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Jurisdiction of Dispute Resolution Panel-Income Tax Order No.3 Delhi High Court directs Army & Air Force to grant Permanent Commission to Women Officers Employment of washing process in the manufacture of agglomerates etc from imported plastic waste and scrap-SEZ Instruction No.48 Haryana Government imposes surcharge ranging from 0.25 per cent to 0.7 per cent on VAT Service Tax Notification No. 17/2010 which exempts the taxable service providing packaged or canned software, intended for single use and packed accordingly amended-Service Tax Notification No.18 Procurement, Import and Export of Prohibited and Restricted Goods by SEZ Units-SEZ Instruction No. 47 Tractors are chargeable to tractor cess in terms of the Tractor Cess Rules, 1992 read with the IDRA Act, 1951-Central Excise Circular No. 916 Authority for Advance Ruling rules the amounts received/receivable by Technopromexport from NTPC under contract for Offshore supply of all plant and equipment including mandatory spares are not liable to tax in India under the provisions of the Income-tax Act, 1961 and DTAA between India and Russia-AIT-2010-79-AAR whether Cess levied under section 5 of Textile Committees Act, 1963 is includable as a component of CVD-AIT-2010-78-HC Export warehousing –Extension of facility at Gautam Budh Nagar in UP and Nagpur in Maharashtra-Central Excise Circular No. 917 Implementation of the provisions of COTP Act, 2003 and The Cigarettes and Other Tobacco Products (Packaging and Labelling) Rules, 2008- Empowering the Customs & Central Excise Officers-Central Excise Circular No. 918 Toilet linen and kitchen linen, of terry toweling or similar terry fabric, of cotton and of other textile materials added in Focus Product Scheme for exports made after 1st Jan 2010-DGFT PN 46 TDS on payment of interest on time deposits under Section 194A of the Income Tax Act by banks following Core-Branch Banking Solutions software-Income Tax Circular No.3 Tariff value for import of Brass scrap is 3732 and for poppy seeds 4640-Customs Non-Tariff Notification No.19 Duty Credit Scrips can also be used / debited towards payment of Customs Duties in case of EO defaults under Authorizations issued under Chapters 4 and 5 of the Policy-DGFT Notification No.32 SC Ruling-the nature of roll over premium charge incurred by the assessee as also the scope and applicability of Section 43A of the Income Tax Act, 1961, in the context of such charges-we find no merit in the contention of the assessee that roll over charges have nothing to do with the fluctuation in the rate of exchange-AIT-2010-75-SC Pre-authentication of excise invoices dispensed with Excise duty on Goggles and OTS cans hiked to 10 per cent av gas and mosquito net impregnated with insecticides subjected to 4 per cent excise Outright exemption from additional duty of customs (of 4%) leviable under sub-section (5) of section 3 of the Customs Tariff Act, 1975 to goods imported in a pre-packaged form and intended for retail sale Benefit of allowing Cenvat credit to be reversed on proportionate basis (when common inputs are used for the manufacture of dutiable and exempt products) extended retrospectively Bad News for flat bookers-unless the entire consideration for the property is paid after the completion of construction (i.e. after issuance of completion certificate by the competent authority), the activity of construction would be deemed to be a taxable service provided by the builder/promoter/developer to the prospective buyer and the service tax would be charged accordingly Bad News for ladies-sanitary napkins & kids diapers subjected to 10 per cent excise excise duty @ 4% imposed on specified IT products like microprocessor other than motherboards, floppy disc drives, CD-Rom drive etc when these items are meant for external use with a computer or laptop as a plug-in device Packaged software or canned software exempted from excise excise duty on Cartons, boxes and cases, of corrugated paper or paperboard manufactured by Standalone manufacturers lowered from 8% to 4% all ceramic tiles, whether manufactured by using electricity for firing the kiln or not, will attract a single excise duty rate of 10% process of drawing or redrawing of aluminium tubes and pipes as amounting to " manufacture" Excise duty on replaceable kits of all domestic water filters except those operating on RO technology reduced from 8% to 4% Excise duty exemption on parts, components and accessories of mobile handsets including cellular phones extended to parts of two accessories namely, battery chargers and hands-free headphones of these devices.

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Commissioner of Customs loses his shirt

AIT News Network

NEW DELHI. Nothing can be a worse news for Customs than its Commissioner of Delhi Customs losing his shirt as a result of Delhi High Court ruling AIT-2006-300-HC for non-payment of Refund to Honda Siel Cars India Ltd. The interest of Rs.65 lakh on delayed payment of refund is now to be recovered from the salary of the Commissioner of Customs and Assistant Commissioner of Customs (Refund) and other defaulting Officers.

The direction to initiate disciplinary proceedings has already taken its toll. Assistant Commissioner(Refund) has already been transferred and the search is on for a suitable candidate for Position of Commissioner of Customs for which many candidates have started making rounds of North Block to be in circulation at the right place at the right time.

The Settlement Commission, Customs and Central Excise, Principal Bench, New Delhi settled the case holding that the correct duty liability of the applicant in the case at Rs.32,63,032/- which was paid by them by appropriating from the deposit of Rs.3 crores made during the investigation. Revenue was directed to consider the return of the balance amount of deposit in accordance with the law.

The Respondents sought the issuance of a direction to the Petitioner to refund Rs.2,67,36,968/-, being the balance amount of principal deposit, along with interest thereon, which the Respondents were constrained/ compelled to deposit during the investigation. The Respondents filed a Refund Application dated 10.4.2003 for the aforementioned sum, followed up by their letters dated 5.5.2003, 7.5.2003 and 13.5.2003.

