TIOL-DDT 2889
15 07 2016
Friday

JUSTICE Dr. Satish Chandra takes over as the new President of CESTAT today. The justice is a very courteous person. Yesterday when I called him, he couldn't take the call, but within a few minutes, he called me back. We don't get this courtesy from everyone. Just three days ago, I called up a senior Revenue Officer; his secretary told me that he was talking on another line and he said he would call me back. I am still waiting for that call.

Justice Satish Chandra brings to the CESTAT varied experience and abundant erudition.

Dr. Satish Chandra is a gold medalist in his LL.M and has an LL.D. He was a professor in several universities and Institutions.

He worked as Director in the Law Commission of India before joining the Income Tax Appellate Tribunal as a Judicial Member. He has been a Judge of the Allahabad High Court from August 2008 to May 2015. He was also a Judge of the High Court of Zanzibar and a Constitutional Advisor to the Government of Zanzibar and a Legal Advisor to the Sultanate of Oman.

Justice Satish Chandra has authored 15 books and several research papers and articles.

We wish the versatile scholar judge all the best in CESTAT.

Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, Applicable to Service Tax

GOVERNMENT has amended the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2016 to make the rules apply mutatis mutandis to a service provider.

These rules apply to an importer, being a manufacturer, who intends to avail the benefit of an exemption notification issued under sub-section (1) of section 25 of the Customs Act, 1962 and where the benefit of such exemption is dependent upon the use of imported goods covered by that notification for the manufacture of any excisable commodity.,

Now, they are made applicable to Service tax and any reference to the expressions manufacture, manufacturer, excise duty and factory in these rules shall be construed as service, service provider, service tax and registered premises respectively of a service provider.

The amending notification also makes a couple of other amendments -

+ In rule 5, in sub-rule (2) after the word, "surety", the words, "or security" are inserted.  Actually, these words existed when the rules were originally framed by notification 32/2016-Cus(NT) dated 01.03.2016 but for some mysterious reasons were omitted by Notification 39/2016-Cus(NT) dated 15.03.2016.  By the current amendment, they are back.

+ In rule 7, for the word, "three", wherever it occurs, the word, "six" shall be substituted.  This amendment increases the time limit available to re-export or clear the unutilised or defective imported goods with permission, of course. Three months from the date of import was apparently too short a time, so it is increased to six months.

Notification No. 100/2016-Cus (NT)., Dated: July 14, 2016

Income Tax - Refunds Up to Rs. 5000 in Non-CASS Cases - CBDT directs Expeditious Disposal

WITH a view to provide relief to small taxpayers, CBDT has decided that refunds up to Rs.5,000/-, as also refunds in cases where arrear demand is up to Rs.5,000/-, in non-CASS cases, may be issued expeditiously without any adjustment of outstanding demand.

The refund pendency data has revealed that there are a large number of pending claims of refunds upto Rs. 5,000/- involving non-CASS cases for Assessment Years 2013-14, 2014-15 and 2015-16.

Board wants the Assessing Officers to issue refunds expeditiously in such cases without making any adjustment of arrear demands under Section 245. Similarly, the non-CASS cases for these assessment years where refund claim is more than Rs.5,000/- but the outstanding demand is Rs.5,000/- or less, may also be processed for expeditious issue of refund without making any adjustment under Section 245.

Board finds that there are several refund claims in respect of which notices have been issued proposing adjustment of outstanding demand under Section 245, but no response has been received from the taxpayer even after expiry of 60 days, as against the stipulated period of 30 days.

Board directs that such cases be treated as though the taxpayer had "no-objection" to the proposed adjustment and accordingly returns may be processed expeditiously and balance refund be issued to the taxpayer, if any, after adjustment of outstanding demand along with applicable interest.

Board wants this exercise to be completed and a compliance report sent to the Board by 29th July, 2016

CASS = Computer Assisted Scrutiny Selection

CBDT Office Memorandum in F. No.312/67/2016-OT., Dated: July 14, 2016

No cash transactions above Rs. 3 lakhs and no cash holding above Rs. 10 Lakh - SIT

THE Special Investigation Team observed, "It is a known fact that for purchasing articles of Rs.20,000/- or more, unaccounted / black money are used without bothering for tax deduction or penalty leviable under Section 271D or Section 271E of the I.T. Act. Question of levying penalty would arise only when such transaction comes to the knowledge of the I.T. Department, because it is difficult to find out or locate the same by the I.T. Department in a country where thousands of such transactions take place everyday. As such, these Sections have failed to control or have any effect on transactions or circulation of unaccounted money."

The SIT in its latest report to the Supreme Court suggested that there should be a positive provision under the I.T. Act that any transaction involving more than Rs.3,00,000/- (Rupees Three Lacs) shall be invalid & illegal and would be a punishable offence, if amount is not paid by account payee cheque or account payee bank draft or use of electronic clearing system through a bank account. Sit adds, “Limits on cash transactions would discourage white collared criminals or hardened criminals from money laundering and dealing in unaccounted / black money. This would also discourage corruption to some extent. May be that corrupt persons would find out ways and means by accepting the gold or ornaments or constructed premises. However, it would prevent to a large extent funding of terrorism and organized crimes and transferring unaccounted money from one destination to other through Angadias or by any other method."

