TIOL-DDT 1157
20.07.2009
Monday

IT had been a universal complaint that precious time of the courts is eaten up in short matters, stay, pre-deposit etc, with hardly any time for Regular Matters. The President of the CESTAT, Justice R.M.S. Khandeparker has come with a radical change.

Come 1st August, three whole days in a week - Tuesday, Wednesday and Thursday will be marked exclusively for final hearing. Mondays and Fridays will be for short matters.

As per an order issued by the President, last week, after hearing the short matters, if time permits on Monday or Friday, the same would be utilized for hearing the regular matters. He has directed the Registry to enlist cases as follows.

In relation to the Single Member Bench matters, all final hearing regular matters should be listed on every Tuesday, Wednesday and Thursday, and short matters to be listed on every Monday and Friday. All the regular matters of the year 2007 and prior thereto should be listed on every Tuesday, Wednesday and Thursday, and every expedited matters should be listed on every Monday and Friday to be heard after the Board regarding the short matters is completed.

All mentioning matters, in case of Division Bench, irrespective of whether it is of Excise matter, Customs matter or Service Tax matter, same shall be before the Division Bench of Justice R.M.S. Khandeparker , President and Mr. M. Veeraiyan , Member (Technical).

This arrangement will continue initially for a period of two months, namely, in the month of August and September, 2009 or till further orders.

A good step indeed worth emulating by all other Courts/Tribunals. Let us hope the results prove that the system works well.

CESTAT President's Order dated July 15 2009

Anti Dumping Duty on viscose rayon filament yarn upto 150 deniers

On the recommendations of the Designated Authority after a mid-term review, the Government has continued Anti Dumping Duty on the import of viscose rayon filament yarn upto 150 deniers including monofilament yarn of less than 67 decitex falling under Chapter heading 5403, originating in, or exported from, the People's Republic of China.

Notification No. 81 /2009-Customs dated July 13 2009

DTAA WITH Republic of Tajikistan

The Agreement between the Government of the Republic of India and the Government of the Republic of Tajikistan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income was signed in India on the 20th day of November, 2008.

The agreement shall be given effect to in the Union of India with effect from the 1st day of April, 2010.

CBDT Notification No. 58/2009, Dated : July 16, 2009

Import of Obscene goods – Who decides obscenity ? Customs?

Tomorrow we are carrying a case where the Tribunal upheld the confiscation of certain obscene goods. A lady Member of the Film Certification Board had opined that the goods were not obscene, but the Tribunal held that her opinion was given without taking into consideration the provisions of the Customs Act.

Is obscenity different under the Customs Act or do we have a National obscenity policy?

What is obscene ?

A statute of a Baby Ganesh in a crawling position – Is it Obscene? Customs thought so; the Commissioner (Appeals) did not and the CESTAT agreed. [2006-TIOL-2006-CESTAT-DEL]

In his famous Novel, “The Seven Minutes”, Irving Wallace brings this out in a masterly way.

The story goes like this:-

The book, “Seven Minutes” is being tried in the Court as obscene. An average American Lady is presented as a witness who affirms that the book is indeed obscene. The defence lawyer tells her that he would read to her some excerpts from recent translations or renderings of four popular books, all written by famous authors. As he finished reading each of the four excerpts, she was to tell him whether in her opinion it is or is not obscene.

He started.

Story No.1 – There was but one point forgot in this treaty, and that was the manner in which the lady and myself should be obliged to undress and get to bed ... '

'Not obscene,' said the witness

Story No.2 :- She undressed brutally, ripping off the thin laces of her corset so violently that they would whistle round her hips like a gliding snake. She went on tiptoe, barefooted, to see once more that the door was locked, then with one movement, she would let her clothes fall at once to the ground; - then, pale and serious, without a word, she would throw herself against his breast with a long shudder.

'Not obscene.' declared the witness.

Story No.3 :- The manager looked at his lovely prize, so beautiful, so winsome, so difficult to be won, and made strange resolutions. His passion had gotten to that stage now where it was no longer colored with reason. He did not trouble over little barriers of this sort in the face of so much loveliness. He would accept the situation with all its difficulties; he would not try to answer the objections which cold truth thrust upon him. He would promise anything, everything, and trust to fortune to disentangle him. He would make a try for Paradise ... '

'Not obscene, not at all.', declared the Average Lady.

