PREAMBLE:

A criminal justice system is a

set of legal and social institu-

tions for enforcing the criminal

law in accordance with a de-

fined set of procedural rules and

limitations. Systems differ in

different countries. In the

United States, there are separate

federal, state, and military crim-

inal justice systems, and each

state has separate systems for

adults and juveniles. But in

India we do not have a separate

federal system and also no sep-

arate systems for each state. I do not propose to discuss

the defects of the criminal justice system such as delays

involved, offenders getting away unpunished by manip-

ulating the system etc. That is common knowledge. It is

same in tax laws also. I have appeared as witnesses in

one case for seven times after my retirement and in an-

other case eight times in all but the cases are still in the

judicial process. I am here to discuss only the theoreti-

cal issues about the system.

CRIMINAL VERSUS QUASI-CRIMINAL:

Offences under IPC (Indian Penal Code) are criminal of-

fences but offences under tax laws (fiscal laws or fiscal

statutes) are quasi-criminal. Adjudication by the De-

partment is quasi-criminal. But when prosecution is

lodged against the offender, it is a criminal case. In gen-

eral the principles are similar but not same. Quasi-crim-

inal means a law suit or equity proceedings that has

some, but not all, of the qualities of a criminal prosecu-

tion. Quasi is used to indicate that it resembles criminal

but there are intrinsic and material differences. The rigid

procedures of criminal trial are not followed in a quail-

criminal case. The other differences we shall discuss on

specific issues later.

SCOPE OF DISCUSSION:

Tax Laws (known as fiscal statutes) are for both direct

taxes (income tax) and indirect taxes such as Customs,

Central Excise, State Excise, Service Tax, Sales Tax,

VAT (Value Added Tax) and GST (Goods and Services

Tax). Indirectly Foreign Exchange Regulation Act

(FERA) now it is Foreign Exchange Management Act

(FEMA) is also relevant. I do not propose to discuss the

taxes separately in relation to each of the relevant Sec-

tions since the principles involved are same for all taxes.

INTERPRETATION: (JURISPRUDENCE IN-

CLUDES INTERPRETATION)

Even interpretation of fiscal statutes, is similar, though

slightly different, for civil statutes and criminal statutes.

The following two judgements are relevant to

Continued on Page 9

It seems that the Directorate of Vigilance

Customs & Cen Excise has forgotten its

role and what is expected of it. It is con-

veniently shrugging off its job because it

appears that the Directorate is harboring

bias against inspectors and superintendents.

It can be verified from the records of the

vigilance department that whenever any

case relating to misdeclaration/ undervalu-

ation/overvaluation/dereliction of duty/con-

nivance is detected, the Directorate is only

capable of finding faults in the working of

the inspectors and superintendents and gen-

erally no higher supervisory officer from

Assistant Commissioner to the rank of

Commissioner is held accountable or held

guilty. It may be reiterated here that the

entire fraternity of inspectors and superin-

tendents are not beyond question, when it

comes to its conduct.

The RTT, in its May 2011 & February

2012 issue, had published a fraud commit-

ted by Export Oriented Units (EOU) in

Raipur , mainly M/s Bhatapara Polytex Pvt

Ltd (BPPL), which led to colossal losses to

the Government exchequer.

BPPL (EOU of Raipur) had been in op-

eration since 06/2003 to 01/2007. The fraud

committed by BPPL came to light in 2003;

readers can find all the details regarding the

fraud committed in the May 2011 & Feb-

ruary 2012 issue published in RTT and

practically no action taken by the depart-

ment. The only commendable work done

by the department is they have put two Su-

perintendents in the ODI list for last eight

years to cover up the whole issue. The

higher officers, however, remain out of the

purview of any investigation, action and ac-

countability.

In most of the cases , except inspectors

and superintendents, no other officer from

the rank of appraiser to commissioner level

have ever been questioned or investigated,

giving an impression that senior officers

like appraisers, ACs, DCs and other higher-

ups had no role whatsoever in any of the

cases where any incongruity occurred .

Case after case of misdeclaration/ fraud is

taking place in Customs & Central Excise,

in which only lower-ranked officers were

Continued on Page 6

REVENUETRANSPARENCY TIMES

English Monthly

New Delhi Vol:IV No. 09 Pages: 16 May 2013 Price: Rs 20/- (Per copy)US $1 (Per copy) Outside India

RNI Regd. No. : DELENG/2009/29517

For e-paper, visit:

www.thertt.com

Transparency weeds out corruption Opaqueness breeds it

In its recent deci-

sion in S.D.

Joshi v. High

Court of Judicature

at Bombay (later re-

ported as AIR 2011

SC 848) the

Supreme Court ex-

plained the differ-

ence between the

two concepts, Tribunals and Courts’ institu-

tions in the following terms;

@pg. 24 ‘This question need not detain us

any further, as the law in this regard is no

more res integra and stands finally stated by

a Constitution Bench of this Court in the case

of Harinagar Sugar Mills Ltd. (supra). Jus-

tice Hidayatullah, as His Lordship then was,

while giving his own reasons concurred with

other Judges in allowing the appeal setting

aside the order of the Central Government.

While commenting upon the maintainability

of the appeals, he drew a distinction between

a ‘Court’ and a ‘Tribunal’ and dealt with the

question as to whether the Central Govern-

ment, while hearing this appeal, was a Tribu-

nal and held as under:-

With the growth of civilization and the

problems of modern life, a large number of

Administrative Tribunals have come into ex-

istence. These tribunals have the authority of

law to pronounce upon valuable rights; they

act in a judicial manner and even on evidence

on oath, but they are not part of the ordinary

courts of civil judicature. They share the ex-

ercise of the judicial power of the State, but

they are brought into existence to implement

some administrative policy or to determine

controversies arising out of some adminis-

trative law. They are very similar to courts,

but are not courts. When the Constitution

speaks of “courts” in Article 136, 227 or 228

Continued on Page 7

It is not without reason that we,

most of the Indians, wish gen-

erally that America remains

peaceful and free from any acts of

terrorism. As far as India is con-

cerned, it in any case survives and

has been surviving for millenni-

ums, by God`s decree, despite ex-

ternal and even internal forces

plundering it for centuries. Such

is the destiny of this nation that

civilizations which attacked or

plundered it, got wiped off from

the world map or are occupying a

very small space on it. But this

nation has survived. Those in-

dulging in loot will not be there

tomorrow leaving whatever they

collected to be enjoyed by some-

one else. However, the reason for

prayers for USA, is driven by self

interest. The life for an average

Indian was much simpler prior to

9/11. Same changed thereafter.

Now after a dozen years and an-

other attack later on the soil of

USA, one can expect more vigor-

ous security checks, submitting

KYC papers with photos to all

banks, stock brokers, insurance

agent etc. The adhaar card may

not have been delivered but, will

still be asked for. In fact, I have

got so fed up submitting my KYC

norms papers to these agencies

that I reserve my worst photos

and their copies for these only.

Continued on Page 6

IS Directorate of VigilanceCustoms & Central Excise

inept in identifying culprits inEOU fraud & other related

cases?

BITS & BYTES

Criminal JusticeSystem –in relation

to fiscal laws in India

Somesh Arora

CCO, Amicus Rarus,

Ex-Comm, Customs &

Central Excise

COST OFBOSTONBLASTS

Sukumar

Mukhopadhyay,

Member, CentralBoard of Excise &

Customs (retd)

Only he will throw the first stone

who has not committed a sin in his

life” so said the Jesus, the Savior.

The Rule of Probity equally applies in pub-

lic life and governance, while we may call

someone a tax evader or a smuggler with

impunity, we have to be equally careful that

there is no wrongful conduct imputed to us.

Unbridled power in the hands of corrupt

can only be cause of alienation of society

and eventual annihilation of civil behavior.

The Department of Revenue can not afford

a scenario where the tax evaders prosecuted

by it are equal in number to its own officers

prosecuted by Anti Corruption Agencies,

while craving for more powers and de-

manding it as a matter of right. The De-

partment has also to ensure integrity within

its own cadre. Even an exporter becomes a

trading house or an export house only after

years of unblemished track record. Will it

not then be proper to vest more and more

powers only in a Department that is re-

sponsible enough to ensure that there is no

corruption at least for some period within

its own cadre? When day in and day out

the officers including those in investigating

agencies are found indulging in grave acts

of corruption, providing of more power to

such officers can only be counter produc-

tive. Even if, there is a justification in the

interest of Revenue to have more powers,

same should be exercised only by sepa-

rately created Directorate of Prosecution,

where officers of utmost integrity alone

should be got posted. If a study is con-

ducted of the cases, where so called tax

evaders were arrested and of the nature of

the violations and stakes involved, one can

Continued on Page 8

HAVE THE POWERS TO ARREST, BUTHAVE A WORTHY CONDUCT TOO

A K Agnihotri

Ex-Comm, Customs

& Central Excise

TRIBUNALISATION OF JUSTICE

REVENUE TRANSPARENCY TIMESMay 2013 2

Duty-free import ofmachinery among slew ofmeasures to boost exports

The Government on 18-4-2013 an-

nounced a package of incentives

to boost sagging exports that in

2012-13 declined marginally, widening

the trade deficit.

The Annual Supplement to the Foreign

Trade Policy (FTP) for 2013-14, which

may involve an overall outgo of ` 3,000-

4,000 crore depending on the level of ex-

ports, rewarded top performing sectors,

including engineering goods and textiles,

with additional sops while extending the

popular scheme for duty-free import of

machinery to all.

“Our exports last year have fallen by

1.76 per cent. It is a mater of concern that

the trade deficit has widened. We view

export not only as a valuable source of

foreign exchange, which helps in stabi-

lizing the current account deficit, but also

as key contributor to growth and em-

ployment,” Commerce Minister, Anand

Sharma, said while announcing the pol-

icy.

Other benefits include widening the in-

terest subvention scheme for the engi-

neering and textile sector, allowing use

of duty credit scrip beyond duty free im-

ports, adding a couple of new markets to

the Focus Market Scheme and 126 new

items to the Focus Product Scheme, and

allowing transferability of status holder

incentive scheme.

“We have announced this policy after

extensive consultation with industry and

exporters. We will carry out a review in

October and announce more measures if

required,” Sharma said.

The Minister, however, refused to esti-

mate the revenue outgo for the schemes

stating that it all depended on how much

was exported by the qualifying sectors.

Expert from the exporters’ body, FIEO,

estimated the additional sops at ` 1,000

crore. With the Government deciding to

continue export sops, including subven-

tion that roughly amounted to ‘ 2,000

crore, an outgo of over ‘ 3,000 crore can

be expected if exports increase.

The Government also announced some

measures for procedural simplification

and reduction of transaction costs, in-

cluding use of e-Bank Realisation Cer-

tificate for VAT refund claims and doing

away with submission of physical copies

of Import Export Code and Registration-

cum-Membership Certificate.

Gems, Jewellery

The gems and jewellery sector that has

been left out of the FTP has been prom-

ised additional incentives by the end of

May. The Minister also said that the ad-

ditional funds would be allocated for

market development after more consulta-

tions with the Finance Ministry.

Sharma said extension of zero duty

Export Promotion Capital Goods

(EPCG) scheme to all sectors will pro-

mote technology intensity of exports.

Textile exporters benefiting from the

Technology Upgradation Funds Scheme

will also be allowed to make use of the

scheme.

While the discount rate of 2 per cent

was not enhanced in the interest subven-

tion scheme, the Government has ex-

tended the scheme up to March 31, 2014,

and included 134 sub-sectors of engi-

neering in addition to handicrafts, hand-

looms, carpets, garments, processed

food, sports goods and toys. The small

and medium enterprise sector, too, would

continue to get the benefit.

Norway has been added as a new mar-

ket under the Focus Market Scheme,

which gives exporters a 2 per cent duty

credit (that can be transferred for money)

taking the total number of markets to

125.

Exports to Venezuela will now be eli-

gible for Special Focus Market Scheme

that allows a duty credit of 4 per cent tak-

ing the number of such markets to 50.

As many as 47 new items have been

added to the Market Linked Focus Prod-

ucts Scheme and benefits for exporting

textile to the EU and the US has been ex-

tended by another year.

[Source : The Hindu Business Line/ELT]

H.K. Sharan’s appointment asIndirect Tax Ombudsman

challenged — HC issues notice toGovt on PIL by Editor E.L.T.

Delhi High Court on 8th April 2013 asked

the Centre and the Revenue Department

to file responses to a plea seeking removal

of H.K. Sharan as Indirect Tax Ombudsman in

Mumbai for “fraudulently” securing LL.B. degree

and other charges.

“Respondent 1 (UOI through Cabinet Secre-

tary) and respondent 2 (Department of Revenue)

will file affidavits in response to the petition. They

(affidavits) should also deal with the objection qua

jurisdiction,” a Bench of justices Sanjay Kishan

Kaul and Indermeet Kaur said.

The Court has now fixed for July 7 the hearing

on the PIL by R.K. Jain, a social and RTI activist

who has sought quashing of Sharan’s appointment

as Indirect Tax Ombudsman at Mumbai by the Fi-

nance Ministry on October 26, last year.

During the hearing, Justice Kaul said the Om-

budsman is in Mumbai and “how come the court

here has got the jurisdiction in the matter.”

“The Delhi High Court has got the jurisdiction

as partial cause of action arose here as appointing

authority, the Central Government, has establish-

ments here,” Prashant Bhushan, appearing for

Jain, said.

“Sharan was not at all eligible to get appointed

to the post of Ombudasman (Lokpal) as persons of

impeccable integrity and upright behaviour can

only be appointed to this post which deals with

the complaints made by the taxpayer against the

officials of Revenue department,” the petition

said.

“Sharan was appointed by Centre without consid-

ering the report Additional Director General Vig-

ilance who had given a categorical finding in an

enquiry initiated on the complaint of the petitioner

that Sharan has obtained LL.B. degree fraudu-

lently from Calcutta University as a regular stu-

dent while he was posted in Delhi and Addl. DG

Vigilance also recommended CBI probe into it” it

claimed.

The PIL said that the Additional Director Gen-

eral Vigilance, in the findings recorded on Octo-

ber 3, 2011, had said that “Sharan obtained LL.B.

degree fraudulently”.

“Despite this, the Additional Secretary, Depart-

ment of Revenue (HQ) in his note dated Septem-

ber 12, 2012, wrongly and falsely recorded that :-

‘the allegation made by R.K. Jain against Sharan

that he had obtained degree in Law from Calcutta

University through fraudulent means, was found

to be baseless’,” it said.

The Appointment Committee of Cabinet was

misled by the subsequent report, it claimed.

“There have been other allegations also which

were levelled from time to time against Sharan.

Casting serious doubt on his integrity…… He has

managed to get the closure reports despite there

being adverse materials against him,” it claimed.

[Based on http://www.zeenews.com]

Review of Foreign Trade Policy package in Oct, more measures, if needed :

Anand Sharma

Ranbir Kapoor detained, fined forcustoms violation

Bollywood actor Ranbir Kapoor was

today detained and fined about Rs

60,000 on undeclared branded per-

sonal goods he was carrying at the Mumbai

International airport, a customs official

said. The 30-year-old actor was later let off.

Kapoor, who landed at the Chhatrapati

Shivaji international airport on a British

Airways flight from London at about 12.30

AM today, was walking away with branded

goods in his luggage that required to be de-

clared before the authorities. "The actor

was intercepted when he was passing

through a passage, which is strictly allowed

to be used only by officials and airport

staff," Sameer Wankhede, Customs Deputy

Commissioner told PTI. "The actor's lug-

gage was then checked when he was found

with the branded goods such as perfumes,

clothes and footwears worth about Rs one

lakh which he should have declared before

customs officials at the Red Channel,"

Wankhede said. Passengers carrying goods

or items above the permitted customs lim-

its should go through the Red Channel after

paying the customs duty. Another officer

said, the actor was then taken aside for an

enquiry by the authorities. He seemed to be

unaware about the customs rules and regu-

lations. "For nearly 40 minutes the actor

was detained, the enquiry and the verifica-

tion of goods was done following which he

was fined about Rs 60,000," the officer

added.

As Kapoor paid the fine, he was allowed to

go with the goods. The actor told the au-

thorities that he was returning from London

after a film's shoot.

Bollywood actors Bipasha Basu, Minis-

sha Lamba, singer Mika Singh, Mallika

Sherawat's brother Vikram Lamba are

among the celebrities fined earlier for cus-

toms violations.

Source : Business Standard

Sahara case: SC puts curbs on pleas intribunal, high court

The Supreme Court Thursday suspended pro-

ceedings before the Securities Appellate Tri-

bunal (SAT) and theAllahabad High Court till

it gives ruling on the market regulator's plea for con-

tempt proceedings against two Sahara group com-

panies.

The Securities and Exchange Board of India

(SEBI) has sought contempt of court proceedings

against real estate companies of the Sahara Group

and its directors, including Subrata Roy, for their

failure to refund Rs.24,000 crore mopped up through

debentures.

The apex court bench of Justice K.S. Radhakrish-

nan and Justice J.S. Khehar stayed all the proceed-

ings after the SEBI pressed that all the proceedings

pending before the SAT and the Allahabad High

Court be transferred to it.

The apex court Aug 31, 2012, directed the two Sa-

hara real estate companies - Sahara India Real Es-

tate Corporation Ltd. (SIRECL) andSahara Housing

Investment Corporation Ltd. (SHICL) - to return

Rs.24,400 crore of investors' money with 15 percent

interest.

The Sahara companies and one of their directors

moved the SAT and the high court against the SEBI's

orders.

While staying the proceedings in the tribunal and

the high court, the apex court issued notice on the

market regulator's plea seeking transfer of cases

pending before the SAT and the high court to it.

Referring to the shifting stands of the Sahara real

estate companies, senior counsel Arvind Datar, ap-

pearing for the SEBI, said "the burden is on them to

pay the investors money and comply with the (apex

court) order".

The SEBI has also sought the apex court's nod for

placing Roy and the two directors - Ravi Shankar

Dubey and Ashok Roy Choudhary - under civil de-

tention. However, for now, the court would address

the contempt plea by the market regulator.

Source: Indo Asian News Service | IANS India Pri-

vate Limited

Date for filing the ST-3 return, for the periodfrom Oct'12 to March'13 has been extended from

25th Apr, 2013 to 31st August, 2013

In exercise of the powers conferred by sub-rule(4) of rule 7 of the Service Tax Rules, 1994, the Central

Board of Excise & Customs hereby extends the date of submission of the Form ST-3, for the period from

1st October 2012 to 31st March 2013, from 25th April, 2013 to 31st August, 2013.

The circumstances of a special nature, which have given rise to this extension of time, are as follows:

“The Form ST-3, for the period from 1st October 2012 to 31st March 2013, is expected to be available on

ACES around 31st of July, 2013”.

F.No.137/99/2011-Service Tax

Order No: 03/2013-Service Tax

Himani Bhayana

Under Secretary (Service Tax)

Central Board of Excise and Customs

May 20133REVENUE TRANSPARENCY TIMES

STOCK WATCHAshish Khungar, Consultant, Amicus Rarus Consults

LATERAL THINKING WILLELIMINATE PENDING STAY

PETITIONS IN CESTAT

The issue of disposing of stay petitions

in the Tribunal for Customs, Excise

and Service Tax (CESTAT) has at-

tained critical significance due to extreme

pressure from the department to realise rev-

enue. When an appeal has been filed and no

stay has been given, revenue presses the

party to pay, even if the merit is not on the

side of the revenue. Once paid, refund is

most unlikely, as there will be a question

about unjust enrichment. So, it is important

to examine the issue of pendency of stay pe-

titions separately independently of the gen-

eral pendency.

