TIOL-DDT 2418
19.08.2014
Tuesday

IT may be a little out of place for TIOL and DDT to discuss an event four days after it took place, but please allow me the indulgence.

I was in the Capital of a neighbouring country, (which was swept by Modi Wave recently) on Independence Day. It was a privilege to attend the Independence Day function at the Indian Embassy in Kathmandu. It was nice to see a large number of Indians gather at the Indian Embassy for the function - all of them proud to be Indians and wanting to be a part of the Indian Celebration. Many of them - businessmen didn't open their shops till afternoon.

Many of them told me that in Nepal, there is a tremendous hatred for India and Indians, but that has been considerably reduced after Modi's recent visit.

Though you must have read it and heard it several times, I would like to highlight some parts of Mr. Modi's speech here.

On this day of sacred festival of independence, the prime servant of India extends greetings to all dear countrymen. I am present amidst you not as the Prime Minister, but as the Prime Servant.

It seemed as if dozens of separate governments are running at the same time in one main government. It appeared that everyone has its own fiefdom. I could observe disunity and conflict among them. One department is taking on the other department and taking on to the extent that two departments of the same government are fighting against each other by approaching Supreme Court.

Nowadays newspapers are full of news that Modiji`s Government has come, officers are reaching office on time, offices open in time, and people get there in time. I observed that India's National newspapers, TV media were carrying these news items prominently. As the Head of the Government I could have derived pleasure in the fact that everything started going on time, cleanliness got the attention, but I was not taking pleasure, I was feeling pained. If government officers arrive to office in time, does that make news? And if that makes news, it shows how low we have fallen. It becomes a proof of that, and that's how, brothers and sisters, the governments have run. Today in the face of global competition, when we have to realize the dreams of millions of Indians, the country cannot run on the lines of "it happens", "it goes". In order to fulfil the aspirations of masses, we have to sharpen the tool called the Government machinery, we have to make it keen, more dynamic, and it is in this direction that we are working. My countrymen, it's not long since I have come from outside Delhi, but I give you an assurance that the people in the Government are very capable - from the peon to the Cabinet Secretary, everybody is capable, everybody has a power, they have experience. I want to awaken that power, I want to unite that power and want to accelerate the pace of the welfare of nation through that power and I shall definitely do it. I want to assure the countrymen that we will achieve that, we will definitely do that. I could not say this on 16th May, but today after my experience of two-two and half months, keeping the tricolour as witness, I am saying on 15th of August that it is possible, it will be achieved.

Unfortunately, we have an environment today wherein if you approach anyone with some work, he begins by saying "what does it mean for me?" He begins by saying "what does it involve for me?" and when he comes to know that it does not entail any benefit for him, immediately he says "why should I bother?" we have to rise above the feelings of "what does it mean for me" and "why should I bother”. Everything is not for self-interest only. There are certain things which are meant for the country and we have to refine this national character. We have to rise above the feelings of "why should I bother" and "what does it mean for me" and instead we have to think that "I am for nation's interest and in this field, I am going to lead". We have to inculcate this sentiment.

The Prime Minister of the Country calls himself the Prime Servant - will our babus who are called civil servants (who are actually neither civil nor servants) learn something from the PM?

The President in his address to the Nation said, "This may be the appropriate moment to recall the great Shivaji's letter to Aurangzeb when the latter imposed jizya. Shivaji told the emperor that Shah Jehan, Jehangir and Akbar could also have levied this tax "but they did not give place to bigotry in their hearts, as they considered all men, high and low, created by God to be examples of the nature of diverse creeds and temperaments". This 17th century epistle of Shivaji carries a message, which is universal. It must become a living testament that guides our behaviour today."

Adieu Planning Commission

I have a personal happiness in the PM's address - he said that the Planning Commission was going to be given a neat burial and he said it so nicely, like Mark Antony saying, "they are all, all honourable”.

I am all for abolition of the Planning Commission - some of the comments on Planning Commission in DDTs.

DDT 2227 08.11.2013

Will Planning Commission go same way?

