TIOL-DDT 2051
22.02.2013
Friday

YOUR DDT has entered the Limca Book of Records - AGAIN - in the 2013 edition as the longest running daily online column on tax matters. This is the longest running daily column by a single author on any matter in any publication.

As the citation above shows,  DDT had completed 1890 issues by June 30, 2012. That is the cut-off date for Limca Book of Records for entries for the year 2013. After that date, DDT has come out with more than 150 issues, as today's DDT is numbered 2051.

It is a proud moment for all of us in TIOL that we hold the prestigious Limca record, but at the same time, we realize that we are here not for the records but to make the records straight for you.

DDT is grateful for all the support from the Netizens, the Government and colleagues, who made this possible. DDT will continue its pursuit relentlessly, with your support. A BIG Thank You!

A Rare Exemplary Officer

FOR the last two years and more, I have been reading news bits about a rare Customs officer in Mumbai Air Customs - Deputy Commissioner Sameer Wankhede, his daring seizures, his no-nonsense dealing with Mumbai's highly egoistic celebrities and his recent refusal to accept a security cover. You should know a little more about this rare exemplary officer.

Consulting Editor, Sunil Achutan had a brief meeting with Sameer. Over to Sunil:-

My Bible is Customs Act

AFTER fixing an appointment with the man in the news, I landed at his office at the appointed time. He called me on my cell and after apologizing profusely said, he would be reaching within an hour. I waited and thought it would be prudent to use this time to ask about the ‘man' from his office staff. Saheb is dynamic, dashing and supportive, they said. Had it not been for him, the recent incident at the Airport would have seen our officers facing the music for no fault of theirs. They were referring to the news item, which we had reported in DDT 2049 .

I had seen a photograph of him sitting in his office in a tabloid and his bulging biceps made me visualize a hefty, heavily built man for his voice over the phone was sonorous. I was waiting in the visitor's room and an officer called out - taxindia se koyiaayahaina, sahab ne bulayahai!

I did not know when he came for I did not see a ‘tall, hefty, muscular man' pass by. The officer took me to his cabin and tea was ordered.

Sameer Wankhede is an unassuming man but talks tough. Whose father retired as a top cop after more than three decades of unblemished service and mother whose social service activities involves looking after the needs of more than two hundred destitute children adopted by her, Sameer could not have chosen a different path but follow in their footsteps and devote his life for the uplift of mankind by serving the community. Saddened by the unearthly affairs in the government offices primarily of corruption he felt that there is no point merely in talking about it. If the system has to be changed, he should be a part of the system to change it from inside. This determination of his saw him clearing the UPSC exams and joining as a Police Officer in the IB in the year 2005. After the rigorous training, he was made a part of the contingent entrusted with Anti Naxalite operations in Andhra Pradesh and soon saw himself being made a part of the Special Operations Group in the capital. Probably, he had other ideas in mind so he had another go at the Civil Services and thus joined the IRS in the year 2008. Being posted to the Mumbai Airport in the year 2010 as an Assistant Commissioner, Air Intelligence Unit, was his dream come true. He was aware of the ludicrous treatment given to top celebrities and top business personalities at the airports upon their arrival from abroad. Whereas the commoners were made to go through the formalities, these celebrities and businessmen were allowed to pass through the green channel with no questions asked. This was what annoyed him. "For me the Bible is the Customs Act and it applies to all - be it a commoner or for that matter any high profile person", thundered Sameer. "They should obey the law not give a damn to it. And I am ready to face the consequences", he says. Sameer's name started appearing in the local newspapers when he had stopped a Bollywood actress who was returning with gold and diamond jewellery worth more than Rs.35 lakhs. Her tantrums notwithstanding, the actress was required to pay the duties and then leave the airport. Till yesterday, all these top celebrities and top businessmen were never stopped at the airport and they used to walk out through the green channel as if nothing or for that matter no one could stop them. "I only made them aware of the Customs Act and said this Act applies to them too", says Sameer. Catching these celebrities and industrial magnates with their loads of merchandise shopped abroad became a regular feature and they realized that it is better to declare and pay the taxes due. Sameer's informants had also made him aware of the rampant collusion between the officers posted in the Airport of various government agencies and private contractors and those involved in smuggling. They were bleeding the exchequer by crores of rupees and Sameer could no longer take it. Drastic action followed and the offenders are now languishing in prison and some have lost their jobs or are suspended. He categorised the offenders into three kinds - one, who are habituated to smuggling, some who do it for earning a fast buck and some who just want to throw their weight around although they can very well afford to pay the duties. His no-nonsense actions have put a spanner in to their evil designs and although smuggling of gold, memory cards and valuable merchandise has not stopped, yet it is down from an ever so high figure of nearly 3000 cases that he booked in the past two years. He also informed that Mumbai has now become a focal point for drug smuggling - consumption of cocaine and party drug methaqualone in rave parties, tinsel town and by wealthy individuals has seen a leap in the recent past. Ketamine smuggling has become most lucrative, he says, manufacturing a kilogram costs around Rs.30,000/- and it sells abroad for more than Rs.10 lakhs. Many such modules have been busted by him and his team. 17 cases, 20 arrests and 153 kgs of drugs have been seized, worth more than 50 Crores in the international markets, he rattles off the figures. Asked whether he gets any calls asking him to go slow, he says, he ignores them.

