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Babus to be polite, honest and accountable? Conduct Rules Amended

DDT in Limca Book of Records - Third Time in a rowTIOL-DDT 2413
08.08.2014
Friday

THE Central Government has amended the All India Services (Conduct) Rules, 1968 by adding two sub rules - Rule 3(1A) and 3(2B)

As per Rule 3(1A), every Member of the Service shall maintain:

(i) high ethical standards, integrity and honesty;

(ii) political neutrality;

(iii) promoting of the principles of merit, fairness and impartiality in the discharge of duties;

(iv) accountability and transparency;

(v) responsiveness to the public, particularly to the weaker section;

(vi) courtesy and good behaviour with the public.

And as per Rule 3(2B), every member of the service shall:

 i. commit himself to and uphold the supremacy of the Constitution and democratic values;

ii. defend and uphold the sovereignty and integrity of India, the security of State, public order, decency and morality;

iii. maintain integrity in public service;

iv. take decisions solely in public interest and use or cause to use public resources efficiently, effectively and economically;

v. declare any private interests relating to his public duties and take steps to resolve any conflicts in a way that protects the public interest;

vi. not place himself under any financial or other obligations to any individual or organisation which may influence him in the performance of his official duties;

vii. not misuse his position as civil servant and not take decisions in order to derive financial or material benefits for himself, his family or his friends;

viii. make choices, take decisions and make recommendations on merit alone;

ix. act with fairness and impartiality and not discriminate against anyone, particularly the poor and the under-privileged sections of society;

x. refrain from doing anything which is or may be contrary to any law, rules, regulations and established practices;

xi. maintain discipline in the discharge of his duties and be liable to implement the lawful orders duly communicated to him;

xii. be liable to maintain confidentiality in the performance of his official duties as required by any laws for the time being in force, particularly with regard to information, disclosure of which may prejudicially affect the sovereignty and integrity of India, the security of State, strategic, scientific or economic interests of the State, friendly relation with foreign countries or lead to incitement of an offence or illegal or unlawful gains to any person;

xiii. perform and discharge his duties with the highest degree of professionalism and dedication to the best of his abilities.

The existing Rule 3(1) loftily states, "Every member of the Service shall at all times maintain absolute integrity and devotion to duty and shall do nothing which is unbecoming of a member of the Service."

Doesn't it take care of all the above?

DoPT Notification in F.No.11017/1/2014-AIS-III] , Dated: August 06, 2014

CBEC Notifies 'Principal Chief Commissioner' in Rules and Notifications

THE Finance Act 2014 has recognised the posts of Principal Chief Commissioner and Principal Commissioner in the Income Tax Act, Customs Act, Central Excise Act and the Finance Act, 1994 (Service Tax).

Now the Government has notified these officers for the purpose of the rules made or deemed to have been or in any other notifications, instructions, decisions, or orders, issued or made under the Acts or rules for Customs, Central Excise and Service Tax.

The notifications are so carefully worded as to not leave any loose ends: The Central Excise Notification reads as:

In exercise of the powers conferred by sections 5A, 37, 37A and 37B of the  Central Excise Act, 1944, (1 of 1944) and of all other powers enabling it in this behalf, the Central Government hereby directs that the references to the authorities specified in column (2) of the Table below, in the rules made or deemed to have been made under the said sections or in any other notifications, instructions, decisions, or orders, issued or made under the said sections or rules or under any other section of the said Act, shall, unless the context otherwise requires, be construed as references to the authorities specified in column (3) of the said Table, namely:-

Table

Sl. No.
Existing reference
Substituted reference
(1)
(2)
(3)
1. Chief Commissioner Principal Chief Commissioner or Chief Commissioner, as the case may be
2. Commissioner Principal Commissioner or Commissioner, as the case may be

The Customs and Service Tax notifications are worded similarly.

Under the new disposition, a zone is headed by either a Chief Commissioner or a Principal Chief Commissioner and a Commissionerate is headed by a Commissioner or a Principal Commissioner. With so many Commissioners around, people will be thoroughly confused as to which Commissioner is higher than which and nothing can offend a babu more than getting his rank right, especially if you are wrong towards the lower side. This is the hierarchy in CBDT and CBEC:

1. Chairman, Board

2. Members, Board

3. Principal Chief Commissioner

4. Chief Commissioner

5. Principal Commissioner

6. Commissioner

7. Additional Commissioner

8. Joint Commissioner

9. Deputy Commissioner

10. Assistant Commissioner

The Chairman and Members of the Board and the Principal Chief Commissioner get the same salary, but they are of different ranks in the ladder.

