REVENUE
TRANSPARENCY TIMES
For e-paper, visit:
www.thertt.com
Transparency weeds out corruption
Opaqueness breeds it
English Monthly
New Delhi
Vol:IV
No. 1
DIAMONDS
ARE
FOREVER
AK
Agnihotri,
Ex-Comm,
Customs &
Central Excise
TEN FAMOUS DIAMONDS
The Great Star of Africa
530.20 Carats - the Cullinan I
or Star Africa diamond is the
largest cut diamond in the world.
Pear shaped, with 74 facets, it is
set in the Royal Sceptre (kept
with the other Crown Jewels in
the Tower of London). It was cut
from the 3,106-carat Cullinan, the
largest diamond crystal ever
found. The Cullinan was discovered in Transvaal, South Africa in
l095 on an inspection tour of the
Premier Mine. The Cullinan was
cut by Joseph Asscher and Company of Amsterdam, who examined the enormous crystal for
around six months before determining how to divide it. Legend
has it that immediately after applying the hammer, Asscher
fainted fearful that he may have
broken the diamond. It eventually
yielded nine major, and 96
smaller brilliant cut stones. When
the Cullinan was first discovered,
certain signs suggested that it may
have been part of a much larger
crystal. But no discovery of the
"missing half" has ever been authenticated.
The Orloff
300 Carats when found, colour:
slightly bluish green, clarity: exceptionally pure, cut: Moghul-cut
rose, source: India.
This gem may be found in the Diamond Treasury of Russia in
Moscow.
There are so many historical
episodes involving the Orloff.
First, it may have been set at one
time as the diamond eye of
Vishnu's idol (one of the Hindu
Gods) in the innermost sanctuary
temple in Sriangam, before being
stolen in the 1700s by a French
deserter. However, the deserter
just dug one eye from its socket,
because he was terror-stricken at
the thought of retribution, so he
couldn't take the other. He went to
Madras, and sold the stone
quickly to an English sea-captain
for 2,000 pounds.
The time passed, the stone arrived
at Amsterdam where the Russian
Continued on Page 11
D
Pages: 16
RNI Regd. No. : DELENG/2009/29517
September 2012
Price: Rs 20/- (Per copy)
US $1 (Per copy) Outside India
A Factual
SUPERMAN OF CUSTOMS
Appraisal of
NO MORE BUT WILL
CAG’s Report
REMAIN ALIVE FOREVER on Coal Block
aya Shankar an Indian Revenue Service officer of the 1978 batch was
known for his unparallel integrity , utmost honesty, daring, talented , and a man with
nerves of steel, and a officer with whom the
juniors wants to work . He took on smugglers
head on in the late 1980s and was known for
his crackdown on the thriving gold smuggling
networks in Daman, Goa and Mumbai died in
Australia following a prolonged illness on 128-2012.
Our civil services are by and large perceived
as corrupt and perception is not entirely unfounded. But there are also a few officers who
have the courage and conviction to discharge
their official duties without any pressure and
pulls and do not follow the wrong and dubious practices irrespective of the fact that this
would put them in position of extreme disadvantage, follow the path of probity and Daya
Shankar was one of those rare officer.
He is perhaps the only officer in the Depart-
ment who had refused to accept the cash rewards given by the department appox 22 lacs
and it is not as if he was rolling in money. A
senior officer once told that Daya Shankar
came to his house long ago and asked for a
small loan for taking his child to the hospital.
"How much", asked the senior officer. "Three",
said Daya This other officer was also an honest
one and he said, "I wouldn't have three thousand at home, but let me see …". Daya said,
"not three thousands, but I need three hundreds!" And this when lakhs were languishing
in his reward account and just a smile or a
squint eye from him would have brought him
Crores.
Daya Shankar was man of word as in 1992;
he stood by his colleague, Coasta Fernandes,
during a CBI probe accusing him of killing
then Goa Chief Minister Churchill Alemao's
brother Alvernaz. The CBI held Fernandes
guilty, but Daya Shankar fought for him
Continued on Page 7
A tale of a harassed inspector of
Central Excise
T
he Central Excise department is infamous for harbouring bias against inspectors and superintendents. It needs to
be reiterated here that the entire fraternity of
inspectors and superintendents are not beyond
question .The Customs and Central Excise is
one of the most substantial contributors to the
public exchequer – the reason why a hawk’s
eye is kept on its activities.
Unfortunately, the premier institution has
miserably failed to maintain a clean image with
people largely eyeing its officers with suspicion.
One such instance of prejudiced has been
gathered by RTT in case of Kamal Kishore
Koli who joined as Inspector of Central Excise
in Vadodara zone on 18/5/2007 and was transferred to AD-IV Sec CBEC on deputation in
Delhi on 24/5/2007.
Koli was selected in the CGLE2003 of SSC
as Inspector (CE) asSC candidate with
SLD/00425 and was working as UDC in
CBEC at the time of selection. Koli had opted
for posting in Delhi, but was allotted Chennai
Central Excise. Koli went to Chennai and
completed formalities required for appointment
mentioned in the advertisement. But finally he
was posted to Pondicherry but some how he
did not join the Chennai Zone.
In the year 2004 Koli again appeared for Inspector grade exams conducted by SSC and
was declared successful with his ranking standing atSLD/ 210. Koli again opted for Delhi,
however again he was posted at Vadodra. He
joined the Vadodra Central excise Commissionerate.
The chairman of CBEC was approched to
post Koli in Delhi as requested by the mother of
Koli Smt Angoori Devi in her representation.
Continued on Page 6
Allotment
Sukumar Mukhopadhyay, Member,
Central Board of Excise & Customs (retd)
C
oalgate is an expression created by the
Media and I do not
propose to use it. It assumes
that there is a massive scam
in coal block allotment in the
last few years. The issue has
been so politically charged
that extreme views are being expressed. In this
treatise, I propose to discuss the factual position depending on the actual report of the CAG,
the available comments of he Prime Minister
in the web-site and some of the non-political
comments of different analysts and important
personalities. I shall try to be completely apolitical.
The report of the CAG is called “Performance Audit on Allocation of Coal Blocks and
Augmentation of Coal Production for the year
ended March 2012”. It has discussed the wider
issue of widening gap between demand and domestic supply and import of coal. The Coal
Mines Nationalization Act 1973 was amended
in 1976 allowing allotment of coal mines to private companies for their captive end use (they
cannot sell to others) in the production of iron
and steel, cement and power. However, allotments by the Screening Committee were made
merely on the basis of recommendation from
State Governments and other administrative
Ministries without ensuring transparency.
Continued on Page 10
As RTT enters its fourth
year, I sincerely thank
our esteemed readers and
contributors for making
the journey eventful and
successful.
A K Banerjee
Editor
Does Rowlatt Act Still Rule Independent India?
Somesh Arora, CCO, Amicus Rarus, Ex-Comm, Customs & Central Excise
Rowlatt Act of
Independent
India: As a
young one and
at my School
going age, I
learnt my first
lesson about
Rowlatt Act, 1919 in India`s independence history. With all my
cramming prowess, my teacher
made me memorize that Rowlatt
Act was draconian as it permitted
the British to detain any Indian
without trial. By the time I studied
law, similar laws had already
started existing in independent
India with MISA and COFEPOSA
in
full
flow. In
fact,
if
Lallu ji had continued to follow the
tradition
of
naming
his
children(even after MISA) on the
names of prevalent preventive detention laws, his children after
MISA would have been called
NSA,COFEPOSA, TADA, POTA,
PITNDPS etc. If implementation
of all these laws in free India was
not appalling, we also started having curbs on the right of enjoyment
of property
of
persons
and their dependents, even when
they had still to stand trial and were
mere accused. While Central Excise and Customs laws provide for
provisional attachment of property
which eventually lapses after some
period of time, Money Laundering
Bits and Bytes
Act permits attachment of property
even without case having been
proved and such attachment continues till the offence is tried and
can result in confiscation on proving of charge or de-attachment at
that stage, in case charge is not
proved. But the law is silent as to
what will happen in case conviction is reversed and confiscated
property is sold or damaged to the
detriment of the owner during the
appellate stage, if he wins. A law
Continued on Page 6
September 2012
REVENUE TRANSPARENCY TIMES
2
On what value service tax payable on works contract
R. S. Sharma
Advocate & Founder,
www.allindiantaxes.com
T
he composition scheme
which allowed payment of
service tax @4.8 per cent on
gross value of works contract is no
more in existence as Notification
No.32/2007-ST has already been
rescinded
by
Notification
No.35/2012-ST.
The value of works contract for
payment of service tax is governed
by Notification No.24/2012-ST
which provides mechanism for determination of value of service portion in the execution of a works
contract.
The general rule is that value of
service portion in the execution of
a works contract is equivalent to
the gross amount charged for the
works contract less the value of
property in goods transferred in the
execution of the said works contract. Where VAT or sales tax has
been paid or payable on the actual
value of property in goods transferred in the execution of the works
contract, then, such value adopted
for the purposes of payment of
VAT or sales tax, shall be taken as
the value of property in goods
transferred in the execution of the
said works contract for determination of the value of service portion
in the execution of works contract
under this clause. Further, gross
amount charged for the works con-
tract shall not include VAT or sales
tax, paid or payable, if any, on
transfer of property in goods involved in the execution of the said
works contract. However, value of
works contract service shall include labour charges, amount paid
to a sub-contractor for labour &
services, charges for planning, designing and architect’s fees;
charges for obtaining on hire or
otherwise, machinery and tools
used for the execution of the works
contract; cost of consumables such
as water, electricity, fuel used in the
execution of the works contract;
cost of establishment of the contractor relatable to supply of labour
and services; other similar expenses relatable to supply of labour
and services; and profit earned by
the service provider relatable to
supply of labour and services.
In case value of goods has not
been determined for payment of
INDIRECT TAX OMBUDSMAN LANGUISHES
ON POOR RESPONSE FROM PEOPLE
Vrishti Beniwal
I
ndirect tax ombudsmen,set up for
faster disposal of complaints, have
been languishing in their offices, with
few aggrieved taxpayers approaching them
for grievance redressal.
Of the seven offices of the indirect tax
ombudsmen announced by the government last year, only three have started
functioning and there, too, the number of
complaints received in last three months
has ranged between zero and two.
The Delhi ombudsman, who has Punjab,
Haryana, Jammu and Kashmir and Himachal Pradesh under jurisdiction, has received only eight complaints since April
2012.
Of these, only two complaints were
valid, while the remaining six did not
come under the scope and jurisdiction of
this ombudsman.
men listed multiple reasons for a muted response.
While all agreed that many were not
aware of it due to lack of publicity, some
said, perhaps, there was a need to review
the guidelines under which the ombudsman was set up.
“The ombudsman has to deliver if it has
to survive. A lot of people have apprehensions if they go to the ombudsman they
would be harassed by revenue authorities,”
said one official, requesting anonymity.
Officials said the indirect tax ombudsman would take some time to pick up, as
the direct tax ombudsman had also started
getting response only in its second year.
They did not rule out going forward a
case for widening the scope of the ombudsman and giving it more powers could
be made.
TEPID RESPONSE
• Ombudsman for Delhi and Bangalore have received only eight and two complaints,
respectively since April 2012
• Lucknow Ombudsman is yet to receive any complaint
• Lack of publicity and awareness coupled with fear of harassment by tax officials
considered to factors behind the trend
• Issue of refund, rebate, adjudication, registration of tax payers among others falls
under its jurisdiction
“The ombudsman cannot act on its own.
It can take some action only when complaints come. But not many people are filing complaints at the moment. Perhaps
they don’t know there is a system like
this,” said Delhi Ombudsman S D Majumder.
Similarly, the Bangalore Ombudsman,
with jurisdiction over Karnataka, Kerala
and Lakshadweep, received only a couple
of complaints, of which only one was
valid.
The Lucknow Ombudsman, who also
handles grievances from some of the bigger states like Uttar Pradesh, Madhya
Pradesh, Uttarakhand and Chhattisgarh, is
still waiting for the first complainant.
“In order to create awareness about the
ombudsman, we intend to interact with
traders and industry, with the help of various chambers of commerce and other trade
bodies,” said Bangalore Ombudsman
Lalitha John.
People associated with these ombuds-
In March 2011, the Union Cabinet had
approved the creation of seven posts of Indirect Tax Ombudsman to be located at
Delhi, Mumbai, Chennai, Calcutta, Bangalore, Ahmedabad and Lucknow.
The ombudsman is yet to be appointed for
Mumbai, Chennai, Calcutta and Ahmedabad.
The indirect tax ombudsman has powers to receive complaints from tax payers
relating to customs, excise and service tax
and facilitate their satisfaction or settlement by agreement through conciliation
and mediation between the revenue department and the aggrieved parties or by
passing an ‘award’.
It can handle complaints relating to any
delays in the issue of refund, rebate, adjudication, registration of tax payers, effecting appellate orders or release of seized
books of account and assets, among others.
Source : Business Standard
VAT or is not ascertainable at the
time of raising of bill; the works
contract will be categorized under
category A or B or C.
On category A works contracts
which involve execution of original works, service tax is payable on
40 per cent. of the total amount
charged for the works contract.
“original works” means all new
constructions; all types of additions
and alterations to abandoned or
damaged structures on land that are
required to make them workable;
erection, commissioning or installation of plant, machinery or equipment or structures, whether
pre-fabricated or otherwise.On category B contracts such as for maintenance or repair or reconditioning
or restoration or servicing of any
goods, service tax is payable on 70
per cent. of the total amount
charged for the works contract.
On category C contracts( not
covered under category A & B), including maintenance, repair, completion and finishing services such
as glazing, plastering, floor and
wall tiling, installation of electrical
fittings of an immovable property ,
service tax is payable on 60 per
cent. of the total amount charged
for the works contract.
