for applicant and jail for Supdt.

A Bidi manufacturer (they are the most downtrodden among Excise assessees) was asked to pay a bribe of Rs. 15,000 for issue of a Central Excise Registration - officially there is no fee for registration.

Bidi is smoked by the poorest people and is made by poorer people and this Central Excise Superintendent wanted a hefty bribe from these poor people. The Superintendent gets about a lakh of rupees a month - the Bidiwala might not have seen a lakh of rupees ever in his life.

The Superintendent, his Inspector and a conduit were trapped by the CBI and arrested. The Central Excise Officers will spend some time in jail, where a bidi will be too expensive for them! Your career, your social and family life - all blown up - in Bidi smoke.

DDT Cartoon

Jurisprudentiol - Monday's cases

Service Tax

CENVAT Credit - Input Services -  any service having nexus with business of manufacture which has been used by manufacturer would qualify as input service: CESTAT

INSURANCE of plant and machinery, goods in transit, cash in transit and insurance of vehicles, and laptop, is an integral part of manufacturing business, as no manufacturer would carry on manufacturing operations without insurance of plant & machinery, cash in transit, goods in transit, vehicles & computers, etc. against any loss due to accident, natural calamities, etc. In view of this, the services of plant and machinery, transit insurance of goods, insurance of cash in transit, laptop, etc. have to be treated as an activity related to the business and would be eligible for cenvat credit.

Judicial Discipline - Censure and Costs : The conduct of the Learned Commissioner amounts to clear judicial indiscipline and irresponsible exercise of adjudication function. Such exercise of adjudication powers in blatant violation of Apex Court's judgment in case of  Union of India Vs. Kamlakshi Finance Corporation Ltd., reported in  2002-TIOL-484-SC-CX-LB  requires to be censured as, if allowed to go unchecked, would lead to collapse of entire dispute resolution mechanism. Such adjudication orders burden not only the Assessee who has to incur avoidable expenses on challenging such order before the Courts/Tribunal, but also impose clearly avoidable costs for the Government, as the Tribunal's/Court's valuable time is also consumed in hearing appeals against such clearly erroneous and indisciplined orders, which should never have been passed. Cost of Rs. 5000 imposed

Income Tax

Whether any expenditure incurred on acquiring right to use database can be treated as akin to acquiring capital asset - NO: HC

THERE was a company jointly promoted by TATAs and IBM which were known as TATA IBM. Both agreed to bifurcate the software development activities and the hardware business into two separate entities namely IBM Global Service India (P) Limited and TATA IBM where hardware business was taken care of. Various assets of the erstwhile TATA IBM were transferred to the newly established assessee-company for certain considerations.

The issues before the Bench are - Whether any expenditure incurred on acquiring right to use database can be treated as akin to acquiring capital asset and Whether loss on account of foreign exchange fluctuation is for importing various consumable items is allowable as revenue expenditure or is to be included in the valuation of closing stock. And the verdict goes in favour of the assessee.

Central Excise

Revenue finding tobacco products in godowns owned by private persons and alleging clandestine manufacture and removal by respondent - there is virtually no evidence lending any credence to said allegation - entire case is based on assumptions and presumptions hence not sustainable: CESTAT

THIS is a Revenue appeal filed in the year 2006.

The department found tobacco products stored in various godowns outside the factory and alleged that the goods have been clandestinely manufactured and cleared by the respondents. Actually, the godowns were originally sealed by the sales tax officers and were found to be stored with the goods bearing the brand name of the respondents.

Statements of the company were recorded and they informed that the said godowns do not belong to them as they do not have any other storing place except the factory premises. When asked about the goods lying in the godowns, they submitted that the goods might have been stolen from their manufacturing units in small quantities clandestinely and might have been stored there.

See our Columns Monday for the judgements

Until Monday with more DDT

Have a nice weekend.

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