drafr-cir-16

PWC may go Arthur Anderson way in India if Satyam's investors decide to sue PWC-employees of PWC and Satyam float their CVs AED or SAED levied on motor spirit and high speed diesel under the respective sections of the Finance Acts and NCCD on goods leviable to it, are not required to be paid for goods exported under bond from a manufacturing unit located in a Special Economic Zone. Similarly, a manufacturer located in a SEZ would be entitled to avail of the facility of export under claim for rebate in terms of rule 18 of the Central Excise Rules in respect of these duties-Central Excise Circular No.881 Under the various incentive schemes under Foreign Trade Policy, the computation of entitlement is to be done on the FOB value of exports inclusive of commissions and discounts, if any-DGFT Policy Circular No.51 Requirement of NOC before clearance of Ozone Depleting Substance (ODS) against Advance Authorizations-DGFT Policy Circular No.52 Bad News for PWC which audited Satyam Computers-Raju admits accounting fraud in company-Raju says it was like riding a tiger not knowing how to get off without being eaten Raju may be arrested and prosecuted Anti-dumping duty imposed on imports of Float Glass of thickness 2 mm to 12 mm (both inclusive) of clear as well as tinted variety (other than green glass) but not including processed glass meant for decorative, industrial or automotive purposes , originating in, or exported from, the Peoples' Republic of China and Indonesia-Customs Tariff Notification No.4 Anti-dumping duty imposed on import of Mulberry raw silk (not thrown), 2A grade and below, originating in, or exported from China-Customs Tariff Notification No.5 Full Bench of HC Ruling-High Court is empowered to condone the delay in filing the Appeals under Section 35G of the Central Excise Act, 1944 which are filed beyond the prescribed period of 180 days-Section 5 of Limitation Act will be applicable to Appeals filed under Section 35G of the Central Excise Act, 1944-AIT-2009-05-HC Co-relation of inputs with the export product under DFIA Scheme-DGFT Policy Circular No.50 Export of Stone Aggregate and River Sand to Maldives for the year 2009-2010-DGFT Notification No.75 Income-tax (First Amendment) Rules, 2009-Rule 40E- Prescribed conditions for the purposes of sub-clause (iii) of clause (B) of sub-section (2) of section 115WB-Income Tax Notification No.1 Income-tax (2nd Amendment) Rules, 2009 –Rule 5D & 5E amended-Income Tax Notification No.2 Government specifies the National Housing Bank (Tax Saving) Term Deposit Scheme, 2008 for the purposes of clause clause (xv) of sub-section (2) of section 80C of the Income-tax Act, 1961-Income Tax Notification No.3 Truckers demand duty free import of radial tyres and lowering of service tax As per provision of Section 47(iv) of Income Tax Act whether the transfer of capital asset by a company to its wholly subsidiary company could be regarded as transfer and therefore capital gains tax could be levied on such transfer-AIT-2008-04-HC Government grants full service tax exemption on taxable services provided to a Goods Transport Agency by their sub-contractors-Service Tax Notification No.1 DEPB Notification No.89/2005-Customs amended to provide benefits on clearances to SEZ- Customs Tariff Notification No. 3 Amendments made in DEPB Rates vide Public Notice No. 102 dated 05.11.2008 in respect of products where DEPB rates were reduced, stand withdrawn w.e.f. 5.11.2008 itself, thereby restoring the DEPB Rates notified prior to 5.11.2008, for the said items-DGFT PN 124 Government releases Rs. 600 crore to regional authorities of DGFT for payment of pending claims of Terminal Excise Duty and Duty Drawback under deemed export scheme-Government also releases Rs. 200 crore to the Development Commissioners of SEZs for payment towards pending claims of CST in respect of supplies made to 100% EOUs Anti-dumping duty on import of acrylonitrile butadiene rubber (NBR) originating in, or exported from, Korea RP -Customs Tariff Notification No.1 Changes in Customs duty on specified goods-Customs Tariff Notification No.2 New Drawback Rates for Boots/half boots/shoes/sandals of leather-cum synthetic/textile materials-Customs Non-Tariff Notification No.1 Drawback Rates on several products hiked-Customs Non-Tariff Notification No.2 Government announces Second Economic Stimulus Package to boost recession hit Sectors-Exemptions from CVD on TMT bars and structurals, and from CVD and Special CVD on cement, withdrawn-Full exemption from basic customs duty on zinc and ferro alloys, withdrawn-Duty drawback benefits on certain items including knitted fabrics, bicycles, agricultural hand tools and specified categories of yarn enhanced retrospectively from 1st September 2008-Accelerated depreciation of 50% provided for commercial vehicles to be purchased on or after 1.1.2009 upto 