T H E R U L I N G:

The evasive conduct of the Petitioners in these proceedings has also pervaded all throughout in their Departmental proceedings in respect of the said Refund Application.

Our attention has been drawn to circular No. 802/35/2004-CX., dated 8-12-
2004 The salient portion of the circular reads as follows:
”3. The Board has noted in the observations of the Hon'ble Supreme Court in its order dated 21-9-2004 and has decided that pre-deposits shall be returned within a period of three months of the disposal of the appeals in the assessee's favour.
…It is again reiterated that in terms of Hon'ble Supreme Court's order such pre-deposit must be returned within 3 months from the date of the order passed by the Appellate Tribunal/Court or other Final Authority unless there is a stay on the order of the Final Authority/CESTAT/Court, by a superior Court.
5. Delay beyond this period of three months in such cases will be viewed adversely and appropriate disciplinary action will be initiated against the concerned defaulting officers. All concerned are requested to note that default will entail an interest liability, if such liability accrues by reason of any orders of the CESTAT/Court, such orders will have to be complied with and it may be recoverable from the concerned officers.”

It is a matter of great regret that till date requisite action has not been taken by the Petitioners. Instead, Mr. Dubey would have us believe that the concerned Commissioner was under the bona fide belief that the refund ought not to be made during the pendency of this writ petition and more particularly owing to the pendency of the stay application. We may simply reiterate that no orders had been passed, or for that matter have been pressed for, on the stay application. We may add that we find it difficult to accept this plea of “bonafide belief” particularly when the Department would itself never accept such a plea of an assessee who has gone in appeal against an outstanding demand of duty and has failed to obtain a stay of recovery of such demand. These very officers, who seem to “bonafide” believe that mere pendency of a stay application of the Department tantamounts to a stay, would insist that the assessee should in fact produce an order of stay of recovery. What is sauce for the goose is sauce for the gander. The yardstick can be no different when the appellant/petitioner is the Department.

It is a matter of regret that although three and half years have elapsed since the Respondent filed an application seeking refund, the petitioners have not till date passed orders thereon.

The loss to the public exchequer due to the willful inaction of the Commissioner of Customs is indeed staggering. In the wake of these Orders we cannot but express our doubts whether the obduracy of the Commissioner was bonafide. Since the impugned Order is dated 20.8.2002, the refund ought to have been made within three months thereof, i.e. latest by 20.11.2002. Section 27A was inserted into the Customs Act by Act 22 of 1995 by Section 55 thereof with effect from 26.5.1995; Section 11BB was inserted into the Central Excise Act, 1944 also by Act 22 of 1995 by Section 75 thereof with effect from 26.5.1995. Prior to these changes in the statutes both these Sections stipulated that if a refund is not made within three months from the date of the receipt of the application, interest at such rate not below ten per cent and not exceeding thirty per cent per annum as may be fixed by the Central Government by Notification in the Official Gazette would become payable. Act 14 of 2001 has substituted the words “not below ten per cent” by the words “not below five per cent”.

Assuming that the Respondent is entitled to a refund of Rs.2,67,36,968/-, the Department has needlessly incurred a liability for payment of interest at the rate of 6 per cent from 20.11.2002 to 19.12.2006 i.e.Rs.65,50,557/-. Furthermore, it has often been contended on behalf of Department that where a party presses for a refund and it is ultimately found that no refund was legitimately due, the Department would be entitled to claim interest at the rate of 15 per cent on the said amount at least on the premise of delayed payment of duty. In the event that the writ petition were to be decided in favour of the Petitioner/Department, by 19.12.2006 the
Respondents would have become liable to pay interest at the rate of 15 per cent on the said sum of Rs.2,67,36,968/- which from 20.12.2002 to 19.12.2006, would be as much as Rs.1,63,76,392/-. In other words if the Respondents request for refund the excise duty had been acceded to instead of paying Rs.65,50,557/- the Department may have been able to stake a claim for the amount of refund together with Rs.1,63,76,392/-. It is thus always in the interest of the Department to refund the excess amount of duties as per the adjudication given at that point of time. The failure to take prompt action on an application for refund may give rise to a legitimate apprehension that such inaction was not bonafide.

It is in these circumstances that we allow C.M. 13551/2006 by directing the Petitioner to comply with the Circular No. 802/35/2004-CX., dated 8.12.2004, the relevant portions of which had been extracted by us in our Order dated 11.12.2006. Furthermore, in terms of paragraph 5 of the Circular dated 8.12.2004 it prima facie appears to us that appropriate disciplinary action should be initiated against the concerned defaulting officers and the additional liability incurred by the Department should be recovered from the concerned officers if they fail to furnish a plausible defence. We order accordingly. Departmental proceedings should be commenced against Commissioner-Refund (Customs), I.C.D. Tughlakabad, Assistant Commissioner (Refund) I.C.D.Tughlakabad, among other officers. The Petitioner shall file a Report before the next date of hearing furnishing details of the action that has been initiated against the delinquent officers and its progress. The Petitioner shall pay costs of Rs.25,000/-, within four weeks from today, to be deposited with the Prime Minister's Relief Fund. The application is allowed in these terms.

A copy of this Order be dispatched by the Registry to the Comptroller and Auditor General of India, and Chairman, Central Board of Excise and Customs.

( Click here for full text of ruling AIT-2006-300-HC )