News Update

GST and the tipping pointGovt amends quality control order for vinyl acetate monomerCX - Co-noticees cannot be held liable once the main noticees have resolved the matter under SVLDRS, as no further liability exists for them: CESTATGovt notifies 7.1% interest rate for Special Deposit Scheme for non-govt Provident FundsCus - The right to a fair hearing is fundamental and must be upheld even if procedural lapses occur on the part of appellant or department: CESTATGovt makes Aadhaar mandatory for receiving MSME benefitsST - Extended limitation - Department can request further documents or conduct an inquiry if duty escapes assessment; audit process should not be used as basis to assume suppression of facts: CESTATGovt revises procurement guidelines to give preference to domestically-manufactured iron and steelST - Department cannot invoke extended limitation on charges of evasion of tax, where it is aware of assessee's activities during relevant period: CESTATIndia delivers 625 MT of relief materials to quake-devastated MyanmarST - Allegations of suppression of facts with intent to evade payment of tax, do not hold where based on open-source documents & where issue involves interpretation of law: CESTATWorld waits with baited breath for Trump’s reciprocal tariff todayI-T - If AO had issued notice u/s 148A(b) which is much earlier to time-limit stipulated, i.e. within three years, then same can't be challenged on ground of limitation period: HCBatman, Val Kilmer, breathes last at 65India’s defence exports peaked to Rs 24K Crore in last fiscal: RMI-T- Re-assessment invalid where reasons therefor did not clearly identify any material facts that were not disclosed during original assessment: HCTrump freezes federal grants to Princeton UnivI-T - Mere production of books before AO from which material evidence could with due diligence were discovered by AO, will not necessarily amount to disclosure within meaning of 1st Proviso to Sec 147: HCChina brazenly stages military drills around TaiwanI-T- Stay on recovery proceedings rightly disallowed where assessee failed to make mandatory pre-deposit without sufficient evidence to justify its claim of financial stringency: HCTrump to take final call on TikTok proposal todayCBIC to introduce electronic processing of BoEs through personal carriage by air paxI-T-Protective Additions in Conduit Cases Unsustainable When Substantive Additions made through Identified Beneficiaries: ITATEPFO 3.0 will make EPFO as accessible and efficient as Banks: MandaviyaI-T - If loan has been used for business purpose, then in view of future prospective view of business, interest expenses should be allowed: ITATGovt has taken steps to build ship-building clusters: MinisterI-T - Statutory approval given by quasi judicial authority without due application of mind as contemplated u/s 153D, would be fatal to entire search assessment proceedings: ITATIndia becomes Chile's priority partnerI-T - Rejection of books of account of assessee ought to have been natural corollary to survey findings particularly when they alluded towards variations in stock and consequential profit of assessee: ITATRailways registers incremental loading of 1.68% across All CommoditiesI-T- Taxable Income determinable from Unexplained Deposits using Net Profit Ratios: ITATAPEDA boosts Millet Exports with trade fairs & global promotionsI-T- CIT(A) not required to call for remand report where evidence is already part of assessment record & AO had failed to substantiate his additions: ITAT
 
Relied upon document - verbal communication?

TIOL-DDT 256
07 12 2005
Wednesday

The Judge asked, "Tell me, what is the Criminal charge against the accused?" The Prosecutor replied, "His neighbour feels this fellow is a criminal". Judge asked, "Neighbour feels!!! Is there any proof of guilt?" The prosecutor replied, "No, My Lord! It is only a gut feel. But the neighbour is a distinguished person!" The Judge threw, both the case and the prosecutor, out of the Court!

This is not an imaginary scene but a real nightmare! DDT came to know of a spate of show cause notices issued to assessees, based on frivolous grounds, across the Central Excise Commissionerates of South India. The facts are :

A merchant exporter has procured cotton yarn from various spinning mills, following the prescribed procedures ( B1 bond, CT 1, etc). All these goods were consigned to various destinations in Bangladesh. Subsequently, all the necessary documents and endorsements required for the "proof of export" have been duly obtained by the merchant exporter and the respective departmental officers have duly accepted the "proof of export".

Now, the Additional Director General, DRI, New Delhi receives a letter from the Embassy, stating that the goods exported by the said merchant exporter, have not reached the destinations. In the said letter, it is also mentioned that the said information is based on a "Verbal Communication" by the Commissioner of Customs, Benapole, Bangladesh. This letter has been duly communicated to the Departmental officers having jurisdiction over the various spinning mills, which had supplied the yarn to the merchant exporter.

Based on the said communication, the Department has religiously started issuing Show Cause Notices to the various spinning mills alleging that the exports have not taken place and has proceeded to demand duty from the spinning mills, for such exports made through the merchant exporter. There is no whisper, whatsoever, in the Show Cause Notices except the reliance based on the "Verbal communication".

Having got all the essentials to prove the exports have duly taken place and also having been issued with the "proof of export" by the department itself, the assesses are aghast, as to how to defend their case! It is also learnt that, when the hapless assessees approached the Colonels of the department for redressal, the officers made them run from pillar to post, finally suggesting a Royal Solution! "Approach the Embassy!" Even though ultimately the merchant exporter is going to fight and win the case, because of the fact that, except the "Verbal communication" there is no other extra evidence placed on record to prove that the exports are bogus, it shall take the pain and time of the adjudication process, to come out successfully. It is an easy guess that the issue may travel to the CESTAT to get redressed. Over and above, does anyone care for the irreparable loss of face, it shall cause to the merchant exporter with the spinning mills?

Service Tax - advertising agency -draft remains a draft?

It is nearly two months since the Board released a draft circular to the effect, "the amount paid by the advertising agency to the media for obtaining space for display or exhibition, being in the nature of input service used in providing the taxable service, is liable to be included in the value of the taxable service". This has caused the appropriate furore. Now has the government decided to bury the draft circular or go slow on it?

Say No to bribes

‘Say No to bribes...’ reads a poster on the wall of the Kolkotta V Central Excise Commissionerate after football coach Subhas Bhowmick, superintendent of Central Excise was arrested red-handed allegedly accepting a bribe of Rs 1.5 lakh from a businessman. The CBI raided Bhowmick's Anti Evasion office and discovered that there had been a departmental enquiry against Bhowmik for allegedly offering bribe to one of his colleagues with a request to allow a businessman evade tax. The Commissioner of Central Excise Mr. Dutta told reporters that he had asked his officials to be more careful. What did he mean by "being more careful"? . He clarified that actually what he told them was to be more honest and transparent. He is reported to have told newsman, "It is embarrassing for me as I am the head of the department. But can you tell me where there is no corruption? It’s everywhere."

Quarrel with a lawyer but you cannot get rid of him

Let us not be prejudiced against lawyers. As a matter of fact, but for 'lawyers, this Constitution would not have come into existence. They are contributing a lot to the world. We can quarrel every day with a lawyer but you cannot get rid of him nor dispense with his services. More often than not, he is the victim of reproach and unfortunate misunderstanding. He has done yeoman service to the cause of freedom. Therefore this power or this right must be conferred by Statute. - Ananthasayanam Ayyanger in the Constituent Assembly.

Until tomorrow with more DDT

Have a nice day.

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