31.03.09-Click on the link below for details CENVAT Credit of service tax paid on all input services up to the Port allowed to Exporters-Click on the link below for details As demanded by AIT; FinMin finally amends CENVAT Credit Rules to allow benefit of non-reversal of Credit on clearances to SEZ Developers-Central Excise Non-Tariff Notification No.50-Click on the lik below for details Anti-dumping duty on import of Flexible Slabstock Polyol, originating in, or exported from, the People's Republic of China, Republic of Korea, Chinese Taipei and Brazil continued till 23rd July, 2009-Customs Tariff Notification No.138 Tariff Value for import of Brass Scrap is 3252 and for Poppy Seeds 4238-Customs Non-Tariff Notification No. 141 Import of new vehicles having an FOB value of US $ 40,000 or more and engine capacity of more than 3000cc for petrol run vehicle and more than 2500cc for diesel run vehicles exempted from policy provision of Import Licensing Note No. 2-DGFT Notification No.74 CBEC clarifies the classification of 'Combined refrigerator freezer with separate external doors' would be under sub- heading 8418 10 and not under 8418 21-Customs Circular No.23 Procedure relating to sanction and pre-audit of refund claims-Customs Circular No.22 Anti-dumping duty imposed on imports of Sodium Hydroxide(Caustic Soda)originating in, or exported from, Korea ROK and the People's Republic of China-Customs Tariff Notification No.137 Abatement from MRP for payment of excise duty lowered by 3 per cent on most of the products-Abatement on Auto Parts lowered to 30 per cent-Central Excise Non-Tariff Notification No. 49 excise duty of 300 PMT notified on cement clinkers-Central Excise Tariff Notification No.64 10% ethanol blended petrol exempted from excise duty Duty free import of capital goods and spare parts under EPCG-Customs Tariff Notification No.136 Anti-dumping duty on import of phenol-Customs Tariff Notification No.135 Authority for Advance Ruling rules looking at the nature of activities carried on or to be carried on by the liaison office of Ikea Trading (Hong Kong) Ltd. in India, no income would accrue or arise or deemed to accrue or arise in India in terms of section 5(2)(b) of Income Tax Act, 1961-AIT-2008-482-AAR Authority for Advance Ruling rules the swapping premium is profit derived from the business of providing long-term finance (computed under the head 'Profits & Gains of Business or Profession' before making any deduction under this clause) in terms of section 36(1)(viii) of the Income Tax Act, 1961-specified percentage thereof is eligible for deduction u/s 36(1)(viii) of the Income Tax Act in view of the fulfillment of condition for carrying this sum to the special reserve-AIT-2008-483-AAR Definition of 'Charitable purpose' under section 2(15) of the Income-tax Act-Income Tax Circular No.11 Import of Trucks/Tippers/Dumpers and spares thereof, under EPCG Scheme by any other sector except for the mining sector is not permitted-DGFT Circular No. 48 transitional arrangements in respect of items whose import has been restricted, shall continue-DGFT Circular No.49 SION norms for export of Shea Stearine notified-DGFT PN 118 The appellant an international firm of solicitors resident in UK, has no office or fixed base in India-the income of the assessee is charged on hourly basis in India and utilised in India shall only be chargeable to Income-Tax Act as disclosed in the return of Income-AIT-2008-480-HC CBDT clarifies that any return of income for the assessment year 2008-09 filed electronically on 30th September 2008, in respect of which the electronic acknowledgement bears the date stamp of 1st October 2008, shall be treated as having been filed within the due date, i.e. 30th September 2008 Export of cement freely allowed from all Ports-DGFT Notification No. 73 Bombay HC rules it is only after enactment of Section 66-A w.e.f. 18.4.2006 that taxable services received from abroad by a person belonging to India are taxed in the hands of the Indian residents- In such cases, the Indian recipient of the taxable services is deemed to be a service provider-Before enactment of Section 66-A, there was no such provision in the Act and therefore, Union of India had no authority to levy service tax-Click on the link below for details Import of all pre-packaged commodities subjected to compliance of all the provisions of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977-Customs Circular No.21 Larger Bench of CESTAT rules in the case of provisional assessment under the Central Excise Rules, 2002 interest is required to be paid from the first day of the month succeeding the month for which such amount is determined-Interest is required to be paid even if the differential amount is paid before the order, under the Rule 7(3) of the said Rules, is issued finalizing the assessment-AIT-2008-473-CESTAT