Service provider is not entitled to
take CENVAT credit of duties paid
on any inputs, used in or in relation
to the said works contract. The
term “total amount” means the
sum total of the gross amount
charged for the works contract and
the fair market value of all goods
and services supplied in or in relation to the execution of the works
contract, whether or not supplied
under the same contract or any
other contract, after deducting the
amount charged for such goods or
services, if any; and VAT or sales
tax, if any, levied thereon.
VERIFICATION MECHANISM AND MONITORING
OF EXPORT OBLIGATION UNDER DUTY
EXEMPTION/ REWARD SCHEMES
R
eference is invited to Board’s Circular
No. 5/2010-Cus dated 16.03.2010. Para
2(c) of the Circular provides that Customs authorities cause random address verification [for some of the authorizations issued
under EPCG/ DFIA/ Advance Authorization
schemes registered at their port to check correctness of address shown in the authorization]
preferably through jurisdictional Central Excise authorities, during validity of the authorization. As far as the EPCG Scheme is
concerned, the provision in Para 2(c) of the
Circular is in addition to ensuring submission
of Installation Certificates (ICs) for capital
goods imported and randomly checking correctness of ICs through Central Excise authorities, when the ICs have been issued by other
than Central Excise authorities. The Commissioners would be ensuring that above requirements are followed.
2.
The C&AG of India in Audit Report
No. 22 of 2011-12 observed that authentication
of licencee premises is an important check
which makes it possible to verify at any time
that imported goods are installed and operated
at the declared location. In this connection the
Audit has noted that utility bills containing the
address can also be used for checks relating to
installation and operation of the imported Capital goods.
3.
Keeping the foregoing in view, Board
has decided to prescribe that when address verifications or Installation Certificate verifications are requested by the Customs authorities
in respect of EPCG authorizations, the Central
Excise authorities should include, in their verification, a check of the periodical utility bills
(containing the address) as one of the means
enabling verification of installation/ operation/
licencee premises.
Circular No. 25 /2012-Cus
F. No. 603/03/2011-DBK
FM HINTS AT TOUGH STEPS
FOR FISCAL CONSOLIDATION
F
inance Minister P. Chidambaram on 68-2012 set up a new panel to advise
him on fiscal consolidation and indicated that some tough decisions on taxes as
well as expenditure may be in store.
But to ensure that the political risks were
minimized, the Minister was quick to add
that the burden would be shared equitably.
“I would like to make it clear that the burden of fiscal correction must be shared,
fairly and equitably, by different classes of
stakeholders. The poor must be protected
and others must bear their fair share of the
burden,” he said in a written statement at a
press conference, without responding to any
questions. For several months, the government has been talking of initiating steps such
as an increase in diesel and urea prices but
has refrained from taking bold decisions
fearing political protests.
The reluctance to take tough measures is
despite fears that the Centre’s subsidy bill
may breach the ceiling of 2% of GDP announced by Pranab Mukherjee when he presented the Budget on March 16.
The new panel will consist of Vijay Kelkar,
Indira Rajaraman and Sanjiv Misra, who
were all members of the last Finance Commission. In July 2004, two months after Chidambaram took over as Finance Minister in
UPA-1, Kelkar had prepared the roadmap for
implementing the Fiscal Responsibility
Budget Management Act, including annual
targets. The focus was on a revenue-led
model, with changes in income tax brackets
and customs duty structure along with implementation of GST.
The new Committee is expected to take a
fresh look at the annual targets although it
may be difficult to reduce the fiscal deficit
considerably in the 2013 Budget given that it
will the last full-fledged financial exercise
before Lok Sabha elections a year later. The
government’s inability to prune unwanted
subsidies, several of which do not reach the
poor, and the slowdown in tax collections
may result in a breach of the fiscal deficit
target of 5.1% of GDP in the current financial year.
[Source : http ://m.timesofindia.com/ELT]
REVENUE TRANSPARENCY TIMES
STOCK WATCH
Ashish Khungar, Consultant, Amicus Rarus Consults
INDIABULLS FINANCIAL:
Indiabulls Financial Services Ltd, one of
India's leading non-banking financial companies (NBFCs) is leading provider of
lending and other financial products including home loans, loans against property, commercial vehicle loans, and
commercial credit to prime corporates. Indiabulls Housing Finance Ltd, a SARFAESI notified Housing Finance
Company is a wholly owned subsidiary of
Indiabulls Financial Services Ltd; provides
competitively priced home loans to both
self employed & salaried segment clients.
Indiabulls Financial Services has a wide
network of 180 branches spread over 100
cities across India. The Indiabulls Financial Services is an integrated financial
services powerhouse providing Consumer
Finance, Housing Finance, Commercial
Loans, Life Insurance, Asset Management
and Advisory services in India, reported its
financial results for the quarter ended 30th
June, 2012. The first quarter witness a
healthy increase in overall sales as well as
profitability. The company’s net profit
jumps to Rs.2651.24 million against
Rs.2195.21 million in the corresponding
quarter ending of previous year, an increase of 20.77%. Revenue for the quarter
rose 27.57% to Rs.10395.33 million from
Rs.8148.85 million, when compared with
the prior year period. Reported earnings
per share of the company stood at Rs.8.50
a share during the quarter, registering
20.46% increase over previous year period. The first quarter witness a healthy increase in overall sales as well as
profitability. Investors can buy this particular scrip with a target price of Rs.240/IVRCL INFRA:
IVRCL Infrastructure (IVRCL) reported
numbers for 1QFY2013, with lower-thanexpected performance. The order inflow
for 1QFY2013 was at Rs3900cr, out of
which Rs2800cr was contributed by road
build operate transfer (BOT) projects and
the balance by engineering, procurement
and construction (EPC) contracts. The
company’s order book stands at Rs27100cr
(4.9x FY2013E revenue, including L1
projects of Rs2000cr). IVRCL has merged
IVRCAH with itself during the quarter.
The company has sold its stake in one of
its road BOT projects and has recognized
an amount of Rs117cr. Further, IVRCL is
in an advanced stage of negotiation for
sale of another two to three road BOT
projects. As per the management, these
asset sales are intended towards meeting
the equity requirement for the road BOT
projects and reducing debt levels. IVRCL
has an equity requirement of Rs2, 700cr
out of which Rs700cr has already been invested. The remaining Rs2, 000cr would
be partly funded by the company through
internal accruals and sale of BOT
assets/land parcels. This is expected to
raise Rs1, 100cr while the remaining
Rs900cr would be funded by Compulsory
Convertible Debentures. IVRCL has a
strong order book of Rs27100cr (4.9x
FY2013E revenue), which provides revenue visibility; however, the company
would need to focus on its execution pace
going ahead, which has not kept pace with
order book growth. One can buy the stock
with a target price of Rs 53/SOUTH INDIAN BANK:
South Indian Bank's has declared a decent
numbers for the quarter ended June 2012.
Although high ROEs of +19%, the recent
deterioration in asset quality and continuous challenging operating environment the
bank is well poised for growth in coming
quarters. Total Business of the Bank stood
at Rs. 64,502 crore, recording an Y-o-Y
growth of over Rs. 10,729 crore (YoY
Growth Rate of 20%) in June’12. Net interest income jumped 44.4% to Rs 296
crore from Rs 205 crore. Core Operating
Profit grew by 45% to Rs. 207.5 crore during Q1FY13 as compared to Rs. 143.1
crore for Q1FY12, showing an increase of
Rs 64.4 crore. South Indian Bank's net
profit shot up by 50% year-on-year to Rs
123 crore for the quarter ended June 2012.
Bank has maintained its asset quality at
high level. The robust growth in business
coupled with few NPAs, had enabled the
bank attain its present level of performance. At the CMP Rs 21, the stock is trading at a PE of 5.1 xs and 4.14 xs of FY13E
& FY14E EPS. Investors can buy the stock
with a target price of Rs 29/-.
DEEPAK FERTILIZERS:
TAN margins continue to remain under
pressure due to high ammonia prices. Margins declined to 21-22% in Q1FY13 compared to 25% last year as ammonia prices
increased from $450/mt to $700/mt within
a short span. Further, lower TAN offtake
due to monsoons & new regulations on
movement of TAN restricts company’s
ability to pass on additional cost increase.
High competition from imported cheaper
grade TAN also limits scope of further
price increases. In FY13, Deepak Fertilizers expects to produce 280,000-300,000mt
of TAN. Though near-term concerns persists, however it is expected that Deepak
Fertilizers long-term growth to be driven
by ramp-up in TAN capacity & recently
announced expansion in fertilizers. Continuous ramp-up in the new TAN facility
is likely to result in improving the blended
capacity utilization to 80% (350,000mt) in
FY14 from 65-70% capacity utilization in
FY13. Increase in capacity is likely to result in incremental revenues of Rs 13bn.
Greenfield expansion in Bentonite Sulphur
is also expected to support earnings. Further, company continues to screen opportunities in specialty chemicals. One can
buy this stock with target price of Rs 180/DISCLAIMER: The views expressed
above are personal, and will not be liable
for any loss caused or suffered. You are
suggested to take proper advice from a financial consultant or a Certified Market
Expert before entering into the stock markets. It is safe to assume that I and my
clients might have investments in some of
the stocks discussed above.
3
September 2012
CAG's audit fees now chargeable
to service tax?
There was controversy even when the positive list of service tax was in place till June this year
Sukumar Mukhopadhyay
W
ith the arrival of a comprehensive
service tax regime, there have
been comprehensive changes.
One issue that has arisen is about the fees
collected by the CAG for audit of corporations,authorities and bodies.
These are known as consent audit which
are entrusted to CAG under the CAG (Duties, Powers and Conditions of Service)
Act,1971, at the request of President or governor . The issue now is whether these fees
would attract service tax.
There was controversy even when the positive list of service tax was there till the end
of June, 2012. Some commissioners charged
the fees under ‘Practising Chartered Accounts’ while others charged under ‘Business Support Services’. At this stage the
CBEC intervened and clarified by a circular
no 159 /10/2012 - service tax, dated June 19,
2012, that the CAG’s services for which the
fees are collected would not fall under any
of the above two headings for service tax.
The circular apparently implied that the fees
are chargeable to service tax but since there
was no heading under which they fall, they
could not be charged to tax.
Now, after the comprehensive tax regime
having come to effect from July 1, the first
impression is that such fees are for the services offered by the CAG and they should pay
the service tax. The list of exemptions does
not include these fees. So we have to see if
the negative list includes them or not. The
negative list in 66 D (a) contains “services
by Government”. The definition of Government is not in the Finance Act. The Government has issued a guidance paper (which is
not a binding circular) which clarifies at para
2.4.7 that since Government has not been
defined in the Act, the definition of Government in the General Clauses Act has to be
relied upon. In section 2 (23) of this Act it
has been given that Government includes
both central government and state government. Central Government, the guidance
paper says, means, the President and the officers subordinate to him while exercising
the executive powers of the Union vested in
the President and in the name of the President. Similar is the position with state government.
According to this disposition, the CAG
does not fall in the category of Government
as it does not function under the President.
So the fees collected by CAG have to pay
the service tax.
This position taken by the guidance paper
is not acceptable because it has made the
fundamental error of mistaking the inclusive
definition of Government in the General
Clauses Act as an exhaustive definition.
In the definition in the General Clauses
Act the expression used is “includes” which
means that there are other institutions which
are Government. But the guidance paper
says, the central Government “means” President and officers subordinate to him. Thus
it is a flawed way of interpreting the definition of Government in the General Clauses
Act. If we take the definition as inclusive we
come to the correct conclusion that there are
certain institutions such as CAG, UPSC,
Parliament, legislature, high court and
Supreme Court which are constitutional
bodies and they are surely Government but
are not working under the President or governor. The revenue earned by the CAG go to
the Consolidated Fund of India under the Article 266 of the Constitution. So also the fees
earned by the UPSC go to the Consolidated
Fund of India. And high court and Supreme
Court also are Government , they being part
of the system of maintaining law and order
which is a basic (sovereign ) function of the
State. One cannot imagine how institutions
created by the Constitution can be considered as not Government. The definition of
the guidance paper completely cuts out the
legislature and judiciary from the scope of
Government which is absurd. So this position taken by the guidance paper is basically
incorrect and needs modification. And in
this view, CAG is Government and its fees
are covered under the Negative List. So they
do not have to pay tax.
The conclusion is that a definition of Government should be incorporated in the Act.
In the meantime, the guidance paper should
be immediately modified. Otherwise it will
create innumerable problems.
[email protected]
Source : Business Standard
Conditions and modalities for registration of contracts of sugar
with DGFT- relaxation of (-) 5% by weight in export of sugar.
T
hrough Policy Circular No 62 (RE2010)/2009-14 dated 14.05.2012,
conditions and modalities for registration of contracts with Regional Authorities of DGFT for export of sugar in the
current sugar season (1st October, 2011-30th
September, 2012) were notified. This was
amended vide Policy Circular No. 63 (RE2010)/2009-14 dated 16.05.2012.
2. It has been decided with the approval of
Competent Authority that a variation of (-)
5% in weight against Registration Certificates issued for export of sugar shall be allowed. Thus, a variation of (-) 5% in weight
in exports of sugar against registered contracts shall not be treated as default for the
purpose of imposition of penalty or debarment from future registrations.
3. This issues with the approval of Director General of Foreign Trade.
Policy Circular No. 3 (RE-2012)/2009-14
Men are more easily governed through their vices than
through their virtues.
—Napoleon Bonaparte
September 2012
REVENUE TRANSPARENCY TIMES
4
LEVY OF ANTI-DUMPING DUTY ON IMPORTS OF METRONIDAZOLE,
ORIGINATING IN, OR EXPORTED FROM PEOPLE’S REPUBLIC OF
CHINA, FOR A FURTHER PERIOD OF FIVE YEARS
G.S.R. (E). -Whereas, the designated
authority vide notification No.
