Somesh Arora: Cen Ex inspector unleashes mob at colleagues, arrested

The DGCEI officers, following a tip-off that a supposedly closed  cigarette factory in Bhopal was operational, raided its premises and seized 30 lakh cigarette sticks. A large number of incriminating documents underlining large-scale illegal clearances were also found. The evidence also  pointed towards the alleged connivance of a Central Excise Inspector — Ramswarup Harlal —posted on the factory premises.

However, no sooner had the the revenue sleuths stepped out of the factory premises that they were attacked by a mob allegedly led by none other than Harlal. He guided the mob to snatch all the documents seized from the factory premises.

It has been gathered that Harlal  was arrested after sustained pressure from DGCEI officers. He has been charged with dacoity and obstruction to government officers in performing their official duty under Sections 395 and 353 of the IPC.

Two months back it was DGCEI officials who were alleged to have beaten up a gutkha fella,

Now there are DGECI officials alleging to have been beaten up by cigarette and their own Excise fella,

Checking a physically controlled unit they were hauled up by their own Excise Inspector,  physically,

Next time, in the President’s Award, a citation will be received by some one for braving his own service mate, gallantly.

Ramswarup Harlal, in the meanwhile, can figure in the rogues’ gallery of customs and excise museum with his daring funda.

Gandhi resisted the Salt Excise law with Dandi, Harlal resisted the DGCEI officials with  Danda and gunda.

Crazy laws, crazy interpretations

Income tax has a law which provides for 100 percent depreciation on the books and periodicals provided these are publications brought out every year and 60 percent if they are not. Therefore as lawyers, chartered accountants, medicos you are required at the year end to segregate each book bought out by you and claim depreciation accordingly. Now in which category with law journals fall is a matter of interpretation. While books like customs manual may get the benefit, what about books like Guides which the publisher decides to publish yearly only depending upon sales and whether they will be yearly or not is not even known to him. The imagination of the assessee may not always match with that of the publisher leaving him open to charge of claiming wrongful deduction and IT officers with enough work.

If you thought that the settled case in favour of assessee, where a passenger landed on the airport three hours after 24:00 hours at night due to flight delay and was showcaused by IT department for having lost his residential status with his stay being less than prescribed 181 days will be enough for Revenue to learn its lessons. Think again. This time it is the turn of CenEx Department. An assessee was show caused for disallowing his abatement because the Departmental authorities after receiving 3 days prior intimation when started work of sealing machines and drawing panchnama at 10:00 pm could only finish it up on the next date at 1:00 am, and due to Gregorian calendar saying it was a new date, therefore the total period of abatement worked to be less than prescribed 15 days and hence abatement was disallowable. Now, who says Gregorian cannot be Draconian, atleast  in the hands of some tax officers.

Tobacco trail: Clarification on Provision 7 The much awaited clarification from the C.B.E.C. is finally out bringing down shutters on frivolous demands worth thousands of crores raised by some commission rates through invocation of Proviso 7 to Rule 9 of the Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Rules, 2008, even when the duty had been paid by the parties under provisio 2 of the same rule. Kudos to the Board for acting in time and for saving assesses and the Department some wasteful litigation, reaffirming  in process our faith that if C.B.E.C. acts in time and with diligence, lot of unnecessary litigation before the courts can be avoided. But equally the field officers should be amenable to making references to the Board on matters which involve purely interpretation of law. The relevant provisions are as under :

 Rule 9 :The monthly duty payable on notified goods shall be paid by the 5th day of same month and an intimation in Form - 2 shall be filed with the Jurisdictional Superintendent of Central Excise before the 10th day of the same month:

 Provided further that if the manufacturer fails to pay the amount of duty by due date, he shall be liable to pay the outstanding amount along with the interest at the rate specified by the Central Government vide notification under section 11AB of the Act on the outstanding amount, for the period starting with the first day after due date till the date of actual payment of the outstanding amount:

 Provided also that in case a manufacturer does not pay the duty payable by the due date, and continues to operate any packing machine, then till the time such non-payment continues, he shall be liable to pay the monthly duty based on the number of operating packing machines declared in the month for which duty was last paid by him or the total number of packing machines found available in his premises at any time thereafter, whichever is higher:.

The confusion in the minds of field officers emanated from the doubt that under provision 2 if duty is paid with interest, whether same will still be considered as a default for the purposes of attracting proviso 7. Therefore, the CBEC vide its clarification F.No. 81/17/2007-CX-3 dated 20/4/2010 to Chief Commissioner, Banglore clarified that default for payment of duty for one month would not be treated as default for all the remaining part of the full financial year and also the total no. of packing machines found available in the proviso 7 has to be interpreted as to mean packing machines available for production. Therefore, the machines which have been sealed by the Department would not be considered as the machines available in the factory for payment of duty.



IPL Tamasha:

Shashi Tharoor  lost his ministerial berth, Modi however  got the show cause,

Dhoni  got the win for his team, but lost in the world cup playing for the national cause,

Directorate of Enforcement is active again making raids all around,

 Harbhajan got his chance to pick the beautiful lady, up the ground,

Betting syndicates are having their cash counters ringing with notes,

BCCI bosses, giving hell to the game, are busy counting their votes.