While welcoming the new president of

CESTAT on April 6, 2013, president of CE-

STAT Bar Association R K Jain said more

than 75,000 general cases were pending and

stay petitions were more than 11,000. The

effect of pendency is so crippling that the

Karnataka High Court has ordered the gov-

ernment to create new benches immediately.

My view is that increasing the number of

benches can only solve the problem margin-

ally. Unless the rate of disposal of stay peti-

tions becomes more than the rate of receipt,

the problem will never be solved. So, we

must do some lateral thinking to increase

disposals.

The government has been rather pusillan-

imous about granting the power to decide

cases to a single bench. It is limited to Rs 50

lakh, if valuation or classification is not in-

volved. Where classification or valuation is-

sues are involved, even a case of Rs 5,000 is

decided for giving stay by a bench of two

members. Most cases are of this category. So

the misery continues.

In this context, one must understand a few

things. Stay is not a final decision. It is only

an interim decision where there is a prima

facie case for the tax payer. Merely for this,

if the time of a division bench is devoted, lit-

tle time is left for deciding cases finally. A

prima facie case can surely be decided by a

single member. And this, in no way, affects

the final decision which will be given by a

division bench. It is only for an interim pe-

riod that the stay is valid. The time is maxi-

mum 180 days and usually about three

months. So, the risk to revenue is not there

particularly, if the chief departmental repre-

sentative in the CESTAT keeps a tab on

cases where stay has been given but final de-

cision is not forthcoming.

There is a very practical difficulty about

forming a division bench in places where

there is only one bench. Usually, one mem-

ber is present always but the second mem-

ber is not available for various reasons. He

may not have joined because it does not suit

him. He may have taken leave because his

family is elsewhere and so on. These are not

imaginary examples. Not having a full

bench stops all cases of stay for quite long.

It is common that stay petitions have not

come up for more than a year.

So, my first and most important sugges-

tion is that all cases of stay petitions, irre-

spective of issues involved, should be

allowed to be decided by single bench in re-

gard to stay matters. There may a limit of Rs

5 crore.

My second suggestion is that bunching of

files should be done both by the CDR and

by the registry of the CESTAT. One decision

will dispose of scores of cases.

Third, the hearings should be fixed on

first-come-first-serve basis.

Fourth, all compliance matters should be

dealt with by the registrar. Only non-com-

pliance can be reported to single bench.

Fifth, where party has paid duty voluntar-

ily after detection, the issue remains only for

imposing penalty. Such cases can be dealt

with by single bench. This suggestion will

not be necessary, if the first one is accepted.

Last but not the least, CBEC should allow

departmental representatives to concede that

there is a prima facie case. This does not

bind the department in the final decision. We

must remember that 85 per cent cases are

lost by revenue in the CESTAT. So why fight

tooth and nail even in stay petitions?

Conclusion: We should free the divisionbenches from hearing routine cases andstay petitions.

Sukumar Mukhopadhyay

Email: smukher2000@yahoo.com

RELIANCE INFRA

Reliance Infrastructure is India's largest in-

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Infrastructure Ltd had made a strategic long

term partnership with Wanda group of

China for real estate development in Hy-

derabad. The company is Developing 11

road projects of 1,000 kms worth 120000

mn. Net Sales and PAT of the company are

expected to grow at a CAGR of 16% and

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company's net profit rose by Rs. 6593.70

million against Rs. 4158.20 million in the

corresponding quarter ending of previous

year. Reported earnings per share of the

company stood at Rs. 25.07 a share during

the quarter. Profit before interest, deprecia-

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earnings for FY13E and FY14E is seen at

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ters also. One can buy in this particular

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longer term horizon.

DEVELOPMENT CREDIT BANK

LIMITED

Development Credit Bank (DCB) reported

good results yet again beating street expec-

tations driven by strong growth in NII, im-

proved cost to income ratio and higher

profitability. PAT almost doubled on YoY

basis and increased 26.9 percent QoQ to Rs

34.1 cr in Q4FY13. For FY13, NIMs stood

at 3.35 percent led by higher yield on ad-

vances and control over cost of funds. PAT

increased 85.4 percent YoY to Rs 102.1 cr

for FY13. It has been seen DCB emerging

strong through tough times with focus on

secured credit which has led to an overall

improvement in advance book and the lia-

bility profile of the bank. The bank has

shown steady progress in most of the per-

formance parameters be it sustainable

NIMs, focus on increasing share of fee in-

come, cost efficiency and controlled credit

cost. It is believed that the bank will em-

bark on expansion plans over the next 2-3

years and gear itself for next innings. One

can “BUY” this stock with a target price of

69/- from longer term perspective.

DB CORP

DB Corp- Management acknowledged

macro uncertainty and has accordingly po-

sitioned itself for moderate growth. How-

ever, there have been some encouraging

trends, with ad growth in 2HFY13 expected

to improve to ~10 percent v/s NIL growth

in 1HFY13, supported by inflection in na-

tional advertising. DBCL’s sales and mar-

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medium-to-long-term. DBCL follows a

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“Stimulating and analytical” content is the

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been taking up various social issues. The

company is expected to report 18 percent

earnings CAGR over FY13-15, driven by

11 percent ad revenue CAGR. Investors can

“Buy” this stock with a target price of 309/-

ENTERTAINMENT NETWORK

INDIA LTD

Entertainment Network (India) (ENIL) is

India’s leading private FM radio player

with a market share of ~24 percent. Being

closely associated with the Times Group, it

is able to leverage its parent’s strong pres-

ence in the print media as well as news

broadcasting business to offer integrated

advertising solutions to clients. ENIL car-

ries out radio broadcasting across the coun-

try under the brand name 'Radio Mirchi'. It

has a presence across 14 states with 32

radio stations in 10 different languages. It

also provides event management/experien-

tial marketing services under the brands of

360 Degrees, Spell Bee, Gadget Awards,

Design Warz and Teen Diva. Being the

leading player in the FM broadcasting in-

dustry with a market share of ~24 percent

and a listener base of over 41 mn, ENIL is

well poised to benefit from the Phase III

implementation which is expected to hap-

pen in FY2014. Phase III entails substantial

capex and it is expected ENIL to bid for 90-

100 channels for which Rs 350-400 crore

would be the capital outlay. For most in-

dustry incumbents (excluding ENIL) rais-

ing this kind of capital would be a tall order

given their stretched balance sheets. How-

ever, no such issues with ENIL are foreseen

as it has ~Rs 220 crore of cash. Further in

case of aggressive competitive bidding, the

debt component if at all would be meager

and not affect the strength of its balance

sheet. Investors can “BUY” this stock with

target price of 340/-

Disclaimer: The views expressed aboveare personal and will not be liable for anyloss caused or suffered. Readers are ad-vised to take proper advice from CertifiedMarket Expert before entering the stockmarkets. I do not have any personal hold-ings in the stocks discussed above.

"Psychologists Say :"1) If a person laughs too much, even at stupid things, he is lonely

deep inside.

2) If a person sleeps a lot, he is sad.

3) If a person speaks less, but speaks fast, he keeps secrets.

4) If some one can't cry, he is weak.

5) If some one eats in an abnormal manner, he is tense.

6) If some one cries on little things, he is innocent & soft hearted.

7) If some one becomes angry over silly or petty (small) things, it

means he needs love.

REVENUE TRANSPARENCY TIMESMay 2013 4

Addition of two newports for import of new

vehicles

AMENDMENTS IN CHAPTER 3 OF FOREIGN TRADE POLICY 2009-14S.O.(E) In exercise of the powers

conferred by Section 5 of the For-

eign Trade (Development and Reg-

ulation) Act, 1992 read with Para

2.1 of the Foreign Trade Policy,

2009-2014, the Central Govern-

ment hereby makes the following

amendments in the Foreign Trade

Policy (FTP) 2009-14 with imme-

diate effect:

2. A new paragraph 3.14.5 of

FTP 2009-14 is added as below:

“3.14.5 Incremental Exports In-

centivisation Scheme (IEIS) on an-

nual basis”

Entitlement (a) Objective of the

Scheme is to incentivize incremen-

tal exports.

(b) An IEC holder would be enti-

tled for a duty credit scrip @ 2% on

the incremental growth (achieved

by the IEC holder) during the cur-

rent year (for example, say for the

period 01.04.2013 to 31.3.2014)

compared to the previous year (for

example, say for the period from

01.04.2012 to 31.3.2013) on the

FOB value of exports. Incremental

growth shall be in respect of each

exporter (IEC holder) without any

scope for combining the exports

for Group Company.

(c) Incentive will be admissible

only if the IEC holder has achieved

growth in the financial year 2013-

2014 vis a vis financial year 2012-

2013. Quantum of benefit will be

calculated on the incremental

growth achieved subject to eligi-

bility criteria given in para

3.14.4(d) of FTP 2009-14.

Eligibility Criteria (d) For the pur-

pose of the scheme, export per-

formance shall not be allowed to be

transferred from any other IEC

holder. Benefit under the scheme

will not be allowed to an exporter

who had made no export during

fiscal year 2011-12 and fiscal year

2012-13. The following exports

shall not be taken into account for

calculation of export performance

or for computation of entitlement

under the Scheme:

(i) Export of imported goods or ex-

ports made through trans-ship-

ment.

(ii) Export from SEZ/ EOU /EHTP

/STPI /BTP/FTWZ

(iii) Deemed Exports

(iv) Service Exports

(v) Third Party exports

(vi) Diamond, Gold, Silver, Plat-

inum, other precious metal in any

form including plain and studded

jewellery and other precious and

semi-precious stones.

(vii) Ores and concentrates of all

types and in all formations.

(viii) Cereals of all types.

(ix) Sugar of all types and all

forms.

(x) Crude / petroleum oil and

crude / primary and base products

of all types and all formulations.

(xi) Export of milk and milk prod-

ucts.

(xii) Export performance made by

one exporter on behalf of other ex-

porter.

(xiii) Supplies made to SEZ units.

(xiv) Items, export of which re-

quires an export authorisation (ex-

cept SCOMET), will not be

considered.

(xv) Export of Meat and Meat

Products.

(xvi) Exports to Singapore, UAE

and Hong Kong.

Special Provision (e) The scheme

is region specific and will cover

exports to USA, Europe and Asian

countries only. In addition export

to 53 countries in Latin America

and Africa ( as mentioned in Public

Notice 3 dated 18th April 2013 )

will be entitled to this benefit. Dis-

claimer provisions of para 3.17.10

(b) of FTP shall not be admissible.

This benefit will be over and above

any benefit being claimed by the

exporter under any of the Chapter 3

Schemes.

Utilisation of Scrip (f) The duty

credit scrip will be freely transfer-

able. Such scrips shall also be eli-

gible for domestic sourcing and for

payment of Service Tax as per para

3.17.5 of FTP 2009-14.

3. The following is added at the

end of Para 3.12.4 of FTP 2009-14:

“SFIS benefit will be allowed on

the Net Foreign Exchange earned.“

4. Following is added at the end of

Para 3.12.6(a) of FTP 2009-14:

“Service providers who are also

engaged in manufacturing activity

can use their SFIS scrip for im-

porting / domestic sourcing of cap-

ital goods( as defined in para 9.12

of FTP) including spares related to

the manufacturing sector business

of the service provider. Such man-

ufacturing sector business of the

service provider would have to be

endorsed on the SFIS scrip from

relevant RA.”

5. The following is added at the

end of existing Para 3.12.6 (b) of

FTP 2009-14:

“Utilisation of Duty Credit Scrip

shall also be permitted for payment

of duty in case of Import/ domestic

sourcing of motor cars, SUV’s and

all purpose vehicles as Professional

Equipment by Hotels, Travel

agents, Tour operators or tour

transport operators and companies

owning/operating golf resorts.

Such vehicles (operating on road

and requiring registration) will

have to be registered for Tourist

purpose only. Proof of registration

will need to be submitted to RA

concerned within 6 months of im-

port/domestic procurement.“

6. Para 3.13.3 of FTP stands

deleted with immediate effect.

7. Sub para (g) is added at the end

of para 3.13.4 of FTP:

“Transferability of the Agri Infra-

structure Incentive Scrip shall be

allowed to supporting manufac-

turer of the status holder. Such

transferability would have to be en-

dorsed on the Agri Infrastructure

Incentive Scrip from relevant RA.”

8. Following is added at the end of

Para 3.16.3 of FTP 2009-14:

“SHIS can be transferred to a man-

ufacturer group company of the

scrip holder even though the group

company is not a status holder.

Group company is defined in para

9.28 of FTP. Such transfer will

have to be endorsed by relevant

RA.”

9. Para 3.17.2 (i) of FTP 2009-14

stands deleted with immediate ef-

fect.

10. Sub para (d) is added after

3.17.5(c):

“Duty credit scrips issued under

FPS, FMS and VKGUY can be

used for payment of Service Tax.

Scrip holder shall be entitled to

avail drawback benefits or CEN-

VAT credit of the Service Tax deb-

ited in the said scrip in accordance

with DOR rules. ”

11. Following is added at the end

of Para 3.17.11 of FTP 2009-14:

“Duty credit scrips can be used for

payment of composition fee under

FTP, for payment of application fee

under FTP, if any and for payment

of value shortfall in EO under para

4.28 (b) of HBP v1 2009-14.

Effect of this Notification: The

Scheme to incentivize incremental

exports for the year 2013-14 and

other amendments to Chapter 3 of

FTP are being notified.

Notification No: 3 (RE-

2013)/2009-2014

(Anup K. Pujari)

Director General of Foreign Trade

E-mail: dgft@nic.in

[Issued from File No.

01/61/180/206/AM13/PC3]

S.O.(E) In exercise of powers con-

ferred by Section 5 of the Foreign

Trade (Development & Regula-

tion) Act, 1992 (No. 22 of 1992),

read with paragraph 2.1 of the For-

eign Trade Policy, 2009-2014, as

amended from time to time, the

Central Government hereby

amends Policy Condition 2 to

Chapter 87 of ITC (HS) 2012,

Schedule 1 (Import Policy) as

under:

2. ICD, Faridabad and Ennore Port

are added to the existing list of 10

Ports / ICDs through which import

of new vehicles is permitted under

Policy Condition 2(II)(d) of Chap-

ter 87 to ITC (HS) 2012, Schedule

1 (Import Policy). Accordingly,

Policy Condition 2(II)(d) of Chap-

ter 87 is revised to read as under:

“The import of new vehicles shall

be permitted only through the Cus-

toms port at Nhava Sheva,

Kolkata, Chennai, Chennai Air-

port, Cochin, ICD Tughlakabad

and Delhi Air Cargo, Mumbai Port

and Mumbai Air Cargo Complex,

ICD Talegaon Pune, ICD Farid-

abad and Ennore Port.”

3. Effect of this notification:

Two new Customs Ports, ICD,

Faridabad and Ennore Port are

added to the list of 10 existing

ports for importing new vehicles.

Notification No 6 (RE–

2013)/2009-2014

(Anup K. Pujari)

Director General of Foreign

Trade

E-mail: dgft[at]nic[dot]in

(Issued from 01/89/180/29/AM-

09/PC-2(A))

S.O. (E): In exercise of powers

conferred under Section 5 of the

Foreign Trade (Development and

Regulation) Act, 1992 read with

paragraph 2.1 of the Foreign Trade

Policy, 2009-2014, as amended

from time to time, the Central

Government hereby makes the fol-

lowing amendment in Chapter 15

of ITC (HS) 2012, Schedule 1 (Im-

port Policy):

2. The Quality Parameter (iv)-

Eicosapentaenoic Acid EPA + Do-

cosaphexaenoic Acid DHA of Fish

Body Oil (Refined) under Exim

Codes 1504 20 10 and 1504 20 20

as prescribed in Policy Condition

5 at the end of Chapter 15 of ITC

(HS) 2012, Schedule 1 (Import

Policy) is revised from the present

‘5-15% by weight’ to ‘Not less

than 5% by weight’. After the re-

vision, the Quality Parameters in

Policy Condition 5 of Chapter 15

shall be as under:

Amendment in the ImportPolicy of Fish Body

Oil (Refined)3. Effect of this Notification

The prescribed standard of EPA &

DHA content in Fish Body Oil

(Refined) has been revised to

‘Not less than 5% by weight’

without any upper limit.

NOTIFICATION NO. 11 (RE-

2013)/2009-2014

(Anup K. Pujari)

Director General of

Foreign Trade

[Issued from

F. No. 01/89/180/Misc.90/

AM-05/PC-2(A)]

5 May 2013REVENUE TRANSPARENCY TIMESAmendments in Chapter4 of the Handbook ofProcedures (Volume I)

In exercise of powers conferred under Paragraph

2.4 of the Foreign Trade Policy, 2009-2014, the

Director General of Foreign Trade hereby noti-

fies the following amendments in Chapter 4 of the

Handbook of Procedures (Volume I). This shall come

into force from 18th April, 2013.

(1) In order to facilitate disposing of pending re-

quests of the exporters by RAs, it has been decided to

amend Para 4.20.5 of HBP v1 which reads as under :-

No clubbing of authorisations issued on or before

31st March, 2004 shall be allowed. Further, no club-

bing of authorisations covered under Appendix 30A

of the HBPv1 or authorisations with less than 18

months EOP shall be allowed.

The amended Sub-para shall read as under [new

portion in bold letters]:-

“No clubbing of authorisations issued on or before

31st March, 2004 shall be allowed. Further, no club-

bing of authorisations covered under Appendix 30A

of the HBPv1 or authorisations with less than 18

months EOP shall be allowed. However, requests for

clubbing of Advance Licences/Authorisations, is-

sued between 1.4.2002 and 31.5.2012, and re-

ceived by RAs on or before 4.6.2012 may be

disposed of as per the provisions of HBP-v1 prior to

issue of Revised Edition/Annual Supplement dated

5.6.2012, provided conditions stipulated in Public

Notice No. 79 dated 13.10.2011 are adhered”.

(2)To rectify the omission under Appendix 21 C re-

lating to PROCEDURE OF ELECTRONIC FUND

TRANSFER in NOTE 3, the word ‘DFIA’ is being

inserted after the words “Advance Authorisation’ in

the 1st sentence of the NOTE.

Effect of this Public Notice: This would facilitate dis-

posal of pending requests the exporters for clubbing

of advance authorisations where applications have

been received upto 4.6.2012. The second para would

facilitate issue of duplicate authorisation in lieu of

cancelled authorisation after payment of only

Rs.200/- as additional application fee as in case of

other authorisations.

