TIOL-DDT 2516
13 01 2015
Tuesday

A CBEC Circular issued yesterday states:

Simplification of Customs procedures for enhanced ease of doing business and trade facilitation is the top priority of the Government. One of the identified areas for such simplification is reduction in the number of mandatory documents required by Customs for import and export of goods.

In one such reduction, Board has decided to merge the Commercial Invoice and Packing List.

Board notes that as per the Customs procedures for both import and export, an importer/exporter is required to submit a commercial invoice and packing list along with the Customs declaration form viz. Bill of Entry/Shipping Bill. Both commercial invoice and packing list are critical for Customs purposes as the former evidences the value of the import/export goods while the latter facilitates examination of goods for ascertaining correctness of duty and quantity. However, there are many identical data fields in a commercial invoice and packing list. Therefore, an exercise was undertaken to explore the feasibility whether these documents can be merged into one document, which would have the advantage of reducing the total number of documents to be submitted to Customs with resultant benefit to trade. In this regard, it is seen that the following data fields / information are invariably contained in a packing list (other than the common data fields / details of commercial invoice):

1. Description of Goods;

2. Marks and Numbers;

3. Quantity;

4. Gross Weight;

5. Net Weight;

6. Number of Packages;

7. Types of Packages (such as pallet, box, crates, drums etc.).

Board has decided that in case an importer/exporter submits a commercial invoice cum packing list that contains the above mentioned data fields/information in addition to the details in a commercial invoice, a separate packing list should not be insisted upon by Customs.

However, Board clarifies that the option should be given to the importer/exporter to do so. In other words, for Customs purposes a commercial invoice cum packing list (with details of marks and numbers as mentioned above) would suffice but if importer/exporter desires to give a separate packing list for some reason, the same would also be accepted, as at present.

Board wants Chief Commissioners to

1. Ensure that above guidelines are complied with scrupulously by the field formations.

2. Monitor compliance thereof at their level.

3. Give wide publicity to trade and industry stakeholders to sensitize them about the guidelines.

CBEC Circular No.01/2015-CUS, Dated: January 12, 2015

Customs - Re-assessment of Self assessed B/E or finally assessed B/E

WHAT do you do when you forget to claim an exemption notification in a Bill of Entry filed by you and self assessed, duty paid and goods cleared? How can you rectify this situation? The Department may not agree to a re-assessment and you cannot go in appeal against your own assessment.

In a recent meeting of the Trade Facilitation Committee in JN Customs, a Customs Broker raised an issue that after introduction of Self Assessment, the Appellate Commissioner holds that Appeal can be entertained only if Re-assessment or order of assessment is issued by the Department whereas the Appraising Group takes a view that assessment done, whether self or not, is an assessment order as was done prior to the introduction of Self Assessment. As of now, in most cases of this nature Commissioner (Appeal) is remanding the matter.

He informed Commissioner that re-assessment/amendment u/s149 of the Customs Act is not allowed in cases where importer by mistake forgot to claim notification benefit for which he was entitled.

Commissioner informed the members that JNCH has already taken up this issue with Board.

Arbitrary Loading in case of RMS facilitated B/Es after recall

IN the same meeting it was submitted that:

1. RMS Facilitated Bills of Entry are recalled by Groups and declared value is enhanced/loaded arbitrarily. This causes delay in clearance.

Solution : Commissioner asked members to discuss specific cases with concerned Addl./Jt. Commissioner.

2. Atleast there should be no loading in case of import from Joint Venture company.

Solution : Commissioner asked for a specific case so that matter can be examined.

There was another question whether the valuation Benchmark is followed at other Custom Houses. Commissioner informed that the valuation Benchmarks are shared with RMD and DGoV and other major Custom House also for circulation. She asked to bring to her notice instances, where other Custom House is assessing at lower value so that the matter can be taken up with that concerned Custom House.

Delay of One day in filing appeal - Commissioner (Appeals) rejects appeal - CESTAT Restores

COMMISSIONERS are learned, respectable, intelligent senior officers of the department ever concerned with collecting more and more revenue without tarnishing the image of the department.

This is a case where a strict law following efficient Commissioner dismissed an appeal because it was filed ONE DAY late, but within his condonable limit.

The wise Commissioner passed a masterly order to dismiss the appeal.

He HELD:

1. The voluminous submissions of the appellant wherein he has dealt with various service tax issues in detail and skillfully interpreted the laws go on to prove that the appellant has access to good legal assistance regarding tax matters.

2. His contention of being confused regarding the filing of the appeal due to shifting of the Commissioner (Appeals)'s office from Mangalore to Mysore is baseless, in this regard. His claim is far-fetched and not reasonable in the given circumstances as I find that the appellant has rightly addressed the letter to the Mysore address which thereby shows that there was no confusion regarding the shifting of the office.

3. I there by find no sufficient cause being made out preventing the appellant from filing the appeal in the prescribed time of two months. As such, I find that the delay in filing the appeal does not merit any condonation and need to be rejected on this ground alone.