15/18/2010-DGAD, dated the 30th
May,2011, published in the Gazette of
India, Extraordinary, Part I, Section 1,
dated the 30th May,2011, had initiated
review in terms of sub-section (5) of
section 9A of the Customs Tariff Act,
1975 (51 of 1975) (hereinafter referred
to as the said Customs Tariff Act) and
in pursuance of rule 23 of the Customs
Tariff (Identification, Assessment and
Collection of Anti-dumping Duty on
Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter
referred to as the said rules), in the matter of continuation of anti-dumping
duty on imports of Metronidazole,
falling under tariff item 29332920 of
the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), originating
in, or exported from, People’s Republic
of China, imposed vide notification of
the Government of India, in the Ministry of Finance (Department of Revenue),No. 61/2006-Customs, dated the
15th June, 2006, published in the
Gazette of India, Extraordinary, Part II,
Section 3, Sub-section (i), vide number
G.S.R.368 (E), dated the 15th June,
2006, and had recommended extension
of the anti-dumping duty vide notification No. 15/18/2010-DGAD, dated the
29th June,2012, published in the
Gazette of India, Extraordinary, Part I,
Section 1, dated the 29th June,2012.
Now, therefore, in exercise of the
powers conferred by sub-section (1)
on Dumped Articles and for Determination of Injury) Rules, 1995, the Central Government, on the basis of the
aforesaid findings of the designated authority, hereby imposes anti- dumping
duty on the goods, the description of
which is specified in column (3) of the
Table below, falling under tariff item of
exported from the country specified in
the corresponding entry in column (5)
and produced by the producer specified
in the corresponding entry in column
(6) and exported by the exporter specified in the corresponding entry in column (7), and imported into India, an
anti-dumping duty at the rate equal to
responding entry in column (9) of the
said Table:2. The anti-dumping duty imposed
under this notification shall be effective for a period of five years (unless
revoked, amended and superseded earlier) from the publication of this notification in the Official Gazette and shall
be payable in Indian currency.
Explanation.- For the purposes of
this notification, rate of exchange applicable for the purposes of calculation
of such anti-dumping duty shall be the
rate which is specified in the notification of the Government of India, in the
Ministry of Finance (Department of
Revenue), issued from time to time, in
exercise of the powers conferred by
section 14 of the Customs Act, 1962,
(52 of 1962), and the relevant date for
the determination of the rate of exchange shall be the date of presentation
of the bill of entry under section 46 of
the said Customs Act.
read with sub-section (5) of section 9A
of the said Customs Tariff Act, 1975
read with rules 18 and 23 of the Customs Tariff (Identification, Assessment
and Collection of Anti-dumping Duty
the First Schedule to the said Customs
Tariff Act as specified in the corresponding entry in column (2),originating in the country specified in the
corresponding entry in column (4), and
the amount as specified in the corresponding entry in column (8), in the
currency as specified in the corresponding entry in column (10) and per unit
of measurement as specified in the cor-
Notification
No.40 /2012-Customs (ADD)
F.No.354/17/2000-TRU (Pt.III)
(Raj Kumar Digvijay) Under Secretary
to the Government of India.
Making
E-payment of
Customs duty
mandatory
K
ind attention is invited to Board
Circular No. 33/2011-Customs
dated 29th July, 2011 wherein it
was decided that by the Board that the
date for mandatory E- payment of Customs duty shall be notified separately.
2. It has been decided to make epayment of duty mandatory for importers registered under Accredited
Clients Programme and importers paying customs duty of one lakh rupees or
more per Bill of Entry with effect from
17.09.2012.
3. All Chief Commissioners of Customs are therefore advised to give wide
publicity to enable trade to be ready in
case any change in their software or any
internal procedure for effecting E-payment is required. As a large number of
taxpayers would be required to pay the
taxes electronically, it is requested that
importers, trade and industry may be
provided all assistance so as to help
them in adopting the new procedure.
Circular No.24/2012-Customs
F.No.450/180/2009-Cus.IV(Pt.)
(G.S. Sinha)
OSD (Customs-IV)
Service tax – vocational
education/training course
Nutrient Chart
Fruits Amount Minerals Contained Vitamins Contained
C
larification has been sought in respect of levy
of service tax on certain vocational education/
training / skill development courses (VEC)
offered by the Government (Central Government or
State Government) or local authority themselves or
by an entity independently established by the Government under the law, as a society or any other similar body.
2. The issue has been examined. When a VEC is
offered by an institution of the Government or a local
authority, question of service tax does not arise. In
terms of section 66D (a), only specified services provided by the Government are liable to tax and VEC is
excluded from the service tax.
3. When the VEC is offered by an institution, as an
independent entity in the form of society or any other
similar body, service tax treatment is determinable by
the application of either sub-clause (ii) or (iii) of
clause (l) of section 66D of the Finance Act, 1994.
Sub-clause (ii) refers to “qualification recognized by
any law” and sub-clause (iii) refers to “approved
VEC”. In the context of VEC, qualification implies a
Certificate, Diploma, Degree or any other similar
Certificate. The words “recognized by any law” will
include such courses as are approved or recognized
by any entity established under a central or state law
including delegated legislation, for the purpose of
granting recognition to any education course including a VEC.
Circular No. 164/15/2012-ST
F. No. 356/17 /2012 - TRU
(S.Jayaprahasam)
Technical Officer, TRU
APPLE
AVOCADO
One medium apple with skin contains
0.47 grams of protein, 95 calories,
and 4.4 grams of dietary fiber.
Potassium - 195 mg
Calcium - 11 mg
Phosphorus - 20 mg
Magnesium - 9 mg
Manganese - 0.064 mg
Iron - 0.22 mg
Sodium - 2 mg
Copper - 0.049 mg
Zinc - 0.07 mg
Also contains a trace amount of other
minerals.
Vitamin A - 98 IU
Vitamin B1 (thiamine) - 0.031 mg
Vitamin B2 (riboflavin) - 0.047 mg
Niacin - 0.166 mg
Folate - 5 mcg
Pantothenic Acid - 0.111 mg
Vitamin B6 - 0.075 mg
Vitamin C - 8.4 mg
Vitamin E - 0.33 mg
Vitamin K - 4 mcg
Contains some other vitamins in small
amounts.
One medium avocado contains 4.02
grams of protein, 322 calories and 13.5
grams of fiber.
Potassium - 975 mg
Phosphorus - 105 mg
Magnesium - 58 mg
Calcium - 24 mg
Sodium - 14 mg
Iron - 1.11 mg
Selenium 0.8 mcg
Manganese - 0.285 mg
Copper - 0.382 mg
Zinc - 1.29 mg
Also contains small amounts of other
minerals.
Vitamin A - 293 IU
Vitamin C - 20.1 mg
Vitamin B1 (thiamine) - 0.135 mg
Vitamin B2 (riboflavin) - 0.261 mg
Niacin - 3.493 mg
Folate - 163 mcg
Pantothenic Acid - 2.792 mg
Vitamin B6 - .517 mg
Vitamin E - 4.16 mg
Vitamin K - 42.2 mcg
Contains some other vitamins in small
amounts.
REVENUE TRANSPARENCY TIMES
EXCHANGE RATE
S.O.
(E). – In exercise of the powers conferred by section 14 of the Customs Act,
1962 (52 of 1962), and in super session of the notification of the Government of India
in the Ministry of Finance (Department of Revenue) No.75/2012-CUSTOMS (N.T.),
dated the 16th August, 2012vide number S.O.1851 (E), dated the 16th August, 2012,
except as respects things done or omitted to be done before such super session, the
Central Board of Excise and Customs hereby determines that the rate of exchange of
conversion of each of the foreign currency specified in column (2) of each of Schedule I and Schedule II annexed hereto into Indian currency or vice versa shall, with effect from 7th September, 2012 be the rate mentioned against it in the corresponding
entry in column (3) thereof, for the purpose of the said section, relating to imported
and export goods.
SCHEDULE-I
5
September 2012
Levy of anti-dumping duty imposed vide
Notification No.94/2007-Customs, dated the
22nd August, 2007, on imports of ‘Nonyl Phenol’,
originating in, or exported from, Chinese Taipei
uptoand inclusive of 21st August, 2013
G.S.R. (E). -Whereas, the designated authority
vide notification No. 15/1007/2012-DGAD, dated
the 9th August, 2012, published in the Gazette of
India, Extraordinary, Part I, Section 1 dated the 9th
August, 2012, has initiated review in terms of subsection (5) of Section 9A of the Customs Tariff Act,
1975 (51 of 1975) and in pursuance of rule 23 of
the Customs Tariff (Identification, Assessment and
Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995
(hereinafter referred to as the said rules), in the
matter of continuation of anti-dumping duty on imports of ‘Nonyl Phenol’, falling under heading
2907 of the First Schedule to the Customs Tariff
Act, 1975 (51 of 1975), originating in, or exported
from, the Chinese Taipei imposed vide notification
of the Government of India, in the Ministry of Finance (Department of Revenue),No. 094/2007Customs, dated the 22nd August, 2007, published
in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.562(E),
dated the 22nd August, 2007, and has requested for
extension of anti-dumping duty upto one more
year, in terms of sub-section (5) of Section 9A of
the said Customs Tariff Act;
Now, therefore, in exercise of the powers conferred by sub-sections (1) and (5) of Section 9A of
the said Act and in pursuance of rule 23 of the said
rules, the Central Government hereby makes the
following amendment in the notification of the
Government of India, in the Ministry of Finance
(Department of Revenue), No. 094/2007-Customs,
dated the 22nd August, 2007, published in the
Gazette of India, Extraordinary, Part II, Section 3,
Sub-section (i) vide number G.S.R.562(E), dated
the 22nd August, 2007, namely: In the said notification, after para 2, the following shall be added, namely: “3. Notwithstanding anything contained
herein above, this notification shall remain in force
up to and inclusive of the 21st August, 2013, unless revoked earlier”. Notification No. 39/2012 Customs (ADD)
[F.No.354/117/2007-TRU ]
Note.- The Principal notification No.094/2007Customs, dated the 22nd August, 2007, was published in the Gazette of India, Extraordinary, Part
II, Section 3, Sub-section (i) vide number G.S.R.
562 (E), dated the 22nd August, 2007.
Applicable rate of CVD on imported Fertilizers
R
SCHEDULE-II
Notification No. 80/2012 - Customs (N.T.)
[F.No.468/15/2012-Cus.V]
(ABHINAV GUPTA)
UNDER SECRETARY TO THE GOVT. OF INDIA
Procedure for disposal of unclaimed/
uncleared cargo under section
48 of the Customs Act, 1962, lying
with the custodians
A
ttention is invited to Board Circular No. 50/2005-Cus. dated 1st
December, 2005, issued on the
above mentioned subject. References
have been received regarding difficulties
faced in respect of disposal of motor cars
and negative list items.
2. The matter has been examined. It
is seen in this regard that instructions
contained in para 3(iii) of the Circular
No. 50/2005-Cus. dated 1stDecember,
2005 in respect of disposal of car and
items of negative list has not been implemented in right perspective which has resulted in accumulation of unclaimed,
uncleared and confiscated cargo and
blockage of substantial Government revenue.
3. Accordingly, it has been decided
by the Board that the concerned Com-
missioner of Customs should ensure that
early investigation, issue of Show Cause
Notice and adjudication, if required, in
respect of such goods (motor cars and
goods of negative list) are taken up on
priority so that the goods are not allowed
to remain uncleared for longer period
blocking substantial Government revenue.
These goods may be disposed of by
auction after adjudication subject to condition that they are not prohibited in nature. Board also desires noticeable
improvement in disposal of such goods
unclaimed / uncleared.
F.No.442/12/2004-Cus.IV (Pt.)
(G. S. Sinha)
OSD (Customs IV)
epresentations have been received from
trade as well as the field formations regarding the applicable rate of additional duty of
customs (CVD) on Fertilizers when imported into
India. Doubts have arisen in view of the fact that
in Notification No. 12/2012-Customs, dated 17-032012, except for Serial Number 200(ii) [where the
CVD rate of 1% is mentioned in column (5)] the
entry in this column for all other Serial Nos. is ““(dash). In terms of the Explanation II (b) of the
said Notification, “–” appearing in column (5)
means additional duty equal to duty of excise leviable on the goods as per the First Schedule to the
Central Excise Tariff Act, 1985 (5 of 1986) read
with any other notifications issued under sub-section (1) of section 5A of the Central Excise Act,
1944 (1 of 1944), for the time being in force. Since,
the effective rate of CVD has been prescribed in
the case of fertilizers, through a notification issued
under section 25 of the Customs Act, 1962, some
field formations have sought to apply the effective
rate of excise duty of 6% ( with cenvat credit) for
the purpose of charging CVD on this item.
2. The matter has been examined. Even
though it is true that for many S. Nos. of notification no. 12/2012-Customs pertaining to goods
falling under Chapter 31(S. Nos 196 to 199 and 200
to 205) the entry indicated in column (5) is ‘-‘, S.
No. 200(ii) covering “All goods, other than those
which are clearly not to be used as fertilizers” prescribes a CVD rate of 1% in column (5). It is relevant that the entry pertaining to basic customs duty
indicated in column (4) against this S. No. is ‘-‘ implying thereby that the otherwise applicable rate of
basic customs duty is to be charged. From a combined reading of other S. Nos. covering goods of
chapter 31 and S. No. 200 (ii), it is evident that the
benefit of concessional CVD of 1% is available to
“All goods, other than those which are clearly not
to be used as fertilizers” even if the benefit of concessional basic customs duty under any other S. No
of the same notification is claimed. For instance,
an importer claiming the benefit of concessional
basic customs duty of 5% under S. No. 204 covering “Potassium sulphate containing not more than
52% by weight of potassium oxide”, would be eligible for the benefit of concessional CVD of 1%
under S. No. 200 (ii) if the goods are to be used as
fertilizers. However, to avoid disputes & place the
matter beyond doubt, notification no. 46/2012-Customs dated 17th August, 2012 has been issued to
expressly prescribe the effective rate of CVD
against the relevant serial nos.