PUBLIC NOTICE No. 0 2 (RE-2013)/ 2009-2014

(Issued from F. No. 01/ 94/180/395/AM13/PC-4)

Enabling employees towork from a place

outside theEOU/EHTP/STP/BTP

In exercise of powers conferred under Paragraph

2.4 of the Foreign Trade Policy, 2009-14, as

amended from time to time, Director General of

Foreign Trade hereby makes following amendments

by inserting a new Para i.e. Para 6.7.5 in the Hand-

book of Procedures Vol. I, after the existing Para

6.7.4 as below:

“6.7.5 Person(s)/employee(s) authorized by a unit of

(i) IT related EOU or (ii) STP or (iii) EHTP or (iv)

BTP may work from a place outside the said unit,

subject to the following conditions:

(a) There must be an Authorisation from the unit

specifying the duration of such authorization.

(b) Responsibility for carrying out the work and su-

pervision, if any, be that of the unit, which will be li-

able for any misuse.

(c) Export of the resultant products/ services would

take place only from the premises of the unit.”

2. Effect of this Public Notice: Authorized per-

son(s)/employee(s) of the IT related EOU; STP;

EHTP; BTP are being permitted to work from home

and/or a place outside the unit.

Public Notice No. 5 (RE-2013)/2009-2014

( Anup K. Pujari)

Director General of Foreign Trade

E-mail: dgft.@nic.in

(Issued from F.No. 01/91/180/223/AM-09/PC-VI)

AMENDMENT IN POLICY CONDITION 1 TOCHAPTER 40 OF ITC(HS), 2012

S.O.(E) In exercise of powers conferred

by Section 5 of the Foreign Trade (De-

velopment & Regulation) Act, 1992 (No.

22 of 1992), read with paragraph 2.1 of

the Foreign Trade Policy, 2009-2014, as

amended from time to time, the Central

Government hereby amends Policy Con-

dition 1 to Chapter 40 of ITC (HS) 2012,

Schedule 1 (Import Policy) as under:

2. Presently, the bracketed portion at the

end of Policy Condition 1 appended to

Chapter 40 of ITC (HS) 2012, Schedule

1 (Import Policy) reads as under:

“[This policy condition applies to EXIM

codes 4012 11 00, 4012 12 00, 4012 13

00, 4012 19 10, 4012 19 20, 4012 20 10,

and 4012 20 90].”

The applicability of Policy Condition al-

ready finds a mention against the relevant

8 digit codes. Hence, the portion men-

tioned in the bracketed portion is not re-

quired.

3. The bracketed portion at the end of Pol-

icy Condition 1 appended to Chapter 40

of ITC (HS) 2012, Schedule 1 (Import

Policy) standsdeleted.

4. Effect of this notification:

The redundancy in Policy Condition 1 ap-

pended to Chapter 40 of ITC (HS) 2012,

Schedule 1 (Import Policy) is removed

with immediate effect.

Notification No 10 (RE–2013)/2009-

2014

(Anup K. Pujari)

Director General of Foreign Trade

(Issued from 01/89/180/209/AM-02/PC

2(A))

AMENDMENTS IN CHAPTER 4 OF THE FOREIGNTRADE POLICY 2009-2014

In exercise of powers conferred by

Section 5 of the Foreign Trade (De-

velopment & Regulation) Act, 1992

(No.22 of 1992) read with paragraph 1.2

of the Foreign Trade Policy, 2009-2014,

the Central Government hereby notifies

the following amendments in the Foreign

Trade Policy 2009-2014 to be incorpo-

rated in the Annual Supplement. This

shall come into force w.e.f. 18th April,

2013.

(1) In Chapter 4 a new sub-para (d) after

para 4.2.6(c) of FTP is being inserted to

disallow exemption from Antidumping

duty and Safeguard duty once a DFIA is

made transferable. The sub para (d) to be

inserted would read as under:-

“Exemption from Antidumping Duty and

Safeguard Duty would be available on ac-

tual user basis only, i.e. before endorse-

ment of ‘transferability’.”

(2) The word “energy” in second sen-

tence of para 4.1.3.1 of the FTP stands

deleted.

(3) In para 4A.16A of FTP inserted vide

Notification No.30 dated 31.01.2013 in

respect of Private/Public Bonded Ware-

house the minimum value addition of 5%

shall be only for DTA units and not SEZ

units. Accordingly, the para may be mod-

ified as under:

“ Private/Public Bonded Warehouses may

be set up in SEZ/DTA for import and re-

export of cut and Polished diamonds, cut

and polished coloured gemstones, uncut

& unset precious & semi-precious stones,

subject to achievement of minimum VA

of 5% by DTA units”.

Effects of this Notification: Anti-dump-

ing duty and safeguard duty would be

leviable on goods imported against trans-

ferred DFIAs. Advance Authorisations

will no more be available for import/sup-

ply of ‘energy’. Value Addition in respect

of SEZ (in respect of para 4A.16A of

FTP) would be as per SEZ Act.

NOTIFICATION NO. 02 (RE-2013)/

2009-2014

(Issued from F. No. 01/ 94 / 180 /395 -

Foreign Trade Policy / AM13 / PC-4)

Increasing accuracy of data capturing byDGCI & S —Alignment of Chapter 3

schemes with ITC HS

Various items have been added

from time to time under Appen-

dix 37A i.e. Vishesh Krishi and

Gram Udyog Yojna (VKGUY) and Ap-

pendix 37D i.e. Focus Product Scheme

(FPS) and Market Linked Focus Product

Scheme (MLFPS) in the Hand Book of

Procedure Vol-I.

2. ITC (HS) codes mentioned against few

items in the Appendices did not match the

description against respective ITC (HS)

codes in the ITC (HS)classification of ex-

port and import item book. An effort has

been made to align the items description

in the Appendices 37 A & 37 D with ITC

(HS) classification of export and import

items.

3. Draft Appendix 37 A (VKGUY) and

Appendix 37 D (FPS and MLFPS) have

been prepared after alignment. Before

notifying the above appendices, it has

been decided to seek views of all stake

holders on the draft Appendices about

correctness of the ITC (HS) code and de-

scription of item. Draft Appendices will

be available on the website of DGFT

www.dgft.gov.in up to 17.05.2013.

4. All stakeholder are requested / encour-

aged to give feedback /suggestion on the

above draft preferably through e-mail to

hardeep.singh@nic.in up to 24.00 hrs on

17.05.2013.

Trade Notice No. 01 /2013, dated 18th

April, 2013

(Hardeep Singh)

Joint Director General of Foreign Trade

Email: hardeep.singh@nic.in

Procedure for refund / revalidation ofDEPBs/Reward Scrips for re-credit of 4%

CVD (SAD)

In exercise of powers conferred under

Para 2.4 of the Foreign Trade Policy,

2009-14, the Director General of For-

eign Trade hereby amends Paragraph

2.13.2A of the Handbook of Procedures

(Vol.1), 2009-14 by substituting contents

of the said para with the following:-

“(i.) Only for the purpose of utilisation of

re-credit of 4% Special Additional Duty

(SAD) of customs, the freely transferable

duty credit scrips (including DEPB), shall

be deemed to have been revalidated till

30.09.2013. No further endorsement by

the respective RA on such scrips shall be

required.

(ii.) If the consolidated certificate

(Credit Note) has already been issued by

Customs or gets issued by 30.06.2013,

then the amount (4% SAD) indicated in

the consolidated certificate by customs

shall be deemed to have been re-credited

in the scrips in such cases, without any

further reference to any RA of DGFT. “

2. This is the last and final extension

to use the re-credited scrips. No further

extension shall be considered by the Gov-

ernment under any circumstances. Im-

porters desirous of such refund in future

must make the payment of SAD in cash.

Effect of Public Notice:

The exporters will now be able to utilize

4% re-credited SAD till 30.09.2013. No

further endorsement is required from RA

for revalidation. No further extension

would be considered.

PUBLIC NOTICE No. 06(RE

2013)/2009-2014

(Anup K. Pujari)

Director General of Foreign Trade and

E-mail: dgft@nic.in

(Issued from File. No. 01/94/180/DEPB-

SAD recredit/AM10/PC-4)

6 REVENUE TRANSPARENCY TIMESMay 2013

Continued from Page 1

booked. If the fraud/ misdeclaration

is happening only due to lower-

ranked officers, should not the

power to examine goods be taken

from them and handed over to ap-

praisers and officers up to the level

of Joint Commissioners. Or, they

too should be involved in the exam-

ination of goods along with Inspec-

tors and Superintendents and certify

regarding the correctness/ specifi-

cations of the shipment.

For the interest of the readers

some key points relating to M/s

Bhatapara Polytex Pvt Ltd

(BPPL) are reproduced below:

Fraud has been committed by M/s

Bhatpara Polytex, Bhatapara,

Raipur and M/s Sai Garments, Bhi-

lai (both EOU) & M/s Ramdev Cor-

poration, Bhilai. All the three units

have procured polyester yarns from

suppliers of Gujarat & other places

on paper only. The fraud committed

in an organized manner by EOU

and it is a big racket. Ramdev Cor-

poration worked for one year with-

out machine in a 10’X12” room. No

penalty has been imposed upon

partners of Ramdev Corporation.

In the instant case, the a/stated

units manufacture fabrics on paper

and supplied to M/s Cannon Indus-

tries, Ludhiana & Regency Interna-

tional Mumbai also on paper.

Benefit derived by suppliers of

polyester yarn:

Goods procured by EOUs on the

basis of CT-3 Certificates are Cus-

toms duty free and yarns procured

on paper are sold in the market of

Gujarat illegally. The units who

gets such unaccounted for raw ma-

terials (yarns) use such yarns in the

manufacture of fabrics which are

cleared in a clandestine manner and

thus central excise duty involved in

the manufacture of fabrics are

evaded. The units who purchase

such customs duty free yarns also

get the advantage of low priced

yarns. Obviously, the suppliers get

its share for their involvement in il-

legal transaction.

Benefit derived 100% EOUs &

fraud manufacturer:

Both the EOUs of Raipur Com-

missionerate diverted the customs

duty free yarns in the open market

in Gujarat and in other supplier’s

area. They supplied fabrics on

paper. On the basis of paper, the re-

ceiver units namely Cannon Indus-

tries & Regency International,

Mumbai had taken illegal Cenvat

Credit without physical receipt of

fabrics. Both the EOUs & Ramdev

Corporation got their share.

Benefit derived 100% EOUs &

fraud manufacture:

The Units like Cannon & Re-

gency exports Chhindis instead of

readymade garments and get export

benefit like rebates from Govt. Be-

sides this, black money sent through

hawala is also converted into white

through this transaction of exports.

In Bhatapara Polytex, Bhatapara,

SCN has been issued for the period

6/2003 to 11/2003 but no SCN has

been issued for the period 12/2003

to 1/2007.

2. The SCN has not been issued

in spite of submission of final in-

vestigation report submitted by A.K

Shrivastav, Supdt (Prev) Raipur Di-

vision.

3. Matter complained to CBI by

Right Thinking Indian Association,

Raipur to Prime Minister and CBI.

4. There are around 25/30 suppli-

ers of M/s Bhatapara Polytex, Bhat-

apara in Gujarat and other states,

but no SCN has been issued per-

taining to paper transaction between

suppliers of yarn units of Gujarat

and Maharashtra to M/s Bhatapara

Polytex, Bhatapara (100% EOU).

List of suppliers of attached.

In this entire case of EOU fraud,

it has been observed that no serious

effort has been made by the Cus-

toms & Central Excise to recover

the subsequent benefits like draw-

back and rebate claimed on the fic-

titious export of goods shown by

the parties. It is also surprising to

note that in reply to a RTI applica-

tion, the Assistant Commissioner

Division Raipur said all the relevant

records in the case of M/S BPPL

has been taken over by the staff of

Hqrs (Prev), after merger of Divi-

sion of Division Prev, they have

submitted a letter and it appears

from that letter of 6/3/2007 of AC

Raipur that DGCEI has directed to

issue SCN after 12/2003. Further

has categorically stated that the

SCN can not be issued by his office.

The then Commissioner Parmod

Kumar Customs & Central Excise

Raipur vide his letter

CNo1(10)Con-V/Cat/01/2012 560

dated 19/3/2012 informed the Chief

Commissioner central Excise

Bhopal intimated “that the main file

of Headquarter Preventive dealing

with the said investigation ,not

being traceable. This office is un-

able to comment on the issued

raised by A K Pati Superintendent

Central Excise. It may ,however, be

informed that no show cause notice

for the period subsequent to No-

vember 2003 has been issued to

M/S Bhatapara Polytex (P) Ltd

Bhatapara.”

Now the question arises what ac-

tion has been taken by the Direc-

torate of Vigilance against those

senior officer under whose regime

the file is misplaced and due ac-

countability has not been be fixed.

The CPIO /Asst Commissioner

(vig) directorate General of Vigi-

lance vide his letter F.no V-

500/RTI/41/2012 dated 9/4/2012

informed one Arun Kumar in re-

sponse to his RTI application dated

22/2/2012 addressed to CPIO o/o

the Revenue Secretary department

of Revenue New Delhi that “An en-

quiry is to be conducted” The EOU

fraud related to 2003 and more than

10 years have elapsed nothing tan-

gible has come out. Moreover. One

year has been passed since the Di-

rectorate of Vigilance intimated that

an enquiry is to be conducted, no

enquiry is completed. How much

time the department will take 50

years or hundred years to complete

an enquiry and to punish the actual

guilty involved in a scam of more

than 100 crores.

The department has also failed to

explain any reason in response to

various RTI applications as to why

no Show cause notice has been is-

sued against Bhatapara polytax

Raipur and its suppliers units of Gu-

jarat and Maharastra unit for the pe-

riod 12/2003 to 1/2007 and why no

action against the officers including

the supervisory head not taken for

non issue of show cause notice re-

sulting in loss of government ex-

chequer in hundred of crores.

A few examples are quoted to

substantiate the bias of the depart-

ment against the lower rank offi-

cers.

Charge sheet was issued to a

number of Superintendents /Inspec-

tors for their tenure at ICD Tugh-

lakabad way back in 1998 and

1999.In fact, the charge sheet to one

of the officers has come on the day

of his retirement — too harsh a

treatment meted out to someone

who has served the department for

more than 30 years.

The case relate to M/S Aravali (

india ) Ltd Hissar that had filed

shipping bills for 265 containers for

export of Unplasticide PVC pipes.

The total drawback amount claimed

was around Rs 7 crore.

No higher officer was held ac-

countable in this case. The said

charge sheet is liable to be quashed

on grounds of inordinate delay as

the issue in question pertains to

1998-99 whereas the Charge sheet

was issued on 31.03.2011 after a

gap of 13 years and that too without

conducting any proper enquiry and

without cross verifying the facts.

In one of the cases even though

the Central administrative tribunal

has decided in the favour of one of

the effected officer however sources

say that the department is going for

appeal.

The Standing Counsel, Govt. of

India in the concerned matter ob-

served that-

"The OA in question has been al-

lowed by the Hon'ble CAT (PB)

New Delhi ; vide order dated 8th

Jan., 2013. The Hon'ble Tribunal

passed a detailed order para 9, 10

and 11 are the relevant and opera-

tive paras of the judgment, the same

may be read in the judgement .The

Hon'ble Tribunal is of the view that

the delay of 8 years in issuing the

charge sheet is violative of the prin-

ciples of natural justice. Therefore,

the Hon'ble Tribunal was pleased to

grant the relief to the petitioner. It is

well-settled law that the unneces-

sary and unwarranted delay in issu-

ing the charge sheet by the deptt

cannot be allowed.

Moreover, a similar case of

Joseph Kuck vs. U.O.I. & Ors. in

OA No. 2727/2010 was allowed by

this Hon'ble Tribunal and that

judgement has not been challenged

by the deptt, hence it has got the

finality.

After going through the judge-

ment of the Hon'ble Tribunal I think

that the Hon'ble Tribunal has passed

a reasoned judgement and it will not

be fruitful to challenge the same.

Moreover, it maybe the wastage of

the govt money and time both.”

Sources say that despite clear cut

advice from the govt standing coun-

sel the file is shuttling between the

parent commissionerate and the Di-

rectorate of Vigilance. Had it been

a case of some IRS officer the ad-

vice would have been accepted with

a day.

Recently the Directorate of Vigi-

lance has directed 35 Superintend-

ents to record their statement

relating a case regarding assessment

of electric motors made by the SIIB

ICD Tughlakabad, New Delhi. Now

the question arises who is responsi-

ble for the assessment, obviously

the assessment is done by the Ap-

praiser and finalized by the Deputy

Commissioners. Whether the Di-

rectorate of Vigilance is contem-

plating any action against the

Appraisers and the Deputy Com-

missioners or has made their mind

to punish the Superintendents and

allow the Deputy Commissioners /

Appraisers Scot free. Even the

C.H.A.`s in the matter have been

forced to give statements to impli-

cate junior officers and those not

obliging have been subjected to var-

ious actions. Matter pertains to pre-

vious decade and assessments were

done finally in most cases on the

basis of value of contemporaneous

imports.

Thus it appears that no one in the

department of Customs & Central

Excise is interested to find out the

revenue loss occurred in various

cases and punish the culprit and is

allowing and waiting for another

fraud/ colossal revenue loss to take

place.

IS Directorate of Vigilance Customs & Central Excise inept inidentifying culprits in EOU fraud & other related cases?

Continued from Page 1Therefore compared to the one at

the top here, the photos submitted

will sure show me like Paan Singh

Tomar in his later avatar of life.

About the Adhaar photos lesser said

the better. In fact, Femina, rather

than selecting Miss India through

such a rigorous process can select

on a single criteria- Beauty is what

appears in the Adhaar card to be so.

Coming to attacks in USA, last time

banks were required to report vari-

ous transactions to designated

agency. But this time it may be that

reporting buying of pressure cook-

ers will be mandatory to another

agency designated for the purpose.

Which if I am allowed the liberty to

suggest a name can be called ` Pres-

sure cooker blast prevention agency’

and can be headed by a Joint Secre-

tary level officer. Marathons may

gradually become confined to

Greece i.e. the country where it

originated and may require security

approval to hold from International

Olympic Association . The presence

of security cameras may increase

and may even require a separate law

indicating what to record and what

not to and where all to place cam-

eras. In short, there will be life re-

defining changes, which normally

Government may not have brought

about if the blasts by terrorists had

occurred on Indian soil, as

placing more police barri-

cades alone is the stereo-

typed response.

Publicity by Revenue Boards: The

tone and tenor of publicity by both

the revenue boards has seen a

marked shift in the recent months.

While earlier the emphasis was on

nation building through tax compli-

ance and tax payments. Now, it is

terrorizing the tax payer and non-tax

payer equally- You are being

watched. You spent so much on buy-

ing your wife or girl friend precious

jewellery- tax man can always nab

you. You spent so much on credit

cards, taxman can catch you. This

sure makes taxmen as dreaded as

wife or girl friend, as the case may

be. Service tax not to be left behind

also displays its newly acquired

muscle power of arrest and prosecu-

tion in its advertisements. Since it is

felt by the mandarins that threaten-

ing has helped them in meeting

downward revised target in the last

fiscal, one can expect that soft ad-

vertising aimed at voluntary com-

pliance is now consigned to

archives. In the last three months,

tax administration has also shown

that the period of bonhomie between

it and the tax payer is also over and

that if fiscal target requirements so

warrant, all out recovery actions will

be taken whether or not it increases

unnecessary litigation. Incidentally

the last honeymoon lasted longer

that it is normally expected to be.

For, there cannot be a long term re-

lationship between tax payer and tax

collector. Tax reduction is a myth in

long term. Tax collectors job is rated

as the sixth toughest in the world.