The SIT further observed, “For successful implementation of restricting accounted/unaccounted cash transaction, it is absolutely necessary to have reasonable restriction in holding cash and to fix the limit of cash holdings. It is known fact that a number of persons are holding cash of lacs of rupees and such holding is undoubtedly unaccounted.

In our view, it would be just and reasonable to have a total ban of cash transactions above Rs.3,00,000/- (Rupees Three Lacs). There should be specific provision in the Act that such transactions shall be illegal, invalid and punishable under the law."

The SIT further suggests:

1. If there is cash withdrawal of more than Rs.3,00,000/- (Rupees Three Lacs) from any bank, then that bank should consider it as a suspicious activity and should report it to Financial Intelligence Unit (FIU) & the concerned Income-tax Department.

2. The aforesaid limitation on the cash transaction can succeed only if there is limitation for cash holding. Maximum limit may be fixed between Rs.10 to 15 lacs. In any case, if any person or industry requires holding of more cash, it may obtain necessary permission from the Commissioner of Income-tax of the area.

Limitation on cash holding would have its deterrent effect. Persons holding more unaccounted money would like to disclose the unaccounted money as per the “Income Declaration Scheme (IDS)" which begins from 01st June, 2016 for such disclosure.

Suggestions on the SIT recommendations can be sent to sit_suggestions@nic.in

Will Babus stop taking bribes in cash and will netas stop distributing cash to buy votes?

Anti Dumping Duty on Viscose Filament Yarn -Explanation Added

ANTI  Dumping Duty on Viscose Filament Yarn, falling under Chapter 54, was imposed by Notification No. 45/2006-Cus dated 24.05.2006, and again by Notification No.23/2012-Customs (ADD), dated the 4th May, 2012.

Now an explanation is added to the notification:

“Embroidered yarn or thread is a yarn that is manufactured or hand spun specifically for embroidery and other forms of needlework. It is a finished product wound on support which is ready to use for embroidery applications. Embroidery Yarn is produced by the process of dying, reeling, twisting, hanking or core winding, finished product quality checking, grading and packing of raw yarn".

Notification No. 32/2016-Cus (ADD)., Dated: July 14, 2016

Anti Dumping Duty on Phenol - Names of Exporters Changed

ANTI  Dumping Duty was imposed on phenol vide Notification No. 6/2016-Cus (ADD) dated 08.03.2016. Now they have made certain changes in the names of exporters.

Notification No. 33/2016-Cus (ADD)., Dated: July 14, 2016

Anti Dumping Duty on Plain Medium Density FibreBoard

GOVERNMENT has imposed anti dumping duty on Plain Medium Density Fibre Board (MDF) originating in or exported from Indonesia and Vietnam

Notification No. 34/2016-Cus (ADD)., Dated: July 14, 2016

Service Tax Appeals - A Bangalore Initiative

WITH a view to provide efficient and transparent taxpayer services to the appellants/taxpayers, an updated status of all appeals including pending appeals, appeals decided and Personal Hearing Schedules has been hosted in the portal www.bangaloreservicetax.gov.in. A feedback facility along with a dedicated e mail address has also been provided for the benefit of the taxpayers and appellants to raise any queries or seek clarifications on status of their pending appeals.

A separate link has been provided to the appellants and taxpayers to find out their jurisdictions to which they have been mapped due to changes in jurisdiction consequent to the Cadre Restructuring in the Department.

An updated status of all appeals including pending appeals, appeals decided and Personal Hearing Schedules is hosted on the portal. The assessee need not visit the Office of the Commissioner (Appeals). The required data is available at his fingertips. The updated data helps Commissioner (Appeals) to assess in real-time basis workload in his section.

CBEC Transfers Commissioners and Principal Commissioners

CBEC has finally done it, ending days of agonizing wait for several senior officers. CBEC has transferred 15 Principal Commissioners and 68 Commissioners. It is a great feat indeed and the Board could beat the post by a whole month in advance this year. Last year they issued the transfer order on 20th August.

The transfer order was certainly not the best guarded secret. The other day I met several officers of the department in a meeting organized by a Trade Association, and many of these officers told me about the transfer - who is going where; and they were not wild guesses; from the transfer list today, I find they were pretty accurate.

Commissioners and Principal Commissioners hold the same rank positions, but now some of the Principal Commissioners are given additional charge of the post of Chief Commissioners. So some Principal Commissioners will work under Principal Commissioners who are given additional charge of Chief Commissioner. They also have a super cadre Commissioner called Principal Chief Commissioner. Now they seem to have more posts going around than the number of eligible officers available to fill those posts.

Now that they are seriously considering GST as a possible reality, they should have a look at the State VAT departments which are headed by a single Commissioner for the whole State.

With too many Commissioners to serve the assessees, doing business will be real tough for the trade.

Until Monday with more DDT

Have a nice Weekend.

Mail your comments to vijaywrite@tiol.in