Such no-nonsense action against the offenders probably did not go down well with the regulars in the trade. Sameer received a couple of abusive letters and death threats recently. Those are cowards, he says. The department head wrote to the police to investigate the matter and provide police protection but Sameer would have none of those. When asked why, he says, I can protect myself! And will this protection be given to all the officers who assist me - even their lives are precious? I do not want to demoralize the force, that's why I refused security cover.

I am only performing my duty and the blessings of my mother and father and the support of my family are always with me, Sameer says. Above all, I believe in HIM - HE will take care of me!

His parents and his better half are proud of his achievements and offer rock solid support to him. My mother says, I have given my son to the nation. He has to take care of his mother-land, said Sameer when asked what his mother felt about his achievements and the recent threats.

"All this, I could achieve because of my Commissioner, who is a fatherly figure to me, is upright and honest to the core and supports me in all the actions taken", said Sameer. "The department stands behind me", he says.

"My officers understand the responsibility that is cast upon them at the airports and ably assist me in bringing to book the offenders. I am a cop at heart", added Sameer.

The tea arrived.

The intercom rang and it was the Commissioner's PA at the other end.

I am sorry, I have to leave, please have the tea and meet you soon, the Commissioner has called me, he said, and scurried from his cabin.

As I left his office, these words reverberated in my ears -

"Jako Rakhe Saiyan, Maar Sake Na Koi,
balnabakakar sake jo jag bairi hove"

(If God protects you there is no one that can harm you even though the full world is on the other side out to harm you and leave alone harm you they cannot even touch a hair of yours)

Customs and Excise Duty Exemption on Machinery for LR-SAM - Another Messed-Up Notification - Again Messed Up!

MACHINERY, equipment, instruments, components, spares, jigs, fixtures, dies, tools, accessories, computer software, raw materials and consumables required for the Long Range Surface to Air Missile (LR-SAM) Programme of Ministry of Defence, were first exempted from excise duty by Notification No. 30/2007 -Cx dated 10.07.2007, by inserting a new Sl. No. 25 to the table in Notification No. 64/95-Central Excise, dated the 16th March, 1995. This was valid only till 31st May 2011.

As usual, the babus forgot all about this notification lapsing in May 2011. They woke up a little later and reintroduced this exemption by Notification No. 34/2011 - Central Excise, dated 19th July 2011 by inserting another Sl. No. 29 in the table to Notification No. 64/95-Central Excise, dated the 16th March 1995. And this was valid till 25th day of November 2011. Again, in November 2011, the experts in the Board forgot about this notification and they woke up and issued a notification in February 2012 inserting another Sl. No. 30 in Notification No. 64/95-Central Excise, with identical words and this new exemption was valid till 25th May 2012. As usual on (or before and after) 25th May 2012, they were sleeping.

They woke up again in October 2012 and issued Notification No. 38/2012 CE, dated October 18, 2012 inserting another Sl. No. 31 in Notification No. 64/95-Central Excise, with identical words and this new exemption was valid till 25th November 2012.

In DDT 1967- 22.10.2012, we had mentioned, "We can be sure it will not be extended before 25th November 2012."

Now, after three months, they have issued a notification inserting a new Sl. No. 33 in Notification No. 64/95-Central Excise, with identical words and this new exemption is valid till 25th May 2013.

The position now is that in the table to the Notification No. 64/95-Central Excise, dated the 16th March 1995, there are four Sl. Numbers 25, 29, 30, 31 and 33 giving the same exemption and there was no exemption during the period, 01.06.2011 to 18.07.2011, 26.11.2011 to 08.02.2012, 26.05.2012 to 17.10.2012 and 26.11.2012 to 19.02.2013

Of course, there is consistency. The Customs Notification No. 39/1996 dated 23.7.1996 has been similarly messed up and now has the same exemption in Sl. Nos 32, 35, 38, 39 and 41 of the table.

Was there no public interest in giving these exemptions during these drowsy periods? Maybe the Defence Ministry should remind the Revenue Department, at least a month before expiry of these notifications.