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Draft Circular

(To elicit response/Comments only)

F.No. 224/40/2006 – CX 6
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

****
New Delhi, the November, 2006

All Chief Commissioners of Central Excise & Service Tax,

All Commissioners of Central Excise & Service Tax,

All major Associations of Trade and Industries

Sub : Seeking views on proposed measures to provide deterrence to tax evaders in the manufacturing sector

The Central Board of Excise and Customs, over the years, has progressively simplified tax procedures regarding excise duty and made them trade facilitative. However, it has been noticed that these measures have not resulted in expected rise in the level of compliance. Even now, many cases are being booked, which indicate that certain classes of assessees continue to evade excise duty in a planned manner. In view of this, it has become necessary to deal firmly with the problem of planned and deliberate non-compliance, and put in place deterrent provisions to discourage default. In this context, the Board proposes to lay down certain measures to be initiated immediately after detection of cases of deliberate non-compliance causing substantial loss of excise revenue.

2. The following offences are to be considered for the purpose of such action:

i) Removal of goods without documents and without payment of duty

ii) Undervaluation of goods where portion of sale proceeds, in excess of the invoice price, is received separately and remains unaccounted.

iii) Taking of CENVAT credit without receipt of goods specified in the document

iv) Taking of CENVAT credit on invoices which are not genuine

v) Issue of excise invoice without delivery of goods (by a manufacturer or a dealer)

vi) Claiming of refund or rebate based on invoices which are not genuine

3. Some of the facilitative procedural changes introduced over the last few years in central excise are as follow:-

i) Monthly payment of duties as compared to consignment-wise duty payment system which was prevalent in the past.

ii) Taking of CENVAT credit for inputs, capital goods and input services used by manufacturers.

iii) Payment of 80% refund/rebate on provisional basis within 15 days of filing of claim.

4. The Government is of the opinion that cases of planned and deliberate evasion should invite swift action such as withdrawal of some of the facilities listed above for a specified period, with a view to create deterrence for planned evasion of duty, as also to encourage voluntarily tax compliance.

5. In this regard, it is proposed to take the following measures:

5.1 Type of offences, which would be covered under the present proposal:

(a) Removal of goods without documents and without payment of duty

(b) Undervaluation of goods where portion of sale proceeds, in excess of the invoice price, is received separately and remains unaccounted.

(d) Taking of CENVAT credit on invoices, which are not genuine

(e) Issue of excise invoice without delivery of goods (by dealers and manufacturers)

(f) Claiming of refund or rebate based on invoices which are not genuine (For Manufacturer Exporters and Merchant Exporters)

5.2 Monetary Limit: Amount of evasion - Rs 10 lakhs or more

5.3 Nature of restrictions proposed to be imposed:

I - For Manufacturers [for cases (a) to ((f)]

(A) (i) Withdrawal of facilities of monthly payment of duties for a specified period.

(ii) Non-utilization of CENVAT credit for a specified period. However, he can take credit and utilize the same after the period of withdrawal is over.

(iii) Withdrawal of the facility of disbursement of 80% refund/rebate on provisional basis within 15 days of filing of claim,

(B) After detection of second case, the manufacturing unit would be placed under physical control.

II - For Dealers (for cases falling in (e) above): Suspension of registration of the dealer for a specified period.

III - For Merchant Exporters (for cases falling in (f) above)

(i) Withdrawal of facility of disbursement of 80% refund/rebate on provisional basis within 15 days of filing of claim.

(ii) Withdrawal of self sealing facility of export consignments.

6. Safeguards & Procedures

As the proposed measures are deterrent in nature, it is proposed that the decision to withdraw the facilities should be taken at a senior level in the Government. The decision to impose the restriction will be taken by the Member (Excise), Central Board of Excise & Customs. The proposal for withdrawal of the facilities will be forwarded by the jurisdictional Commissioner or Additional Director General (CEI) to the Chief Commissioner/Director General (CEI). The zonal Chief Commissioner/Director General (CEI) will examine the proposal after giving an opportunity to the assessee to present his case. After due consideration of the evidence on record, and the submissions made by the assessee, the CC/DG will forward his recommendations to the Member (Excise). His recommendations will, inter alia, specify the facilities that may be withdrawn and the period of withdrawal of the facility. The final decision in this regard will be taken by the Member (Excise), CBEC, after due consideration of the facts and circumstances of the case. The order of such withdrawal will be administrative in nature and, therefore, no appeal remedy will be available to the tax defaulter.

7. The above-mentioned measures are proposed to be brought into force with effect from 1.01.2007 and necessary legislative changes, as required, shall be carried out in this regard.

8. All the field formations are requested to bring the content of proposed measures to the notice of Trade, Industry and Associations. The views and comments of Trade, Industry, Associations and field formations will be examined before taking a final decision. The views of the Trade, Industry, Association and field formations shall be sent within 15 days by post or by E-mail to Ms. Hemambika R. Priya, Director(CX 6&8). CBEC, Room no. 144A, North Block, New Delhi or hema.priya@nic.in.

9. It is once again reiterated that the intention of the Government is to encourage voluntary compliance and promote the cause of the genuine taxpayers. At the same time, the Government is also keen to deal firmly with the cases of deliberate non-compliance that causes substantial loss of revenue.

(Rahul Nangare)

Under Secretary