F.No.354/35/2011-TRU
Circular No. 23 /2012-Customs
Import of Night Vision Binoculars/ Passive Night Vision
Devices(PNVs) require an Import Authorization
S.O. (E) - In exercise of powers conferred by Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, as amended, read with
paragraph 1.3 and paragraph 2.1 of the Foreign
Trade Policy – 2009-14, the Central Government
hereby amends Schedule – I (Imports) of the
ITC(HS) Classifications of Export and Import
Items, 2009-14, Chapter-90 as under:
2. Presently, the import policy for Binoculars (HS
Code: 9005.10.00) is free. Night Vision Binoculars/
Passive Night Vision Devices (PNVs) areclassified
under the same HS Code: 9005.10.00. But these
items will be ‘restricted’ for import. So the
amended entry HS Code: 9005.10.00 will read as
table.
3. Effect of Notification: Import of Night Vision
Binoculars/ Passive Night Vision Devices(PNVs)
will require an Import Authorization.
Director General of Foreign Trade
NOTIFICATION NO.15 (RE-2012)/2009-2014
[Issued from File No. 01/89/180/00220/AM02/PC-2(A)]
September 2012
6
REVENUE TRANSPARENCY TIMES
A tale of a harassed inspector of Central Excise
Continued from page 1
She further represented that the then chairman (CBEC) made remarks’ may pl consider it’ on the application of Koli , but the
concerned section officer in CBEC told
Koli that the chairman has written,` may
be consider it’ and it is their sweet will
whether to consider or reject his request.
Koli’s mother further alleged that Section
officer also demanded some illegal gratification for posting Koli in Delhi. Since Koli
could not fulfill the wishes of the Section
officer, therefore he had no choice but to
join Vadodra Central Excise.
Since Koli was already working in CBEC
his senior officer started a proposal for taking him on loan basis after his Joining in
Vadodara Zone. He was, therefore, transferred to ADIV Sec CBEC on loan basis
and worked their till 6/10/2009. There after
Koli was transferred to Delhi Central Excise Commissionerate on deputation basis
vide F.No II/3-35/CCO/2003/pt1 dated
19/8/2009.and joined Delhi Central excise
Commissionerate II on 9/10/2009 and was
posted in Div VII Central Excise Delhi II.
The main grievances of Koli as alleged is
that the department had not posted him in
Delhi despite the fact that Koli was holding
higher ranking than others who were posted
in Delhi (ranking no 213 and 306). Further
Koli had applied from Delhi and opted for
Delhi. However the candidates having ranking no 213 &306 were allotted Delhi
though both the candidates do not belong to
Delhi besides the fact that the candidate did
not apply to SSC from Delhi. Further out
of the 7 candidate’s allocated Delhi Zone
candidates at S No 4, 5, 7 did not belong to
Delhi and S No 3 &4 did not join Delhi .
Koli also informed the Chairman CBEC
that he was allocated Vododra Zone when
option for choice zone for posting was not
called for by the department from any candidates for 2003 & 2004 for recruitment of
Inspectors. The allocation of the candidates
to various zone was done by CBEC from
the selected candidates by SSC for batch
examination for the year 2003 & 2004.The
criteria adopted by CBEC was made on
merit –cum permanent address basis and
the CBEC also issued some guidelines on
the selection of zone in their letter F.A 12034/2/2003/AD.III (B) (Vol II). Since
Koli was much higher in ranking issued by
SSC and was residing in Delhi with his old
aged parents and had also applied and opted
for Delhi while making his application to
SSC. His request appears to be genuine and
logical. Reference is also invited to
DOPT’S
OM
No.36028/31/2007Esst(res)dated 9/10/2009 which says that
the merit of reserved category can not be allowed to work against him even if it is beneficial to him.
Koli in his representation alleged that the
Vadodra commissionerate did not settle his
pending medical and other claims which
also forced him to opt for deputation as he
can avail the CGHS facilities in Delhi.
However a very few people know that the
Administrative wings of CBEC is full of
nepotism and favoritism and corruption can
not be ruled out. The babus sitting in the
different section of CBEC are not less then
a parallel power centre because without
their whims and fancies nothing can be
done because they know all tricks to favour
or reject any one.
Koli’s mother also approached the National Commission for Scheduled Castes regarding the harassment faced by his son,
The Commission wrote to the Chairman
CBEC on 6/8/12 to submit facts and information on action taken on the allegation harassment made by mother of Koli. Sources
say that no relief has been given to Koli
rather he has relieved with the direction to
join his parent Commissionerate Vadodra,
even before his completion of tenure
5/10/12.
It appears that department is bent upon to
harass a Scheduled caste Inspector in one
way or the other. The SC/ST commission
also has been of late reduced to a mere post
office with no decision to redress grievances being taken with effective implementation and Finance Ministry treating it as
any other Government Office.
The story of harassment of Koli did not
end here. Anandi Lal koli father Kamal
Kishore Koli made a representation to
Commissioner Central Excise Commissionerate Delhi II intimating the commissioner that his son is under great mental
stress and duress after participating in an
Central Excise operation conducted by the
AE wing of central excise commissionerate
Delhi II on 4/3/2011. He alleged that a
search warrant was issued in the name of
Koli to visit M/S Tirupati Industries, though
he was not posted in A/E branch of Delhi
II.
It so happened that Koli was dictated one
Panchnama by the other officers in the raid
party and latter on the superintendent A/E
Delhi II Commissionerate issued a latter no
IV(HQRS PREV) 12/14/ENQ/DII/2011pt
dated 26/8/11 directing Koli to explain the
facts written in panchnama dated 4/3/11 relating to Tirupati Industries. The Supt again
issued a letter to Koli on 15/9/2011 directing him to explain as to why the entire
goods in annexure A to the panchnama
dated 4/3.11 were not seized. This caused a
huge pressure and tension in the mind of
Koli and he had to rush AIIMS New Delhi
for treatment on 27/9/11. Perhaps the Superintendent Concerned did not realise that
a Panchnama in law is a statement of witnesses and is not required to be dictated by
any officer.
His father also alleged while writing to
Commissioner Delhi II that when other officers along with Superintendent also visited the factory on 4/3/11 why Koli was not
guided by other officers of team.
His father further alleged that after the
said incident Koli appears to be disheartened from life and can take any dangerous
step to his life.
A question arises as to why Koli was targeted only for some lacuna in the Panchnama if any because the job of A /E wing is
a collective one and for any mistake only
one officer can not be targeted. Further
what the Asst Commissioner /Deputy Commissioner were supervising.
For each every case of seizure/search or
recovery of Central excise duty every officer from the rank of Superintendent to
Commissioner takes the credit of a particular case and mentions the same in their
ACR and why Koli was asked to explain.
What is responsibility of higher officers?
Why action should not be initiated against
all the officers if any mistake has been committed?
It is nothing new in Central Excise that
whenever there is any problem, the departments always take action against the junior
officers like Inspector/ Superintendent.
An impartial enquiry needs to be conducted by CBEC so that justice can be done
to an Inspector belonging to Scheduled
caste category.
Does Rowlatt Act Still Rules Independent India?
Continued from page 1
for taking away the right of enjoyment of
property even prior to conviction was
made to my knowledge by dictator Col.
Gaddafi of Libya. Even in USA such attachment is provided post conviction in
cases of drug crimes. For smugglers ,
SAFEMA in India, provides for attachment of property post conviction or in
cases where preventive detention orders
were not quashed or revoked.
- Recently, Justice Ramasubramaniam
of H`ble Madras High Court declared the
PMLA as a legislation that punishes even
the victim as he is bound to loose his property either to the state or to the wrong doer.
While declaring Section 8(4) of PMLA as
unconstitutional, following observations
were made by the Justice Ramasubramaniam “With great respect to the Division
Bench of the Andhra Pradesh High Court,
the court has not tested the validity of Section 8 (4) of the Act on the touchstone of
the Constitutional guarantees available to
children and women residing in the property and the statutory protection available
to tenants in terms of other enactments.
- Even if I assume for a minute that the
object of the PML Act is to keep the accused out of the possession and enjoyment
of the proceeds of crime, the human rights
of other members of his family or even
persons who are in occupation of the property under lawful agreements of tenancy
cannot be thrown to the mercy of the respondents (Union Finance Ministry and
Enforcement Directorate),” the judge said.
- He held that PMLA, not only seeks to
punish the offenders, but also seeks to punish the victims of such offences. Take for
instance a case, where an offence of kidnapping for ransom punishable under Section 364-A takes place. If the amount
involved is more than Rs.30 lakhs, it is a
scheduled offence under PMLA. Therefore, if the accused is apprehended and
charged under PMLA and the money is
also recovered, then the person who paid
the ransom to the accused and who happens to be the victim of the crime, will lose
his money by virtue of Section 8(6) and
Section 9. He would rather prefer to turn
hostile in the criminal case by reaching an
agreement with the accused so that the attachment order gets lifted under Section
8(5) enabling him to take away his money.
In other words, Section 8(6) and Section 9,
which seeks to punish the victims of crime
along with the accused, appear to be a disincentive for the victims. The same analogy holds good even for offences of
robbery and dacoity punishable under Sections 392 to 402, which are included in
Paragraph 1 of Part B of the schedule to
the Act. A person, who is robbed or a person on whom dacoity is committed, has to
lose his property to the Central Government by virtue of Section 8(6) and Section
9 of the Act, if the stand taken by the respondents is accepted. For the victims of
crime, there would virtually be no difference between the accused and the Central
Government, as in any case, they would
have to lose their property, to either of the
two.
- Now, that we have Political persons
who have been on the receiving end of
some of the legislations which though ostensibly were made with good objectives
made them suffer as well, Is not this the
time that legislation are made which are
practical and do not have potential to victimize the common man? After all, if
Rowlatt Act was bad for Indians under the
British and was opposed by Mahatma and
Lajpat Rai who mobilized opinions against
it, how similar Acts can be good for Indians under Indian Government. The prudence of not taxing salt under Excise law
in independent India equally applies to the
Rowlatt Act.
- Hope the proposed Money Laundering(
Amendment) Act, 2012 will be viewed in
this light and not as a mere tool to give
more powers to the State or to appease
some international body.
Former FMs hog the limelight: The
month of July,2012 was particularly auspicious for the former occupants of the North
Block. It was for the first time that an occupant of Finance Ministry in North Block
moved to the middle of Raisina hill, when
Mr. Pranab Mukherjee became president
of India. Another former FM who became
PM came back as FM, though only for a
short while in July. We heard the news of
former FM Sh. N.D. Tiwari being declared
DNA Dad at the advanced age of 87, after
a protracted legal battle having been fought
by his claimant son, again a record of the
sorts. Further, we found Lord Murugan
and celestial combination was favorable to
Sh. P.C. Chidamabram who moved retro to
western part of the North Block again from
its Eastern part, after again becoming FM
from HM. He also got clean chit from
Apex Court in 2-G scam matter signaling
that in Chiddu v/s Subbu battle, it is time
for the latter to lie low and accept that stars
are not particularly favoring him.
Greater than Rs. 2,000/- Cash Register:
A part from making all its staff take the
oath of integrity and honesty and no corruption atleast two times a year (the frequency may increase in future), successive
Governments have also been adhering in
their bid to make `serious effort to curb
corruption’ to ask all its staff having public dealings to make entry in a register, if
they have in their possession more than
Rs.2, 000/-. How much such an initiative
has curbed corruption is anybody`s guess?
But, such an exercise does eat into, whatever little time an officer has for public
dealings after Parliament questions, R.T.I.,
office work and protocol duties. Another
positive fall out is that such an exercise has
generated employment in and around Government offices, as we have collecting
agents available and willing to do the work
for officers helping them in keeping their
pockets light in Police,Custom Houses,
Transport, Provident Fund ,land revenue
and other departments. They also act as
mobile human ATM machines -accepting
and dispensing cash as per requirement. An
empty pocketed corrupt officer can easily
make entry of Rs.20,000/-,as he will not be
subjected to any check or can borrow from
his other like colleagues for the sake of
showing -as the Currency note numbers
are not entered and will thus get a license
to make cool Rs. 20,000/- per day without
much problem.
The greater than
Rs.2,000/- Cash register also presumes that
a corrupt officer will not demand bribe
other than in cash and therefore does not
require him to declare his/ her Gold or
solitaire rings or other material possessions. It also presumes that corruption exists only in places having public dealings,
though the scams point out otherwise.
That whole of the staff, whether honest or
dishonest detests such a measure as lack of
confidence shown by the Government in
them, is another thing.
REVENUE TRANSPARENCY TIMES
7
September 2012
SUPERMAN OF CUSTOMS NO MORE BUT WILL REMAIN ALIVE FOREVER
Continued from page 1
While posted in Bombay he had
taken on the might of Dawood
Ebrahim by raiding his strongholds, once while chasing Smugglers he had even entered Pakistani
territorial water, where Pakistani
Coast Guard had arrested him and
India had to take help of International Agencies to seek his release.
He was perhaps the most effective Preventive Officer of the
Indian Customs and ruled his territories without any challenge from
smugglers. They changed their
routes and courses to escape from
him. A.K. Pandey, Former Member of C.B.E.C., in his book “GRIT
THAT DEFIED ODDS” has narrated the unparallel qualities of
Daya Shankar in following words
:“Let me ask this simple question
to young recruits of the Customs
and Excise services - Who is Daya
Shankar? I am more than sure that
the fresh batches of officers of all
ranks will not know such important
parts of glorious history of Indian
Customs which had locked horns
with resourceful and hi-tech gadgets-equipped smuggling syndicates, specialising in gold and
electronic
goods
smuggling
through the sea routes. Officers of
today have to man and plug only
the official route of imports to prevent frauds. But, only about 30
years back, the entire smuggling
scenario was bone-chillingly scary
in the country, with two unequals
fighting serious battles. Customs
being ill-equipped in terms of modern gadgets and infrastructure had
unrivalled strength of only the law
on its side. And other party was the
fearsome community of smugglers.