The Principal Commissioner is not the boss of the Commissioner but gets a higher salary - but you are ruined if you call him just a Commissioner!

Additional Commissioner gets about Rs. 40,000 more than a Joint Commissioner but the JC is not his subordinate and the powers wasted on both the ranks are the same.

The Assistant Commissioner gets a promotion as a Deputy Commissioner and both of them have exactly the same powers and functions. Sometimes the Divisions are headed by Deputy Commissioners and sometimes by Assistant Commissioners and you should be very careful when writing to a Divisional Head. Be sure to find out whether he is a Deputy Commissioner or Assistant Commissioner. No problem if you address an Assistant Commissioner as Deputy Commissioner but in the converse - if you address a Deputy Commissioner as Assistant Commissioner, you will rue the moment you committed the indiscretion.

There is still scope for expansion for the next cadre review. There can still be posts like Additional Principal Chief Commissioner, Additional Deputy Commissioner, Additional Assistant Commissioner, etc. In some Directorates under the CBEC there is already a post of Additional Assistant Director! (this is a glorified Inspector)

Notification No. 56/2014-Customs (N.T.), Dated: August 06, 2014

Notification No. 23/2014-Central Excise (N.T.), Dated: August 06, 2014

Notification No. 16/2014-Service Tax, Dated: August 06, 2014

Customs - New Exchange Rates from Today

CBEC has notified new exchange rates for Imported Goods and for Export Goods with effect from 8th August 2014. The US Dollar is 61.85 rupees for imports and 60.85 rupees for exports.

The Exchange rates were last notified on 17th July 2014.

Notification No. 57/2014-Cus (N.T.), Dated: August 06, 2014

Income Tax - Rectification of Mistake - proceedings have limited scope - High Court

A Revenue application for rectification of mistake was dismissed by the ITAT. The aggrieved Revenue went in writ petition to the High Court.

The High Court held that these proceedings have limited scope;that in these proceedings the Tribunal cannot reopen the findings on factual matters and which according to it are conclusive. That would require the Tribunal to go behind its order and consider its legality and validity. That can be done if the findings are questioned in a distinct proceeding.

The High Court found that not only did the Revenue request the Tribunal to go behind its order and correct it in the garb of pointing out the mistakes and terming them as apparent. But, what essentially the Revenue was projecting was that the order passed by the Tribunal was erroneous. That it contains certain factual errors; if the Tribunal concludes that some point or issue which may be very debatable, but was not raised or argued before the Tribunal, then, in a limited power it cannot take note of the grievance of the Revenue. That would require it to conduct an exercise of going behind the entire order and record and find out whether it omitted from consideration certain vital factual material or statement or figures therein. This course was clearly impermissible; the discretionary and equitable jurisdiction under Article 226 of the Constitution of India is, therefore, not available to question the order passed.

Please see 2014-TIOL-1326-HC-MUM-IT

Prevention of Corruption Act - requirement of sanction for launching prosecution - not unconstitutional - Supreme Court

IN a PIL, a practicing advocate has challenged in the Supreme Court Section 19 of the Prevention of Corruption Act, 1988 which requires sanction of the Government to prosecute Public Servants, as unconstitutional. He wants prosecution of all cases registered and investigated under the provisions of PC Act against the politicians, M.L.As, M.Ps and Government officials, without sanction as required under Section 19 of the PC Act. He avers that the provision for sanction as a condition precedent for prosecution is being used by the Government of India and the State Governments to protect dishonest and corrupt politicians and Government officials. The discretion to grant sanction has been misused.

The Supreme Court held that:

Requirement of sanction has salutary object of protecting an innocent public servant against unwarranted and mala fide prosecution. Undoubtedly, there can be no tolerance to corruption which undermines core constitutional values of justice, equality, liberty and fraternity. At the same time, need to prosecute and punish the corrupt is no ground to deny protection to the honest. Mere possibility of abuse cannot be a ground to declare a provision, otherwise valid, to be unconstitutional. The exercise of power has to be regulated to effectuate the purpose of law.