Therefore, options are limited. What

in the modern context makes it more

difficult is that need for more rev-

enue arises in the year(s), when eco-

nomic growth is not robust. The

ultimate solution may lie in for the

Finance Minister to create a Rev-

enue Buffer Fund, where in a per-

centage of cash inflows can be made

when revenue exceeds targets and

outflows can be made in the year of

economic or natural crisis. This will

help in making people feel that the

Government empathizes with them

in the year of sluggish economic

growth. Revenue Publicity, then,

can again cajole tax payers to help

in nation building rather than acting

like a threatening spouse.

The views of the writer are personal.

COST OF BOSTON BLASTS

May 20137REVENUE TRANSPARENCY TIMES

After stonewalling CIC, Govt.

decides to reveal PPP info

In a significant move towards trans-

parency, the Government on 16-4-

2013 said all public authorities

should proactively disclose informa-

tion related to public private partner-

ship (PPP) projects on their websites.

Though the disclosure will be vol-

untary, this marks a shift from the Cen-

tre’s stand for the last two years when

it had stonewalled the Central Infor-

mation Commission (CIC)’s recom-

mendation seeking disclosure of PPP

projects and will herald greater trans-

parency.

Guidelines issued by the Depart-

ment of Personnel and Training

(DoPT) said that details— including

setting up of special purpose vehicles,

concession agreements, process of se-

lection of private party, information on

fees, toll or other revenue collected

under authorization from the Govern-

ment — should be made public volun-

tarily.

The guidelines come at a time

when all core infrastructure projects

— including highways, ports, airports,

Metro and the Delhi-Mumbai Indus-

trial Corridor (DIMC) — are being

built under the PPP model. The de-

partment has accepted the recommen-

dations of a Government task force set

up in May, 2011.

[Source : The Times of India/ELT]

Continued from Page 1

or in Articles 233 to 237 or in the

Lists, it contemplates courts of civil

judicature but not tribunals other

than such courts. This is the reason

for using both the expressions in Ar-

ticles 136 and 227.

By “courts” is meant courts of civil

judicature and by “tribunals”, those

bodies of men who are appointed to

decide controversies arising under

certain special laws. Among the

powers of the State is included the

power to decide such controversies.

This is undoubtedly one of the at-

tributes of the State, and is aptly

called the judicial power of the State.

In the exercise of this power, a clear

division is thus noticeable. Broadly

speaking, certain special matters go

before tribunals, and the residue goes

before the ordinary courts of civil ju-

dicature. Their procedures may dif-

fer, but the functions are not

essentially different. What distin-

guishes them has never been suc-

cessfully established. Lord Stamp

said that the real distinction is that

courts have “an air of detachment”.

But this is more a matter of age and

tradition and is not of the essence.

Many tribunals, in recent years, have

acquitted themselves so well and

with such detachment as to make this

test insufficient.

Lord Sankey, L.C. in Shell Company

of Australia v. Federal Commissioner

of Taxation observed:

“The authorities are clear to show

that there are tribunals with many of

the trappings of a court, which, nev-

ertheless, are not courts in the strict

sense of exercising judicial power....

In that connection it may be useful to

enumerate some negative proposi-

tions on this subject:

1. A tribunal is not necessarily a

court in this strict sense because it

gives a final decision.

2. Nor because it hears witnesses on

oath.

3. Nor because two or more con-

tending parties appear before it be-

tween whom it has to decide.

4. Nor because it gives decisions

which affect the rights of subjects.

5. Nor because there is an appeal to

a court.

6. Nor because it is a body to which

a matter is referred by another body.

A court in the strict sense is a tri-

bunal which is a part of the ordinary

hierarchy of courts of civil judicature

maintained by the State under its

constitution to exercise the judicial

power of the State. These courts per-

form all the judicial functions of the

State except those that are excluded

by law from their jurisdiction. The

word “judicial”, be it noted, is itself

capable of two meanings. They were

admirably stated by Lopes, L.J. in

Royal Aquarium and Summer and

Winter Garden Society v. Parkinson

in these words:

“The word ‘judicial’ has two mean-

ings. It may refer to the discharge of

duties exercisable by a Judge or by

Justices in court, or to administrative

duties which need not be performed

in court, but in respect of which it is

necessary to bring to bear a judicial

mind — that is, a mind to determine

what is fair and just in respect of the

matters under consideration.”

That an officer is required to decide

matters before him “judicially” in the

second sense does not make him a

court or even a tribunal, because that

only establishes that he is following

a standard of conduct, and is free

from bias or interest.

Now, in its functions the Govern-

ment often reaches decisions, but all

decisions of the Government cannot

be regarded as those of a Tribunal.

Resolutions of the Government may

affect rights of parties, and yet, they

may not be in the exercise of the ju-

dicial power.

Resolutions of the Government

may be amenable to writs under Ar-

ticles 32 and 226 in appropriate

cases, but may not be subject to a di-

rect appeal under Article 136 as the

decisions of a tribunal. The position,

however, changes when Government

embarks upon curial functions, and

proceeds to exercise judicial power

and decide disputes. In those cir-

cumstances, it is legitimate to regard

the officer who deals with the matter

and even Government itself as a tri-

bunal. The officer, who decides, may

even be anonymous; but the decision

is one of a Tribunal, whether ex-

pressed in his name or in the name of

the Central Government. The word

“tribunal” is a word of wide import,

and the words “court” and “tribunal”

embrace within them the exercise of

judicial power in all its forms. The

decision of the Government thus

falls within the powers of this Court

under Article 136.”

It was held that all tribunals are not

Courts though all Courts are tri-

bunals. This view has been reiterated

by this Court, more particularly, in

relation to drawing a distinction be-

tween a tribunal and a Court. A tri-

bunal may be termed as a Court if it

has all the trappings of a Court and

satisfies the above stated parameters.

Every Court may be a tribunal but

every tribunal necessarily may not be

a Court.

GENESIS:

Post Independence saw an in-

creased role of the Government in

public welfare and the Executive saw

in this an opportunity to expand itself

and perform a number of quasi- leg-

islative and quasi-judicial functions,

thereby blurring the constitutionally

mandated doctrine of Separation of

Powers, under which the powers of

the Government or Governance were

apportioned amongst the Legislature,

Executive and the Judiciary.

The increasing interface of Gov-

ernment machinery with the popu-

lace and the consequent friction

raised disputes which not only raised

legal issues but also matters which

affected the social fabric of the pop-

ulace. Consequently, the Courts be-

came deluged with litigation arising

directly and incidentally from such

increased governmental role. The in-

herent procedural limitations made it

difficult for the courts to dispose

these cases promptly, leading to a

huge backlog of cases in all levels of

the judiciary. It was also felt in many

quarters that the members of the Ju-

diciary were neither adequately

trained nor equipped to deal with the

complex socio-economic and techni-

cal matters being adjudicated. It was

felt that specialised adjudicatory

bodies such as Tribunals were

needed to resolve such disputes

fairly, effectively and speedily. That

none of the pious wishes were

achieved is another matter.

Tribunals by definition are a “Judg-

ment Seat; a Court of Justice; Board

or Committee appointed to adjudi-

cate on claims of a particular kind”.

Though the term ‘Tribunal’ is pres-

ent in the Constitution of India in Ar-

ticles 136 and 227, it has not been

specifically defined. However, the

essence of the meaning of the word

Tribunal which can be culled out

from the various Supreme Court au-

thorities is that they are adjudicatory

bodies (except ordinary courts of

law) constituted by the State and in-

vested with judicial and quasi-judi-

cial functions as distinguished from

administrative or executive functions

as was held in Durga Mehta v.

Raghuraj Singh-(AIR 1954 SC 520

at 522.)

The test of qualification of a tribu-

nal, within the meaning of Articles

136 and 227, is that they are adjudi-

catory bodies vested with resolving

conflicting rights.

Generally, it would seem that any-

body vested with the power to deter-

mine the conflicting rights of two or

more parties conclusively would sat-

isfy the test of exercising a judicial

function and can be regarded as a tri-

bunal within the meaning of Articles

136 and 227. A Tribunal as described

aforesaid is to act judicially when de-

termining the dispute between the

parties concerned. However, the

mere fact that an authority is to act

judicially does not clothe the author-

ity with the judicial power of the

State. The Supreme Court in Jaswant

Sugar Mills v.Lakshmi Chand (AIR

1963 SC 677 at 687) laid down the

following characteristics or tests to

determine whether an authority is a

tribunal or not:

1. Power of adjudication must be de-

rived from a statute or statutory rule.

2. It must possess the trappings of a

court and thereby be vested with the

power to summon witnesses, admin-

ister oath, compel production of evi-

dence, etc.

3. Tribunals are not bound by strict

rules of evidence.

4. They are to exercise their func-

tions objectively and judicially and

to apply the law and resolve disputes

independently of executive policy.

5. Tribunals are supposed to be inde-

pendent and immune from any ad-

ministrative interference in the

discharge of their judicial functions.

To be Continued.....The views of the writer are personal.

TRIBUNALISATION OF JUSTICE

The article has borrowed liberally from a number of authorites

and it is well nigh impossible to express gratitude to each or to

cite each. Suffice to say: THANK YOU

RTI activists seek more teeth for whistleblower law

‘Bill in present form isn’t strong

enough to provide cover’

With over 16 activists killed and thou-

sands under attack or threatened, RTI

activists have demanded a stronger

whistleblower law, including provi-

sions for accountability and compen-

sation for victims. The Whistleblowers

Protection Bill is likely to come up in

Parliament in the Budget Session start-

ing next week.

But activists feel that the Bill in its

present form is not strong enough to

prevent deaths. National Campaign for

People’s Right to Information

(NCPRI) have sought making Section

4 of the RTI Act—that calls for proac-

tive disclosure of information —

mandatory, besides ensuring that there

is accountability under the Whistle-

blower’s Bill.

Speaking on the need for a strong law,

National Commission for Minorities

chairman Wajahat Habibullah said that

there was no accountability under the

Whistleblower’s Bill.

“We have seen in cases that people

have gone and complained right up to

the PM but there is no action. Officials

must be held accountable,” he said. He

was supported by NCPRI members, in-

cluding Aruna Roy, Nikhil Dey and

Anjali Bharadwaj.

The NCPRI has also demanded that

the definition of victimization should

be broadened to include not just threat

to physical life and liberty.

The activists felt that the law must stip-

ulate a clear timeframe—no more than

45 days — within which the discreet

inquiry by the authority must be com-

pleted to prevent inordinate delays.

The recommendations, which came

after a day-long tribunal where

whistleblowers and their families pre-

sented their testimonials, include peo-

ple who are providing information

through documents and other material

to the whistleblower must also be pro-

tected.

The NCPRI has demanded that the Bill

should provide for acting upon anony-

mous complaints if it is accompanied

with adequate supporting documents

which reveal a prima facie case.

[Source : The Times of IndiaELT]

8 REVENUE TRANSPARENCY TIMESMay 2013

Continued from Page 1

easily find more than equal number

of instances, where in other more

serious cases, persons were al-

lowed to go scot free simply be-

cause it suited discriminative

interest of some one within the De-

partment. If statistics are made

available in this regard the dis-

crimination can easily become dis-

cernible even to a person of normal

prudence. All this for the depart-

ment which not so much in the dis-

tant past used to pride itself with

having a strong internal vigilance

and also one of the best record of

detections.

From the legal angle, while the

Budget of 2013-14 has sought to

re-store the powers of the officers

in Customs and Central Excise and

has also introduced the same on the

Service Tax side, the same has

been done by increasing monitory

limits wherefrom an act becomes a

cognizable offence. In this re-

gard, Section 9 of the Central Ex-

cise Act and Section 135 of the

Customs Act are the relevant pro-

visions for providing various pun-

ishments of imprisonment for

offences under the respective Acts.

If some of these offences are cog-

nizable after the proposed budget

amendments come in to force, the

Courts are allowed to take cog-

nizance of the same but on whose

complaint, specifically, these Acts

do not mention, as is case with

most of the other Acts dealing with

economic offences like NDPS Act.

Further in relation to power to ar-

rest the relevant provisions and

proposals in relation to Section 104

of the Customs Act, 62 are as fol-

lows:

SECTION 104. Power to arrest. -

(1) If an officer of Customs em-

powered in this behalf by general

or special order of the Commis-

sioner of Customs has reason to be-

lieve that any person in India or

within the Indian customs waters

has committed an offence punish-

able under section 132 or section

133 or section 135 or section 135A

or section 136, he may arrest such

person and shall, as soon as may

be, inform him of the grounds for

such arrest.

(2) Every person arrested under

sub-section (1) shall, without un-

necessary delay, be taken to a mag-

istrate.

(3)Where an officer of customs has

arrested any person under sub-sec-

tion (1), he shall, for the purpose of

releasing such person on bail or

otherwise, have the same powers

and be subject to the same provi-

sions as the officer-in-charge of a

police-station has and is subject to

under the Code of Criminal Proce-

dure, 1898 (5 of 1898).

(4) Notwithstanding anything con-

tained in the Code of Criminal Pro-

cedure, 1973,( 2 to 1974) any

offence relating to -

(a) prohibited goods; or

(b) evasion or attempted evasion of

duty exceeding fifty lakh repees,

shall be cognizable.

(5) Save as otherwise provided in

sub-section (4), all other offences

under the Act shall be Non-cogniz-

able.

(6) Notwithstanding anything con-

tained in the Code of Criminal Pro-

cedure, 1973, the offences under

the Act shall be bailable.

Clause (6) above is proposed to be

substituted by the Finance Bill,

2013 by the following clause:

“(6) Not withstanding anything

contained in Code of Criminal Pro-

cedure, 1973, an offence punish-

able under Section 135 relating

to---

(a) Evasion or attempted

evasion of duty exceeding fifty

lakh rupees; or

(b) Prohibited goods notified

under Section 11 which are also

notified under sub-clause (C) of

clause (i) of sub-section (1) of Sec-

tion 135; or

(c) Import or export of any

goods which have not been de-

clared in accordance with the pro-

visions of this Act and the market

price of which exceeds one crore

rupees; or

(d) Fraudulently availing of

or attempt to avail of drawback or

any exemption from duty provided

under this Act, if the amount of

drawback or exemption from duty

exceeds fifty lakh rupees, shall be

non-bailable.

(7) Save as otherwise provided in

sub-section (6), all other offences

under this Act shall be bailable”.

The condition of one crore of mar-

ket price as in sub –clause ( C) can

reach in a number of cases even

when duty involved may be few

lakhs only. What with normal rate

of basic customs duty being about

10 percent and CVD about 12 per-

cent. Therefore, what has been pro-

vided by limit hike in clause (a)

from 30 lakhs to 50 lakhs has been

largely undone by clause ( C). As

is well known, the need for amend-

ing Clause(6) was felt by the de-

partmental officers in the

aftermath of decision of supreme

Court in 2011 (272) E.L.T. 321

(S.C.) in OM PRAKASH Versus

UNION OF INDIA, which held

that customs offences are bailable

since they are compoundable.

Now, the choice before the Depart-

ment was either to treat these of-

fences as non-compoundable and

hence non- bailable or to declare

certain category as non-bailable

even when same has been allowed

to be continued as compoundable

under various provisions including

u/s 137 of the Customs Act. De-

partment has obviously opted for

second course of action as it never

wanted to do away with Com-

pounding Procedure, but whether

such a course of action will stand

Judicial scrutiny in the light of Om

Prakash`s Case ( cited supra), only

time will tell. Again, when a pre-

ventive arrest is required to be

made at the time of investigation,

who will decide even prior to adju-

dication as to whether an offence

of more than Rs. 50 lakhs or of

value of more than one crore has

been committed. Will it not amount

to putting the cart before the horse?

In fact, before arresting, it would

be necessary that the duty leviable

under the provisions of the Cus-

toms Act as indicated in the pro-

posed Clause(6) would first have to

be adjudicated upon and deter-

mined. There has to be a process

of adjudication to determine the

amount of levy before any punitive

action by way of arrest can be

taken.

Further, even for compounding

through Settlement Process, if a

serious offence involving duty is

involved same can be taken up for

settlement but if it involves only

offending goods of any value, same

cannot be taken up for settlement,

if duty is not involved because ad-

mission of duty of a particular

amount is the essential requirement

for approaching the settlement

Commission. Again, even for ap-

proaching the Compounding Au-

thority, levy of duty and penalty is

required to be pre- determined.

Therefore, though the power to ar-

rest is being taken by the depart-

ment, there is bound to be confu-

sion galore. And if finally the of-

fences are held to be eventually

bailable as happened after years of

arrest of hundreds of tax payers/

evaders/ smugglers/ connivers/

abettors, will the Department com-

pensate the people of this nation

for the days spent in the jail even

when there was provision for im-

mediate bail. Will CESTAT/ Courts

consider it as a mitigating circum-

stance for putting lesser penalties?

And even if they do so under the

Customs Act, the Central Excise

Act with its mandatory penalty will

not permit them to do so. So keep

pushing the tax payers in jail till the

law exists in the book and as is un-

derstood by the department, who

knows they may get the august

company of some revenue officials

in the confinement. Especially

those who wanted to have their

own assets at the expense of the

hapless smugglers who could not

escape their wrath by paying off.

The latest example of blunt misuse

of power by the Customs officer

wherein the Punjab Police arrested

a superintendent of Central Excise

and Customs department posted at

Attari Railway Station and seized

10 kg of heroin worth Rs 50 crore

in international market from his

possession. A pistol, nine car-

tridges and Rs 17, 000 in cash were

also recovered from him. The ar-

rested customs officer, identified as

Gurdev Singh, a resident of Patti in

Tarn Taran district, after getting a

tip off that he was transporting the

contraband in a SUV. Hence the

department may give the power to

arrest to those officers who are

likely not to be arrested in future to

its own Vigilance.

Have the powers to arrest, but have a worthy conduct too

CORRUPTION CASE AGAINST DGFT OFFICIALS — NO SANCTION NEEDEDFOR PROSECUTING GOVERNMENT OFFICIALS — CBI COURT

After being denied sanction

from the government to prose-

cute public servants who have

been accused in a corruption case, a

CBI Court has sent the trial to the Met-

ropolitan Magistrate, stating that “no

sanction was required” to prosecute all

the accused on charges of cheating and

criminal conspiracy.

“No sanction is required for taking

cognisance under Section 420 IPC

against any of the accused persons. No

sanction is required even under Section

197 CrPC as laid down by the Supreme

Court in the case of Prakash Singh

Badal in the year 2007,” Special CBI

Judge Swarana Kanta Sharma said.

He added that “corrupt persons should

not escape trial simply due to lack of

sanction”.

The CBI in 2010 had lodged a case

of cheating, criminal conspiracy, and

corruption against seven accused, in-

cluding three officials of the Direc-

torate General of Foreign Trade

(DGFT).

The agency had accused the Nehru

Place Hotels Ltd, its Director Amit Rai

Sood, Vice-President Yogender

Dhawan, and Engineer Rohit Kumar of

conspiring with DGFT officials De-

vender Bajaj, Sheela Ahuja and Motor

Vehicles Inspector Ashok Kumar to

“cheat the government by misutilising

the import licence and obtaining huge

pecuniary benefits”.

