TIOL-DDT 2449
01.10.2014
Wednesday

THE CBEC has issued a letter to all CCs and DGs on its action plan to evolve Non-adversarial indirect tax administration. It says that one of the key objectives of the Department is to foster non-adversarial tax administration and initiatives have been taken to simplify procedures to reduce interface between the tax officials and the taxpayers.

The initiatives being undertaken to make the tax administration non-adversarial and taxpayer friendly are:

(i) Punctuality : Officers are advised to maintain the appointed time as indicated in the communications regarding personal hearing/trade meetings and any other interaction with the taxpayers. It may also be ensured that adequate gap in the timings between two meetings be maintained so that there is no undue delay in the subsequent meeting.

Many officers derive pleasure in making people wait - even when their PAs tell them that somebody is waiting, they say, “let him wait”. The Board advises the officers to maintain the appointed time. Who will listen to Board's advice when serious instructions are flouted with impunity? You must teach them that the taxpayer is your boss not your servant.

(ii)   Prompt acknowledgement of all letters/complaints/references : It may be ensured that all references/communications received from the trade are acknowledged promptly. To this end, a centralised computerized system for receipt/dispatch of dak may be put in place so that status can also be monitored centrally.

Does the Board do this? And in some offices, they simply refuse to take certain letters!

(iii)  Priority processing of representations/communications received from taxpayers : It is the mission of CBEC to administer indirect taxes collection by creating a climate for voluntary compliance and by providing suitable guidance to tax payers. To this end, it is imperative that all communications received from the trade seeking clarifications are attended to expeditiously.

Who is competent to give guidance when the Board itself is the fundamental source for confusion? Some Commissioners are kind enough to give clarifications, but they are so carefully worded that there is no real clarification. One Commissioner extracted the Rule and told the assessee to follow that - as if the assessee had no access to the Rules!

(iv) Regular interaction with the trade-As per the Board's instructions, meetings of the Regional Advisory Committee/Public Grievance Committee/Permanent Trade Facilitation Committee/Open House etc., chaired by the Chief Commissioner/ Commissioner are to be held by the concerned Zones/Commissionerates on a regular basis. In this regard the Board desires that field officers persuade assessees to ensure participation at a higher level from Trade and Industry so that these meetings result in tangible outcomes.

If you remember once upon a time, these meetings were attended by the captains of business, but slowly they realised that it is a waste of time as nobody takes decisions and even the few decisions taken are against the assessees who highlight the problem. Even now some assessees attend these meetings only to be in the good books of the Chief Commissioner and Commissioners.

It is also informed that the Board is in the process of

(v) Simplifying the Registration process to obviate the need for physical visit of the taxpayers to the offices.

Even now, there is no need for physical visit of the taxpayers to the offices - but in practice, the moment you apply for a registration, you are treated as a thief or a goose full of golden eggs in its belly.

(vi)  Facilitating online credit of refunds and rebates to the taxpayers.

ACES is said to be fully capable of accepting and processing online refund claims. Why is it not done? I know a couple of assessees who are running around Excise offices for their genuine refunds. How many appeals are pending in the Tribunal in cases of ridiculous rejection of refund claims?

(vii)  Easing of Compliance verification norms.

God knows what benefits the assessees will have to suffer.

Board further informs that these initiatives are designed to bring about a more collaborative and solution-oriented indirect tax administration, in tandem with the international best practices.

While the CBEC's lofty goals are praiseworthy, what really will happen in the field does not inspire confidence. Nobody cares for the CBEC instructions in the field - to be fair to them they have equal contempt for the Statutes and the Courts. CBEC instructions are consistently disobeyed and what the helpless CBEC does is to issue another instruction that this blatant disobedience will be viewed seriously and everybody knows that it is an empty threat.

Because of all the simplifications and trade friendly measures, the CESTAT is bulging with over a lakh of pending cases. The Board should teach the officers a little law; a little respect for the law; a little obedience to the higher authorities and a little understanding that they are paid out of the taxes and taxpayers are as important to the country as the taxmen. It should start during probation at NACEN.

CBEC Instruction in F.No.296/165/2014-CX.9, Dated: September 30 2014

Definitive Anti Dumping Duty on Phenol

GOVERNMENT has imposed definitive anti dumping duty on Phenol [Chapter 29] originating in, or exported from Chinese Taipei and the United States of America and imported into India with effect from 16th May 2014. No, this is not retrospective - the provisional anti dumping duty was imposed by Notification No.23/2014-Customs (ADD), dated 16th May 2014 and would have been in force till 15th November 2014, but this time the Board was not caught napping. They imposed the final anti dumping duty more than a month before the provisional imposition expired. DDT wholeheartedly congratulates the Board.