THE Planning Commission of India is another unconstitutional/non-constitutional body created by a Government resolution exercising enormous power and clout. Every Chief Minister appears before the Hon'ble Deputy Chairman of the venerable Planning Commission of India once in a year to get their annual plans approved. The Planning Commission was set up by a Resolution of the Government of India in March 1950 - nobody knows under what authority and under what law or which provision of the Constitution of India and it has grown into a monstrous extra constitutional authority.

The best planning the Planning Commission had done in the last 63 years was said to be renovating the toilets in Yojana Bhavan at a cost of Rs. 35 lakhs while telling the Nation that any Indian who earns more than Rs. 35 a day is above poverty line! And the Deputy Chairman is said to spend more than Rs. 2 lakhs a day on his foreign trips, which are absolutely necessary to do the planning for the poor citizens of India!

DDT 2360 26.05.2014

While on it, there are several dumping yards in Delhi for unemployed politicians, bureaucrats and economists - all of which cost us a fortune. They may be closed down, the Planning Commission is a good place to start with.

DDT 1844 26.04.2012

Anyway, according to the wise men in the Planning Commission, all that you need, to be called rich in India, is thirty rupees a day. To ensure that every Indian does not go beyond that level, you can do all your experiments.

DDT 1698 - 22.09.2011

I am really worried that soon we may not have any poor people left in the country and when there is no poverty, maybe there is no need for so much of governance and 75 per cent of the Government machinery can be closed down. Maybe, we can bring down the poverty level to one rupee a day and lo and behold, we can simply abolish poverty in India and declare India as a rich country - all that we need is a report from the Planning Commission. Prosperity anywhere seems to be a threat to poverty everywhere.

But do we really need a Planning Commission?

DDT 7 - 09 12 2004

Shourie calls the Planning Commission a parking lot - the whole purpose of the Planning Commission is as a dumping ground for people who are unwelcome as ministers or retired civil servants who refuse to go away.

Tariff Value of Gold, Silver etc. changed

THE Government has increased the Tariff value of Gold from 421 USD to 426 USD per 10 gms. The tariff value of Silver has decreased from 671 to 650 USD per kilogram. Tariff Values of oils have been reduced except that of Crude Soyabean Oil which sees a marginal increase. Tariff value of Brass scrap has been increased along with that of Areca Nuts. However, the Tariff value of Poppy Seeds remains where it was. The Tariff values as on 31.07.2014 and with effect from 14.08.2014 are as under:

Notification No. 71/2014-Customs (NT), Dated: August14, 2014

Anti-Dumping Duty on Polypropylene continues

VIDE notification 119/2010-Cus., Dated: November 19, 2010, Anti-dumping duty on "Polypropylene" originating in, or exported from, Singapore was imposed for a period of five years beginning 30th July, 2009. Obviously, the five year period ended last month and everyone was caught napping.

But the designated authority had initiated a review a day before the notification was to expire and he had requested for extension of the anti-dumping duty for a further period of one year. And it takes time for the giant wheels of the government machinery to move.

So, you have an amending notification which tells you that the parent notification imposing anti-dumping duty remains in force up to and inclusive of the 29th day of July, 2015.

Notification No. 38/2014-Customs (ADD) dated the 13th August, 2014

Anti-dumping duty imposed on Ceftriaxone Sodium Sterile

THE designated authority had initiated a review in the matter of continuation of anti-dumping duty on imports of Ceftriaxone Sodium Sterile, also known as Ceftriaxone Disodium Hemiheptahydrate-Sterile originating in or exported from the People's Republic of China, imposed vide notification No. 98/2008-Customs dated 27th August, 2008. The Central Government had extended the anti-dumping duty on the subject goods upto and inclusive of the 28th November, 2013 vide notification 50/2012-Customs dated (ADD) dated 29th November, 2012.

In his final findings dated 20th May, 2014 the designated authority has come to the conclusion that there is continued dumping of the product concerned from the subject country, causing injury to the domestic industry; dumping of the product under consideration is likely to intensify from the subject country should the current anti-dumping duty be withdrawn, and has recommended imposition of the anti-dumping duty on the subject goods, originating in or exported from subject country.