In its chargesheet, the CBI had al-

leged that the accused government of-

ficials had allowed the hotel to import

a Porsche and two BMW Limousine

cars without paying proper Customs

duty, evading almost ‘ 1 crore in taxes.

Though the chargesheet was filed in

2012, the government had refused to

grant sanction for prosecution of the

public servants, which is necessary for

trial under the Prevention of Corrup-

tion Act.

The hotel had allegedly submitted

documents to the DGFT stating that the

cars would be used as commercial ve-

hicle to carry guests, but had obtained

registration of the cars as private vehi-

cles.

The chargesheet said the accused

government officials had “deliberately

overlooked” the violation of Import

Rules by the hotel, and had “failed to

verify” the actual use of the vehicles.

The agency had also stated that the

hotel had obtained fancy registration

number for one of the vehicles, and had

even raised allegations of culpability of

the then Minister of Transport, Delhi

Government, since the Transport De-

partment had allotted the fancy number

for the Porsche, registering it as a pri-

vate vehicle.

However, the CBI Court noted that the

allegations against the Transport Min-

istry could not be sustained since the

papers submitted to the department

were not the correct papers, and had

claimed that the car was for non-com-

mercial purposes.

The Special CBI Court on 12-3-

2013 has held that a “prima facie case”

of corruption and cheating could be

made out against the accused, and has

now sent the case file to the court of the

Chief Metropolitan Magistrate for

“further proceeding”.

[Based on

http://www.indianexpress.com/ELT]

9 May 2013REVENUE TRANSPARENCY TIMESCRIMINAL JUSTICE SYSTEM –IN RELATION TO FISCAL LAWS IN INDIA

Continued from Page 1

substantiate this point. In the case of

Commissioner of Wealth Tax vs. H.

Begum – 1989(40) ELT 239(SC) re-

lating to wealth tax the Supreme

Court said, “I see no reasons why

special canons of construction

should be applied to any Act of Par-

liament and I know of no authority

for saying that a Taxing Act is to be

construed differently from any other

Act”. And in the case of C.I.T. vs,

Shahzada Nand and Sons – AIR

1966 SC 1342 also the Supreme

Court observed, “The fundamental

rule of construction is the same for

all statutes whether fiscal or other-

wise”. However, over a period of

time, several judgments given by the

Supreme Court have underlined the

differences in interpretation in spe-

cific cases. There are also occasions

which arise only in fiscal cases such

as exemption notification, identity of

goods, sections for charging tax, sec-

tions for prescribing machinery to ef-

fectuate the levy of the tax. These do

not arise in criminal cases. These

differences we shall notice as we

proceed.

ADJUDICATION OF OF-

FENCES BY THE DEPART-

MENT:

The basic difference between

criminal cases and quasi-criminal

cases is that there is only prosecution

in criminal cases ,whereas in the fis-

cal laws there is adjudication by the

Department and also prosecution in

the Court by filing a petition for

prosecution in the Court. Adjudica-

tion is done departmentally on a

daily basis in large numbers in cus-

toms, excise and income tax. The of-

fending goods in the case of customs

and central excise can be confis-

cated. In the case of income tax the

offending income can be confiscated.

Apart from that penalty also can be

imposed. The rule of interpretation

of penal provisions in fiscal statutes

is that they are to be interpreted not

so strictly as in the case of criminal

laws. While imposing penalty on the

person (offender) the interpretation

has to be strict which means that the

person to be penalised comes fairly

and squarely within the plain words

of the enactment (Maxwell on Inter-

pretation of Statutes, 12th Edition,

p.239). If the language of the penal

statutes is equivocal and there are

two reasonable meanings of that lan-

guage, the interpretation which

avoids penalty is to be adopted

(Crates on Statutes Law, 7th edition,

S.G.G. Edgar, p.534).

Even confiscation (of goods) is

also a penal provision. The Supreme

Court held in the case of Motibhai

Fulabhai Patel v. Collector of Cen-

tral Excise, Baroda – AIR 1970 SC

829 that Rule 40 of the Central Ex-

cise Rules, which provided for con-

fiscation of goods was a penal

provision and therefore “it would not

be proper for us to extend the scope

of that provision by reading into it

words which are not there and

thereby widen the scope of the pro-

vision relating to confiscation”.

What Supreme Court held here is

that confiscation and penalty are both

penal provision and therefore have to

be interpreted strictly and not liber-

ally. The Supreme Court has held in

several cases that strict interpretation

should be made of penal provision in

taxing statutes. The cases are (i)

C.I.T., West Bengal vs. Vegetable

Products Ltd. – AIR 1973 SC 927,

(ii) J.K. Synthetics vs. State of Ra-

jasthan – 1994 (94)STC 422 (SC),

(iii) Goodyear India Ltd. Vs. State

of Haryana – 1990(76) STC 71(SC)

(iv) CCE, Ahmedabad vs. Orient

Fabrics Pvt. Ltd. – 2003 (158) ELT

545 (SC).

However, the Supreme Court held in

the case of Gujarat Travancore

Agency, Cochin vs. C.I.T., Kerala –

AIR 1989 SC 1671 that in fiscal law

the approach should not be so strict

as in the case of criminal laws. The

court held the following, “A penalty

imposed for tax delinquency is a civil

obligation, remedial and coercive in

its nature and is far different from the

penalty for a crime or a fine or for-

feiture provided as punishment for

the violation of criminal or penal

laws”. The Supreme Court was talk-

ing here about Section 271(1)(a) pro-

viding for penalty if tax returns are

not filed in time compared to Section

276(c) which provides for prosecu-

tion if the return is wilfully not filed

in time. For Section 271(1)(a) no

mens rea is necessary.

ADJUDICATION NEEDS FAR

LESS DEGREE OF PROOF

THAN PROSECUTION.

Adjudication is only relating to con-

fiscation of goods if there is no li-

cence or if there is a violation of

customs law such as misdeclaration

of goods or violation of conditions of

exemption etc which are quasi-crim-

inal and not criminal in nature. And

the nature of controversies is more

straight forward. In the case of pros-

ecution, the offender will go to jail if

he is proved guilty. So all the crimi-

nal jurisprudence will come into

play. That is why generally the Rev-

enue Department first completes the

adjudication and then goes for pros-

ecution. Only in those fringe cases

where the carriers of smuggled

goods are involved, that the Depart-

ment goes for prosecution first since

the carriers are likely to run away if

adjudication is done first when they

are in bail. Theoretically speaking

the adjudication and prosecution are

two different proceedings and can be

launched simultaneously or prosecu-

tion can be launched before adjudi-

cation. This has been held by the

Supreme Court in the case of Stan-

dard Chartared Bank vs Directorate

of Enforcement , 2006 (197) ELT 18

(SC).But in effect it becomes im-

practicable to launch prosecution be-

fore adjudication since voluminous

records are to be examined and also

many other facts are to be scrutinised

which is done during adjudication. In

effect filing prosecution in cases of

import and export, or excise and in-

come tax matters before adjudication

can turn out to be a case of harass-

ment . It is not advisable and is not

done usually. I was asked to file pros-

ecution before adjudication in two

very important cases and I did not. I

pointed out that unless adjudication

is done , one does not know whether

the case is established or not. If in ad-

judication the case is dropped, then

prosecution will be untenable. The

law has now been set at rest by the

Supreme Court in the case of Rad-

heshyam Khejriwal vs State of West

Bengal, 2011 (266) ELT 294 (SC) .

It has been held in this case that

where adjudication finds allegation

against accused to be unsustainable

on merit, criminal prosecution on

same set of facts and circumstances

cannot be allowed to continue, un-

derlying principle being that higher

standard of proof is necessary in

criminal cases. However if the ac-

quittal in adjudication is on technical

grounds, prosecution can continue. If

the acquittal is on the basis of bene-

fit of doubt, then also the prosecution

is not affected. This was held by the

Supreme Court in the case of AC

customs v L.R.Malwani 1999 (110)

ELT (SC).The reason was that , the

Court pointed out, the adjudication

before the Collector of Customs was

not a prosecution and the Collector

of Customs was not a court within

the meaning of the Article 20(2) of

the Constitution.

To be Continued.....The views of the writer are personal.

Customs officeramong 4 in CBI

graft net

The CBI on 21-3-2013 raided the of-

fice of the Land Customs Station

Office on Indo-Nepal border at Jog-

bani in Araria District and caught the As-

sistant Commissioner, Customs, Shiv

Shankar Yadav (an officer of Indian Rev-

enue Service), Customs Superintendent

Adesh Kumar and two Inspectors Rakesh

Kumar and Puneshwar Paswan red-handed

while distributing ‘ 50,000 among them-

selves. All the four officials were arrested.

Giving this information, CBI DIG V.K.

Singh said the raid at the residence of

Adesh Kumar located in Buddha Colony

in the State capital continued till late in the

evening.

He said though items like maida, flour and

paddy are free from export duty, these Cus-

toms officials were charging ‘ 6,001 from

each truck carrying these items which used

to cross to Biratnagar side of Nepal from

the Jogbani border. Moreover, if 100 or

more trucks of a businessman crossed the

border, the officials used to charge ‘ 5,001

per truck.

The CBI reacted when a rice mill owner,

Mukesh Golcha, complained that the Cus-

toms officials were asking for ‘ 50,000

from him for his 10 trucks which had

crossed over to the other side of the bor-

der. A trap team was formed to conduct the

raid, after which the four officials were ar-

rested.

[Based on http://www.timesofindia.india-

times.com/ELT]

Two Customs officials nabbed oncharges of taking bribe

Two Customs officials were on 21-3-

2013 nabbed by CBI from the Kandla

SEZ for allegedly taking bribe.

The duo were taking bribe from the units sit-

uated in the SEZ, an official alleged.

“Two Customs officials were caught for tak-

ing bribe from the units in Kandla SEZ. One

of them, J.R. Meena, was caught red-handed

on 21-3-2013 while accepting ` 50,000 from

a unit owner there,” a CBI official said.

“The other Customs officer, Kaushik Kale-

ria, was taking money from the units situated

in the SEZ. Enough evidence is there against

him,” he said.

[Source : http://www.business-

standard.com/ELT]

CBI raid on thefamily member of

Ex-ChiefMinister of TamilNadu, Case gainst

DRI Official& importerregistered

The Central Bureau of Investigation

has seized 16 more imported cars in

a follow up action in the case relat-

ing to alleged violation in import of luxury

vehicles. During searches at the premises

of accused persons, documents relating to

imported vehicles and property at Delhi

were recovered. Incriminating documents

recovered are being scrutinized.

A case was registered u/s 120-B r/w 420,

467, 468 r/w 471 IPC and Sec. 13(2) r/w

13(1)(d) of PC Act, 1988 in connection

with a complaint that about 33 vehicles had

been imported in Tamil Nadu and of these,

certain vehicles are believed to have been

imported and subsequently sold in viola-

tion of import provisions causing loss of

upto ` 48 crores approx. to the exchequer.

The case has been registered against an im-

porter and a Senior Intelligence Officer of

DRI who allegedly did not take any action

even after identification of vehicles at the

premises of certain users and unknown

others.

Investigation is in progress.

[Based on http://www.cbi.nic.in/ELT]

CBI raid in airport over Customs duty evasion

The CBI and the Directorate of Revenue In-

telligence (DRI) jointly raided the Customs

Office of Jaipur International Airport on

19-3-2013 on suspicion of a major racket involved

in duty evasion. Several documents were seized

on the basis of complaints that some Customs of-

ficers were helping several importers of semi-pre-

cious stones in evading Customs duty by showing

imports on reduced rates. CBI officials said that

the scam may run into crores of rupees.

CBI DSP Sanjay Sharma told TOI that complaints

were received against certain Customs officers

that they were hand-in-glove with some jewellers

who import semi-precious stones from countries

like China.

“As per the complaints, the Customs officers

would show the total value of the imported semi-

precious stones as much less than their actual

value. As a result, the importer would pay less

Customs duty. The Customs officers would get a

share in the duty that was evaded this way,” said

Sharma.

“It was a joint operation by the CBI and DRI. Sev-

eral documents were seized,” said the officer. He

added that the agencies probing the scam had also

inspected the imported consignments of semi-pre-

cious stones.

The officer added that the scam was going on at

least for the past one year. It could be a case of

embezzlement of crores of rupees, the officer said.

The investigating agencies however refused to

disclose the names of the customs officers and the

importers involved in the scam.

“There are six Customs Superintendents and six

Customs Inspectors. We are yet to ascertain ex-

actly who all are involved in the scam and who

not. Besides, the importers are also being identi-

fied,” the officer added. The agencies are yet to

lodge an FIR in the matter. “We are collecting ev-

idence. The cases will be lodged soon,” a CBI of-

ficer said.

Jaipur has a big market for semi-precious stones.

They are imported raw from countries like China,

Africa, Sri Lanka and Mangolia. Their quality is

improved in Jaipur by their precise cutting and

polishing. They are then exported to all over the

world, especially Europe.

[Source :timesofindia.indiatimes.com/ELT]

10 REVENUE TRANSPARENCY TIMESMay 2013

AMENDMENT OF NOTIFICATION NO. 12-2012-CUSTOMS,DATED 17-03-2012

G.S.R. 248 (E). - In exercise

of the powers conferred by

sub-section (1) of section 25

of the Customs Act, 1962 (52

of 1962), the Central Govern-

ment, being satisfied that it is

necessary in the public inter-

est so to do, hereby exempts

goods specified in the Table 1

annexed hereto, from,-

(i) the whole of the duty of

customs leviable thereon

under the First Schedule to the

Customs Tariff Act, 1975 (51

of 1975), and

(ii) the whole of the addi-

tional duty leviable thereon

under section 3 of the said

Customs Tariff Act, when

specifically claimed by the

importer.

2. The exemption under this

notification shall be subject to

the following conditions,

namely:-

(1) that the goods imported

are covered by a valid autho-

risation issued under the Ex-

port Promotion Capital Goods

(EPCG) Scheme in terms of

Chapter 5 of the Foreign

Trade Policy permitting im-

port of goods at zero customs

duty;

(2) that the authorisation is

registered at the port of import

specified in the said authori-

sation and the goods, which

are specified in the Table 1 an-

nexed hereto, are imported

within eighteen months from

the date of issue of the said

authorisation and the said au-

thorisation is produced for

debit by the proper officer of

customs at the time of clear-

ance:

Provided that the bene-

fit of import of capital

goods at concessional duty

under this notification for

creation of modern infrastruc-

ture shall be extended only to

such retailers who have a min-

imum area of 1000 square

metres:

Provided further that the

catalyst for one subsequent

charge shall be allowed, under

the authorisation in which

plant, machinery or equip-

ment and catalyst for initial

charge have been imported,

except in cases where the Re-

gional Authority issues a sep-

arate authorisation for catalyst

for one subsequent charge

after the plant, machinery or

equipment and catalyst for

initial charge have already

been imported;

(3) that the importer is not is-

sued, in the year of issuance

of zero duty EPCG authorisa-

tion, the duty credit scrips

under Status Holder Incentive

Scrip (SHIS) scheme under

para 3.16 of the Foreign Trade

Policy. In the case of applicant

who is Common Service

Provider (herein after referred

as CSP), the CSP or any of its

specific users should not be

issued, in the year of issuance

of the zero duty EPCG autho-

risation, the duty credit scrips

under SHIS. This condition

shall not apply where already

availed SHIS benefit that is

unutilised is surrendered or

where benefits availed under

SHIS that is utilised is re-

funded, with applicable inter-

est, before issue of the zero

duty EPCG authorisation.

SHIS scrips which are sur-

rendered or benefit refunded

or not issued in a particular

year for the reason the au-

thorisation has been issued in

that year shall not be issued in

future years also;

(4) that the authorisation for

annual requirement shall in-

dicate export product to be

exported under the authori-

sation. The importer shall sub-

mit a Nexus Certificate from

an independent Chartered En-

gineer (CEC) in the format

specified in Appendix 32A of

HBP (vol. I) notified under

the Foreign Trade Policy, cer-

tifying nexus of imported cap-

ital goods with the export

product, to the Customs au-

thorities at the time of clear-

ance of imported capital

goods. A copy of the CEC

shall be submitted to the con-

cerned Regional Authority

alongwith copy of the bill of

entry, within thirty days from

the date of import of the Cap-

ital Goods;

(5) that the goods imported

shall not be disposed of or

transferred by sale or lease or

any other manner till export

obligation is complete;

(6) that the importer executes

a bond in such form and for

such sum and with such surety

or security as may be speci-

fied by the Deputy Commis-

sioner of Customs or Assistant

Commissioner of Customs

binding himself to comply

with all the conditions of this

notification as well as to ful-

fill export obligation on Free

on Board (FOB) basis equiva-

lent to six times the duty

saved on the goods imported

as may be specified on the au-

thorisation, or for such higher

sum as may be fixed or en-

dorsed by the Regional Au-

thority in terms of Para 5.10

of the Handbook of Proce-

dures Vol I, issued under para

2.4 of the Foreign Trade Pol-

icy, within a period of six

years from the date of issue of

Authorisation, in the follow-

ing proportions, namely :-

Provided that in case the authorisation

is issued to a CSP, the CSP shall exe-

cute the bond with bank guarantee and

the bank guarantee shall be equivalent

to 100% of the duty foregone, and the

bank guarantee shall be given by CSP

or by anyone of the users or a combi-

nation thereof, at the option of the

CSP:

Provided further that the export ob-

ligation shall be 75% of the normal

export obligation specified above

when fulfilled by export of following

green technology products, namely,

equipment for solar energy decen-

tralised and grid connected products,

bio-mass gassifier, bio-mass or waste

boiler, vapour absorption chillers,

waste heat boiler, waste heat recovery

units, unfired heat recovery steam

generators, wind turbine, solar collec-

tor and parts thereof, water treatment

plants, wind mill and wind mill tur-

bine or engine, other generating sets

- wind powered, electrically operated

vehicles – motor cars, electrically

operated vehicles – lorries and trucks,

electrically operated vehicles – motor

cycle and mopeds, and solar cells:

Provided also that for units located in

Arunachal Pradesh, Assam, Jammu

and Kashmir, Manipur, Meghalaya,

Mizoram, Nagaland, Sikkim and

Tripura, the export obligation shall be

25% of the normal export obligation

specified above:

Provided also that spares (including

refurbished or reconditioned spares),

moulds, dies, jigs, fixtures, tools and

refractory for initial lining, for the ex-

isting plant and machinery (imported

earlier, under EPCG or otherwise),

shall be allowed to be imported under

the EPCG scheme subject to an ex-

port obligation equivalent to 50% of

the normal export obligation specified

above in case of separate authorisation

issued, subject to the condition that

the Cost, Insurance and Freight (CIF)

value of import of the said spares etc.

is limited to 10% of the CIF value of

the plant and machinery imported

under the EPCG authorisation or 10%

of the book value of the plant and ma-

chinery imported earlier otherwise

than under EPCG Scheme, as the case

may be:

Provided also that where a sick

unit is notified by the Board for

Industrial and Financial Reconstruc-

tion (BIFR) or where a rehabilitation

scheme is announced by the con-

cerned State Government in respect of

sick unit for its revival, the export ob-

ligation may be fulfilled within time

period allowed by the Regional Au-

thority as per the rehabilitation pack-

age prepared by the operating agency

and approved by BIFR or rehabilita-

tion department of State Government.

