TIOL-DDT 2908
11 08 2016
Thursday

BY Notification No. 32/2015-CE dated 04.06.2015, Government had exempted  Ethanol produced from molasses generated from cane crushed in the sugar season 2015-16 i.e. 1st October, 2015 onwards, for supply to the public sector oil marketing companies, namely, Indian Oil Corporation Ltd., Hindustan Petroleum Corporation Ltd. or Bharat Petroleum Corporation Ltd., for the purposes of blending with petrol.

If this ethanol is exempted, it would attract the vice of Rule 6 of the Cenvat Credit Rules and the complicated procedure has to be followed.

The Government discovered this reality four months later and by Notification No. 21/2015-CE(NT), dated 07.10.2015, amended the Cenvat Credit Rules to add

Ethanol produced from molasses generated from cane crushed in the sugar season 2015-16 i.e. 1st October, 2015 onwards, for supply to the public sector oil marketing companies, namely, Indian Oil Corporation Ltd., Hindustan Petroleum Corporation Ltd. or Bharat Petroleum Corporation Ltd., for the purposes of blending with petrol, in terms of the provisions of S.No.40A of the Table in notification No.12/2012-Central Excise, dated the 17th March, 2012, number G.S.R. 163(E), dated that 17th March, 2012.

To the excluded list of Rule 6(6).

Now, the exemption to ethanol is withdrawn and consequently the reference to that in Rule 6(6) is deleted.

Also please see Duty on Ethanol - a discriminatory approach & DDT 2700.

Notification No. 30/2016-CE., Dated: August 10 2016

Notification No. 41/2016-CENT., Dated August 10 2016

General Conditions for Work from Home by employees of SEZ units

THE Department of Commerce has laid down the General Conditions for Work from Home by employees of SEZ units:

a) The Person should be a regular employee of the SEZ unit and should be authorized by the SEZ unit {issued Identity cards as per Rule 70(2) of SEZ Rules, 2006} to undertake the work pertaining to that unit.

b) The work to be performed by the employee permitted to work from home should be as per the services approved for the SEZ unit, and the work is related to a project of the SEZ unit.

c) For the purpose of work from home, SEZ unit should provide laptop/desktop and secured connectivity (for e.g VPN, VDI etc) to establish a connection between the employee and work related to the project of the SEZ unit.

d) Ensure export revenue of the resultant products/services should be accounted for by the SEZ unit to which the employee is tagged and at no given point should work from home involve the export of services from outside the SEZ unit.

e) Once the employee ceases to be part of the project of SEZ unit, the employee shall be untagged from the respective SEZ unit and the unit shall surrender the I-Card (form-K) to Specified Officer as per rule 70 (2) of SEZ Rules 2006.

Dept. of Commerce SEZ Division Instruction No.85, Dated: August 02, 2016

Registration-cum-Membership Certificate Mandatory for SEZ

GOVERNMENT has amended the SEZ Rules to stipulate that the Unit or the developer including co-developer shall obtain a Registration-cum-Membership Certificate for availing exemptions, drawbacks and concessions.

"Registration-cum-Membership Certificate" means the membership certificate issued by Export Promotion Council for Export Oriented Units and Special Economic Zones.".

Dept. of Commerce Notification in F. No. C-2/2/2016-SEZ, Dated: August 05, 2016

Audit, Adjudication in SEZ

GOVERNMENT has amended the SEZ Rules to stipulate that:

- Audit in Special Economic Zones for indirect taxes - All the authorised operations under Special Economic Zones Act, 2005 and transactions relating thereto in Special Economic Zones and Units in the Special Economic Zones shall be audited by the Customs officers from a panel drawn by the Jurisdictional Development Commissioner in consultation with the Jurisdictional Chief Commissioner of Customs and Central Excise.

- Refund, Demand, Adjudication, Review and Appeal with regard to matters relating to authorised operations under Special Economic Zones Act, 2005, transactions, and goods and services related thereto, shall be made by the Jurisdictional Customs and Central Excise Authorities in accordance with the relevant provisions contained in the Customs Act, 1962, the Central Excise Act, 1944, and the Finance Act, 1994 and the rules made there under or the notifications issued there under.

Dept. of Commerce Notification in F.No.D.6/40/2012-SEZ, Dated: August 05, 2016

Extra Territorial Commissioners of Customs

IT has come to notice of the Board that some Chief Commissioners/Directors General are assigning additional charge of posts of Commissioner under their jurisdiction to the Commissioner working in other Zones/Directorates without approval of the Board.