Income and Service tax departments are happy as they got the extra tax,

IPL tamasha will be there every year for betting sake, so watch and relax.

Jairam: Changing heart changing mind

Firstly he wears the gown, but throws it of in public as barbaric relic, the next moment,

What prompts the Guy, Is he attempting to initiate an anti-imperialist movement,

Next he goes to China, does some China appeasing and Home-Minister bashing,

Once back, changes his tone again to being mum, after PM thrashing.

From Chandni Chowk to China-  Uski baat  kisi ko samajh ayee na,- par ik bat hai zaroor,

From  look and feel- he appears like the big brother to Shashi Tharoor. 



SAD refund, not so sad ending after all

Let me first give credit where it is due. With all the effort to highlight the plight of exporters in RTT and elsewhere in the media, finally things have started moving both at Delhi and Mumbai customs formations with SAD refunds being sanctioned and efforts being made to bring down the pendencies. This coupled with pragmatic approach of doing away with the payment of SAD in  several instances in the last budget is sure to bring back smiles on the faces of exporters and reinforce their faith that things do work in the customs department.

yea?H<p?rx?qlass=MsoNormal>2. Codify export baggage rules by at least bringing out the absolute export restrictions, as outbound passenger is not supposed to look into all the FEMA Rules, export control orders and restrictions under EXIM policy etc.

Income Tax

1. Tax rebate for individuals or any member of the family adhering to small family norm to check population growth.  Can be Rs.10,000/- for two children and Rs.15,000 for one child family)- It has been real long since this Government or any other Government in the past has even paid a lip service to family planning. So, why not reward those who voluntarily think of the National Cause. The PM and his team will also show that they are sincere towards the burning issues of the Nation.

2. One time amnesty scheme to allow Indians holding money in tax heavens to bring it back to India   (to be invested in low yield or no yield Infra bonds with a lock in period of three years)- If this Government really wants to be step a head of what Advani ji thought for his biggest pole-plank, then here is the solution. Pressurizing tax heavens to give details will only make the tainted money to run from one tax heaven to another, with very little of it likely to land in India. One big solution for all our recession related woes, even though Supreme Court had recommended that amnesty schemes should not be resorted too often. But one last time, this seems to be the only pragmatic solution.

3. Free allowances under Income-Tax Act be indexed as provided for in the 6th Pay commission.  If pay Commission can do it why should not Income Tax Department do it as well. So, have the free Income-Tax limit, Section 80-C limit, other allowances indexed. It would reduce the burden of budget exercise on future FMs.

3. Limit of 15 lakhs for professionals for annual audit by C.A.  under Income –Tax Act needs to be enhanced to 40 lakhs as same is the limit for service providers  (many of whom are professionals) under Service Tax. Otherwise the benefit given under Service-Tax last year gets frittered away.  After simplification of the tax structure, next assault has to be on the complicated tax compliance issues. All business and professions can be given the option of paying tax up to receipts of 25 lakhs by treating 50% of the receipts as taxable income on a notional basis just by maintaining the account of receipts only. This will better tax recovery and will reduce unnecessary maintenance of accounts by small business and professionals.

4. The accounting for share market transactions and recording of capital gains on the same is a complicated process involving FIFO method, looking at the holding period of every single transaction. May be by enhancing STT the same can be done away all together, as the Government will not lose revenue or at least can jack up STT to that level and investors will be saved of such cumbersome recording of transactions for which even a software has not been developed till date. In the event any Income Tax officer thinks otherwise, then let some of the worthy officers of the department maintain these accounts on a trial basis for two different individuals for about two hundred transactions and I shall cede that there is no logic in the suggestion.

5. Despite all the noises made by Team Anna, pragmatism should not be lost sight of.  Government should, therefore, come out with one last time “Amnesty or Compounding Scheme”, as this is the only way to get the money back to where it belongs. In any case, talking about ethical issues is fine, (since some newspapers are opposing the move), but if the country can alleviate all its poverty, remove all hunger related deaths from its map through influx of such money, then all the intellectual and ethical arguments get dwarfed. Otherwise with all their might, all the agencies of India will never be able to get this money back to Indian coffers. Again, are we still not continuing to have such amnesty schemes every year for various taxes like service tax, house tax and even VAT, then what is wrong in making it known to all defaulters by legislative process that it is one last time and allow it for income-tax purpose also?

6. Further, suggestion will be to hike the rate of corporate tax and MAT or by levy of special purpose cess on tobacco products etc. solely with the objective of creating a corpus for political funding of elections. A beginning has to be made somewhere considering that India is again slipping down in the list of corrupt nations prepared by Transparency International. Why not make a beginning this year? How the corpus is going to be apportioned can be left to the collective wisdom of the legislators to decide.

TAX Payer Empowerment:

1. Create tax ombudsman as a body having representation of Samman holding tax payers. Let the Tribunals also have some members selected from this section of society.

2. Allow Samman holder Central Excise assesses paying revenue of more than one crore, 1% as tax collection incentive as they reduce cost of collection to the department.

3. Income-tax returns to collect and collate information from taxpaying assessees regarding where would they like 10% tax payers discretionary spend to go i.e. whether in education, science research, poverty alleviation, defense, electoral reforms etc. and Government to give weight age to such view in future budgeting.