So lucrative and well-organised it
was then that it gave birth to an
icon like Dawood Ibrahim - an international terrorist, and the force
behind the serial bomb blasts in
Mumbai. But, do the young generations of Customs officers know
that one officer whom Dawood
used to fear was Mr. Daya
Shankar! Once in an interview with
The Illustrated Weekly, Dawood
was quoted as expressing his wish
to work with Mr. Daya Shankar as
an Inspector! So devastating was
Mr. Daya Shankar’s preventive
aura among the smuggling syndicates along the Gujarat coast those
days.
And what were those exemplary
qualities of Mr. Daya Shankar? If
you read the book you may find
that none of them was outlandish
and out of the world! But we all
know that what makes a quality
rare in today’s world is the simple
rule of being honest to one’s duty
and application of mind. Among
the multiple inborn and acquired
assets of Mr. Daya Shankar, the
two prominent assets were his honesty and absolute courage! He used
to be perceived so incorruptible by
the smugglers that none ever made
even an attempt to send him a
feeler. And courage was indeed in
surplus in his case. In spite of lack
of infrastructural support and overt
departmental back-up in the interiors of the coast, he would lead his
team of daredevils in a slow-moving dhow to intercept the goldladen dhows coming from Dubai.
Undeterred by the fact that the
smugglers’ dhows had the advantage of getting tips from Dubai
through satellite mobile phones, he
used to chase and trap them in the
deep sea rather than the coastline
where the consignments used to
disappear in small lots.”
Similarly, let's ask the young
Customs officers about an officer
called Costao Fernandes? Who was
he? What did he do? What is that
Supreme Court judgement in
which he was instrumental, and
that landmark judgement came as
a shield to the officers in the Government, honestly discharging their
duties.
A K Pandey on his untimely
death bemoan with these words”IT
was very sad to learn about the premature demise of Daya Shankar.
The service regrettably had lost
him much earlier. He would, however, be fondly remembered by all
who knew him, particularly those
who had occasion to work closely
with him. When honesty combines
with courage, it makes for an indomitable soul, for nerves of steel,
which can withstand any challenge. And honesty of such people
is out of conviction and not fear. It
may not instantly change the system, but leaves an indelible impact
- a small step which may ultimately
lead to change. Every service has
such people. Daya Shankar was the
ONE in our service. Such people
want nothing in return, not even a
name and they define what public
service is. Our system does not
need the honest who are unconcerned about their surroundings. It
needs honest who have the courage
to cleanse the system. It is certainly
not self enrichment or business.
Ironically, it has become just that
and with a brazenness. Fence eats
the crop, and having nourished on
it, eats it with greater vigour ever
after. Instances are not wanting,
where many a public servant having robbed the exchequer, walk
away with a smirk to occupy even
more vintage position, thanks to
their protectors and supporters. But
a churning is going on currently.
This time it seems the change may
come. But honesty of conviction
can not come overnight. It takes
time to take root. People however
are not ready to wait. It has been a
long wait already. Therefore till
that happens, honesty in public
services has to be brought about by
the fear of a strong law. People,
who are honest out of conviction,
have to be at the helm. If such
change comes, the efforts of the
likes of Daya Shankar will not
have gone in vain”
Srinivas Rao, the then Addl Director, DRI on Daya Shankar
“Daya Shankar joined the Indian
Revenue Services in the year of
1978. Naturally talented, brilliant,
irreverent and eccentric in the early
stages of his career itself, he distinguished wherever he worked
with unflinching courage and
supreme dedication. In early stages
of his career itself, he earned a reputation as a man of integrity to the
core, which he maintained
throughout his life in all walks.
His reputation as a formidable
officer came to fore while he was
posted at Mumbai Airport and subsequently as an Assistant Commissioner, at Daman Coast, DRI
Mumbai, M&P Mumbai and in
GOA where he stood up for an
honest inspector who took on the
Chief minister’s brother and exposed that even the CBI is toeing
the line of powerful and influential.
At Mumbai Airport, it was
known to everyone that while he
was on duty, Smugglers got themselves off loaded from foreign destinations. While at Daman - one of
the most vulnerable places for
smuggling gold and silver - Shri
Daya Shankar, took upon with
Mafia Don – Bakia and later JogiNani @ LalluJogi. He arrested both
of them and stopped their smuggling activities and instilled a lot of
confidence in the people of Daman
district. What Police Department at
Daman failed to do, Shri Daya
Shankar could do single handedly.
In another similar case, the erstwhile Chief Minister of Goa was
investigated by him for smuggling
activity and got him detained under
COFEPOSA.
Daya Shankar had excellent network of people and was capable of
generating continuous intelligence
on many issues related to smuggling, terrorism, Narco trafficking
etc. Mumbai Police and Intelligence Bureau would seek specific
information from him on complicated cases and it may not be incorrect to say that without his
inputs many of the actions initiated
by these Agencies would not have
yielded results. For all his credible
work, there were approved rewards
in the form of cash incentives for
Shri Daya Shankar, which were not
accepted by him and returned to
the Government. He could have
got rewards of more than a crore of
rupees in the eighties and nineties
when there were no ceilings on the
amount of rewards. But he did not
accept even a penny as reward for
his work. He considered his work
as a part of his responsibility and
these cash incentives did not motivate him – he was already an Inspiration by himself. No amount of
money inspired him – his honesty
and integrity stood above everything else.”
Since Daya Shankar was singlehandedly instrumental in preventing smuggling activities in highly
lucrative and organized smuggling
along Maharashtra and Gujarat
coastlines, the Customs top brass
thankfully perceived a major
counter-threat to his life. Thus
came numerous suggestions to
keep him away from the radar of
possible attacks. And one of the
suggestions Daya Shankar probably unwillingly accepted was to
take a 'Study Leave' and go to Australia. Because of certain local policies of the Australian Government
he came back to India after a year
but since he had not finished his research work, he was very keen to
do so if an opportunity came his
way. And, that indeed came after a
couple of years. He went back to
Australia to finish his Ph.D in
2003. Predictably, he lost himself
in his research work relating to
IPRs. A man, endowed with highly
desirable traits like dedication to
whatever he does, high IQ and
acute hunger for knowledge, forgot
to fulfill the procedural niceties of
his parent department which initiated disciplinary action for unauthorised absence from the
Department once it received his
notice for voluntary retirement in
2005.
However it took six years for the
CBEC to accept his voluntary reretirement. Exercising his powers the
CBEC Chairman is learnt to have
decided to drop the disciplinary
charges against Daya Shankar and
the Union Finance Minister, after
getting to know the 'least known
tales' about him has not only shared
the Chairman's conviction and accepted the notice for voluntary retirement w.e.f 2005 but also noted
on the file that ''he is an exceptional, good and honest officer'' and
the super hero of customs finally
got justice from the Finance Minister .
With the untimely demise of the
of Daya Shankar the Customs fraternity has lost its Super hero, who
will always be remembered for his
exemplary and unparallel courage
and devotion to his duties. A person like Daya Shankar never dies
rather they are always alive and remains in the heart of the people.
Source : The Times of India, Tax
India online, ELT, A K Pandey’s
book “GRIT THAT DEFIED
ODDS”.
CUSTOMS WANTS TO SELL CONFISCATED WEAPONS
TO ITS OWN OFFICERS
T
he Customs Department has
moved a proposal to sell
confiscated non-prohibited
bore weapons in its armoury to its
own officers at nominal rates, designating the same as “non-performing assets”. An inventory showed
that over 800 weapons were lying in
the armoury gathering rust.
If the Ministry of Finance
clears the proposal, officers would
be able to purchase and retain confiscated pistols/revolvers both while
in service and post-retirement. A
copy of the proposal is with The Indian Express.
As per existing guidelines,
“there is a complete ban on sale of
non-prohibited
bore
(NPB)
weapons to departmental officers”,
which can be sold “only to sitting
MPs and VIPs”.
However, confiscated firearms
or service weapons are “loaned’’ to
officers for self-protection, subject
to the condition that on retirement/superannuation,
these
weapons would be returned to the
department.
The proposal was made in a
letter written by Commissioner
(Prevention) Sunil Uke, to P K
Singh, Commissioner, Directorate
of Logistics, on March 1, 2012. “To
generate and augment revenue from
the seemingly non-performing asset
of the department, i.e. the armoury
containing a whole lot of weapons
THE REASONING
* MPs entitled to buy confiscated weapons, but sale limited
to only 4-5 per year.
* At this rate, it will take 200
years to exhaust stock.
* Many weapons lying in armoury for more than 40 years.
* Dept can earn Rs 5 cr from
sale.
* Officers need protection even
after retiring.
of value, it is proposed that the sale
of non-prohibited bore firearms to
departmental officers may be
opened. For those who already own
a firearm on loan basis... an option
may be given... to purchase the
same at the current market prices,”
says the letter.
It adds that there is not much
demand among MPs for the
firearms. “...During a year only 4-5
weapons are bought by MPs. At this
rate, it would take more than 200
years to exhaust the stock... If these
are sold to the departmental officers
we would generate revenue of more
than Rs 5 crore.”
The communication also says that if
the weapons, some of them lying in
the armoury for more than 40 years,
are not disposed of, these would
rust.
A senior Customs official also
justified the proposal on the
grounds that officers who have been
on sensitive assignments need protection when they retire.
The Customs Department incidentally already has more than 6,000
service weapons loaned to officers.
There are known instances of these
being loaned without authorisation
or not being returned.
Source : Indian Express
September 2012
REVENUE TRANSPARENCY TIMES
8
Inland Customs Line
The route of the 1870s Inland
Customs Line and Great Hedge
ity for Government was transferred
to the Crown following the events
of the Indian war of Independence
of 1857. By 1780 Warren Hastings,
the Company's Governor-General
of India, had brought all salt manufacture in the Bengal Presidency
under Company control. This allowed him to increase the ancient
salt tax in Bengal from 0.3rupees
per maund (37 kg) to 3.25 rupees
per maund by 1788, a rate that it remained at until 1879. This brought
in a huge amount of revenue for the
Company, amounting to 6,257,470
rupees for the 1784–85 financial
T
he Inland Customs Line
which incorporated the
Great Hedge of India (or
Indian Salt Hedge) was a customs
barrier built by the British across
India primarily to collect the salt
tax. The customs line was begun
while India was under the control
of the East India Company but continued into the period of direct
British rule. The line had its beginnings in a series of customs houses
that were established in Bengal in
1803 to prevent the smuggling of
salt to avoid the tax. These customs
houses were eventually formed
into a continuous barrier that was
brought under the control of the Inland Customs Department in 1843.
The line was gradually expanded
as more territory was brought
under British control until it covered a distance of more than 2,500
miles (4,000 km), often running
alongside rivers and other natural
barriers. At its greatest extent it ran
from the Punjab in the northwest
until it reached the princely state of
Orissa, near the Bay of Bengal, in
the southeast. The line was initially
made of dead, thorny material such
as the Indian Plum but eventually
evolved into a living hedge that
grew up to 12 feet (3.7 m) high and
was compared to the Great Wall of
China. The Inland Customs Department employed customs officers, Jemadars and men to patrol
the line and apprehend smugglers,
reaching a peak of more than
14,000 staff in 1872. The line and
hedge were considered to be an infringement on the freedom of Indians and in opposition to free trade
policies and were eventually abandoned in 1879 when the tax was
applied at point of manufacture.
The salt tax itself would remain in
place until 1946.
Origins
When the Inland Customs Line
was first conceived, British India
was governed by the East India
Company. In1858, the responsibil-
India in 1823
year, at the cost of the Indian consumer, who would have to expend
around 2 rupees per year (2
months' income for a labourer) to
provide salt for his family. There
were taxes on salt in the other
British India territories but the tax
in Bengal was the highest, with the
other taxes at less than a third of
the Bengal tax rate.
It was possible to avoid paying
the salt tax by making it illegally in
salt pans, stealing it from warehouses or smuggling salt from the
princely states which remained
outside of direct British rule. The
latter was the greatest threat to the
company's salt revenues. Much of
the smuggled salt came into Bengal from the west and the company
decided to act to prevent this trade.
In 1803, a series of customs houses
and barriers were constructed
across major roads and rivers in
Bengal to collect the tax on traded
salt as well as duties on tobacco
and other imports. These customs
houses were backed up by
"preventative customs houses"
located near salt works and the
coast in Bengal to collect the tax at
source.
These customs houses alone did
little to prevent the mass avoidance
of the salt tax. This was due to the
lack of a continuous barrier, corruption within the customs staff
and the westward expansion of
Bengal towards salt-rich states. In
1823 the Commissioner of Customs for Agra, George Saunders,
installed a line of Customs posts
along the Ganges and Yamuna
rivers from Mirzapur to Allahabad
that would eventually evolve into
the Inland Customs Line. The main
aim was to prevent salt from being
smuggled from the south and west
but there was also a secondary line
running from Allahabad to Nepal
to prevent smuggling from the
Northwest frontier. The annexation
of Sindh and the Punjab allowed
the line to be extended north-west
by G. H. Smith, who had become
Commissioner of Customs in 1834.
Smith exempted items such as tobacco and iron from taxation to
concentrate on salt and was responsible for expanding and improving the line, increasing its
budget to 790,000 rupees per year
and the staff to 6,600 men. Under
Smith's leadership the line saw
many reforms and was officially
named the Inland Customs Line in
1843.