The Board reminds that "The Chief Commissioners/Directors General have been empowered to assign additional charge in the grade of Commissioner of Customs and Central Excise within their respective Zones. They are not authorised to assign additional charge of the post of Commissioner under their jurisdiction to any Commissioner posted in any other Zone/Directorate. The order regarding assigning of additional charge in the grade of Commissioner to the Commissioner working outside the Zone are issued only by the Board with the approval of Chairman, Central Board of Excise and Customs."

How sad the learned Chief Commissioners do not know these elementary principles!

Board requests that that if there is any need to assign the charge of a post of Commissioner to a Commissioner posted outside the Zone/Directorate, a proposal in this regard, with justification, may be sent by the concerned Chief Commissioner/Director General to the Board for processing further.

CBEC F.No.A-22011/11/2016-Ad.II., Dated: August 08 2016

Duty Free Shops - Board Issues FAQ

CBEC has issued 'Frequently asked questions' and their answers on Duty Free Shops & Customs bonded warehouses:

Yes. Any person who is running a Duty Free Shop should apply for a licence under Section 58A.The licensed premises is to be used for storage of the bonded goods, before they are removed to a Duty Free Shop.

There is no restriction on the items that can be stored in a special warehouse under Section 58A as long as the goods are removed to a DFS under physical escort by the Bond officer.

Yes. You will have to follow the procedure laid down in the Warehoused Goods (Removal) Regulations 2016. It will be a transfer under Section 67.

Yes. Goods imported by you can be stored in a Public Bonded warehouse licensed under section 57. As and when required, the goods shall be removed from the public bonded warehouse to the warehouse under section 58A. Such removal will be done following the procedure laid down in the Warehoused Goods (Removal) Regulations 2016. It will be a transfer under Section 67.It is also clarified here that the goods stored in the public warehouse cannot be removed directly to the DFS.

See FAQ

Tribunalisation of Justice - Clogged Supreme Court

IN a landmark case,  L. Chandra Kumar v. Union of India  -  2002-TIOL-159-SC-CB, a Constitutional Bench of the Supreme Court held,

1. We hold that all decisions of Tribunals whether created pursuant to Article 323A or Article 323 B of the Constitution, will be subject to the High Court's Writ jurisdiction under Article 226/ Article 227 of the Constitution, before a Division Bench of the High Court within whose territorial jurisdiction the particular Tribunal falls.

2. We may add here that under the existing system, direct appeals have been provided from the decisions of all Tribunals to the Supreme Court under Article 136 of the Constitution. In view of our above-mentioned observations, this situation will also stand modified.

3. In the view that we have taken,  no appeal from the decisions of a Tribunal will directly lie before the Supreme Court  under Article 136 of the Constitution; but instead, the aggrieved party will be entitled to move the High Court under Article 226/ 227 of the Constitution and from the decision of the Division Bench of the High Court, the aggrieved party could move this court under Article 136 of the Constitution.

The Supreme Court was very emphatic that no appeal shall lie to the Supreme Court from an order of a Tribunal. (From DDT 2341 28.04.2014)

But appeals still continue to be filed and admitted in the Supreme Court against orders of Tribunals.

In a judgment delivered day before yesterday, the Supreme Court was concerned with this issue.

It is well known that in the wake of 42nd Amendment to the Constitution of India, incorporating Article 323A and 323B of the Constitution under Part XIVA, various Tribunals have been set up. The Tribunals constitute alternative institutional mechanism for dispute resolution. The declared objective of such Tribunals is inability of the existing system of courts to cope up with the volume of work. This Court has gone into the question of validity of scheme under which the High Court is bypassed without the alternative institutional mechanism being equally effective for the access to justice which was necessary component of rule of law and this Court being over burdened with routine matters in several judgments to which reference may be made.

In L Chandra Kumar Vs. Union of India, in the course of considering the constitutional validity of exclusion of jurisdiction of the High Courts in service matters against the orders of the Central Administrative Tribunal, this Court observed that the manner in which justice is dispensed with by the Tribunals left much to be desired. The remedy of appeal to this Court from the order of the Tribunals was too costly and inaccessible for it to be real and effective. Furthermore, the result of providing such remedy was that the docket of this Court was crowded with decisions of the Tribunals and this Court was forced to perform the role of a first appellate court. It was necessary that High Courts are able to exercise judicial superintendence over decisions of the Tribunals. With these observations this Court directed that "all" decisions of the Tribunals will be subject to High Court's writ jurisdiction under Article 226/2272. It was further observed that the then existing position of direct appeal to this Court from orders of Tribunal will stand modified.

