Coal Classification - Reference to Larger Bench Stays
18 08 2015
Tuesday
IT was only a few weeks ago that we reported that the reference to the Larger Bench was stayed by the Madras High Court.
A little background: (from DDT 2647)
When the then Hon'ble Finance Minister in his budget speech for 2012-13 said "Domestic producers of thermal power have been under stress because of high prices of coal. I propose to ease the situation by providing full exemption from basic customs duty and a concessional CVD of 1 per cent to Steam coal for a period of two years till March 31, 2014. Full exemption from basic duty is also being provided to the following fuels for power generation", he perhaps might not have realized that he is actually triggering the stress for the Industry in the next few months and "easing the situation" is never going to be a reality.
The premier investigating agencies started to believe that the thermal power producers of this country, both in public and private sector have been evading crores of Rupees of customs duty by irregularly taking benefit of the exemption announced by the Finance Minister by mis-classifying their coal as Steam coal while it merits classification as Bituminous coal. They started protecting the revenue for the Government.
When the matter reached Tribunal, the Bangalore Bench in Coastal Energy Pvt Ltd & Others Vs CCE - 2014-TIOL-1157-CESTAT-BANG upheld the demand on coal imported by classifying the same as Bituminous Coal and rejected the contention of the importers that it is classifiable as Steam Coal. In subsequent order in case of Maheswari Brothers Vs CCE - 2014-TIOL-2502-CESTAT-BANG, the Tribunal ordered pre-deposit of duty and interest.
The Ahmedabad Bench of the Tribunal had also ordered pre-deposit - 2014-TIOL-2492-CESTAT-AHM and even an appeal by one of the parties to the High Court was not successful. - 2014-TIOL-2204-HC-AHM-CUS .
When the issue came up before the Chennai Bench of the Tribunal disposing the stay applications filed by a large number of appellants, the Bench observed that there is a conflict between decisions in case of Tamil Nadu Newsprint & Papers Ltd. Vs Commissioner of Customs, Tuticorin - 2009-TIOL-1851-CESTAT-MAD and Maheswari Brothers - 2014-TIOL-2502-CESTAT-BANG and placed the matter before the President for constitution of Larger Bench. - (2014-TIOL-2503-CESTAT-MAD)
Now that Chennai Bench has referred the matter to the Larger Bench, should other appellants in the queue get waiver of pre-deposit?
Not exactly!
The Bangalore Bench of the CESTAT in a recent order, (2015-TIOL-1507-CESTAT-HYD) observed, "it can be seen that there is a High Court decision, two final orders of the Tribunal and the decisions of the Mumbai Bench ordering pre-deposit and also observations in paragraph 7.3 based on standard text which show residual moisture as well as inherent moisture are determined and only difference is in temperature and both are different.", and the tribunal ordered pre-deposit of 50% of the duty demanded.
This Bench was headed by the President of the Tribunal and he has a reference from a Divisional Bench to refer the matter to a Larger Bench. In spite of the matter being referred to the Larger Bench, Stay was not granted.
In the meanwhile, the Madras High Court stayed the Chennai CESTAT order referring the issue to the Larger Bench. The High Court observed, "We are inclined to accept the prima facie case of the appellant that there is no need for the Tribunal to refer the matter to the Larger Bench in the light of the two decisions referred to by the Tribunal. Hence, there will be an order of interim stay of reference to the Larger Bench." (2015-TIOL-1659-HC-MAD-CUS)
Can an order referring an issue to Larger Bench be appealed against in High Court?
THE Madras High Court considered this issue in the above appeal.
The High Court noted that as per Section 30 of the Customs Act, "An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal …"
It is clear that unless a person is aggrieved by an order of the Tribunal, an appeal cannot be maintained. A reference made by one Bench of a Tribunal to a Larger Bench, on the ground that two Benches of coordinate jurisdiction had come to different conclusions on the same issue, is not a decision, on which one or the other party can be stated to be aggrieved.
So, the High Court held that no appeal is maintainable as against a mere reference of certain issues by a Bench of the Customs, Excise and Service Tax Appellate Tribunal, to a Larger Bench.
But in this case, the Revenue had appealed against waiver of pre-deposit also. While no appeal is maintainable against an order referring a case to a Larger Bench, appeal is maintainable against an order waiving pre-deposit.
The High Court dismissed the Revenue appeal, but directed the Tribunal to constitute a Larger Bench at the earliest and dispose of the appeals within a period of two months from the date of receipt of a copy of its order.
