TIOL-DDT 2387
02.07.2014
Wednesday

COURTS are very liberal in condoning the delay in filing appeals by the Government, as it is understood that the red tape doesn't allow files to move fast and the Government should not be a victim of an officer's negligence.

But yesterday the Supreme Court took a serious view of a delay of about two years in filing the appeal in a Service Tax case. The issue involved is whether the bottling and packing of country made liquor attracts Service Tax.

The Supreme Court in its order dated 01.07.2014 observed that there is hardly any justification to condone the delay. In fact, not even a day's delay has been explained.

To ensure that the Union of India does not habitually file belated petitions, the Supreme Court imposed a cost of Rs.10,000 on the Petitioner-Revenue. If the cost is not paid within two weeks that is before 15.07.2014, the Department's petition will stand dismissed summarily.

Will they pay up that Rs. 10,000 in two weeks?

Maybe they will spend ten lakhs to pay that ten thousand. The petition is filed by the Indore Commissioner. The officers will perhaps fly between Indore and Delhi half a dozen times before the payment is made.

In any case, this action by the Supreme Court may not have any impact on the babus. First of all they will not pay this money from their pocket and as long as it is paid from the Consolidated Fund of India, it makes no difference to them whether it is ten thousand or ten crores.

Please see 2014-TIOL-62-SC-ST

Supreme Court rejects PIL against Vodafone

THE Supreme Court yesterday rejected a PIL seeking a direction to the Government to collect the income tax arrears from Vodafone.

The Petitioner, Bishwajit Bhattacharyya, a former Additional Solicitor General filed this writ praying:

Civil Appeal No. 733 of 2012 concerning tax dispute involving the Vodafone Group with the Income Tax/Authorities was disposed of by the Court vide Judgment dated 20.01.2012. (2012-TII-01-SC-LB-INTL)

As we know, the Government undid the Supreme Court judgement and now Vodafone is in arbitration with the Government and this is what the petitioner is challenging. The petitioner submitted that the Income Tax Department is not taking any action to recover the demand from Vodafone.

However the petitioner, appearing in person, sought permission of the Court yesterday to withdraw the Writ Petition with liberty to file a fresh petition with all the necessary documents.

Permission sought for is granted by the Supreme Court and the writ petition is disposed of as withdrawn.

Income Tax -ASK for 70 more centres

IN the Result Framework Document, 2014-15, the CBDT has resolved to augment the number of Aayakar Seva Kendras from existing 189 already set up in the Income-tax department by setting up additional 70 Aayakar Seva Kendras (ASK) all over the country in the current financial year 2014-15.

The Board has decided that these Centres should preferably be set up in relatively bigger stations where the senior most authority is either the CIT, Addl CsIT or Multiple ITOs charge. Accordingly, the CBDT has finalised setting up of 70 Aayakar Seva Kendras. CBDT has specified the Stations and the jurisdictional CCsIT. The setting up of ASK at these locations is also included in the Annual Action Plan 2014-15.

The Directorate of O&M Services of the CBDT is monitoring the setting up of the ASK centres.

CBDT Directorate of O&M Services letter in F.No.48/3/2014/ASK/P.V/DOMS/754, Dated: June 30, 2014

Customs Inspector drowned in sea

IT is learnt that a Customs Inspector accidentally fell into the sea at Mumbai's Mandwa Jetty and died yesterday. His body was recovered by the Coast Guard.

Officers not trained to work in the sea are posted causing such risks. Hope the Department will support the bereaved family.

CE - Uttarakhand Exemption - Minor amendments - 11 year old mistake corrected as per Court Orders

GOVERNMENT has amended Notification No. 50/2003-Central Excise, dated the 10th June, 2003 dealing with exemption to goods manufactured in Uttarakhand.

The name of a village - "Sakharkheda" is amended as "Sarverkheda" and its Khasra numbers are also amended.

Why this amendment now?

Well, that is an interesting story.

It seems there is no village by name "Sakharkheda"in Uttarakhand and what they all through meant was "Sarverkheda". You know if the Government makes a mistake, the citizen has to suffer. Perhaps somebody in "Sarverkheda" was denied the exemption, because he was not in the non-existent "Sakharkheda".

The Director of Industries, Uttarakhand had in his letter dated 12.10.2012 requested the Central Government to amend the notification suitably. Obviously nobody took him seriously.