Inland Customs Line
Smith's new Inland Customs
Line was first aligned and between
Agra and Delhi and consisted of a
series of customs posts at one mile
intervals, linked by a raised path
with gateways (known as
"CHOWKIES") to allow people to
cross the line every four miles.
Policing of the barrier and sur-
Salt revenue 1840–77
rounding land, to a distance of 10
to 15 miles (16 to 24 km), was the
responsibility of the Inland Customs Department, headed by a
Commissioner of Inland Customs.
The department staffed each post
with an Indian Jemadar (approximately equivalent to a British Warrant Officer) and ten men, backed
up by patrols operating 2–3 miles
behind the line. The line was
mainly concerned with the collection of the salt tax but also collected tax on sugar exported from
Bengal and functioned as a deterrent against opium smuggling.
The end of company rule in 1858
allowed the British government to
expand Bengal through territorial
acquisitions, updating the line as
needed. In 1869 the government in
Calcutta ordered the connection of
sections of the line into a continuous customs barrier stretching
2,504 miles (4,030 km) from the
Himalayas to Orissa, near the Bay
of Bengal. This distance was said
to be the equivalent of London to
Constantinople. The north section
from Tarbela to Multan was lightly
guarded with posts spread further
apart as the wide Indus River was
judged to provide a sufficient barrier to smuggling. The more heavily guarded section was around
1,429 miles (2,300 km) long and
began at Multan, running along the
rivers Sutlej and Yamuna before
terminating south of Burhanpur.
The final 794-mile (1,278 km) section reverted to longer distances
between customs posts and ran east
to Sonapur.
In the 1869–70, the line collected 12.5 million rupees in salt
tax and 1 million rupees in sugar
duties at a cost of 1.62 million rupees in maintenance. During this
period the line employed around
12,000 men and maintained 1,727
customs posts. By 1877 the salt tax
was worth £6.3 million (approx
29.1 million rupees) to the British
government in India, with the majority being collected in the Madras
and Bengal provinces, lying on either side of the customs line.
Great Hedge
It is not known when an actual
live hedge was first grown along
the customs line but it is likely that
it began in the 1840s when thorn
bushes, cut and laid along the line
as a barrier (known as the "dry
hedge", took root. By 1868 it had
become 180 miles (290 km) of
"thoroughly impenetrable" hedge.
The original dry hedge consisted
mainly of samples of the dwarf Indian Plum fixed to the line with
stakes. This hedge was at risk of attack by white ants, rats, fire,
storms, locusts, parasitic creepers,
natural decay and strong winds
which could destroy furlongs at a
time and necessitated constant
maintenance. Allan Octavian
Hume, Commissioner of Inland
Customs from 1867–70, estimated
that each mile of dry hedge required 250 tons of material to construct and that this material had to
be carried to the line from between
0.25 and 6 miles (0.40 and 9.7 km)
away. The amount of labour involved in such a task was one of
the reasons that a live hedge was
encouraged, particularly as damage
required the replacement of around
half of the dry hedge each year.
In 1869 Hume, in preparation for
a rapid expansion of the live hedge,
began trials of various indigenous
thorny shrubs to see which would
be suited to different soil and rainfall conditions. The result was that
the main body of the hedge was
composed of Indian Plum, Babool,
Karonda and several species of Euphorbia. The Prickly Pear was used
where conditions meant that nothing else could grow, as was found
in parts of the Hissar District, and
in other places bamboo was
planted. Where the soil was poor it
was dug out and replaced or overlain with better soil and in flood
plains the hedge was planted on a
raised bank to protect it. The hedge
was watered from nearby wells or
rainwater collected in large, purpose built trenches and a "well
made" road was constructed along
its entire length.
Hume was responsible for transforming the hedge from "a mere
line of persistently dwarf seedlings,
or of irregularly scattered, disconnected bushes" into a formidable
barrier that, by the end of his tenure
as commissioner, contained 448.75
miles (722.19 km) of "perfect"
hedge and 233.5 miles (375.8 km)
of "strong and good", but not impenetrable hedge. The hedge was
nowhere less than 8 feet (2.4 m)
high and 4 feet (1.2 m) thick and in
some places was 12 feet (3.7 m)
high and 14 feet (4.3 m) thick.
Hume himself remarked that his
barrier was "in its most perfect
form, ... utterly impassable to man
or beast".
Hume also substantially realigned the Inland Customs Line,
joining together separate sections
and removing some of the spurs
that were no longer necessary.
Where this happened, whole runs
of hedge were abandoned, and the
men would have to construct a
hedge from scratch on the new
alignment. The living hedge was
terminated at Burhanpur in the
south, beyond which it could not
grow, and at Layyah in the north
where it met the River Indus,
whose strong current was judged
sufficient to deter smugglers.
Agra Canal construction work
Hume was replaced as Commissioner of Customs in 1870 by G. H.
M. Batten who would hold the post
for the next six years. His administration saw little realignment of the
hedge but extensive strengthening
of the existing run, including the
building of stone walls and ditch
and bank systems where the hedge
could not be grown. By the end of
Batten's first year he had increased
the length of "perfect" hedge by
111.25 miles (179.04 km), and by
1873 the central portion between
Agra and Delhi was said to be almost impregnable. The line was altered slightly in 1875-6 to run
alongside the newly built
Continued on Page 9
REVENUE TRANSPARENCY TIMES
9
September 2012
Inland Customs Line
Continued from Page 8
Agra Canal, which was judged a
sufficient obstacle to allow the distance between guard posts to be increased to 1.5 miles (2.4 km).
Batten's replacement as Commissioner was W. S. Halsey who
would be the last to be in charge of
the Great Hedge. Under Halsey's
control the hedge grew to its greatest extent, reaching a peak of 411.5
miles (662.2 km) of "perfect" and
"good" live hedge by 1878 with a
further 1,109.5 miles (1,785.6 km)
of inferior hedge, dry hedge or
stone wall. The live hedge extended to at least 800 miles (1,300
km) and in places was backed up
with an additional dry hedge barrier. All maintenance work was
halted on the hedge in 1878 after a
decision was made to abandon the
line in 1879.
The customs line and hedge required a large number of staff to
patrol and maintain it. The majority
of the staff were Indian, with the
officers coming mainly from the
British. In 1869 the Inland Customs Department employed 136
officers, 2,499 petty officers and
11,288 men on the line, reaching a
peak of 14,188 men of all ranks in
1872, after which staff numbers declined to around 10,000 as expansion slowed and the hedge
matured. The Indian staff was recruited disproportionately from the
Muslim population, who constituted 42 percent of the customs
men. The men were intentionally
stationed in areas away from their
home towns which, together with
their removal of local wood for the
hedge, made them unpopular
among local people.
To encourage co-operation,
those Indians who lived in villages
near the line were allowed to carry
up to 2 pounds (0.9 kg) of salt
across for free.
The job of customs man was
highly desirable due to its high pay
of five rupees per month (agricultural wages were around three rupees a month), which could be
topped up with the proceeds from
the sale of seized salt. However the
men were forced to live away from
their families in order to minimise
distractions and were not provided
with houses, being expected to
build their own from mud or wood.
In 1868 the Inland Customs department allowed the men's families to join them on the line, as the
previous order had led to customs
men straying from their posts and
associating too closely with local
women. The men worked twelvehour days consisting of two equal
day and night shifts. The principal
tasks were patrolling and maintaining the hedge; in 1869 alone the
customs men carried out 18 million
miles (29 million km) of patrols,
dug 2 million cubic feet (57,000
cubic metres) of earth and carried
over 150,000 tons of thorny material for the hedge. There was a
fairly high level of turnover in the
staff; for example, in 1876-7 more
than 800 men left the service. This
included 115 customs men who
died on the line, 276 dismissed, 30
deserted on duty, 360 failing to rejoin after leave and 23 removed for
being unfit.
The officer corps was almost entirely British; attempts to attract Indian men to the post proved
unsuccessful, as the officers were
required to be fluent in English,
and such men could easily find better paid work in other fields. The
job was tough, with each officer responsible for 100 men on 10 to 30
miles (16 to 48 km) of the line, and
working through Sundays and holidays. The officers undertook at
least one customs excursion per
day on average, weighing and applying tax to almost 200 pounds
(91 kg) of goods, in addition to personally patrolling around 9 miles
(14 km) miles of the line. The only
other British men they would meet
while on the line would typically
be officers of adjacent beats and
senior officers who visited about
three times a year.
Abandonment
Lord Lytton, in 1890, ordered
the abolition of the Inland Customs
Line in 1879.
Several British viceroys considered dismantling the line, as it was
a major obstacle to free travel and
trade across the subcontinent. This
was partly due to the use of the line
for the collection of taxes on sugar
(which made up 10 percent of the
revenues) as well as salt, meaning
that traffic had to be stopped and
searched in both directions.[41] In
addition the line had created a confusing number of different customs
jurisdictions in the area surrounding it. The viceroys were also displeased with the corruption and
bribery which was present in the
Inland Customs system, and the
way the line came to serve as a
symbol of unjust taxes (parts were
set on fire during the Indian
Mutiny of 1857). However, the
government could not afford to
lose the revenue generated by the
line and hence, before they could
abolish it, needed to take control of
the increase of the salt tax in
Madras, Bombay and northern
India to 2.5 rupees per maund and
a reduction in Bengal to 2.9 rupees.
This reduced difference in tax between neighbouring territories
made smuggling uneconomical
and allowed for the abandonment
of the Inland Customs Line on 1
April 1879. Strachey's tax reforms
continued, and he brought an end
to import duties and almost complete free trade to India by 1880. In
1882 Viceroy Lord Ripon finally
standardised the salt tax across
most of India at a rate of two rupees per maund. However the
trans-Indus districts of India continued to be taxed at eight annas (½
rupee) per maund until 23 July
1896 and Burma maintained its reduced rate of just three annas. The
equalisation of tax cost the government 1.2 million rupees of lost revenue.
Impact on smuggling
The principal function of the line
was to prevent smuggling, often
the only way to procure affordable
salt, and in this respect it was fairly
successful. Smugglers who were
caught by customs men were arrested and fined around 8 rupees,
those that could not pay being imprisoned for around 6 weeks. The
number of smugglers caught increased as the line was lengthened
and improved. In 1868 2,340 people were convicted of smuggling
after being caught on the line, this
rose to 3,271 smugglers in 1873–
74 and to 6,077 convicted in 1877–
78.
Several methods of smuggling
were employed. Early on, when patrols were patchy, large scale
smuggling was common, with
armed gangs breaking through the
line with herds of salt-laden camels
or cattle. As the line was strengthened, smugglers changed tactics
and would try to disguise salt and
bring it through the line or throw it
over the hedge. Scams were also
attempted with salt being hidden
within the jurisdiction of the customs department to collect the 50
with customs men and another
drowning while trying to escape by
swimming an irrigation tank.
Legacy
Writers have described the line
as infringement of the principles of
free trade and the freedom of the
people of India. Sir John Strachey,
the minister whose tax review led
to the abolition of the line, was
quoted in 1893 describing the line
as "a monstrous system, to which it
would be almost impossible to find
a parallel in any tolerably civilised
country". The massive scale of the
undertaking has also been commented upon, with both Hume, the
Customs Commissioner, and M. E.
Grant Duff, who was Under-Secretary of State for India from 1868 to
1874, comparing the hedge to the
Great Wall of China. The abolition
of the line and equalisation of tax
has generally been viewed as a
good move, with one writer of
1901 stating that it "relieved the
people and the trade along a broad
belt of country, 2,000 miles long,
from much harassment". Sir
Richard Temple, governor of the
Bengal and Bombay Presidencies,
wrote in 1882 that "the inland customs line for levying the salt-duties
GandhiJi on the Salt March to Dandi
of March 1930
has been at length swept away" and
that care must be taken to ensure
that the "evils of the obsolete transit-duties" did not return.
The use of the customs line to
maintain the higher salt tax in Bengal is likely to have had a detrimental effect on the health of
Indians through salt deprivation.
The higher prices within the area
enclosed by the line meant that the
average annual salt consumption
was just 8 pounds (3.6 kg) com-
BOOK - REVIEW
all salt production in India, so that
tax could be applied at the point of
manufacture.[43]
The Viceroy from 1869 to 1872,
Lord Mayo, took the first steps towards abolition of the line, instructing British officials to
negotiate agreements with the
rulers of princely states to take control of salt production. The process
was speeded up by Mayo's successor, Lord Northbrook, and by the
loss of revenue caused by the Great
Famine of 1876–78 that reduced
the land tax and killed 6.5 million
people. Having secured salt production, British India's Finance
Minister, Sir John Strachey, led a
review of the tax system and his
recommendations, implemented by
Viceroy Lord Lytton, resulted in
percent finder’s fee.
Clashes between smugglers and
customs men were often violent,
with the deaths of customs men in
the line of duty not being uncommon. A large incident occurred in
September 1877 when two customs men attempted to apprehend
112 smugglers and were both
killed. More than half of the gang
were later caught and either imprisoned or transported. Another
customs man lost his life near
Sohar when he attempted, with
seven colleagues, to capture a gang
of 30 smugglers. Fourteen of the
gang were later captured and,
again, imprisoned or transported.
Many of the smugglers also died,
with examples including one killed
by his fellow smugglers in a fight
pared with up to 16 pounds (7.3 kg)
outside the line. Indeed the British
government's own figures showed
that the barrier directly affected salt
consumption, reducing it to below
the level that regulations prescribed for English soldiers serving
in India and that supplied to prisoners in British jails. The consumption of salt was further
lowered during the periods of
famine that affected India in the
19th century.
