TIOL-DDT 2327
03.04.2014
Thursday

SERVICE TAX Return (ST-3) for the period Oct 13-March14 is now available for e-filing by the assessees in both offline and online version. The last date of filing the ST-3 return for the said period is 25th April, 2014, informs the ACES website.

However, to avoid congestion and inconvenience in the last minute, all assessees who wish to file their ST-3 for the said period are advised to start e-filing the returns immediately and not to wait till the last date. The assessees can file return either online or use the offline utility by downloading the latest version from http://acesdownload.nic.in/ or from 'DOWNLOADS' Section of ACES website.

In case of any difficulty in accessing the ACES Application or in filing the ST-3 returns, the assessees can seek help of the ACES Service Desk by sending e-mail to aces.servicedesk@icegate.gov.in or calling up National Toll-free number 1800 425 4251. In general, the Service Desk functions on any working day from Monday to Friday between 9 AM and 7 PM & on Saturdays between 9 AM to 2.30 PM. But to help the assessees file their returns, it will remain open from 9 AM and 7 PM on all Saturdays and closed holidays till 25th April, 14 and on last Sunday i.e. 20-04-2014.

Do file that return - don't wait till 25.4.2014.

Registration of importers - ACES ready

AS per Notification No. 8/2014-CENT dated 28.2.2014, Rule 9 of the Central Excise Rules 2002 was amended to make it mandatory for an importer who issues an invoice on which CENVAT Credit can be taken, to get registered. By Notification No. 10/2014-CENT dated 28.2.2014, "Importer" was included in the Application Form for Registration. These provisions came into force with effect from 1.4.2014.

Now ACES informs that necessary modifications have been made in Form A-1 to enable registration of 'Importers' as a separate category of Registrants in Central Excise.

Ore or Concentrate? - CESTAT grants stay

VIDE Finance Act, 2011, Chapter Note 4 was inserted in the Chapter 26 of the Central Excise Tariff to declare "In relation to products of this Chapter, the process of converting ores into concentrates shall amount to "manufacture". Notification No 4/2006 CE 01.03.2006 exempted ores falling under Chapter 26 from excise duty. (This is continued in 12/2012 CE also). Many importers were claiming exemption from payment of Additional duty of customs by availing this Notification. However, after inserting the chapter note 4 in Chapter 26, demand notices were issued by denying the benefit of exemption on the ground that the imported Ores are to be treated as concentrates. The dispute has now reached the CESTAT and in a recent case, the South Zonal Bench waived pre-deposit completely and granted absolute stay against the demand.

We had covered this issue in detail in DDT 1823 - 26.03.2012

Please see 2014-TIOL-503-CESTAT-BANG

Income Tax Rules Amended - New Forms Prescribed -Mandatory E-filing

THE CBDT has amended the Income-tax Rules, 1962 with effect from 1.4.2014. As per the existing Rule 12(3) of the Income Tax Rules, the return of income may be furnished in any of the following manners, namely:

(i) furnishing the return in a paper form;

(ii) furnishing the return electronically under digital signature;

(iii) transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V;

(iv) furnishing a bar-coded return in a paper form:

Now, the first Proviso to this Rule is amended to stipulate that a person required to furnish the return in Form ITR-5, should furnish the return for the assessment year 2014-15 and subsequent assessment years in the manner specified in clause (ii) or clause (iii) that is electronically with or without digital signature.

Even ITR-7 has to be furnished electronically.

New Forms ITR-1, ITR-2, ITR-4 and ITR-V are prescribed substituting the existing forms.

CBDT Notification No. 24/2014, Dated: April 1, 2014

CE Supdt sentenced in bribery case - Greed is Limitless

A Delhi CBI Court last week sentenced a Central Excise Superintendent to one year Rigorous Imprisonment for demanding and accepting a bribe.

In this strange case, the Additional Commissioner,Central Excise, Rohtak issued a Show Cause Notice to a Delhi Firm. This Show Cause Notice was delivered by our Superintendent. The Superintendent who was a simple delivery boy hit upon the idea of making some good cash out of the Show Cause Notice. He promised to settle the Show Cause Notice for a consideration of Rs. 7.5 lakhs - and got caught while accepting a part payment.

The CBI Judge observed:-

(i) corruption is not only a moral wrong, legal wrong but is also a social evil with disastrous consequences.

(ii) Now a days corruption is deep rooted in our society. It is almost unchecked and uncontrolled.

(iii) The greed is limitless. Everyone wants quick and easy money and do not mind even if the same is by unlawful means.

(iv) It is indeed deplorable. It is making the whole system paralysed and putrefied.

(v) In the present case by demanding bribe the convict was only concerned with the satisfaction of his personal pocket forgetting that this way he would deprive the Excise Department of his lawful dues.