Now, the issues are getting slightly more complicated.
Can the President reject the request of the Division Bench to refer the matter to a Larger Bench? Sitting in another Bench he has already opined (though prima facie ) that there was no conflict to refer to a Larger Bench. Technically he can ask the Division Bench to decide the issue, but the High Court has asked him to constitute the Larger Bench and the case is to be decided within two months!
We bring you this High Court order today. Please see Breaking News.
Anti Dumping Duty on Diketopyrrolo Pyrrole Pigment Red
GOVERNMENT has imposed anti dumping duty on Diketopyrrolo Pyrrole Pigment Red 254 (DPP Red 254), falling under heading 3204 or 3206 of the Customs Tariff, originating in, or exported from the People's Republic of China and Switzerland.
This will be effective for a period of five years from 17.08.2015.
This is a chemical used in the manufacture of paint.
Notification No. 41/2015-Customs (ADD), Dated: August 17, 2015
Income Tax - Exemption to Universities - CBDT Clarifications
AS per Section 10(23C)(vi), income of any university or other educational institutions, existing solely for educational purposes and not for purposes of profit, shall be exempt from tax if such entities are approved by the prescribed authorities.
The approval is not required in cases of university or educational institutions wholly or substantially financed by the Government [sub-clause (iiiab)] or if their aggregate annual receipts do not exceedRs.1 Crore [sub-clause (iiiad) r.w. rule 2BC].
While granting approval to entities covered under sub-clause (vi), the prescribed authority has to ensure that the applicant institution must exist "solely for educational purposes and not for purposes of profit".
The CBDT has issued clarifications on this issue:
1. At the time of granting approval u/s 10(23C)(vi), the prescribed authority is to be satisfied that the institution existed during the relevant year solely for educational purposes and not for profit. Once the prescribed authority is satisfied about fulfillment of this criteria i.e. the threshold pre-condition of actual existence of an educational institution under section 10(23C)(vi), it would not be justifiable, in denying approval on other grounds, especially where the compliance depends on events that have not taken place on the date on which the application for grant of approval has been made.
2. Obtaining prior registration before granting approval u/s 10(23C) cannot be insisted upon.
3. Mere generation of surplus by educational institution from year to year cannot be a basis for rejection of application u/s 10(23C)(vi) if it is used for educational purposes unless the accumulation is contrary to the manner prescribed under law.
4. Collection of small and reasonable amounts under different heads of fee, which are essentially in the nature of fee connected with imparting education and do not violate any Central or State regulation does not, in general, represent a profit making activity. Hence, there is no justification for treating the charging of small amounts under different heads of fee as profit making activity unless the amount in the nature of 'capitation fee' is charged directly or indirectly.
5. There is no provision under the Act which calls for denial of exemption merely on account of appointment or removal of trustees.
CBDT Circular No. 14/2015., Dated August 17, 2015
RBI transfers Rs. 65,900 Crores to Government
LAST week almost all newspapers reported that RBI has transferred surplus amounting to Rs. 65,896 crore to the Government of India.
Did RBI suddenly make a surplus and did the Government get an unexpected windfall?
This is an annual feature.
In the Union Budget 2015-16, under the Non-Tax Revenue, Dividend/Surplus of Reserve Bank of India, Nationalised Banks & Financial Institutions, an amount of Rs. 64,477 crore was shown as receipts. Similar receipts were provided for in the previous years.
So, this year the RBI has given the Finance Minister more than what he has budgeted for.
But where does RBI get the money and more so surplus from?
As per the Annual report for 2013-14, RBI's income was Rs.64,616.97 crore from Interest, Discount, Exchange, Commission, etc. Of this, the RBI spent 11,933.92 crores leaving about 53,000 crores surplus which was paid to the Government.
As per Section 47 of the RBI Act,
Allocation of surplus profits.: After making provision for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds and for all other matters for which provision is to be made by or under this Act or which] are usually provided for by bankers, the balance of the profits shall be paid to the Central Government.
RBI generates the revenue primarily from its lending and borrowing activities. When it borrows it usually intervenes in the market to mop up excess liquidity and the ROI is below the market rates. When it lends it lends to inject liquidity when the market struggles and ROI is above the market rates. So it has this twin advantage as a lender of last resort of dictating the ROI. Thus, it always makes money.
Other sources are administering the huge foreign exchange resources by deploying them in overseas markets and generating interest income, exchange difference earned, levies, penalties etc.
Until Tomorrow with more DDT
Have a nice day.
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