Notification No. 43/2014-Customs (ADD). , Dated: September 30, 2014

FTP - Application Form for Served From India Scheme (SFIS) for Net Foreign Exchange earning in the year 2013 -14

DGFT has notified the Application Form ANF 3B1 for claiming benefit of Served From India Scheme (SFIS) for foreign exchange earning in the year 2013-14

DGFT Public Notice No.71 (RE 2013)/2009-14 . , Dated: September 30, 2014

  Board of Approval for SEZs Cancels Approvals

THE Board of Approval for Special Economic Zones (SEZ) headed by the Commerce Secretary has cancelled the approval/notification/co-developer status to 9 SEZ developers. The Board noted that the progress made by these developers/co-developers is not satisfactory.

This is subject to the Development Commissioner furnishing a certificate in the prescribed format certifying that the developer has not availed any tax/duty benefits under SEZ Act/Rules or has refunded any such benefits availed by it and subject to the State Govt. furnishing its no objection certificate to the proposal.

Tariff Value of Gold, Silver reduced - hike in oils

THE  Government has decreased the Tariff value of Gold from 400 USD to 396 USD per 10 gms. The tariff value of Silver has decreased from 609 to 575 USD per kilogram. Tariff Values of oils have been hiked except soyabean. Tariff value of Brass scrap has been decreased. However, the Tariff value of Poppy Seeds and areca nuts remain unchanged. The Tariff values as on 15.09.2014 and with effect from 30.09.2014  are as under:  

Notification No. 95/2014-Customs (NT), Dated: September 30, 2014 

64th Batch of IRS probationers Passing Out

RECENTLY NACEN had a glittering function for the passing out parade of the 64th batch of IRS probationers. The entire Board including the Chairperson was present. The former DG NACEN, Rashida Hussain was a distinguished guest.

Cadre Review promotions

THOUSANDS of Inspector rank officers in the CBEC have been promoted yesterday to the rank of Superintendent. Some of them are getting their first promotion after nineteen years experience in the Department.

Jurisprudentiol – Tuesday's cases

Central Excise

Appeals - Commissioner (Appeals) should not have expressed an opinion different from the order of the High Court - AP High Court

THIS case as noted by the High Court has an interesting background. This challenges the order, dated 18.06.2014 passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals-II), Hyderabad

The writ petitioner approached the High Court earlier seeking the relief to issue an appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus declaring as arbitrary, illegal, indiscrete, high handed, discriminatory and affront to doctrine of legitimate expectations as well as doctrine of equity, fairness & reasonableness…

In spite of the directions of the High Court, the Commissioner (Appeals) refused to decide the appeal. The Commissioner should not have expressed the opinion differently to that of the opinion given by the Court. When the High Court has in clear terms ruled that appeal lies, the Commissioner under Article 227 of the Constitution of India, had no option, but to proceed with the hearing of the appeal on merit. Perhaps, this aspect escaped the notice of Commissioner.

Income Tax

Whether, for the purpose of claiming Sec 10B benefits, it is necessary to obtain approval of STPI authority - YES: High Court

THE assessee company, incorporated in 2003, was engaged in software development. It had started business operations from January, 2004. The assessee prepared accounts for the period 19.12.2003 to 31.3.2005. For the first time, in AY 2005-06, the assessee claimed deduction u/s 10B and filed return of income declaring total income of Rs.38,430/-. The said return was processed u/s 143(1) and subsequently, the case was taken up for scrutiny. The AO while dealing with the claim of deduction u/s 10B, found that the assessee had applied for registration as 100% EOU to Software Technology Parks of India (STPI) and obtained approval only in May, 2005; hence, as per Circular No.1 of 2005 dated 06.01.2005 of the CBDT, the assessee was not eligible for the benefit u/s 10B. Accordingly, AO disallowed the entire claim of deduction u/s 10B on the ground that the assessee had obtained approval from STPI only in May, 2005, which was after the end of the previous year relevant to the AY 2005-06.

The issue before the Bench is - Whether, for the purpose of claiming Sec 10B benefits, it is necessary to obtain approval of the STPI authority. And the answer goes against the assessee.

Service Tax

Services received of development, maintenance and installation of software systems etc. are IT Software services & cannot be said to be covered under BAS as 'customer care service' - Appeal allowed: CESTAT

A Service Tax demand of Rs.5.39 crores was confirmed against the appellant by the CCE, Pune-I by classifying the services received by them under ‘Business Auxiliary Service'. The period of demand is from 18/04/2006 to 15/05/2008.

The first part of the demand of Rs.3.76 crores is in respect of IT services received by the appellant from M/s. SKF, Sweden and the second part of the demand consists of an amount of Rs.1.63 crores in respect of various expenditure incurred by the appellant towards foreign currency purchase, professional management fees, group management programmes, engineering software support services, etc.

See our Columns Tuesday for the judgements

It's going to be a long period of holidays:

2nd October - Thursday - Gandhi Jayanti

3rd October - Friday - Dussehra

6th October - Monday - Bakrid

Until Tuesday with more DDT

Have a nice time.

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