So, the Central government has imposed an anti-dumping duty on the subject goods imported from the subject country and the same shall be effective for a period of five years.

What happened during the period between 29th November, 2013 & 13th August, 2014 is anyone's guess!

Notification 39/2014-Customs (ADD), Dated: August 14, 2014

Safeguard duty imposed on Seamless Pipes & Tubes

THE Central Government after considering the findings of the Director General (Safeguard), has imposed on Seamless Pipes and Tubes when imported into India, a safeguard duty at the following rate, namely:-

(a) twenty per cent. ad valorem when imported during the period from 13th August, 2014 to 12th August, 2015 (both days inclusive);

(b) ten per cent. ad valorem when imported during the period from 13th August, 2015 to 12th August, 2016 (both days inclusive); and

(c) five per cent.ad valorem when imported during the period from 13th August, 2016 to 12th February, 2017.

This notification does not apply to imports of Seamless Pipes and Tubes from countries notified as developing countries other than the People's Republic of China.

Notification No. 02/2014-Customs (SG) dated, 13th August, 2014

Jurisprudentiol - Wednesday's cases

Service Tax

Tax paid by appellant on reverse charge basis in respect of services provided by its agents in J&K and credit availed thereof - CENVAT Credit taken by the appellant is nothing but refund of the service tax paid by them on the services on which they were not required to pay service tax: CESTAT

THE appellant is engaged in the business of providing General Insurance Service throughout India. The head office of the appellants is located at Pune and is centrally registered with the service tax department for discharge of service tax liability on general insurance services. The appellant had appointed independent insurance auxiliary agents to promote their business. These insurance agents are providing services to the appellant and the said service is taxable under the category of insurance auxiliary services under Section 65(105)(zl) of the Finance Act, 1994. In terms of Rule 2(1)(d)(iii) of the Service Tax Rules, 1994, the liability to pay the service tax on insurance auxiliary services has been shifted to service receiver i.e. on insurance company.

Accordingly, the appellants discharged the service tax liability as a receiver of service from the insurance auxiliary agents. After paying the service tax on the said service, the appellants take CENVAT Credit of the service tax paid by them.

Income Tax

Whether an exporter is eligible to claim deduction u/s 80HHC for deemed credit under CENVAT Incentive Scheme - YES: High Court

THE assessee is an Indian company which is engaged in the business of export of any goods or merchandise. It had filed its return, declaring a total income of Rs.88,16,140. The assessee claimed deduction u/s 80HHC of deemed credit of Rs.89,34,887/- under the CENVAT Incentive Scheme as part of business profits. During assessment, the AO held that CENVAT incentives were not eligible profits for claiming a deduction under section 80HHC and thus had to be excluded from the business income while calculating deductions under section 80HHC. Therefore, it determined the total income of the assessee at Rs.1,63,79,073. On appeal, the CIT(A) confirmed the same. Whereas, the Tribunal held that the CENVAT incentives were in the nature of export incentives and hence allowed for the purpose of calculating business income whilst calculating a deduction under section 80HHC.

The issue before the Bench is -Whether an exporter is eligible to claim deduction u/s 80HHC for deemed credit under CENVAT Incentive Scheme. And the answer of the High Court is YES.

Central Excise

Demand of duty on clandestine removals - Since the appellant had prepared invoices during the period, clearly indicating therein that they are operating under compounded levy scheme, it cannot be held that they had removed goods clandestinely: CESTAT

THE premises of the appellant were searched by the officers of the department and on physical stock verification in the presence of some of the Directors of the main appellant, it was noticed that there was shortage of 1,05,993L.Mtrs of finished man-made fabrics. After investigations, show cause notices were issued to the main appellant as well as the individuals, directing them to show cause as to why the Central Excise duty should not be demanded from them for clandestine removal of the goods, why interest be not demanded and penalties be not imposed. The adjudicating authority, after considering the submissions made on behalf of all the three appellants, confirmed the demands with interest and also imposed penalties. The first appellate authority also confirmed the demands.

See our Columns tomorrow for the judgements

Until Tomorrow with more DDT

Have a nice day.

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