As per CBEC Circular No. 752/2003 dated 1.10.2003, Joint Commissioners can adjudicate cases involving duty above Rs. 5 Lakhs and up to Rs. 10 Lakhs. Additional Commissioners can adjudicate cases above 20 Lakhs and up to Rs. 50 Lakhs.

In a Department in which HR planning is totally absent, there seems to be a scarcity of Additional Commissioners and so the 20 to 50 lakhs cases are held up for adjudication.

So now the Board has made the Joint Commissioners equal to the Additional Commissioners. That is Joint Commissioner can adjudicate cases involving duty up to Rs. 50 Lakhs. A Deputy Commissioner who can adjudicate up to Rs. 5 Lakhs , on promotion gets power to adjudicate ten times that amount. Anyway this tinkering does not make much of a difference for the assessee as all these officers work overtime to give the consultants a large number of appeals.

Now the Board wants Commissioners to distribute the adjudication work among their JCs and ADCs and issue necessary corrigendum notices and transfer the relevant files – all within 15 days. 15 days from when? Board has not clarified that. It should be assumed that it would be 15 days from the receipt of the Board Circular by the Commissioners. Many of them will not receive it till another month!

And as usual Board has forgotten that there is a similar circular 80/1/2005- ST, Dated: August 10, 2005 for Service Tax where identical powers are wasted on the JC and Additional Commissioner. Board has not amended that Circular. Hopefully it will come in the next few days.

CBEC Circular No. 865/2008 –  Dated 19 February 2008.

Export of rice – prohibition not to apply to relief to Bangladesh

The DGFT has notified that the prohibition imposed on export of non-basmati rice shall not be applicable to export of 5000 MT of non-basmati rice to Bangladesh through the West Bengal Essential Commodities Supply Corporation Limited ( WBECSC Ltd.). This 50,000 MT of non-basmati rice shall be procured by the WBECSC Ltd. exclusively from within the state of West Bengal .

DGFT Notification Nos. 80 (RE-2007)/2004-2009 Dated 18 February 2008.

TIOL @ the speed of light

There was a time when ITAT orders used to be published a couple of years after pronouncement of judgements – until TIOL came into the scene. The other day we got a complaint that we carried a judgement after two weeks. “We wondered if that was a delay. By your standards, it is indeed delayed”, he told us disarmingly.

Tomorrow, we bring you an order of the ITAT Special Bench delivered on 15.2.2008 – within a week.

Kindly excuse this self trumpet.

Jurispruden tiol  – Tomorrow ' s cases

Income Tax

Computer software–revenue or capital expenditure? Tests of ownership, enduring benefits to be satisfied before functional test; if the life of the software is less than two years, it may be treated as revenue expenditure – ITAT SB

After the Supreme Court held that computer software is goods in the context of the AP Sales Tax Act, its ripples spread to Service Tax, Central Excise and now the Income Tax Appellate Special Bench is concerned with the issue. The Special Bench laid down the general guidelines and held that the issue has to be decided for each software based on the tests enunciated by it.

Read the scholarly words of Lord Denning,

“The question revenue expenditure or capital expenditure  is a question which is being repeatedly asked by men of business, by accountants and by lawyers. In many cases the answer is easy; but in others it is difficult. The difficulty arises because of the nature of the question. It assumes that all expenditure can be put correctly into one category or the other: but this is simply not possible. Some cases lie on the border between the two: and this border is not a line clearly marked out; it is a blurred and undefined area in which anyone can get lost. Different minds may come to different conclusions with equal propriety. It is like the border between day and night, or between red and orange. Everyone can tell the difference except in marginal cases; and then everyone is in doubt. Each can come down either way. When these marginal cases arise, then the practitioners be they accountants or lawyers must of necessity put them in one category or another. And then, by custom or by law, by practice or by precept, the border is staked out with more certainty. In this at least, where no decision can be said to be right or wrong, the only safe rule is to go by precedent. So the thing to do is to search through the cases and see whether the instant problem has come up before. If so, go by it. If not, go by the nearest you can find.”

Tribunal's comments on an issue not before it – Sales Tax

Sale of DEPB in Orissa on exports made from Andhra Pradesh – No sale in AP – Tribunal should not have decided on issue not before its consideration – Supreme Court

The Supreme Court asked a Tribunal to decide whether there was any sale in the State of Andhra Pradesh . The Tribunal held that there was no such sale, but went on to add that there was a sale in Orissa. The appeal in the Supreme Court is to the effect that Tribunal should not have held on an issue not before it.

The appellant earned DEPB credit on exports made from Vizag in Andhra Pradesh, but sold the DEPB from its headquarters in Bhubaneswar in Orissa State to buyers in other states and paid CST.

The Sales Tax Authorities in Andhra Pradesh issued show cause notice proposing to levy tax under the Andhra Pradesh General Sales Tax Act, 1956 on the transactions relating to transfer of the DEPB Licenses on the ground that such licenses were registered with Visakhapatnam Port through which the export took place. The authorities considered it to be local sales within Andhra Pradesh and accordingly levied tax.

Central Excise

Central Excise – export - CVD entitled for refund: High Court

From the conjoint reading of the provisions of the Act , it is crystal clear that the rebate of duty of excise on goods exported or on excisable material used in the manufacture of goods which are exported are eligible for refund and such refund includes rebate of duty as well as the duty of excise on excisable material and the refund of such rebate of duty is payable in cash to the applicant if such amount is relatable to rebate of duty of excise on excisable goods exported out of India on excisable material used in the manufacture of goods which is exported out of India.

When ground for rejecting appeal of appellant is totally non-existent on date of order, the order is required to be set aside with consequential relief : Tribunal

NOTWITHSTANDING the provisions of Section 11BB of the CEA'44 that requires interest to be paid in case of delay in granting refunds, the excise authorities come out with all sorts of revolutionary excuses to reject a refund claim are not afraid to even ink them in black white.

In fact, the Board had categorically mentioned in its Circular 572/9/2001-CX. Dated 22.02.2001 that where refund arises consequent to the decision of any authority, the first and foremost action ought to be to expeditiously file an appeal/stay application well before the expiry of stipulated period of three months (and not waiting for the last date of filing of appeal) that no refund/rebate claim should be withheld on the ground that an appeal has been filed against the order giving the relief, unless stay order has been obtained.

As always, not many officers have high regards for these Circulars which often are preserved as relics of a bygone era.

If one wishes to know how blatantly the first appellate authorities reject an appeal of the assessee, here is a typical example.

See our columns tomorrow for the judgements

Until tomorrow with more DDT

Have a nice day.

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