In cases where the time period is not

specified in the rehabilitation package,

the export obligation may be fulfilled

within the time period allowed by the

Regional Authority which shall not

exceed nine years:

Provided also that where the capital

goods are imported for technological

upgradation as per conditions speci-

fied in Para 5.8 of the Foreign

Trade Policy, the export obligation

shall be fixed equivalent to six times

the duty saved on the capital goods

imported as may be specified on the

authorization, or for such higher sum

as may be fixed by the Regional Au-

thority, to be fulfilled within period of

six years from the date of issue of au-

thorization under the said para:

Provided also that export obligation of

a particular block may be set off

against the excess exports made in the

said preceding block;

(7) that if the importer does not claim

exemption from the additional duty

leviable under section 3 of the Cus-

toms Tariff Act, 1975, the additional

duty so paid by him shall not be taken

for computation of the net duty saved

for the purpose of fixation of export

obligation provided the Cenvat credit

of additional duty paid has not been

taken;

(8) that the importer, including a

CSP, produces within 30 days from

the expiry of each block from the date

of issue of authorisation or within

such extended period as the Deputy

Commissioner of Customs or Assis-

tant Commissioner of Customs may

allow, evidence to the satisfaction of

the Deputy Commissioner of Customs

or Assistant Commissioner of Cus-

toms showing the extent of export ob-

ligation fulfilled, and where the export

obligation of any particular block is

not fulfilled in terms of the condition

(6), the importer shall within three

months from the expiry of the said

block pay duties of customs equal to

an amount which bears the same pro-

portion to the duties leviable on the

goods, but for the exemption con-

tained herein, which the unfulfilled

portion of the export obligation bears

to the total export obligation, together

with interest at the rate of 15% per

annum from the date of clearance of

the goods;

(9) that where the importer fulfills

75% or more of the export obligation

as specified in condition (6) (over and

above 100% of the average export ob-

ligation) within half of the period

specified for export obligation as

mentioned in condition (6), his bal-

ance export obligation shall be con-

doned and he shall be treated to have

fulfilled the entire export obligation;

(10) that the capital goods imported,

assembled or manufactured are in-

stalled in the importer‟s factory or

premises and a certificate from the ju-

risdictional Deputy Commissioner of

Central Excise or Assistant Commis-

sioner of Central Excise, as the case

may be, is produced confirming in-

stallation and use of the capital goods

in the importer‟s factory or premises,

within six months from the date of

completion of imports or within such

extended period as the Deputy Com-

missioner of Customs or Assistant

Commissioner of Customs, as the case

may be, may allow :

Provided that in case of import of

spares, the installation certificate shall

be produced within three years from

the date of import:

Provided further that if the importer,

including an importer who is a Com-

mon Service Provider (CSP), is not

registered with the Central Excise or

if the importer is a service provider

(other than a CSP), as the case may

be, he may produce the said certificate

of installation and usage issued by an

independent Chartered Engineer:

Provided also that in the case of man-

ufacturer exporter and merchant ex-

porter having supporting

manufacturer(s) or vendor(s) or in the

case of import of irrigation equipment

for use in contract farming for export

of agricultural products or in the case

of importer rendering services, the

capital goods may be installed at the

factory or premises of such other per-

son whose name and address is en-

dorsed on the authorisation referred to

in condition (1) and also on the ship-

ping bills and where the bond for full

difference of duty, if necessary, in

terms of condition (6) with or without

a bank guarantee, as the case may be,

is executed by the importer and such

other person binding themselves

jointly and severally to fulfill the ex-

port obligation and all other condi-

tions of this notification and to pay

duty with interest at the rate of 15%

per annum in case of default. This

shall not apply to a CSP:

Provided also that agro units located

in Agri Export Zones or service

providers in Agri Export Zones may

move the capital goods within the

Agri Export Zones under intimation to

the jurisdictional Deputy Commis-

sioner of Central Excise or Assistant

Commissioner of Central Excise, as

the case may be, subject to the condi-

tion that the importer shall maintain

accurate record of such movement;

(11) that the imports and exports are

undertaken through the seaports, air-

ports or through the Inland Container

Depots or through the Land Customs

Stations as mentioned in the Table 2

annexed hereto or a Special Economic

Zone notified under section 4 of the

Special Economic Zones Act, 2005

(28 of 2005):

Provided that the Commissioner of

Customs may, by special order or a

public notice and subject to such con-

ditions as may be specified by him,

permit import and export through any

other sea-port, airport, inland con-

tainer depot or through a land customs

station within his jurisdiction;

(12) that notwithstanding anything

contained in condition (6) above,

where the Regional Authority grants

extension of block-wise period for any

block(s) or overall period of fulfill-

ment of export obligation up to a pe-

riod of two years or regularization of

shortfall in export obligation, not ex-

ceeding five percent of such export

obligation, the said block-wise period

or overall period of export obligation

shall be extended or condoned by the

Deputy Commissioner of Customs or

Assistant Commissioner of Customs,

as the case may be:

Provided that in respect of sick units

referred to in the fifth proviso to con-

dition (6) above, extension of overall

period of export obligation shall not

be allowed.

Continued on Page 11

11 May 2013REVENUE TRANSPARENCY TIMESAMENDMENT OF NOTIFICATION NO. 12-2012-CUSTOMS, DATED 17-03-2012

Continued from Page 10

3. Where the goods specified in the

Table 1 are found defective or unfit for

use, the said goods may be re- exported

back to the foreign supplier within

three years from date of payment of

duty on the importation thereof:

Provided that at the time of re-export,

the goods are identified to the satisfac-

tion of the Deputy Commissioner of

Customs or Assistant Commissioner of

Customs, as the case may be, to be the

same as the goods which were im-

ported.

Explanation – For the purpose of this

notification,-

(A) “Authorisation” includes “Autho-

risation for Annual Requirement”.

(B) “Capital goods” has the same

meaning as assigned to it in Paragraph

of 9.12 of the Foreign Trade Policy;

(C) “Common Service Provider”

(CSP) means a service provider who is

designated or certified as a Common

Service Provider by the DGFT, De-

partment of Commerce or State Indus-

trial Infrastructural Corporation in a

Town of Export Excellence;

(D) “Export obligation”,-

(I) means obligation on the importer to

export to a place outside India, goods

manufactured or capable of being man-

ufactured or services rendered by the

use of capital goods imported in terms

of this notification and the export obli-

gation shall be over and above the av-

erage level of exports achieved by the

importer in the preceding three licens-

ing years for the same and similar

products within the overall export ob-

ligation period including the extended

period, if any and such average shall be

the arithmetic mean of export perform-

ance in the last three years for the same

and similar products:

Provided that in case of export of

goods relating to handicraft, hand-

looms, cottage, tiny sector, agriculture,

animal husbandry, floriculture, horti-

culture, pisciculture, viticulture, poul-

try, sericulture, carpet, coir and jute, the

importer shall not be required to main-

tain the average level of exports:

Provided also that in case of export of

goods relating to aquaculture (includ-

ing fisheries), the importer shall not be

required to maintain the average level

of exports subject to the condition that

EPCG authorisation has been obtained

for goods other than fishing trawlers,

boats, ships and other similar items:

Provided also that the goods, excepting

tools, imported under this notification

by the aforesaid sectors, shall not be al-

lowed to be transferred for a period of

five years from the date of imports

even in cases where export obligation

has been fulfilled. Transfer of capital

goods would, however, be permitted

within the group companies, after ful-

fillment of export obligation but before

five years from the date of imports,

under intimation to Regional Authority

and jurisdictional Central Excise Au-

thority:

Provided also that exports made to

such countries as notified by Director

General of Foreign

Trade, shall not be counted for fixing

the average level of exports:

Provided also that exports against only

such shipping bills which mention the

authorisation number and date of the

authorisation shall be counted for the

fulfillment of the export obligation:

Provided also that in the case of autho-

risation issued to a CSP, -

(i) the reference to „importer‟ in this

Explanation shall be taken to mean a

reference to

„CSP and specific users whose details

are informed prior to export by CSP to

the Regional

Authority‟;

(ii) for the exports by users of the com-

mon service to be counted towards ful-

filment of export obligation of CSP, the

respective shipping bills of the users of

common service shall contain the au-

thorisation details of the CSP and the

concerned Regional Authority shall be

informed about the details of the users

prior to such export; and

(iii) the exports counted against the au-

thorisation in terms of this notification

shall not be counted towards fulfill-

ment of other specific export obliga-

tions against all other authorisations

issued under Chapter 5 of the Foreign

Trade Policy, including para 5.22 of

Handbook of Procedures Volume 1;

(II) shall be fulfilled through physical

exports and the export proceeds re-

alised in freely convertible currency.

However the following categories of

supplies, shall also be counted towards

fulfillment of export obligation:

(a) deemed exports, namely:

(i) supply of goods against Advance

Authorisation/Advance Authorisation

for Annual

Requirement/ Duty Free Import Au-

thorisation (DFIA);

(ii) supply of goods to Export Oriented

Units (EOUs) or Software Technology

Parks

(STPs) or Electronics Hardware Tech-

nology Parks (EHTPs) or Bio-Tech-

nology Parks (BTPs);

(iii) supply of goods to projects fi-

nanced by multilateral or bilateral

agencies or Funds as notified by the

Department of Economic Affairs

(DEA), the Ministry of Finance (MOF)

under International Competitive Bid-

ding (ICB) in accordance with proce-

dures of those agencies or Funds,

where legal agreements provide for

tender evaluation without including

customs duty; supply and installation

of goods and equipments (single re-

sponsibility of turnkey contracts) to

projects financed by multilateral or bi-

lateral agencies or Funds as notified by

DEA, MOF under ICB, in accordance

with procedures of those

agencies/Funds, where bids may have

been invited and evaluated on the basis

of Delivery Duty Paid (DDP) prices for

goods manufactured abroad;

(iv) supply of goods to any project or

purpose in respect of which the Min-

istry of Finance, by a notification, per-

mits import of such goods at zero

customs duty and the supply is made

under ICB procedure;

(v) supply of goods to mega power

projects as provided in sub-clause (ii)

of clause (f) of para 8.2 of Foreign

Trade Policy;

(vi) supply of goods to nuclear power

projects through competitive bidding

as provided in clause (j) of para 8.2 of

Foreign Trade Policy;

(b) supply of ITA-1 items to Domestic

Tariff Area, provided realization is in

free foreign exchange;

(c) royalty payments received in

freely convertible currency and foreign

exchange received for Research and

Development (R&D) services; and

(d) payments received in rupee terms

for port handling services in terms of

chapter 9 of the Foreign

Trade Policy.

(E) “Foreign Trade Policy” means the

Foreign Trade Policy, 2009-2014,

published in the Gazette of India, Ex-

traordinary, Part II, Section 3, Sub-sec-

tion (ii) vide notification number

G.S.R. 1293 (E) of the Government of

India, Ministry of Commerce and In-

dustry, Department of Commerce No.1

(RE – 2012) /2009-2014 dated the 5th

June, 2012, as amended from time to

time;

(F) “Handbook of Procedures, Volume

1” means the Handbook of Procedures

Volume 1, 2009-14, published in the

Gazette of India, Extraordinary, Part I,

Section 1 vide public notice of the

Government of India in the Ministry of

Commerce and Industry, Department

of Commerce, No.1 (RE – 2012)

/2009-2014 dated the 5th June, 2012,

as amended from time to time;

(G) “Manufacture” has the same mean-

ing as defined in clause (f) of section 2

of the Central Excise Act, 1944 (1of

1944);

(H) “Regional Authority” means the

Director General of Foreign Trade ap-

pointed under section 6 of the Foreign

Trade (Development and Regulation)

Act, 1992 (22 of 1992) or an officer au-

thorised by him to grant an authorisa-

tion including a duty credit scrip under

the said Act;

(I) “Town of Export Excellence”

(TEE) means a selected town produc-

ing goods of Rs. 750 Crore or more

based on potential of growth in ex-

ports. However, for TEE in handloom,

handicraft, agriculture and fisheries

sector the threshold limit would be

Rs.150 Crore.

Table 1

Table 2

[F.No.605/10/2013-DBK] Notification No. 22 / 2013-CUSTOMS

Tax on service provided by way of erection of pandal or shamiana

Several representations have been received seeking clarifica-

tion on the levy of service tax on the activity of preparation of

place for organizing event or function by way of erection/lay-

ing of pandal and shamiana. The doubt that has been raised is that

this may be a transaction involving “transfer of right to use goods”

and hence deemed sale.

2. The issue has been examined. “Service” defined in section 65B

(44) of the Finance Act, 1994, includes a ‘declared service’. Activ-

ity by way of erection of pandal or shamiana is a declared service,

under section 66E 8(f). The process of erection of Pandal or shami-

ana is a reasonably specialized job and is carried out by the supplier

with the help of his own labour. In addition to the erection of pandal

or shamiana the service is generally coupled with other services like

supply of crockery, furniture, sound system, lighting arrangements,

etc.

3. For a transaction to be regarded as “transfer of right to use goods”,

the transfer has to be coupled with possession. Andhra Pradesh High

Court in the case of Rashtriya Ispat Nigam Ltd. Vs. CTO [1990 77

STC 182] held that since the effective control and possession was

with the supplier, there is no transfer of right to use. This decision of

the Andhra Pradesh High Court was upheld by the Supreme Court

subsequently [2002] 126 STC 0114. In the matter of Harbans Lal vs.

State of Haryana – [1993] 088 STC 0357 [Punjab and Haryana High

Court], a view was taken that if pandal, is given to the customers for

use only after having been erected, then it is not transfer of right to

use goods.

4. In the case of BSNL Vs. UOI [2006] 3 STT 245 Hon’ble Supreme

Court held that to constitute the transaction for the transfer of the

right to use the goods, the transaction must have the following at-

tributes:- (a) There must be goods available for delivery; (b) There

must be a consensus ad idem as to the identity of the goods; (c) The

transferee should have a legal right to use the goods and, conse-

quently, all legal consequences of such use including any permis-

sions or licenses required therefor should be available to the

transferee; (d) For the period during which the transferee has such

legal right, it has to be the exclusion of the transferor : this is the

necessary concomitant or the plain language of the statute, viz., a

“transfer of the right to use” and not merely a license to use the

goods: (e) Having transferred the right to use the goods during the

period for which it is to be transferred, the owner cannot again trans-

fer the same right to others.

5. Applying the ratio of above judgments and the test formulated by

Hon’ble Supreme Court, the activity of providing pandal and shami-

ana along with erection thereof and other incidental activities do not

amount to transfer of right to use goods. It is a service of preparation

of a place to hold a function or event. Effective possession and con-

trol over the pandal or shamiana remains with the service provider,

even after the erection is complete and the specially made–up space

for temporary use handed over to the customer.

6. Accordingly services provided by way of erection of pandal or

shamiana would attract the levy of service tax.

Circular No. 168/3 /2013 - ST F. No. 356/2/2013-TRU

12 REVENUE TRANSPARENCY TIMESMay 2013

Opportunities

would con-

tinue to be

high and the

g r o w t h

p r o s p e c t s

would look

very promising. There will be

much financial growth this month.

There are good chances of a com-

mitment in relationship. Health

might not be good, as you remain

prone to infections and injuries.

Remedy: Do sundar kand pathdaily.

S u c c e s s f u l

phase but only

after your share

of challenges

and hurdles are

over. Your fi-

nances will be

under pressure.

There could be excessive expenses

and some losses too. A special and

a very happy phase would operate

in love. Chances of injury, inflam-

mation and resurgence of chronic

ailments present this month.

Remedy: Do durga stuti daily anddonate sweet chapatti made of guroutside temple on every Tuesday.

This month you

will find many

external factors

that will pull up

options at

work, although

actual progress

would not be much yet. You need

to be judicial in expenses and

avoid any form of speculation of

wasteful expense now. Love life

will be below average, despite a

very high level of desire. There

could be some amount of health is-

sues due to a long and unrelenting

period of stress.

Remedy: Water peepal tree onevery Thursday and wear one 4mukhi rudraksha.

Career wise, a

very active

month. You will

be positive, dy-

namic and

make a name in

what you do.

You will find gains and growth by

multiple sources this month. Rela-

tionship wise this will be very

great month. You will spend some

happy moments with your partner.

Health will be good throughout as

long as you do not create too much

stress in your environment.

Remedy: Do jal abhishek of shiv-ling every Monday this monthand do bhairon chalisa daily.

There would be a

rise in your au-

thority, while

many new oppor-

tunities would

come up at work

this month. Money matters will

bring in mixed results this month.

June will bring good inflow of

money. Love life will be some-

what blocked and not be very pos-

itive for you. Health will be good

throughout.

Remedy: Donate 600 gms curd toa poor young girl on every Fridayof this month.

Progress at work

would be slow

this month. In-

vestments could

bring in losses

for you. Avoid

any form of spec-

ulation or risk financially. Love

life will be good till May, from

June onwards existing relationship

will be challenging. Health wise

you might find problems in your

neck or lower abdomen.

Remedy: Apply a paste of sind-hoor and Jasmine oil on hanu-man ji’s idol in a temple on everyTuesday.

Despite the hur-

dles, the gains

& growth

would be high.

You will find

growth & op-

portunities from

unknown sources. Income will be

average. Love life will be better as

compared to previous month. Mar-

ried life will be very influential.

Health will be below average. Be

cautious.

Remedy: Do gayatri mahamantra path daily and give waterto rising sun in a copper utensil.

This will be a posi-

tive month wherein

you will achieve a

lot due to your hard

work and persever-

ance. Money mat-

ters will be positive although your

expenses might be higher. Love

life will not be very helpful now.

Health will be good, although too

many new events, stress and

overeating could push your health

slightly.

Remedy: Give donation in blindschool on every Saturday of thismonth.

There would be

multiple influ-

ences in career

due to the five

planet combina-

tion in your work

area and career in general. Gains

will continue to be very positive.

It is a good time to consolidate and

increase your savings. Love life

would be below average this

month as some new confusion and

controversy could crop up. Health

will be good throughout.

Remedy: Give jawar to a cow onevery Friday of this month.

Career would be

going great guns

and it is a period

when you can

hope to get many

new opportuni-

ties. Income will

be good throughout. You will do

well in terms of generating higher

financial yields. Love life will be

good. New relationships & pro-

posals could come along. Health

will remain nice & positive. Avoid

stress and eat carefully.

Remedy: Pour raw milk on rootsof banyan tree on every Tuesdayof this month.

Career will grow

and continue to

progress, mostly

on account of

your hard work

& sheer dy-

namism. Money matters will be

positive. Real estate investments

are avoidable this month. Love life

will be good this month. Spouse

will be very social & friendly.

There will be overall positive

trends in health matters through-

out.

Remedy: Feed bajra to birdsdaily.

This month your

position & issues

experienced in the

past would improve

but hurdles will

continue in a certain way still. You

should remain cautious and avoid

risks in money matters till 23rd

May. Love life will jump up this

month. Overall this will be a very

blissful month for you and your

lover. Health will remain challeng-

ing this month. You need to con-

trol stress and eat carefully.

Remedy: Donate black or bluecolored clothes to poor old peopleon Saturday’s.