Appeals to this Court on question of law or substantial question of law show that Tribunals deal with such questions or substantial questions. Direct appeals to this Court has the result of denial of access to the High Court. Such Tribunals thus become substitute for High Courts without manner of appointment to such Tribunals being the same as the manner of appointment of High Court Judges.

The Supreme Court referred to an article by Mr. T.R. Andhyarujina former Solicitor General of India:

"The jurisdiction of the Supreme Court should by and large be limited to matters of constitutional importance and matters involving substantial questions of law of general importance. The Supreme Court of India, like apex Courts in other jurisdictions, was not to be a final court to decide ordinary disputes between parties. The highest court has its unique assigned role. But after the year 1990, the Supreme Court is losing its original character and becoming a general court of appeal by entertaining and deciding cases which do not involve important constitutional issues or issues of law of national importance. The adverse effect of this trend is that matters of constitutional importance are not getting the due priority and are pending for several years.

On account of increase in number of issues other than constitutional law or substantial questions of general importance, all the Benches are engaged in handling the heavy routine work. The court rooms are so crowded that it is hardly possible to enter a court room or to pass through the corridors. "No other Supreme Court presents such an undignified sight." The highest courts are engaged in deciding cases of national importance by larger benches of 9/11 judges while the Supreme Court of India is deciding most of the cases by Benches of two-judges, which has its own adverse implications. On an average, in a year 80 cases are decided by Supreme Court of U.K., the Canadian Supreme Court and the Australian High Court. 38 cases are decided by Constitutional Court of South Africa in a year. Supreme Court of India is deciding large number of cases and the reports in the cases sometimes run upto 19 volumes in a year with only a few cases of real constitutional or of national importance. In Australia there is no appeal to the highest court as of right and the cases are entertained only if they are of public importance. They are to resolve difference of opinion in different courts. This was necessary to preserve efficiency and standing. The Supreme Court of India must cease to be a mere court of appeal to litigants and a daily mentor of the Government, if it is to preserve its pristine character, dignity and stature comparable to the Supreme Court in other jurisdictions."

Supreme Court is not a regular court of appeal. If an additional forum above the Tribunal was required to be set up, a separate national court of appeal could be created. In this respect, the matter was also considered in 229th Report of the Law Commission submitted in August, 2009.

While there may be no lack of legislative competence with the Parliament to make provision for direct appeal to the Supreme Court from orders of Tribunals but the legislative competence is not the only parameter of constitutionality. It can hardly be gainsaid that routine appeals to the highest court may result in obstruction of the Constitutional role assigned to the highest court. This may affect the balance required to be maintained by the highest court of giving priority to cases of national importance, for which larger Benches may be required to be constituted. Routine direct appeals to the highest court in commercial litigation affecting individual parties without there being any issue of national importance may call for reconsideration at appropriate levels. Further question is composition of Tribunals as substitutes for High Courts and exclusion of High Court jurisdiction on account of direct appeals to this Court. Apart from desirability, constitutionality of such provisions may need to be gone into.

The Supreme Court requested the Law Commission to examine the following:

2. Whether it is permissible and advisable to provide appeals routinely to this Court only on a question of law or substantial question of law which is not of national or public importance without affecting the constitutional role assigned to the Supreme Court having regard to the desirability of decision being rendered within reasonable time?

3. Whether direct statutory appeals to the Supreme Court bypassing the High Courts from the orders of Tribunal affects access to justice to litigants in remote areas of the country?

4. Whether it is desirable to exclude jurisdiction of all courts in absence of equally effective alternative mechanism for access to justice at grass root level as has been done in provisions of TDSAT Act.

5. Any other incidental or connected issue which may be considered appropriate.

The Supreme Court requested the Law Commission to give its report as far as possible within one year. Thereafter the matter may be examined by concerned authorities. Action taken by the Central Government, after its consideration, may be placed on record.

List the matter in November, 2017 before an appropriate Bench, preferably of three Judges to consider the above issue.

Until Tomorrow with more DDT

Have a nice day.

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