The Tribunal observed,

The observations are self explanatory. In our opinion, the Commissioner (Appeals) should have condoned the delay under the circumstances and considered the stay application and appeal on merits in accordance with law. Accordingly, we condone the delay of one day in filing the appeal before the Commissioner and remand the matter to the Commissioner (Appeals) for fresh decision after considering the stay application and appeal filed by the appellant.

The Commissioner was perfectly legal in dismissing the appeal because he did not want to condone a day' s delay. But what did he do for the Government which pays him a decent salary? He has caused unnecessary expenditure for the assessee and the Government. He has added to the burden of the Tribunal which is not able to sustain the huge pendency of appeals.

And finally what did he achieve? A big nothing - he knew pretty well that any appellate court would have condoned that one day ' s delay and the case would come back. A Revenue officer indeed!

Please see 2015-TIOL-99-CESTAT-BANG

Jurisprudentiol-Wednesday's cases

FTP

Transfer of SFIS duty credit scrips among group companies – Interpretation of 'Group Company ' under para 9.28 of the FTP - Director General of Foreign Trade cannot introduce something which is not envisaged in FTP and impose an additional restriction: High Court

THE petitioner is 100% subsidiary of GMR Hyderabad International Airport Limited (GHIAL). Petitioner is one of the group companies of GHIAL. In recognition of exports carried out by the petitioner, competent authority issued Duty Credit scrips which can be encashed while importing goods specified in the Served From India Scheme. These scrips are transferable within the group company. Therefore, petitioner requested the Director General of Foreign Trade to permit utilisation of scrips by GHIAL. Petitioner submitted a representation dated 20.12.2013 requesting to grant such permission. In response, by letter dated 12.2.2014, the petitioner was asked to furnish documentary evidence as per para 9.28 of the Foreign Trade Policy for the years 2009-2014 duly attested by Registrar of Companies to process the case further. On application, the Registrar of Companies, informed that no such certificate can be issued. Therefore, a certificate from M/s. Brahmayya & Company, Chartered Accountant of GHIAL was obtained and submitted in lieu of requirement of certificate of attestation from the Registrar of Companies. By proceedings dated 22.7.2014, petitioner was informed that request for transferability of Duty Credit scrips under the Served From India Scheme to GHIAL was rejected on the ground that petitioner is not holding more than 26 % of the shares in GHIAL, which is a mandatory requirement as per policy.

Income Tax

Whether inter-corporate deposits can be considered as part of loans and advances and same attracts provisions of Sec 2(22)(e) - NO: ITAT

THE assessee had taken inter corporate deposits from its subsidiary company Ernst & Young Merchant Banking Services Pvt. Ltd. (EYMBSPL). The AO treated these deposits as loans and advances and held them as deemed dividend u/s 2(22)(e) in the hands of the assessee received from its subsidiary. While the assessee contested that no income on account of deemed dividend was attracted in the instant case since there is a clear distinction between the inter-corporate deposits vis- à -vis loan/advance, however, the AO made the addition. On appeal, the CIT(A) deleted the addition. The Revenue filed this appeal.The counsel of the assessee argued that there is a clear distinction between deposits vis- à -vis loans or advances. He further submitted that the provisions of section 2(22)(e) of the Act is a deeming fiction, and such a deeming fiction should not be given a wider meaning than what it purports to do. The Counsel relied on the case law of Special Bench of this Tribunal in the case of Gujarat Gas Financial Services Ltd. Vs. ACIT wherein it was held that interest on inter corporate deposit and interest on loans or advances are different.

The issues before the Bench are - Whether inter-corporate deposits can be considered as a part of loans and advances and Whether section 2(22)(e) can be invoked when an assessee involved in financing business has taken such deposits from its subsidiary company. And the verdict goes against the Revenue.

Service Tax

Services to members of club/co-operative housing society is not a service by one to another and, therefore, is not chargeable to service tax – appeals allowed: CESTAT

M/s Matunga Gymkhana runs a club for their members. The activities carried out by them relate to Sports, Yoga etc. According to them, their objective is charitable as per the constitution of the Gymkhana. They are a Public Charitable Trust registered under the Mumbai Public Trust Act. Their objective is for promotion of physical well-being and most of the sports facilities are utilized by the members and their children. According to them, Section 65 (25a) of the Finance Act, 1994 states that club or association means any body or body of persons providing services facilities for a subscription but does not include any body engaged in activities having objectives which are in the nature of public service and are of charitable, religious or political nature.

Revenue was of the view that the activities are not charitable in nature as they are chargeable and neither are they in the nature of public service. According to Revenue, the appellant does not come within the purview of the exclusion clause under Section 65(25a) ibid. Therefore, the demand of service tax against the appellant was confirmed, appropriate interest ordered and penalties imposed under Sections 76, 77 & 78 of the Act.

See our Columns Tomorrow for the judgements

Until Tomorrow with more DDT

Have a nice day.

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