Ankush Khungar

Astrologer & Tarot card reader

Cellphone : 9582577023 (Delhi),

9888491324 (Chandigarh)

mail: ashu.astro@yahoo.com

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Telecom major Bharti Airtel has been asked to pay

‘ 80 crore as Service Tax under a Customs, Ex-

cise and Service Tax Appellate Tribunal (CES-

TAT) order issued on 11-4-2013.

According to the order, the telecom company has

to pay the amount for period up to 2009 with regard to

the free telephone connection provided to its employ-

ees.

The total Services Tax liability for providing free

telephone connection, a Government source said, was

over ‘ 120 crore. However, Bharti Airtel had appealed

against the order in the CESTAT. As per the order the

company will have to pay up the Service Tax “within

four weeks”, the source said.

Free telephone connection provided to employees is

exempted from the Service Tax net only when the serv-

ice is provided absolutely free without even any hidden

charges.

According to experts, many companies provide free

services but charge it indirectly from the beneficiary.

So, the value of taxable services in relation to tele-

phone connection provided is the total amount received

by the telegraph authority from the subscriber. In case

the service is provided free and no amount is received by

the telegraph authority, the Service Tax at the current

rate of 12.36 per cent is not to be paid.

[Based on The Indian Express]

Airtel asked to pay

‘ 80 crore Service

Tax dues

JOGBANI CUSTOMS

SHUT OVER BRIBERY

The Jogbani Customs in India has

been closed for the past two days

after India’s Central Investigation

Bureau raided the Customs office and ar-

rested four employees on bribery charges.

Regular check has been obstructed since

22-3-2013 following the incident.

According to a source at the Customs,

the CBI team had arrested four employees

with ‘ 50,000/- Nepali currency on 21-3-

2013.

The arrested are Customs Commissioner

Shiva Shankar, Superintendent Aadesh

Kumar and Inspectors Rakesh Kumar and

Puleswor Paswan.

They have been taken to Bihar’s capital

Patna-based Special Court for investiga-

tion.

According to an employee at the Cus-

toms, the CBI team had been tipped off that

the Customs officials were seeking bribes.

It is claimed that staff at the Jogbani Cus-

toms collect ‘ 20 million per month in

bribes.

Infamous for bribery, the Customs office

was raided for the first time on 21-3-2013.

Vice-chairperson of the Biratngar Custom

Agents Union, Bijendra Parasar, said staff

at the Customs had been creating hassles

to Nepali businessmen for no apparent rea-

son.

“The raid at the Customs has made Nepali

traders happy,” Parasar said.

Meanwhile, Chief of the Biratnagar Cus-

toms Rajendra Dahal said they have closed

the office and no Indian goods have en-

tered Nepal in the last two days.

Following the shutdown in Jogbani, hun-

dreds of heavy trucks and tankers ferrying

raw materials for industries in Nepal have

been stranded at Bathanaha, India. Birat-

nagar Customs, which collects ‘ 3 crore

revenue per day, could not collect any rev-

enue on 23-3-2013, said Chief Dahal.

The Customs office collected a meagre

‘4 million on 22-3-2013, he added. “There

is no prospect of the Biratnagar Customs

opening before 25-3-2013,” Dahal added.

Morang Business Union Chairman

Avinash Bohara said the closure of Jogbani

Customs will have adverse impact on busi-

nesses in Nepal.

[Source :

http://www.thehimalayantimes.com]

13 May 2013REVENUE TRANSPARENCY TIMESAnnual Supplement 2013 to Foreign Trade

Policy 2009-14 Regarding Exemptionunder Post Export EPCG Duty Credit Scrip

G.S.R. 251 (E).– In exercise of the pow-

ers conferred by sub-section (1) of sec-

tion 5A of the Central Excise Act, 1944

(1 of 1944), read with sub-section (3) of

section 3 of the Additional Duties of Ex-

cise (Goods of Special Importance) Act,

1957 (58 of 1957) and sub-section (3) of

section 3 of the Additional Duties of Ex-

cise (Textiles and Textile Articles) Act,

1978 (40 of 1978), the Central Govern-

ment, on being satisfied that it is neces-

sary in the public interest so to do,

hereby exempts the goods specified in

the First Schedule and the Second

Schedule to the Central Excise Tariff

Act, 1985 (5 of 1986), when cleared

against a Post Export EPCG duty credit

scrip issued by the Regional Authority in

accordance with paragraph 5.11 under

Chapter 5

Export Promotion Capital Goods

(EPCG) Scheme of the Foreign Trade

Policy which provides for duty remission

in proportion to export obligation ful-

filled (hereinafter referred to as the said

scrip) from,-

(i) the whole of the duty of excise levi-

able thereon under the First Schedule

and the Second Schedule to the Central

Excise Tariff Act, 1985 (5 of 1986);

(ii) the whole of the additional duty of

excise leviable thereon under section 3

of the Additional Duties of

Excise (Goods of Special Importance)

Act, 1957 (58 of 1957); and

(iii) the whole of the additional duty of

excise leviable thereon under section 3

of the Additional Duties of

Excise (Textiles and Textile Articles)

Act, 1978 (40 of 1978).

2. The exemption shall be subject to the

following conditions, namely:-

(a) that the conditions (1) to (14) speci-

fied in paragraph 2 of the Notification

No. 23/2013 – Customs, dated the 18th

April, 2013 are complied and the said

scrip has been registered by the Customs

authority at the specified port of regis-

tration (hereinafter referred as the said

Customs authority);

(b) that the holder of the scrip, who may

either be the person to whom the scrip

was originally issued or a transferee-

holder, presents the said scrip to the

said Customs authority along with a let-

ter or proforma invoice from the supplier

or manufacturer indicating details of its

jurisdictional Central Excise Officer

(hereinafter referred as the said Officer)

and the description, quantity, value of the

goods to be cleared and the duties levi-

able thereon, but for this exemption;

(c) that the said Customs authority, tak-

ing into account the debits already made

towards imports under Notification No.

23/2013-Customs, dated the 18th April,

2013, and this exemption, debits the du-

ties leviable, but for this exemption in or

on the reverse of the said scrip and also

mentions the necessary details thereon,

updates its own records and sends writ-

ten advice of these actions to the said Of-

ficer;

(d) that the validity of the said scrip shall

be eighteen months from the date of

issue and the said scrip shall be valid on

the date on which the above debit of duty

is made;

(e) that at the time of clearance, the

holder of the scrip presents the said scrip

debited by the said Customs authority to

the said Officer along with an undertak-

ing addressed to the said Officer that in

case of any amount short debited in the

said scrip he shall pay on demand an

amount equal to the short debit, along

with applicable interest;

(f) that based on the said written advice

and undertaking, the said Officer en-

dorses the clearance particulars and val-

idates, on the reverse of the said scrip,

the details of the duties leviable, but for

this exemption, which were debited by

the said Customs authority, and keeps

a record of such clearances;

(g) that the manufacturer retains a copy

of the said scrip, debited by the said Cus-

toms authority and endorsed by the said

Officer and duly attested by the holder of

the scrip, in support of the clearance

under this notification;

(h) that the benefits under this notifica-

tion shall not be available to clear the

items listed in Appendix 37Bof the

Handbook of Procedures, Volume 1;

(i) that the benefits under this notifica-

tion shall not be available to goods or

items, the imports of which are not per-

mitted against the said scrip; and

(j) that the said holder of the scrip, to

whom the goods were cleared, shall be

entitled to avail the drawback or CEN-

VAT credit of the duties of excise levi-

able under the First Schedule and the

Second Schedule to the Central Excise

Tariff Act, 1985 (5 of 1986), section 3 of

the Additional Duties of Excise (Goods

of Special Importance) Act, 1957 (58 of

1957) and section 3 of the Additional

Duties of Excise (Textiles and Textile

Articles) Act, 1978 (40 of 1978), against

the amount debited in the said scrip and

validated at the time of clearance.

Explanation - For the purposes of this

notification,-

(A) “Export obligation” shall have the

same meaning as specified in Notifica-

tion No. 23/2013- Customs, dated the

18th April, 2013;

(B) “Foreign Trade Policy” means the

Foreign Trade Policy, 2009-2014, pub-

lished in the Gazette of India, Extraordi-

nary, Part II, Section 3, Sub-section (ii)

vide notification number G.S.R.

1293(E) of the Government of India,

Ministry of Commerce and Industry, De-

partment of Commerce No.1 (RE

– 2012) /2009-2014 dated the 5th June,

2012, as amended from time to time;

(C) “Handbook of Procedures, Volume

1” means the Handbook of Procedures

Volume 1, 2009-14, published in the

Gazette of India, Extraordinary, Part I,

Section 1 vide public notice of the Gov-

ernment of India in the Ministry of Com-

merce and Industry, Department of

Commerce, No.1 (RE – 2012) /2009-

2014 dated the 5th June, 2012, as

amended from time to time;

(D) “Regional Authority” means the Di-

rector General of Foreign Trade ap-

pointed under section 6 of the Foreign

Trade (Development and Regulation)

Act, 1992 (22 of 1992) or an officer au-

thorised by him to grant an authorisation,

including a duty credit scrip under the

said Act.

[F.No.605/10/2013-DBK]

Notification No. 14 / 2013 - Central Ex-

cise

(Rajiv Talwar) Joint Secretary

to the Government of India

Customs slaps ‘ 38.5 crore dutyevasion fine on Adani firms

The Customs department has

imposed a collective

penalty of ‘ 38.5 crore on

Ahmedabad based Adani Exports

Limited (AEL) and its related enti-

ties in a case of ‘679.62 crore duty

evasion involving import and ex-

port of diamonds. Of the penalty, `

1 crore has been imposed on AEL’s

managing director Rajesh Adani.

The Customs’ decision has come

six years after the Directorate of

Revenue Intelligence (DRI) issued

a show cause accusing the com-

pany of importing diamonds and

exporting the same, falsely claim-

ing value addition. AEL thus in-

flated the export turnover to claim

government incentives in the form

of duty free imports, DRI had al-

leged. Customs commissioner P.M.

Saleem, in the January 14 order,

endorsed the findings and said.

“The value addition claimed is

bogus.”

Vikram Nankani of Economic

Laws Practice, who represented

the company, said they have gone

in appeal in the Customs, Central

Excise and Service Tax Appellate

Tribunal. “The matter is sub judice

and I would not like to comment,”

he told TOI over the phone on 5-4-

2013. AEL had denied the allega-

tions during the hearing of the

show cause notice and said the

value addition was genuine.

In 2004, the Government launched

a scheme, Target Plus, that permit-

ted duty free imports for compa-

nies which fulfilled certain export

performance conditions. The

scheme was for five years, but di-

amonds were removed from the

list of items in 2006, following

misuse complaints. While the

scheme was in force, AEL ac-

quired interest in two companies

and accordingly, the export figures

rose. When the policy changed, en-

hancing the value addition from

5% to 10%, AEL’s corresponding

figures also rose, thus inflating ex-

ports, the order said. The exports

dropped to one-third in January

2006 because the companies had

achieved the targets for the same

by then.

The order said the companies in

Hong Kong and Singapore that ei-

ther supplied the diamonds or

bought the value-added diamonds

were controlled by AEL. These

firms were shut the moment the in-

centive scheme was discontinued.

AEL also paid illegal commission

to overseas entities for exports,

which if taken into account reduces

the value addition claimed by the

company. AEL is the main culprit,

the order said.

The order said that AEL entered

into MoUs with group companies,

who passed on incentives claimed

for exports to AEL, for a commis-

sion.

[Source : The Times of India,

Mumbai/ELT]

CUSTOMS TO REPLACE OLD ARMS WITH BERETTA, GLOCK

For effective anti-smuggling

operations and to handle ter-

rorism-related threats, In-

dian Customs authorities have

decided to phase out thousands of

its old and obsolete weapons and

replace them with state-of-the-art

firearms. And the shopping list

may include Beretta and Glock

pistols, revolvers made in Indian

Ordnance Factories and INSAS as-

sault rifles.

On February 15, a Committee

headed by the DG Revenue Intelli-

gence opined that the majority of

the weapons available with Cus-

toms are old and need immediate

replacement. In view of the depart-

ment’s expanding role, including

tackling terror threats, “best

weapons” should be made avail-

able to it, the Committee recom-

mended to the Central Board of

Excise and Customs (C.B.E. & C.).

The Customs has over 6,000

weapons, including 1,500 outdated

0.303 rifles, which needs to be

phased out immediately. These ri-

fles are likely to be replaced with

5.56 mm INSAS, manufactured by

Ishapore rifle factory in West Ben-

gal, according to official sources.

Meanwhile, C.B.E. & C. has di-

rected the Committee, which in-

cludes four Customs Preventive

Commissioners, to rework norms

for arms and ammunition depend-

ing upon the actual requirement.

After norms are fixed and ap-

proved, the process of procurement

of arms shall begun, said a Senior

Customs Official.

Apart from rifles and signal pis-

tols, the Customs currently has 65

LMGs, 548 SLRs, more than 1,500

pistols of different make and more

than 1,500 revolvers. These

weapons are now proposed to be

replaced with imported or Ord-

nance Factory made revolvers and

pistols. More LMGs will be pro-

cured for newly acquired patrol

boats.

These weapons are already loaned

to officers for performing anti-

smuggling duties, in field forma-

tions. According to Senior

Customs Officials, the Department

has anti-smuggling and border en-

forcement role but it may have to

tackle terror related issues, con-

cerning national security, which re-

quires better equipment and

weapons. And due to problem of

‘misfiring’, Customs authorities

have suggested to replace the re-

volvers with pistols.

The funding of this massive pur-

chase shall be done through Spe-

cial Equipment Fund, used for

purchasing anti-smuggling equip-

ment and budgetary grants, re-

vealed a senior official.

[Source : The Indian Express/ELT]

Top Customs official probed insmuggling of red sanders

The Directorate of Revenue In-

telligence (DRI) is investigat-

ing an Assistant Commissioner

of Customs for his alleged role in a

smuggling attempt of red sanders re-

cently from Nhava Sheva port. The

DRI has interrogated and recorded the

statement of the Customs official. He

is posted with the Marine and Preven-

tive wing of the Customs department.

Sources said DRI officials also visited

the Office of the Assistant Commis-

sioner of Customs recently in South

Mumbai.

Though the Customs official has not

been arrested, a report on his alleged

role has been sent to the Central

Board of Excise and Customs (C.B.E.

& C.) in New Delhi for departmental

action to be initiated against him.

Sources said there was an attempt to

smuggle out the consignment of red

sanders from Nhava Sheva port re-

cently in which the Customs official

allegedly helped the group involved in

the attempt. Sources said during ques-

tioning of the accused involved in the

smuggling attempt, the name of the

Assistant Commissioner of Customs

cropped up following which an in-

quiry was initiated.

Sources said the officer was not ar-

rested, as it would not have served any

purpose because the Customs Act

being a bailable offence, he would

have got bail immediately. “The DRI

also books cases of smuggling under

Customs Act which is bailable,” said a

Customs official. He said that an offi-

cer can be suspended if he remains in

custody for 48 hours. “Here, arresting

would not have led to his suspension

because there was no question of his

custody,” the official said.

[Source : http://www.hindustan-

times.com/ELT]

Indirect tax collectionexceeds revised estimate

by Rs 6,000 crore

Providing a major relief to the government in

meeting the fiscal deficit target of 5.2 per cent

of GDP for 2012-13, the indirect tax collection

has exceeded the revised estimate by Rs 6,000 crore.

The actual indirect tax collection for the last fiscal

stood at Rs 4.74 lakh crore as against the revised tar-

get of Rs 4.68 crore for the year, a government official

said. While the excise duty collection stood at Rs

1,76,457 crore for the year as against the revised tar-

get of Rs 1,70,460 crore, customs collection stood at

Rs 1,65,896 crore as against Rs 1,64,853 crore tar-

geted earlier. The collection from the services stood

at Rs 1,32,000 crore as against the revised estimate of

Rs 1,32,697 crore, the official said.

Taking together the direct and indirect taxes, the gov-

ernment has achieved its revenue target for the year.

The revised revenue target of the government for

2012-13 was Rs 10.3 lakh crore. The revenue growth

in 2012-13 was 16.7 per cent.

Source Indian Express

REVENUE TRANSPARENCY TIMESMay 2013 14

IS AMRITSAR CUSTOMS A DEN OF NARCOTICS SMUGGLING?

S.O.(E) In exercise of powers con-

ferred by Section 5 of the Foreign

Trade (Development & Regula-

tion) Act, 1992 (No. 22 of 1992),

read with paragraph 2.1 of the For-

eign Trade Policy, 2009-2014, as

amended from time to time, the

Central Government hereby substi-

tutes the contents of the existing

Para 2.49.2 of Foreign Trade Pol-

icy 2009-14 as under;

“2.49.2 Personal Hearing by

DGFT

a) Paragraph 2.5 of FTP contains

the provision for relaxation of Pol-

icy and Procedures on grounds of

genuine hardship and adverse im-

pact on trade. DGFT may consider

such request after consulting re-

spective Norms Committee, EPCG

Committee and Policy Relaxation

Committee (PRC).

b) As a last resort to redress griev-

ances of Importers/Exporters,

DGFT may provide an opportunity

for Personal Hearing (PH). For

such PH, a specific request has to

be made to DG if following condi-

tions are satisfied:

i. If an importer/exporter is ag-

grieved by any decision taken by

Policy Relaxation Committee

(PRC), or a decision/order by any

authority in the Directorate Gen-

eral of Foreign Trade, and

ii. a request for review before the

said Committee or Authority has

been filed,

iii. such Committee or Authority

has considered the request for a re-

view, and

iv. the exporter/ importer continues

to be aggrieved.

c) The decision conveyed in pur-

suance to the personal hearing shall

be final and binding.

d) The opportunity for Personal

Hearing will not apply to a deci-

sion/order made in any proceeding,

including an adjudication proceed-

ing, whether at the original stage or

at the appellate stage, under the rel-

evant provisions of F.T.(D&R) Act,

1992, as amended from time to

time”.

2. Effect of the Notification:

The existing grievance redressal

mechanism stands revised.

Notification No 08

(RE–2013)/2009-2014

(Anup K. Pujari)

Director General of Foreign Trade

File No:

01/60/162/12/AM-12/GRC

GRIEVANCE REDRESSAL Swami

Vivekananda

If money help aman to do goodto others, it is

of some value;but if not, it issimply a massof evil, and the

sooner it isgot rid of,the better.

15 May 2013REVENUE TRANSPARENCY TIMES

AMENDMENT TO CESTAT APPEAL FORMS

The Board has decided to

amend/revise the forms for

filing appeal in the CES-

TAT. Accordingly, new forms for

Central Excise (E.A.-3, E.A.-4,

E.A.-5), Customs (C.A.-3, C.A.-4,

C.A.-5) and Service Tax (S.T.-5,

S.T.-6, S.T.-7) have been notified

vide Notification Nos 6/2013-Cen-

tral Excise (N.T.), 37/2013-Cus-

toms (N.T.) and 5/2013-Service

Tax, all dated 10.04.2013 respec-

tively. These forms have been

made effective from 1.6 2013.

Therefore, all appeals filed in the

Tribunal on or after 1.6.2013

would be in the new form being

prescribed.