The Supreme Court also observed that the issue is no longer res integra. The matter has already been dealt with in various decisions of this Court. The Court referred top the famous cases of Vineet Narain and Subramanian Swamy and observed that it is not possible to hold that the requirement of sanction is unconstitutional, the competent authority has to take a decision on the issue of sanction expeditiously as already observed. A fine balance has to be maintained between need to protect a public servant against mala fide prosecution on the one hand and the object of upholding the probity in public life in prosecuting the public servant against whom prima facie material in support of allegation of corruption exists, on the other hand.

Please see 2014-TIOL-67-SC-MISC

FTP - Export to Iran - Realisation in Rupees - ‘specific' deleted

PARA 2.40A of the Foreign Trade Policy, 2009-2014 read as:

Export proceeds against specific exports to Iran realized in Indian rupees are permitted to avail exports benefits/incentives under the Foreign Trade Policy, 2009-14, at par with export proceeds realized in freely convertible currency .

Now, the word ‘specific' is deleted.

DGFT Notification No. 89 (RE-2013)/2009-2014, Dated: August 06, 2014

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Legal Corner Icon

Jurisprudentiol - Monday's cases

Legal Corner IconService Tax

'BSS' has not been carved out of 'franchise service' - If service is classifiable under "Business support service” from a given date and said service is not carved out of any of existing services, it cannot be construed that service was taxable prior to that date: CESTAT

THE appellant was awarded a contract by Maharashtra State Road Transport Corporation (MSRTC) for the sole right of transporting parcel, courier and allied services on/in ordinary buses having luggage carrier of the licensor for the entire State of Maharashtra and Inter-State services of Maharashtra for the purpose of above business. The right granted under the contract was for right to book, deliver, transhipment, handling, loading & unloading and transportation of parcels, specified allied services and to carry out the business of courier by the ordinary buses of the licensor for all types of clients including Government, Semi-government, banks and public undertakings for a period of three years from October 2005 to September 2008.

Income Tax

Whether when assessee discontinues manufacturing activities and commences trading from part of premises and also earns rental income by leasing out remaining part, it is entitled to set off business loss from trading against rental income on which Sec 24 benefit was also availed - NO: HC

THE assessee was in the business of manufacture of air conditioners. The assessee had given building as well as land on lease for the production of printing inks and received total rental income at Rs.39lacs. Assessee filed return of income declaring income. The assesse made a claim of expenditure under the head repair & maintenance. Assesse had also claimed traveling and conveyance expenses which were disallowed by itself in the computation of income. Except for these expenses consisted of remuneration to director, salary & wages, visiting fees, insurance expenses and interest expenses. Assessee had also shown sales against which cost of goods sold was shown. Assessee had also shown purchase of one AC, which had been shown as part of the closing stock. Assessee's case was processed under Section 143(1).

THE issue before the Bench is - Whether when assessee discontinues manufacturing activities and commences trading from part of premises and also earns rental income by leasing out remaining part, it is entitled to set off business loss from trading against rental income on which Sec 24 benefit was also availed. NO is the HC's answer.

Central Excise

Laptop with special software used for managing functionalities of machine is eligible for credit as capital goods: CESTAT

THE appellants are manufacturers of aluminium extrusions falling under Chapter Heading 7604 of the First Schedule to the Central Excise Tariff Act, 1985. For controlling the machines used in such manufacture they used a laptop on which special software required for managing the functionalities of the machines was installed and the laptop was so used. Revenue issued a Show Cause Notice alleging that the said laptop was not either part of any machine or linked with the production process. After considering the submissions of the appellant, the adjudicating authority denied the Cenvat credit for the reason that the laptop is movable and hence not capital goods. Aggrieved by the said order, the appellant filed appeal with the Commissioner (Appeals) who rejected their appeal.

See our Columns Monday for the judgements

Until Monday with more DDT

Have a nice weekend.

Mail your comments to vijaywrite@taxindiaonline.com


 RECENT DISCUSSION(S) POST YOUR COMMENTS
   
 
Sub: Designations without distinction

Compared to a Chief Commissioner, a Commissioner, at present, exercises far more statutory powers, including power to adjudicate without pecuniary upper limit. what will be the powers of principal Commissioner and Principal CC? Are these two merely ranks created for the purpose of promotion and salary hike, without any effect on the statutory powers? It looks like most of these high ranking officers will spend their career keeping an eye on the people down the line just as the Chief Commissioners have been doing so far. Unless there is distinction amongst these ranks, the whole exercise will be rendered farcical.

Posted by Gururaj B N
 

AR not Afar by SK Rahman

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