It is impossible to know how
many died from salt deprivation in
India as a result of the salt tax as
salt deficiency was not often
recorded as a cause of death and
was instead more likely to worsen
the effects of other diseases and
hinder recoveries. It is known that
the equalisation of tax made salt
cheaper on the whole, decreasing
the tax imposed on 130 million
people and increasing it on just 47
million, leading to an increase in
the use of the mineral. Consumption grew by 50 percent between
1868 and 1888 and doubled by
1911, by which time salt had become cheaper (relatively) than at
any earlier stage of Indian history.
The rate of salt tax was increased
to 2.5 rupees per maund in 1888 to
compensate for the loss of revenue
from falling silver prices, but this
had no adverse effect on salt consumption. The salt tax remained a
controversial means of collecting
revenue and became the subject of
the 1930 Salt Satyagraha, a civil
disobedience movement led by
Mohandas Gandhi against British
rule. During the Satyagraha
Gandhi and others marched to the
salt producing area of Dandi and
defied the salt laws, leading to the
imprisonment of 80,000 Indians.
The march drew significant publicity to the Indian independence
movement but failed to get the tax
repealed. The salt tax would finally
be abolished by the Interim Government of India, led by Jawaharlal
Nehru, in October 1946.
Rediscovery
Despite its scale, the customs
line and associated hedge were not
widely known in either Britain or
India, the standard histories of the
period neglecting to mention them.
Roy Moxham, a Conservator at the
University of London library,
wrote a book* on the Customs Line
and his search for its remains that
was published in 2001. This followed his finding, in 1995, of a
passing mention of the hedge in
Major-General Sir W.H. Sleeman's
1893 work Rambles and Recollections of an Indian Official. Moxham looked up the hedge in the
India Office Records of the British
Library and was determined to locate its remnants.
Moxham conducted extensive
research in London before making
three trips to India to look for any
remains of the line. In 1998 he located a small raised embankment
in the Etawah district in Uttar
Pradesh which may be all that remains of the Great Hedge of India.
Moxham's book, which he claims
to be the first on the subject, details
the history of the line and his attempts to locate its modern remains. The book was translated
into the Marathi language by
Anand Abhyankar and published in
2007.
*The Great Hedge of India: The
Search for the Living Barrier
That Divided a People.
by Roy Moxham---
The book is available on Flipkart. *The Great Hedge of India,
the book has been reviewed
by A K Agnihotri---
September 2012
REVENUE TRANSPARENCY TIMES
10
A Factual Appraisal of CAG’s Report on Coal Block Allotment
Continued from page 1
In some cases there was nothing on
record in the minutes or in other documents the reason for such allotments. In July 2004, the Secretary
(Coal) submitted a “comprehensive
note for competitive bidding for allocation of coal blocks” to the Minister of State for Coal and Mines
highlighting that “since there is a
substantial difference between the
price of coal supplied by Coal India
and coal purchased through private
mining, there is a windfall gain to the
person who is allotted the captive
blocks”. This note further said that
“the bidding system will only tap
part of the windfall profit for the
public purposes”. The Minister of
State (Coal and Mines) referred the
matter to the Cabinet. On the draft
Cabinet Note the PMO raised objection pointing out certain disadvantages in competitive bidding.
Secretary (Coal) replied that these
objections are no merits. There were
so many discussions and it is clear
that while Secretary (Coal) always
wanted the competitive bidding system, the PMO opined that it would
be appropriate to amend the Mines
and Minerals (Development and
Regulation) (MMDR) Act 1957 so
that the system of competitive bidding could be made applicable to all
minerals. Amending an Act covering
all mines and minerals was by nature
highly controversial because it would
withdraw the existing power of the
States. In the meantime the Ministry of Law in June 2004 had opined
that in 28th July 2006 that “it was
open to the Government to introduce
the auctioning of coal mining blocks
for captive use through competitive
bidding as the section process for allocation was possible by amending
the existing administrative instruction and such a process could be governed by the provisions of the Indian
Contract Act 1872”. This view was
reiterated by the Law Secretary in
August 2006 also. Rather than following this simple method, the Government chose the longest and the
most controversial method of
amending the law involving the
rights of the States. This naturally
took time and it is only on 9.9.2010
the amendment of the Act was
passed and notified and on 2.2.2012
(after eighteen months) the rules for
auction were framed. The CAG’s
case is that while there was a clear
cut opinion of the Law Ministry in
favour of auctioning by merely issuing an executive order, the whole
process was delayed for several years
by choosing the complicated route of
amending the law comprehensively.
If the government really wanted to
do what the Secretary (Coal) resolutely pursued since July 2004 and
which was supported by Law Ministry in August 2006, the long delay
would not have taken place. The
Government could have continued
with the auctioning by administrative
action while at the same time amending the law. The CAG’s argument is
fundamentally that “delay in introduction of competitive bidding has
rendered the existing process (of allotment) beneficial to a large number
of private companies to the extent of
1.86 lakh crore. The CAG’s conclusion is exactly the following “A part
of this financial gain could have accrued to the national exchequer by
operationalising the decision taken
years earlier to introduce competitive
bidding for allocation of coal
blocks”.
Estimation:
CAG estimated financial gains to
the tune of 1.86 lakh crore likely to
accrue to private coal blocks allottees
based on the following method for (i)
opencast mines (ii) Mixed mines
where mining plan are available and
(iii) mixed mines where mining
plans are not available. He has left
out public sector companies and underground mines. Average sales price
for similar grade of CIL mines is
more than the average cost of these
grades even including the financing
cost. This difference has been taken
to multiply the extractable reserves
for these three types of mines. The
total comes to exactly 185,591.34
crore. There is hardly any postulate
or assumption involved in this calculation excepting the very general one
that similar goods are sold at the
same price and their cost of manufacturing and the financial cost are
the same.
The calculation in the final draft
has been criticized by some because
it is much less than in the draft. But
that is its strength , not weakness.
After the Ministry points to some aspects, they are accommodated which
is always the practice. The calculation has also been criticized as purely
hypothetical by some analysts. The
fact is that there has to be some assumption when by nature it is a financial gain, “likely to accrue” and
“could have accrued”. By its very
nature it is like calculating under valuation for imported goods which is
done by comparing with same and
similar goods as provided in the valuation Sections of the Customs Act.
Similarly here also the same types of
similar goods have been accepted for
comparison of value and cost. Cus-
toms Law regarding under valuation
provides for best judgement assessment which is based on assumptions.
All theories of Economics are based
on assumptions. Even the Keynesian
theory is based on assumption about
propensity to consume and save. So
a theory is as good as its assumptions. Here the assumption by the
CAG is minimum and is also unassailable. There is no assumption
about policy matters, as some critics
have argued.
Power of CAG :
The power of the CAG to delve
into policy has been questioned.
However, the law is clearly on his
side. Section 16 of CAG`s (Duties,
Powers and Conditions of Service)
Act 1971 says that : “It shall be the
duty of the CAG to audit all receipts
which are payable into the Consolidated Fund of India …. and to satisfy
himself that the rules and procedures
in that behalf are designed to secure
an effective check on the assessment, collection and proper allocation of revenue and are being duly
observed ...”.So he has the power to
delve into the design of the rules and
procedures. Thus performance audit
is his jurisdiction and he has been
doing it for more than four decades.
It may be of interest to know that
the theory of unjust enrichment was
first discussed with the CAG and
later canvassed by the PAC. Section
11B of the Central Excise Act was
amended and also the relevant Section of the Customs Act. It is now
applicable to service tax also. Similarly Section 125(2) of the Customs
Act was amended at the instance of
the CAG and the PAC. This amendment has a background. Section
125(2) says the following: “Where
any fine in lieu of confiscation of
goods is imposed under sub-section
(1) the owner of such goods or the
person refer to in sub-section(1)
shall, in addition, be liable to any
duty payable in respect of such
goods”. The amendment was also
accompanied by an amendment of
sub-section(1) to introduce the concept that the duty will be liable to be
paid by the person from whose possession the goods are seized even
where the owner of the goods was
not known. This was quite a departure from the existing understanding
of the Customs Act under which the
taxable event was the act of importation and if the importer was not
known, the tax could not be levied on
the owner who had not committed
the act of importation. There were
several Supreme Court judgements
to support this view. These Court
judgements1 categorically state that
the taxable event in the case of imported goods is not ownership but
the act of importation and the person
who does the act of importation is the
sole person who is liable to pay the
duty. This amendment incorporated
in Section 125(2) makes a change in
the fundamental position enunciated
by the Supreme Court not only in
one judgement in 19632 but subsequently in a series of judgements.
Even after this amendment in 1985,
there are other Supreme Court judgements given3 in 1989 and 1990
which reiterated the same position
that the ownership is not the taxable
event but the act of manufacture (or
act of importation for Customs).
This amendment, therefore, was
quite a wrong policy and, I would
say, quite unconstitutional also. But
the government introduced both
these policies mentioned above without even a murmur against the CAG
that he has no jurisdiction to deal
with policy. I am not holding the
view that the CAG can delve into
fundamental policies such as fiscal
policy of the Ministry of Finance or
monetary policy of the Reserve Bank
or the general policy of whether nationalization is better than laissez
faire. He can only deal with policy if
it relates to the design of rules and
procedures relating to the assessment, collection and allocation of
Revenue for the Consolidated Fund
of India. This has been done by the
CAG for several decades. Performance Audit is going on for long. Earlier the government did not protest
because the issue did not touch any
involvement by extremely senior political functionaries. Now that it has
touched them, they are raising huge
noise about the power of the CAG.
Delay due to the involvement of
States :
The delay in the amendment of the
law could have been due to the involvement of the States but if the
government wanted to introduce
competitive bidding straight away by
following the Law Ministry’s opinion of August 2006, there would
have been no delay. Coal is a central
subject and the views of States were
not relevant for allocation.
Delay due to obfuscation by Law
Ministry :
This is a very cruel way of passing
on the buck to another Ministry. If
the Law Ministry have given clear
cut opinion that executive decision
was enough, it was enough for the
Government to act on it. If the Government makes too many references
CUSTOMS LEVY ALSO AFFECTS GOLD DEMAND
C
ustoms duty of 4% has also taken
a toll on gold demand. Market
players said that sales were hit
during the initial part of the quarter as
jewellers pulled down shutters to protest
the 1% Excise duty proposed by Pranab
Mukherjee in the Budget, which was later
withdrawn.
In volume terms, demand fell to 181
tonnes, a 38% decline from 294.5 tonnes
during April-June 2011, data released by
the World Gold Council, the international
agency tracking the sector, showed.
Within this, it was investment demand
which faced a bigger dent recording a
51% decline to 56.5 tonnes. Investment
demand is measured in terms of sales of
coins and medallions. Jewellery that accounts for a much larger share of purchase in India witnessed a 30% fall during
the period with demand adding up to
around 125 tonnes.
“We had expected that demand would
bounce back in May-June, which is wedding season. But it remained flat,” said
MMTC GM N. Balaji. The poor demand
in India along with a weak show in China,
which together accounted for 45% of second quarter international sales, impacted
global performance. During the second
quarter, global sales were down 7% to
999 tonnes. World Gold Council said.
[Source : The Times of India, /ELT]
clouding the issue, bringing the question of amendment of a bigger law,
naturally the issue is obfuscated.
But the Law Ministry is not responsible for that.
No loss since the blocks have not
started operating :
The operation of the block is inconsequential since the “financial
gain likely to accrue” is when the
blocks became operative. The fact is
that the private factories have got
grossly undervalued coal blocks
which will accrue profit to them
when the blocks start operating. And
the government has lost ownership
of them and so the opportunity of
using them.
Auctioning would increase the cost
of production of coal, steel, cement
:
This argument is not valid because
the government itself has decided to
auction on principle since 2006.
Only it has done it too late.
Conclusion :
To auction or not to auction is not
the question. The question is, why
decide to auction so late. This late
decision has led to undue enrichment
of a private sector under less than
transparent circumstances. But all
this will be better understood if there
is a thorough discussion in the Parliament. The discussion in the Parliament should not be stalled. May
be after the discussion the Parliament
may take a decision to cancel the allotment of those coal blocks which
have breached the conditions of allotment. This is not a case where the
principle of promissory estoppel can
be invoked. There is no promise
here since the sale has already taken
place. Allotment can only be revoked if there is a violation of the
condition of allotment or if allotment
was obtained by misrepresentation of
facts. The legal position is just similar about the law relating to cancellation of license in the case of
customs.
1) Sea Customs Act, 1878 – 1963AIR
SC 1760; Sulekh Ram & Sons v. UOI1978(2)ELT (J525); Empire Industries
Ltd. V. UOI – 1985(20)ELT 179 (SC);
Ujagar Prints v. UOI – 1988 (38) ELT
535 (SC) & many others.
2) Sea Customs Act, 1878 – 1963AIR
SC 1760.
3) Wallace Flour Mills Company Ltd.
V. CCE – 1989 (44) ELT 598 (SC) &
Synthetic Chemicals Ltd. V. State of
UP – 1990 (1) SCC 109.
NETAJI SUBHASH
CHANDRA BOSE
1.
Nationalism is inspired by the highest ideals of the
human race, satyam [the true], shivam [the god], sundaram [the
beautiful]. Nationalism in India has ... roused the creative faculties which for centuries had been lying dormant in our people.
2.
I have no doubt in my mind that our chief national problems relating to the eradication of poverty, illiteracy and disease
and the scientific production and distribution can be tackled only
along socialistic lines.
REVENUE TRANSPARENCY TIMES
DIAMONDS ARE FOREVER
Continued from Page 1
count Grigori Orloff, an ex-lover of
Empress Catherine the Great was
residing. He heard about rumours
of the stone, and he bought the diamond for 90,000 pounds and took
it back to Russia for Catherine's
favour. The stone has been called
the Orloff since then. Catherine received his gift and had it mounted
in the Imperial Sceptre. She gave a
marble palace to Grigori in exchange for the Orloff. However,
Grigori couldn't get Catherine's
love. Grigori Orloff passed away at
the nadir of disappointment in
1783.