(2). The new forms are expected to

ensure quick disposal of cases. Ad-

ditional information sought would

lead to faster communication be-

tween the Tribunal Registry and

the appellant, bunching of cases

and would also facilitate creation

of a comprehensive database.

3). Salient features of the changes

introduced in the new appeal forms

are as under-

(i). Presently appeal against the or-

ders passed by Commissioner (Ap-

peals) under sub-section (2) of

Section 35 B of the Central Excise

Act, 1944 and sub-section (2) of

Section 129A of the Customs Act,

1962 are being filed in E.A.-3 and

C.A.-3 forms respectively by the

department. These forms are also

used for filing appeals by the party.

Similarly, E.A.-5 and C.A.-5

forms are being used for filing de-

partmental applications against

Order-in-Original of Commis-

sioner on the strength of order of

the Committee of Chief Commis-

sioner under sub-section (1) of

Section 35E of the CEA, 1944 and

sub-section (1) of Section 129D of

the Customs Act, 1962. While in

the Service tax matter, appeals are

filed under Section 86 (2) and Sec-

tion 86 (2A) of the Finance Act,

1994 against orders passed by the

Commissioner and Commissioner

(Appeals) respectively in a single

form S.T.-7. Therefore, to align the

forms for filing appeals with that of

Service Tax, in the new appeal

forms, the appeal against order

passed by Commissioner (Appeals)

in Central Excise and Customs

matter are to be filed in the new

E.A.-5 and C.A.-5 forms along

with appeal against orders passed

by the Commissioner.

(ii). Separate fields have been pro-

vided in the new forms seeking de-

tails of Assessee Code (PAN based

registration number), Location

Code (Commissionerate / Division

/ Range identifier), PAN or UID

where PAN is not available. Apart

from this, e-mail address, tele-

phone number and fax number of

the assessee is also being sought in

the new forms. These new fields

are intended to facilitate quick

communication between the Tribu-

nal Registry and the Appellant and

would help in identifying the loca-

tion code of the assessee in case of

shifting of the unit or re-organiza-

tion of the jurisdiction under which

the unit existed earlier. In such

cases, the Tribunal Registry was

not able to reach to the assesseefor

service of notices and delivery of

orders. Location Codes can be ob-

tained from websites

http://cbec.nsdl.com and

www.aces.gov.in

(iii). In appeal forms for Customs,

IEC (Importer Exporter Code) is to

be furnished mandatorily by the

Appellant along with the Port Code

so as to identify the Port from

which the import or export has

taken place. These Port Codes are

available on ICEGATE.

(iv). In Service Tax forms, a sepa-

rate field for Premises Code is

being introduced for identification

of the jurisdictional Commission-

erate / Division / Range.

(v). PAN is required to be fur-

nished by the Appellants. In case

where PAN is not available and the

Appellant is having UID, the same

is required to be furnished. This

would help in identification / loca-

tion of persons who are not regis-

tered with the Department but are

charged with penalty etc.

(vi). It has been decided to intro-

duce a 21 string alphanumeric

number along with the date of the

Order against which appeal is

being filed. All the 140 existing

Commissionerates have been as-

signed pre-figured series and serial

numbers have to be filled in for the

orders passed by the Commissioner

or Commissioner (Appeal) or

Commissioner (Adjudication), as

the case may be. Some examples

of the alpha-numeric series are as

below-

“AHM-CUSTM-000-COM-034-

12-13 DT 02-09-2012. This would

mean Order-in-Original No.34 for

the year 12-13 passed by Commis-

sioner of Customs, Ahmadabad.”

In case of Commissioner (Ap-

peals), the alpha numeric number

would consist of APP in place of

COM. For example-

“AHM-CUSTM-000-APP-034-

12-13 DT 02-09-2012. This would

mean Order-in-Appeal No.34 for

the year 12-13 passed by Commis-

sioner of Customs (Appeals), Ah-

madabad.”

To illustrate, first three letters de-

note the city where the Commis-

sionerate office of the Adjudicating

authority is located.

The next 5 alpha string denotes the

nature of the Commissionerate i.e.

‘CUSTM’ for exclusive Customs

Commissionerates, ‘EXCUS’ for

combined Commissionerates of

Excise, Service Tax & Customs,

‘SVTAX’ for exclusive Service

Tax Commissionerates and

‘LTUNT’ for LTU Commissioner-

ates. This part of the code is for the

Commissionerate, and NOT for the

subject matter of the impugned

order. Thus, even if the impugned

order passed by (or relating to),

say, a Central Excise Commission-

erate relates to Customs or Service

Tax matters, the second part of the

code would still read as EXCUS.

This is necessary for achieving the

desired purpose of Commissioner-

ate-wise indexing of appeals.

The next three numeric strings de-

note the specific Commissionerate

where the first eight strings are not

sufficient to identify the Commis-

sionerate. In cases where the first

two parts suffice to identify the

Commissionerate, this third part

will simply be three zeroes, i.e.

“000”. For example, the code of

Ahmedabad Customs Commis-

sionerate would be AHM-

CUSTM-000. The code of

Allahabad Central Excise Com-

missionerate would be ALD-

EXCUS-000. The reason why 000

has to be kept in the third part even

for such Commissionerates is be-

cause no field can be left blank in

the string. In respect of places hav-

ing more than one Central Excise

Commissionerates, the third part

will be 001, 002, 003 and so on. In

respect of Commissioner (Adj),

this part will be ‘ADJ’. In respect

of Customs (Preventive) Commis-

sionerates, the third part will be

PRV. In respect of Customs Com-

missionerates in Chennai/Delhi/

Mumbai, the codes given in the

third part suitably capture the na-

ture of the Commissionerate. For

example, CHN-CUSTM-SXP

refers to Chennai Customs Sea

(Export) Commissionerate (the ‘S’

in the 3rd part is for Sea and the XP

is for Export). Similarly, in the

code DLI-CUSTM-AGN for the

Delhi [Airport, ACC (Import) and

(General) Commissionerate], the

third part AGN means ‘A’ for Air-

port and ‘GN’ for General.

Thus, to recapitulate, the first three

parts (11-characters long) of the

proposed numbering system will

uniquely identify the Commission-

erate of the adjudicating authority.

The next three alpha strings denote

the officer who is adjudicating the

case. COM would denote Order in

Original passed by the Commis-

sioner, APP would denote order in

appeal passed by the Commis-

sioner (Appeal) and ADJ would

mean order in original passed by

the Commissioner (Adjudication).

The next three numeric strings is

meant for serial number of the

order to be assigned by the office

of the Commissioner who is pass-

ing the order.

The next four numeric strings

would denote the financial year in

which the order was passed.

The last 8 empty boxes in the string

are meant for the date and year of

the order passed.

(vii). Separate entries are being

provided in the revised form for

demand of duty, fine, penalty and

interest.

(viii). In order to facilitate bunch-

ing of identical issues separate

entry has been provided with sub-

ject codes which are being ap-

pended to the forms. The

Appellant would be required to tick

mark the subject in dispute. For

example, in a Customs Appeal, Sl.

No.16 requires the appellant to

choose from the list given under

three separate heads of “Import”,

or “Export”, or “General” depend-

ing upon the nature of the case.

(4). The above changes may be

taken note of by the field forma-

tions as well as trade for proper

usage of the new forms from

1.6.2013. However, the old forms

may continue to be used for a pe-

riod of three months from the date

of coming into effect of the new

forms, i.e. till 31.08.2013. From

01.09.2013 onwards, no appeal

shall be filed in the old forms.

(5). Wide publicity may be given to

the new form for the benefit of

trade and industry.

(6). The pre-figured alpha numeric

numbers for all the 139 Commis-

sionerates and 8 Commissioners

(Adjudication) are being uploaded

on the websites -

http://www.cbec.gov.in under

Legal Affairs and

http://www.cdrcestat.gov.in

Circular No.969/03/2013-CX

(Sunil K. Sinha)

Director (Judicial Cell)

IMPORT POLICY OF CARS MANUFACTUREDPRIOR TO 1ST JANUARY, 1950

S.O.(E) In exercise of powers conferred by Section 5

of the Foreign Trade (Development & Regulation) Act,

1992 (No. 22 of 1992), read with paragraph 2.1 of the

Foreign Trade Policy, 2009-2014, as amended from time

to time, the Central Government hereby makes the fol-

lowing amendments in Chapter 87 to ITC (HS) 2012,

Schedule 1 (Import Policy):

2. Import policy of cars manufactured prior to 1st Janu-

ary, 1950 has been revised from ‘restricted’ to ‘free’. Ac-

cordingly, a new paragraph is being inserted under

Policy Condition 1 of Chapter 87 to ITC (HS) 2012,

Schedule 1 (Import Policy). The new paragraph (III) will

read as under:

“(III) Cars manufactured prior to 1st January, 1950

are free for import by Actual Users. Policy Condition

(I) and (II) above shall not be applicable for these

cars. However, such of the cars that would be plying on

public roads will continue to be subject to Central

Motor Vehicles Act, 1988 and Rules, 1989.”

3. Effect of this notification:-

Import policy of cars manufactured prior to 1st January,

1950 is being revised from ‘restricted’ to ‘free’ for Ac-

tual Users with immediate effect.

Notification No 5 (RE – 2013)/2009-2014

[Issued from F. No. 01/93/180/ 1483/AM-03 /PC-2(A)]

INDIA JOINS TRADEMARKSYSTEM

India on 9-4-2013 joined the Madrid Protocol, which will en-

able domestic companies and entrepreneurs to obtain a cost-ef-

fective global trademark registration. Commerce and Industry

Minister Anand Sharma, who is in Geneva, said : “We recognise

that this instrument will provide an opportunity for Indian compa-

nies, which are increasing their global footprint, to register trade-

marks in member countries of the protocol through a single

application, while also allowing foreign companies a similar dis-

pensation.”

[Source : Business Standard]

Printed, Published & Owned by: A K Banerjee Printed at : Metro Press, B-49, Lawrence Road Industrial Area, Delhi-35 Published at: S-6, Second Floor, Pankaj Plaza, 7, MLU Pocket-VII,

Sector-12, Dwarka, New Delhi-110075 Editor: A K Banerjee E-mail: akkbanerjee@yahoo.co.in Telephone nos.: +91-11-20600801, 9312946781 Legal advisors : Raju Dudani & Ajayveer Singh

Jain *All disputes will be subject to the jurisdiction of the Delhi court *Metro Press is not responsible for any content of this newspaper (RNI Regd. No. : DELENG/2009/29517)

REVENUE TRANSPARENCY TIMESMay 2013 16

The Central Board of Excise and

Customs and Ministry of Fi-

nance (Department of Rev-

enue) Government of India issues

Notifications, Circulars and Instruc-

tions for guidance of officers as well

as EXIM trade. These publications

are based on Government Polices and

finally settle case law on issues re-

lated to Customs Act, Procedures, tar-

iff and other matters for import and

export from India.

It has been noticed that sometime

circulars although very few in num-

bers have errors by which the whole

purpose of issuance of circular is lost.

The field formations do not take cor-

rective measures and ultimately the

exim trade suffers. To highlight this

problem an example of one circular

issued in 1994 having incorrect Sec-

tion no. is put forthwith and till date

no correction has been made on this

matter by the CBEC.

The circular was issued by Govern-

ment of India, Ministry of Finance

(Department of Revenue), New Delhi

vide file Reference No. 473/43/94-LC

dated 22.09.1994 for “Stock and sale

facility for imported capital goods,

spares and consumables.”

This reads as follows:

“Attention of the trade is invited to

the fact that consequent upon the

amendment in Section 61 of the Cus-

toms Act, 1962 all imported goods

can now be warehoused for minimum

period of one year. Further, the trans-

fer of these goods to another person is

also permissible as per the provisions

of Section 50 of the said Act. Accord-

ingly the sale of imported warehoused

goods to Duty Exemption or duty

concession license holders is allowed.

In such cases the transferee would be

in a position to clear the goods from

warehouse only on payment of Cus-

tom-Duty, if any, and fulfillment of

the licensing provisions.”

The clarification of the circular

was on three issues-

1 Time period for warehousing

2. Transfer of bonded goods to an-

other person as per the provision of

Section 50 of the Custom Act (Sec-

tion should have been 59)

3. Sale of imported warehoused goods

to duty exemption or duty concession

license holders.

This circular could not help the trade

or the Custom field formation due to

wrong mention of Section 50 in the

circular. The section 50 of Custom

Act 1962 reads as :

“Section 50- Entry of Goods for Ex-

portation:

(1) The exporter of any goods shall

make entry thereof by presenting

(electronically) to the proper officer

in the case of goods to be exported in

vessel or aircraft, a shipping bill, and

in the case of goods to be exported by

land, a bill of export in the prescribed

form.

[Provided that the Commissioner of

Customs may, in cases where it is not

feasible to make entry by presenting

electronically, allow an entry to be

presented in any other manner.]

(2) The exporter of any goods, while

presenting a shipping bill or bill of ex-

port, shall make and subscribe to a

declaration as to the truth of its con-

tents.”

Whereas the above referred circular

was for warehousing related issue and

the Correct Section 59 of Custom Act

1962 should have been there instead

Section 50 was mentioned in the Cir-

cular.

To give an example the problem faced

by an importer on import of News

Print under CTH 48010090, for which

RNI registration is the condition for

import . The importer was an Indent-

ing Agent and wanted to put the

goods in warehouse under Section 59,

so that he can sell it to companies

having RNI registration as per the

condition of import for Newsprint in

Rolls or Sheet. Custom field forma-

tion did not agree for bill of entry to

be filed under section 59, with an ob-

jection that the importer was not hav-

ing RNI registration and the above

referred circular was for Section 50

and not Section 59.

The importer was asked to deposit

some amount as cash security and

B.E. was Cleared under Section 59

with Provisional Duty Bond.

The Custom department does not

agree to erroneous mentioning of Sec-

tion in the circular by mistake or over-

sight but make the B/E provisional.

It is pertinent for the CBEC to address

such type of apparent mistakes and

take corrective measures.

CUSTOMS OFFICER HELD WITHHEROIN WORTH RS 50 CR

WILL CBEC CLARIFY ITSCLARIFICATION?

R K Mehrotra

The Punjab Police Saturday arrested a superin-

tendent of Central Excise and Customs depart-

ment posted at Attari Railway Station and

seized 10 kg of heroin worth Rs 50 crore in interna-

tional market from his possession. A pistol, nine car-

tridges and Rs 17, 000 in cash were also recovered

from him.

Briefing the media, SSP (Jalandhar Rural) Yurinder

Singh Hayer said a team arrested the customs officer,

identified as Gurdev Singh, a resident of Patti in Tarn

Taran district, after getting a tip off that he was trans-

porting the contraband in a SUV.

The police intercepted Gurdev's vehicle, a Tata Sa-

fari, at a checkpost near Kartarpur. The packets of

heroin were found concealed inside the front seat.

During preliminary investigations, Gurdev Singh re-

vealed that he was to deliver the consignment, sus-

pected to be smuggled in from Pakistan, at Jalandhar.

He said was to get Rs 50, 000 per kilo for safe deliv-

ery of the contraband.

Gurdev told the police that he had already delivered a

consignment of 8 to 9 kilos of heroin in Ludhiana.

More information may be revealed during police re-

mand of the accused, the SSP said.

Being a superintendent in the department of Central

Excise and Customs, the accused developed links with

smugglers and started peddling drugs. The accused

joined the department as an inspector in 1980 and was

promoted as Superintendent in 1997. He served the de-

partment at Jammu, Amritsar, Ludhiana and Chandi-

garh and was currently posted at Attari Railway

station.

Source: Express news service : Jalandhar,

CENTRAL GST AT 11%, STATETAX AT 13%, SAYS SUB-PANEL

The rates of Goods and Services Tax (GST) will

be a median 11 per cent for the Centre and 13

per cent by the states, according to a sub-com-

mittee of states and Central government officials

working on the subject.

There will be some variations in the rates for merit

and de-merit goods, but an official connected with the

exercise said the combined rate will be 24 per cent, al-

most unchanged from the current rates to ensure rev-

enue neutrality.

For traders with turnover of over Rs 1.5 crore the

Centre will collect the taxes while for those between

Rs 25 lakh and Rs 1.5 crore it is the states which will

collect the tax. The current threshold for excise duty is

annual turnover of Rs 1.5 crore and for service tax it

is Rs 10 lakh.

These decisions by the technical groups set up by

the empowered committee of state finance ministers

will now be examined by each state. The groups which

have officials from both the sides are expected to give

their report in May. The revenue-neutral rate (RNR)

suggested by the committee is very high when com-

pared to earlier suggestions made by Vijay Kelkar

committee or the finance ministry.

According to the Thirteenth Finance Commission

chaired by Kelkar, the rate for both was set at 6 per

cent — a grand bargain as Kelkar puts it. He also sug-

gested an exemption threshold of Rs 31 lakh crore. A

finance ministry panel suggested instead 6 per cent for

states, a Central standard rate of 10 per cent, and for

goods and services at 8 per cent.

However, the technical groups in their reports have

argued that keeping the several exemptions including

on alcohol and petrol from the ambit of the GST, the

total effective rate at 24 per cent is justified.

"Keeping several items out due to revenue and po-

litical consideration has led to such a high effective

rate. However, going forward if the states agree to put

some of these items under the GST, the RNR would

come down, benefiting traders," a government source

said. At such a high rate, experts said that the evasion

of tax and non-compliance would shoot up, and will

not lead to any increase in tax collection as expected.

The empowered committee is scheduled to meet on

May 10-11 in Mussoorie to take forward the discus-

sion on the implementation of the new indirect tax

regime and discuss the report of the three technical

committees which were tasked with working out RNR,

the issue of dual control, threshold for GST and ex-

emptions, respectively.

The technical committees, though, have discussed a

floor rate between 8-10 per cent for standard goods

and a lower rate for merit goods, it is yet to be fi-

nalised, the source added. Earlier, in January, the states

had reached a broad consensus on GST design with

the Centre agreeing to do away with the proposed dis-

putes settlement authority.

Source: Indian Express

Customs Deputy Comm. & Appraiser sentenced

The Special Judge for CBI Cases, Chennai

has convicted the then Deputy Commis-

sioner of Customs & then Appraiser of

Customs, Chennai in a bribery case and sen-

tenced them to undergo one year Rigorous Im-

prisonment with fine of ` 6,000/- each.

A case was registered on 6-1-2010 based on

the complaint of a Proprietor of Cuddalore Dis-

trict (Tamilnadu), alleging that Shri V.S. Sun-

dararajan, Deputy Commissioner of Customs,

and Shri D. Ramani, an Appraising officer Cus-

toms both of Courier Cell, Air Cargo Complex

Meenambakkam, Chennai had conspired to-

gether and demanded a bribe of ` 2,500/- for

clearing the consignment of the complainant who

imported two numbers of printed circuit boards,

which were sent to Colombo for repair through

an authorised courier service company. CBI laid

a trap and both the accused were caught red

handed while demanding & accepting the bribe

amount from the complainant.

After investigation, a chargesheet was filed be-

fore the Designated Court at Chennai. The Court

found both the accused guilty and convicted

them.

[Based on http://www.cbi.nic.in/ELT]

NAPOLEON"The world suffers a lot. Not because of the violence of

bad people,

But because of the silence of good people!"