TIOL-DDT 2834
28 04 2016
Thursday

IN the context of increasing number of offences involving various modus-operandi such as fraud and duty evasion by bogus IEC holders etc., an obligation has been cast on the Authorized Courier to verify the antecedents, identity of his client and the functioning of his client in the declared address by using reliable, independent, authentic documents, data or information. It would be obligatory for the client/ customer to furnish to the Authorised Courier any two of the listed documents. However, there is no requirement for the client/ customer to furnish a photograph separately to the Authorised Courier.

Express Industry Council of India has represented that only one identification/ document instead of minimum two documents should be collected from importer/exporter at the time of delivery/pick up of shipment.

In order to redress the genuine difficulty, CBEC in Circular No. 07/2015 dated 12.02.2015 communicated that two documents, one for 'proof of identity' and other for 'proof of address' are required for KYC verification. This is in line with the KYC norms stipulated by RBI. However, in case of individuals, if any one document listed in the Board Circular No 09/2010-Cus dated 08.04.2010 contains both 'proof of identity' and 'proof of addresses', the same shall suffice for the purpose of KYC verification.

Express Industry Council has again represented that in case of import consignments meant for an individual, where two documents, one for proof of identity and other for proof of address are required for KYC verification. Many a time, individuals possess proof of identity in the form of prescribed documents but the address mentioned in the document is not the address where the individual is staying. Individuals often find it difficult to produce present/current proof of address.

A responsive Board has again reacted positively and instructs that:

1. in cases where the proof of present address is not available with the individual, the proof of identity collected at the time of delivery along with the address recorded for the delivery purpose by the courier companies would suffice for KYC verification.

2. The courier company would keep a record of the address where the goods are delivered and the same would be treated as proof of address of the individual.

3. However, courier companies must show due diligence in maintaining the records of proof of address.

4. The above dispensation for proof of address would be available only in respect of individuals for import of documents, gifts/samples/low value dutiable consignments upto the maximum CIF value limit of Rs. 50000/-.

CBEC Circular No. 13/2016-Cus., Dated: April 26, 2016

Income Tax -Penalty for cash dealings in excess of Rs.20,000 - Limitation - CBDT Clarification

AS per Section 269SS of the Income Tax Act, "No person shall take or accept from any other person, any loan or deposit or any specified sum, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, if the amount is twenty thousand rupees or more".

As per Section 271D, If a person takes or accepts any loan or deposit or specified sum in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified sum so taken or accepted.

As per Section 275(1), No order imposing a penalty under this Chapter shall be passed -

(a) in a case where the relevant assessment or other order is the subject-matter of an appeal to the Commissioner (Appeals) under section 246 or section 246A or an appeal to the Appellate Tribunal under section 253, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, whichever period expires later :

xxxxx

(c) in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later .

Now the question is in case where loan is accepted in cash in excess of Rs. 20,000/- whether the limitation to demand penalty is to be under Section 275(1)(a) or 275(1)(c).

The Delhi High Court in the case of  Commissioner of Income Tax vs. Worldwide Township Projects Ltd - 2014-TIOL-890-HC-DEL-IT, considered the issue and observed that, "It is well settled that a penalty under this provision is independent of the assessment. The action inviting imposition of penalty is granting of loans above the prescribed limit otherwise than through banking channels and as such infringement of Section 269SS of the Act is not related to the income that may be assessed or finally adjudicated. In this view Section 275(1)(a) of the Act would not be applicable and the provisions of Section 275(1)(c) would be attracted.”

The CBDT has accepted this judgement. Therefore, CBDT communicates to the field that it is now a settled position that that the period of limitation of penalty proceedings under section 271D and 271E of the Act is governed by the provisions of section 275(1)(c) of the Act. Therefore, the limitation period for the imposition of penalty under these provisions would be the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later. The limitation period is not dependent on the pendency of appeal against the assessment or other order referred to in section 275(1)(a) of the Act. Accordingly, no appeals may henceforth be filed on this ground by the officers of the Department and appeals already filed, if any, on this issue before various Courts/Tribunals may not be pressed upon.

(Section 271E deals with penalty proceedings for repayment of loans by cash in excess of Rs.20,000/.)

CBDT Circular No. 10/2016, Dated: April 26, 2016

Customs - Hazardous Items lying in Mumbai Port for disposal

IN a recent meeting of the Customs Clearance Facilitation Committee (CCFC) of the Mumbai Customs, it was pointed out that there are many hazardous items lying for disposal. CONCOR informed that M/s. Maersk Lines vide their letter dated10.03.2016 requested Customs for destruction of longstanding import consignments using biodegration process, which is approved by JNPT Customs/BARC. Principal Commissioner (Gen) informed that a meeting would be convened in this regard and they would be able to resolve the issue soon. The Chief Commissioner directed that immediate steps should be taken to dispose of the hazardous goods, after the meeting.

Please also see Customs - Draft Disposal Manual 2013

Customs - Delay in taking out Cargo - Excessive Checking by CISF

IN the same meeting, it was informed by Trade that there is a considerable delay for taking the import delivery of loaded vehicles out of port premises due to excessive and slow checking by CISF.The issue needs to be attended by the Authority on top priority in order to facilitate timely clearance. There is delay of 2 to 4 hours for the vehicle to come out of the port premises.

The Dy. Chairman of the Port Trust informed that the matter is under discussion with CISF to avoid any double checking. And also steps have been taken to check documents of outgoing cargo/vehicles at about 100 Mtrs. inside proposed gate.

PMLA - Whether summons issued to petitioner under Section 50 of PMLA is violative of Constitutional protection under Article 20(3) - At stage of investigation, Petitioner cannot be called accused - Petition dismissed - HC

THE petitioner had challenged the summons issued to him by the Enforcement Directorate. The High Court held that it would be clear that when an ECIR is lodged with the Directorate of Enforcement there is no Magisterial intervention unlike an FIR and mere registration of ECIR against the suspects of offence under Section 3 of PMLA cannot go to mean that such persons are accused under Section 3 of PMLA. Consequently, the protection against testimonial compulsion as under Cr.P.C as well as under Article 20(3) of the Constitution of India, would not be available, as claimed by the petitioners.

The petitioner was represented by P. Chidambaram.

For further details, please see Breaking News.

Until Tomorrow with more DDT

Have a nice day.

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