This issue has already reached the Tribunal and at least in two cases, Tribunal had granted stay.

1. 2011-TIOL-1653-CESTAT-BANG

2. 2010-TIOL-981-CESTAT-BANG

The Board should seriously consider job work for its notification manufacturing activity.

Notification No. 04/2013 CE, Dated: February 20, 2013 and Notification No. 08/2013 Cus, Dated: February 20, 2013

New Exchange Rates from Today

CBEC has notified the Exchange Rates for imported goods and export goods with effect from 22.02.2013. The last exchange rates notified were with effect from 07.02.2013.

CBEC Notification No. 23/2013-Cus.,(N.T.), Dated: February 21, 2013

Government directed to consider PS Pruthi for selection as Member CBEC - CAT

PS Pruthi is a Chief Commissioner under the CBEC since 09.11.2011, having joined the IRS in 1978. He is aggrieved with the appointment of Sandhya Baliga, Shobha L. Charya and Lipika Majumdar Roy Choudhary as Members of the CBEC, while his own candidature was not considered. In the year 2012-13, four vacancies arose in the Board on 1.5.2012, 01.08.2012, 4.9.2012 and 31.12.2012 and the three ladies were appointed to the three vacancies. Pruthi's claim is that he was eligible for the fourth vacancy, as he would have completed one year of qualifying service by 31.12.2012, having been appointed as Chief Commissioner on 09.11.2011. But he was not considered, as he did not have the requisite service as on 1.4.2012.

The Tribunal was convinced with his argument and directed the Government to enlarge panel of the year 2012-13 as per the relevant Recruitment Rules by considering the Applicant for the vacancy arising on 31.12.2012 as per his merit and as per rules as he has already been promoted as Chief Commissioner on 09.11.2011 and fulfilled the requirement of the Recruitment Rules.

The Tribunal did not agree to quash the appointment of the three Members as they were found to have the requisite one year's required service in the prescribed post even as on 01.04.2012, the question of considering them not qualified for the post does not arise.

Now, will Government consider Pruthi's case promptly and appoint him a Member of CBEC? He still has 11 months of service left.

For the full text of the CAT Order, please Click Here.

DDT Cartoon

Jurisprudentiol – Monday's cases

Service Tax

Since sugar is manufactured product it cannot be said that service rendered to sugar factory is in relation to agriculture - so also, as activity involved is harvesting of sugarcane and transportation of sugarcane from fields to sugar factory, it cannot be said to be in relation to sale or procurement of sugarcane - pre-deposit ordered of 50% of ST dues: CESTAT

THE Revenue representative submitted that the contract entered into by the appellants is not for sale or purchase of agricultural produce but for harvesting and transport of sugarcane and, therefore, same would not qualify for benefit under Notification No. 13/2003-ST. Similarly, the benefit under Notification No. 14/2004-ST will be available only if the procurement of goods and services are provided in relation to agriculture. In the instant case the service has been rendered to the sugar factory and sugar being a manufactured product, it cannot be considered as an agricultural produce and consequently the service cannot be said to have been rendered in relation to agriculture.

Income Tax

Whether when very foundation of reopening is knocked out, any further proceeding in respect to such assessment can still survive - NO: HC

THE issues before the Bench are - Whether if the reason for which the assessment is reopened u/s 147 fails, the AO can still proceed to assess other income, which had escaped assessment; Whether when the very foundation of the reopening is knocked out, any further proceeding in respect to such assessment can still survive and Whether where notice for reopening has been issued beyond a period of four years, the assessment would continue, even though on all the grounds on which the additions are being made, there was no failure on part of the assessee to disclose true and full material facts. And the verdict goes against the Revenue.

Central Excise

Respondent assessee is not successor of business and, therefore, is not liable to pay arrears of Central Excise dues incurred by registered unit whose factory was taken over by Financial institution and auctioned and which premises was purchased on lease from successful bidder by them - Registration certificate cannot be revoked by lower authorities: CESTAT

IN the case of Krishna Lifestyle Technologies Pvt. Ltd.(supra) the Hon'ble High Court Bombay has held that "purchase of immovable/movable assets of a tax defaulter, though assets were sold, sale of assets by itself would not be transfer of business in whole or in part, there must be material on record to show that business has been transferred to Petitioner and consequent thereto petitioner has succeeded in business. In absence of petitioner succeeding in business or part of business, issue of petitioner being liable for arrears of Central Excise dues will not arise.

See our Columns Monday for the judgements

Until Monday with more DDT

Have a Nice Weekend

Mail your comments to vijaywrite@taxindiaonline.com

24 February