Story No.4 :- “Actually, these passages are too lengthy to quote from in detail. If you don't mind, I'll take the liberty of synopsizing some of the passages” – “We have here a young man who is married to a young woman, but he has been unable to consummate their marriage. The young man dies and his wife is widowed. Now the brother of the dead young man appears before the widow, determined to impregnate her. Either before or during copulation with her, he has second thoughts about what he is doing. He refrained from giving her his semen, and he masturbates instead. Later we have another adventure in this young widow's life. She is angry at her father-in-law. She wants to expose his own lechery. One day she disguises herself as a prostitute and allows her father-in-law to pick her up and copulate with her. When the father-in-law learns that his widowed daughter-in-law has become pregnant, he wants to punish her, but then he is exposed as the one who made her pregnant.'

'Obscene,' the witness said. 'Utterly and definitely obscene.'

Now the lawyer tells her the source of the extracts which he read out to her.

1. The first extract was the most suggestive passage in Sterne's “A Sentimental Journey through France and Italy”. The witness said the passage was not obscene . But in 1819 the book was declared obscene by the Vatican and banned throughout the world.

2. The second extract was one of the more controversial ones from Flaubert's “Madame Bovary”. In 1856, when Flaubert's book was published in France, it was taken into court on charges of obscenity, and in 1954 it was blacklisted by certain purity groups in the United States. The witness said it was not obscene.

3. The third extract was one of the more suggestive ones from Dreiser's “Sister Carrie”. In 1900 when the book appeared, it was banned in Boston, and to avoid further charges of obscenity it was withdrawn from circulation and suppressed. The witness said it was not obscene.

4. As for the fourth and last book from which was quoted, that extract was taken from a modern translation of the Old Testament of the Holy Bible !' And this was the only extract which the witness found obscene - utterly obscene

In 1928, a book “The Well of Loneliness”, a story about two lesbians, was banned for seven words - And that night they were not divided. In 2009 the Delhi High Court had held that the ladies were not into any illegal activity.

Jurisprudentiol – Tuesday's cases

Central Excise

Supplies to SEZ Developer – amendment to Cenvat Credit Rules retrospective – Stay granted: CESTAT

THE controversy is; when goods are supplied from the DTA to the SEZ Developers, there is no excise duty; if there is no excise duty, they were required to pay 10% as per Rule 6 of the Cenvat Credit Rules. This was not required if the goods were supplied to a unit in the SEZ –but unfortunately the Developer was not included. The bright Central Excise Department started demanding this 10% from suppliers of SEZ Developers, while from the other side the Customs officers wanted to collect Export Duty!

Income Tax

Assessee's contract as CEO of subsidiary of US Company terminated - compensation - assessee claims as capital receipt for restrictive covenants - sum received against termination of contract is profit in lieu of salary u/s 17(3)( i ) and is taxable: ITAT

PAYING compensation for sudden severance with the employer company is a common phenomenon in today's globalised economy. But what should be the tax treatment of such compensation? This is the moot question before the Tribunal in this case and the ITAT has held that the sum received by the assessee on termination of his contract as CEO of a subsidiary of an American company was the profit in lieu of salary under section 17(3)( i ) of the Act and is very much taxable and revenue receipt.

Customs

Import of Obscene goods – Who decides obscenity ? - Expert's opinion not applicable to Customs Act: CESTAT

IMPORT of any obscene book, pamphlet, paper, drawing, painting, representation, figure or article is prohibited. Now who decides what is obscene? The Customs Officer at the counter, the CBEC or the Ministry? What appears obscene to one officer may not be obscene to another! Is the importer supposed to go round finding the obscenity standards of Customs officers?

In this case before the CESTAT, the appellants imported certain toys and games, which were promptly confiscated by the Customs as obscene.

See our columns Tomorrow for the judgements

Until Tomorrow with more DDT

Have a nice day.

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