In 2013, Prakash Industries Ltd filed a writ in the Uttarakhand High Court seeking writ of Mandamus commanding the respondent no. 1 to make correction in the name of village and khasras in Notification No. 50/2003-CE dated 10.6.2003 at Sr. No. 28, which is wrongly mentioned as SAKHARKHEDA in place of SARVERKHEDA and Khasra Nos. 285/A and 288A instead of 285/1 and 288/1.

Even when the writ was filed, the Government could have amended the notification, but they waited. Finally on March 11 2014, the High Court directed the Central Government to issue necessary rectification notification within about six weeks of the receipt of the Court order.

And so finally, as per the directions of the High Court, the Government of India kindly amended the notification to correct the name of the village which it had spelt wrongly 11 years ago.

If you need a High Court to get a small spelling corrected in a notification, what can poor Modi do for more governance and less Government?

Interestingly, there exists a village by the name "SAKHARKHEDA" but this village is situated in Narkhed tehsil and located in Nagpur district of Maharashtra and not in the State of Uttarakhand.

Notification No. 07/2014-Central Excise Dated: June 30, 2014

Will they recognise Telangana?

A new State of Telangana came into existence with effect from 2nd of June 2014 bifurcating the State of Andhra Pradesh.

Now, Andhra Pradesh figures and Telangana does not figure in hundreds of statutes. Will they amend them all?

50th Cartoon of An Ni

 Jurisprudentiol - Thursday's cases

Customs

Objectionable maps in book to be taken out and destroyed in presence of Customs authorities - On being satisfied that in left-out part there is no objectionable material or map, Customs authorities may release 'UNESCO World Heritage Atlas' to appellant - no redemption fine but penalty upheld: CESTAT

IN December, 2012, the appellant imported 500 numbers of "UNESCO" World Heritage Atlas" and filed bill of entry for the same.

During examination of the goods, it was noticed that the external boundaries of India was found wrongly depicted/not represented in the maps. The Ministry of Finance Notification No. 19-Cus. dated 6.3.1976 prohibits import of any books, periodicals, pamphlets, leaflets or other documents containing any words, signs or visibility representations which directly or indirectly questions the frontiers of India as declared by the Government or the territorial integrity of the county. Further, standing order No. 53/2004 dated 31.12.2004 of JNCH directs that import of such material shall be confiscated absolutely.

Income Tax

Whether when assessee suo motu makes certain disallowance as per Rule 8D, further disallowance as per Sec 14A is warranted - NO: ITAT

THE assessee, a company is engaged in full bouquet of travel services. It has grown to be one of the largest Complete Travel Management companies in India, with each of its products and services bearing the distinct ISO 9001 quality benchmarking. The assessee had claimed depreciation @60% on computer, UPS and printers, etc. The assessee had dividend income on which it allowed himself expenses relating to the earning of the dividend. AO concluded that UPS, printers, etc., were not part of computer, but part of machinery, therefore reduced depreciation @ 15%. Whereas, in respect of the expenses incurred on dividend income the AO asked the assessee to further furnish clarification. The assessee submitted no expenses had been incurred for earning the exempted income, therefore such allowance should be allowed. The AO rejected the submission of the assessee, invoked the provisions of Rule 8D and made a disallowance in regard to the expenses incurred.

The issues before the Bench are - Whether disallowance u/s 14A is warranted, when the disallowance suo motu made by the assessee is itself more than the disallowance envisaged under Rule 8D and Whether it can be presumed that the assessee must have had incurred some administrative expenditure for earning the exempted income, although the AO has failed to return any finding on expenditure incurred by the assessee. And the verdict goes against the Revenue.

Central Excise

CENVAT - Appellant, manufacturer of excisable goods taking credit of tax paid on services used in Trading activity - question of taking credit on input service and its utilization thereof cannot be permitted at all prior to 01.04.2011 - Pre-deposit ordered: CESTAT

THE appellant is a manufacturer of excisable goods and also undertakes trading of furniture, locks, air-conditioners, safes, etc. which are not manufactured by them.

The appellant availed CENVAT credit of the service tax paid on various services such as advertisement, air-travel agent, architect, ATM operations, business auxiliary services, Business exhibition and business support services, insurance services, storage and warehousing services, telecommunication services, and so on. These services were used both for the manufacture of the excisable goods and the trading of non-excisable goods (goods not manufactured but traded by them). However they did not maintain separate accounts for the credit availed by them in respect of taxable activities and non-taxable activities.

See our Columns Tomorrow for the judgements

Until Tomorrow with more DDT

Have a nice day.

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