On the prayer for mercy by the Superintendent, the Judge observed, "The sentencing is always a complex process in a criminal trial; primarily it is to be borne in mind that sentencing for any offence has a social goal;sympathy or sentiment by itself cannot be a ground for passing an order on sentence."

Ultimately, was it worth it?

Jurisprudentiol – Friday's cases

Service Tax

In the absence of any documentary evidence, there cannot be any presumption in favour of the appellant that the consideration received was for other than the Consulting Engineers Service - Order of adjudicating authority is impeccable - appeal dismissed: CESTAT

ON the basis of intelligence that the appellant had evaded Service Tax, an investigation was carried out by the Anti-Evasion Wing of Service Tax Commissionerate, Mumbai and records were summoned and statements recorded. Based on investigation conducted, it appeared that the appellant had received a consideration of Rs.51,49,56,282/- by way of Engineering Consultancy during the period from 1.4.2001 to 31.12.2005 and they had not discharged Service Tax liability on the consideration received.

Alleging that the Engineering Consultancy undertaken by the appellant would come under the category of Consulting Engineer's Service, a SCN was issued demanding Service Tax of Rs.4,12,93,802/-.

The appellant led evidence before the adjudicating authority by way of invoices showing that the consideration received during the year 2002-03 and upto 31.12.2005 were not on account of any Engineering Consultancy Services rendered but on account of other reasons such as Export earnings, Erection and Installation Services, Works Contract Services, supply of material and so on and, therefore, they were not liable to pay any Service Tax on this consideration received under the category of Consulting Engineers Service. This was accepted by the adjudicating authority, who dropped the Service Tax demand amounting to Rs.3,80,40,960/- for the period 2002-03 to 31.12.2005. However, since the appellant could not produce similar documentary evidence for the year 2001-02, the adjudicating authority confirmed the demand on the consideration received during the period 2001-02 classifying the service rendered under the category of Consulting Engineers' Service. Penal and interest provisions were also put into good effect.

Income Tax

Whether, after 18 years of the Search conducted, documents obtained under RTI Act can be relied upon for establishing that no notice u/s 143(2) was issued - YES: High Court

THE assessee was assessed to income tax for the block period from 1.4.1985 to 15.9.1995 u/s 143(3) read with Section 158BC, pursuant to a search u/s 132. The assessee filed Nil return of income and subsequently, the AO passed an order u/s 143(3) read with Section 158 BC determining the total undisclosed income at Rs. 9,55,380/- and demanding income tax of Rs. 5,73,228/-. On appeal, it was contended before the Tribunal that since no notice u/s 143(2) was issued, the entire assessment should have been set aside. The Tribunal observed that the assessee was subjected to search in 1995 and the appeal was being heard afresh in 2013, therefore, the possibility of misplacing the 143(2) notice cannot be ruled out in this span of almost 18 years. It was also observed that the assessee did not urge this legal issue at the time of filing appeal before the Tribunal, but urged for the first time before us after a lapse of considerable years. The Tribunal reduced the addition only to a limited extent. Aggrieved, this appeal has been filed in which the assessee has produced a document based on the Right to Information Act, which suggests that no such notice was issued.

The issue before the Bench is - Whether document obtained under Right to Information Act for establishing the non issuance of notice u/s 143(2) can be accepted as an evidence, although there has been a lapse of 18 years since the search was first conducted. And the answer favours the assessee.

Customs

Whilst the Court has the power to answer substantial questions of law, at the same time, a mere error in the findings of one or the other lower authorities would be insufficient to invoke the restricted nature of jurisdiction conferred under Section 130 of the Act - questions which were agitated before the CESTAT were duly considered - What the appellant/assessee is urging this Court to do is convert itself into a third court of appellate review - no substantial question of law arises - Appeal dismissed: High Court

IN this case that the proprietor of the assessee had made a statement under Section 108 admitting that the items imported were covered under Schedule 3 of the items of Central Excise Tariff Act, 1985 and, therefore, required MRP disclosure. Furthermore, the show cause notice and the Order-in-Original are entirely premised upon the goods having been seized because they were found to be without MRP stickers at the time of the search on 16.5.2008. The Order in Original as well as the Order in Appeal are categorical that such valuation attracted Sections 111(d) and 111(m) and thus, properly resulted in penalty and confiscation. After considering these aspects, the redemption fine and penalty were reduced having regard to the entire conspectus of circumstances. These questions were agitated before the CESTAT, which duly considered them. What the appellant/assessee is urging this Court to do is convert itself into a third court of appellate review. Whilst the Court has the power to answer substantial questions of law, at the same time, a mere error in the findings of one or the other lower authorities would be insufficient to invoke the restricted nature of jurisdiction conferred under Section 130 of the Act."

See our Columns Tomorrow for the judgements

Until Tomorrow with more DDT

Have a nice day.

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