In 1812 the Russians, fearing that
Napoleon with his Grand Army
was about to enter Moscow, hid the
Orloff in a priest's tomb. Napoleon
supposedly discovered the Orloff's
location and went to claim it. However, as a solider of the Army was
about to touch the Orloff, a priest's
ghost appeared and pronounced a
terrible curse upon the Army. The
Emperor, Napoleon scampered
away without the Orloff.
The Centenary Diamond
273.85 Carats, discovered at the
Premier Mine, in July 1986. The
'Centenary' diamond weighed
599.10 carats in the rough. Together with a small select team,
master-cutter Gabi Tolkowsky took
almost three years to complete its
transformation into the world's
largest, most modern-cut, topcolour, flawless diamond.
Possessing 247 facets - 164 on
the stone and 83 on its girdle - the
aptly-named 'Centenary' diamond
weighs 273.85 carats, and is only
surpassed in size by the 530.20
carat 'Great Star of Africa' and the
317.40 carat 'Lesser Star of
Africa', both of which are set into
the British Crown Jewels.
The Regent
140.50 Carats, although it is
now surpassed in weight by other
famous diamonds, the exceptional limpidity and perfect cut of
the Regent give it an reputation as
the most beautiful diamond in the
world. Discovered in India in 1698,
it was acquired by Thomas Pitt,
Governor of Madras, who sent it to
England where it was cut. In 1717
the Regent purchased it from Pitt
for the French Crown. It first
adorned the band of Louis XV's silver gilt crown (in the Louvre) at his
coronation in 1722, going then to
Louis XVI's crown in 1775. Later
in 1801 it figured on the hilt of the
First
Consul's
sword
(Fontainebleau, Musée Napoléon
1st), and then on the Emperor's
two-edged sword in 1812. In 1825
it was worn on the crown at the
coronation of Charles x, and during the Second Empire it embellished the "Grecian diadem" of the
Empress Eugenie. It can be seen
today at the Louvre in Paris.
Koh-i-Noor (Mountain of Light)
105.60 Carats, an oval cut gem,
now part of the British Crown Jewels. The name of this diamond
means "Mountain of Light" and its
history, dating back to1304, is the
longest of all famous diamonds. It
was captured by the Rajahs of
Malwa in the sixteenth century by
the Mogul, Sultan Babur and remained in the possession of later
Mogul emperors. It may have been
set in the famous Peacock Throne
made for Shah Jehan. After the
break-up of the Persian empire the
diamond found its way to India. It
may have travelled to Afghanistan
with a bodyguard of Nadir Shah,
who fled with the stone when the
Shah was murdered, to be later offered to Ranjit Singh of the Punjab
in exchange for military help
(which was never delivered). After
fighting broke out between the
Sikhs and the British, The East
India Company claimed the diamond as a partial indemnity, and
then presented it to Queen Victoria
in 1850. When the stone came from
India, it weighed l986 carats; it was
later recut to l08.93 carats. It was
first worn by the Queen in a
brooch. It was later set in the State
Crown, worn by Queen Alexandra
and Queen Mary, and 1937 was
worn for by Queen Elizabeth for
her coronation. It is kept in the
Tower of London, with the other
Crown Jewels.
The Idol's Eye
70.20 Carats, a flattened pearshaped stone the size of a bantam's
egg. Another famous diamond that
was once set in the eye of an
idol before it was stolen. Legend also has it that it was
given as ransom for Princess
Rasheedah by the Sheikh of Kashmir to the Sultan of Turkey who
had abducted her.
The Taylor-Burton
69.42 Carats, Pear-shape. It was
found in 1966 in the Premier Mine
in South Africa. The rough, which
weighted 240.80 carats, was cut
into a 69.42 pear shape diamond.
Richard Burton bought and named
this stone as a gift for Elizabeth
Taylor. Richard Burton bought it
$1,100,000. He also named this
stone as an engagement. After Burton's death in 1979, Liz Taylor sold
the stone for charity and reportedly
received $2.8 million. She donated
in his memory to a hospital in Biafra. It was last seen in Saudi Arabia.
Sancy Diamond
Little is known of the Sancy Diamond before the 14th century
when it was most likely stolen
from India. It was first recorded as
measuring 100 carats when it was
part of the dowry of Valentina,
Galeazzo di Visconti's daughter in
1389. She married Duke d'Orleans
who was the brother of Charles VI
of France. This began a long history of the diamond being used as
collateral and going in and out of
pawn over the next few hundred
years. Duke John of Burgundy acquired the stone as a spoil of war
victory and passed it down through
his family for several generations
including Charles the Bold.
Charles brought the stone into battle believing it was good luck. This
turned out not to be true as he lost
the battle and his life and the stone
was missing for 14 years. It then
turned up in the possession of
Jacob Fugger who sold it to the
King of Portugal. When Phillip II
of Spain Invaded Portugal he
claimed the Sancy, however, the
king escaped with several other
jewels which he sold the French
11
and English Crown. The Sancy
found itself in the ownership of
Elizabeth I, who also owned the
Three Brothers stone which was
also lost by Charles the Bold. Elizabeth secretly pawned the stone to
finance a Dutch war against Spain.
The diamond changed hands again
and found a new owner Nicolas
Harlay de Sancy whose wife had
an appetite for diamonds. Elizabeth
I wanted the diamond back and
Sancy who eventually went bankrupt was convinced to sell it back
to James I of the English Crown.
The diamond disappeared again for
25 years long enough for the statue
of limitations to expire, when it
surfaced to be purchased by
Nicholas Demidov, who gave it to
his wife. It was then sold to Sir
Jamsetee Jeejeebhoy and eventually to William Astor in 1865. The
Astor family kept possession of the
stone until 1976 when they sold it
for an undisclosed amount to the
Louvre Museum where it still resides today.. Most experts agree
that the Sancy was part of a much
larger diamond that was re-cut at
some point however there is no
consensus which diamond it originally came from.
Hope Diamond
The Hope Diamond is the previous record holder for being the
largest faceted diamond and is
probably the most well known and
historically interesting of all diamonds. The Hope Diamond was
originally known as the Tavernier
Blue which was a crudely cut triangular diamond. According to
legend, it was stolen from an Indian statue of Sita and purchased
by Jean-Baptiste Tavernier around
1660. The diamond was sold to
King Louis XIV of France who had
it cut into a 67.125 carat stone. It
was renamed the French Blue and
worn for ceremonial functions in
France. The diamond was rarely
seen until Louis XVI gave it to
Marie Antoinette who added it to
her jewellery collection. When the
French Revolution started the dia-
September 2012
mond was stolen and resurfaced in
La Havre four years later. The diamond disappeared for another 20
years (which coincidentally is exactly how long it took for the
statute of limitations to run out on
the crime) when it resurfaced in the
hands of a London diamond merchant Daniel Eliason in 1812.
Henry Philip Hope purchased the
diamond in 1824, after his death
his heirs fought over the diamond.
It passed through three generations
of the Hope family until Henry
Francis Hope Pelham-Clinton
Hope fell into bankruptcy and was
forced to sell the stone. The diamond continued to change hands
until Pierre Cartier acquired it in
1910. They reset the stone and sold
it to socialite Evelyn Walsh
McLean. She left the stone to her
heirs, however it had to be sold
again to settle outstanding debt.
The stone was purchased by legendary jeweller Harry Winston
who had the lower portion of the
stone cut to increase its brilliance.
After having the diamond as part of
his traveling exhibit known as "the
court of jewels," he donated it to
the Smithsonian Institution where
he sent it through the US postal
service in plain brown wrapper.
The diamond is said to have been
cursed by the Hindu God from
whose statue it was originally
stolen because financial ruin or
sudden death occurred to many
who owned it. The diamond was
also the inspiration for the fictional
"Heart of the Ocean" in the movie
Titanic. In 2005 new computer
research proved that the Hope Diamond was indeed the French
Blue that was stolen from the
jewellery collection of Marie Antoinette.
Hortensia Diamond
The Hortensia Diamond is a pale
pink, orange diamond that was
originally part of the jewel collection of the French Crown.
named after the Queen of Holland, the step-daughter of
Napoleon Bonaparte, this gem is
part of the French Crown Jewels
and may be viewed at the Louvre
in Paris. It was lost/stolen with all
of the other gems in Marie Antoinette's collection during the
French Revolution. A man named
Depeyron confessed its secret location while on the chopping block
facing execution. The Regent Diamond was also recovered from the
secret hiding spot. The diamond
gets its name from Hortense de
Beauharnais the Queen of Holland
who wore the diamond. It was also
mounted on the epaulette braid of
Napoleon for a short time.
To be Continued.....
September 2012
REVENUE TRANSPARENCY TIMES
12
MONTHLY FORECAST
Career
will
grow. It is only
that joint projects & partnerships
will
experience unnecessary
stress. Gains from hard work especially from real estate sources are
possible. Love life will be good but
aggressive temperament of spouse
or a partner can’t be ruled out.
Health will remain unsteady & unreliable.
Remedy: Give 11 hanuman chalisa in a temple on any Tuesday of
this month.
This month will
be exceptional
in terms of activity,
dynamism
&
opportunity for
growth. Hard
work will bring
much growth now. Money matters
will be good. Investments will give
good returns throughout. Great
month for new relationships but
avoid any controversial talks with
your partner.
Remedy: Give food to stray dogs
daily for good health and prosperity.
Career will be
good but not as
vibrant as you
would want it
to be. There
would be hurdles & slowdowns. Money matters will be
average. Expenses would be disproportionate to income & gains.
Love life will be positive. Marriages will be distant as spouse
will be disconnected this month.
Health will be good to average but
remain careful after 28th September.
Remedy: Donate Chana Dal in a
religious place on any Thursday
of this month.
Career will be
good. Reasonable progress at
work will be
possible. Money
matters will be
positive but you
might incur expenses on home or
a car. Avoid speculation of any
kind. Love life will be good; you
might spend much time on partying and socializing. Health will
improve and speedy recovery is indicated.
Remedy: Wear shri shani kripa
kawach to ward off evil effects of
dhaiya of shani.
Career will expand. Money matters will be quite
positive, inflow
will be higher
than
outflow.
Love life will dip a bit due to building pressure at work. Chances of
new relationship are very less.
Health issues like cervical and
shoulder pain are indicated.
Remedy: Give donation to blind
and poor people on every Saturday for good luck and charm.
Policy Circular No. 2
(RE-2012)/2009-14
dated 19.7.2012 Corrigendum thereto
P
olicy Circular 2 was
issued on 19.7.2012
with the subject
header ‘Pending EODC
cases where vehicles imported under EPCG
Scheme were not registered as Commercial/
Tourist Vehicle- Reference
Policy Circular dated
07.05.2008’. Para 4 (c)
and Para 5 (a)(i) of this
policy circular indicate the
reference
date
as
“31.08.2006”.
2.
Para 1(iii) of Notification No. 11 (RE
2006)/2004-09
dated
14.06.2006 mandated registering of vehicles imported under EPCG
Scheme as under:
“the vehicles imported
under this scheme shall be
registered either as a
tourist vehicle or shall
have an appropriate regis-
tration specific to a particular state enabling the vehicle to be used for tourist
purpose. A copy of the
Registration certificate
should be submitted to the
concerned Licensing Authority as a confirmation
of the vehicle having been
imported and capital good
installed.”
Therefore, the correct
reference date in Policy
Circular 2 should read as
14.06.2006.
3. Accordingly, the reference date mentioned in
Para 4(a) and in Para
5(a)(i) of the Policy Circular 2 dated 19.07.2012 is
amended to read as
14.06.2006.
4.
This issues with the
approval of DGFT.
Policy Circular No. 4 (RE2012)/2009-
SEP. 15, 2012 - OCT. 15, 2012
Career will begin
on a low note &
might see a fall
or losses. Creative work would
be
rewarded
well. Income will
start improving as compared to
last month. Speculation and investments should be still avoided
this month. Love life will be good
as new relationship can be expected. Marriage matters would
be happy.
Remedy: Wear horse shoe ring in
your middle finger on Saturday to
pacify sade-sati’s negative effects.
Career will see
a slide & blocks
now. Work environment will be
difficult
and
challenging.
Expenses will
add burden to your financial position. Long term investments will be
good but cause unnecessary worries presently. Love life will not be
easy too. Work pressures as well as
ego will hold back success in love.
Remedy: Donate yellow sweets
outside some religious place on
Thursdays and donate cooked 800
Gms black grams to poor people
on Saturdays of this month.
Career will be very
gainful & progressive. You will find
support of people in
position of authority
&
government
sources. Money matters will be
good. Gains from associations and
partnerships are indicated. Love
life will be happy. Relationships
will move towards commitments.
Remedy: Do shani mrityunjaya
jap and hanuman chalisa daily to
remove negative effects of mars
and Saturn.
Very
good
progress at career
front is indicated.
Work environment
will be very dynamic and positive. There would be high level of
gains and success in financial matters. Income will be exceptionally
high. Love life will be average this
month. Health will be average, be
careful about your diet.
Remedy: Wear one blue topaz of
5 ¼ ratti in middle finger after
pran prathishta for betterment in
every sphere of life.
Career will be very
good but those who
are in authoritative
position need to remain cautious. Income
will
be
substantial
this
month. New investments should be
made cautiously. Married and love
life will be difficult, avoid unnecessary arguments with your partner. Health will recover as immune
system will improve.
Remedy: Do Lakshmi chalisa
daily and donate 600 Gms of curd
to poor girl on every Friday.
Career will be
average and will
take momentum
from next month.
Work environ-
10 YEARS RIGOROUS
IMPRISONMENT TO THREE DELHI
POLICE OFFICIALS AND 3 YEARS RI
TO SSO OF CFSL IN THE CASE OF
CUSTODIAL DEATH OF GOPI RAM
T
he Additional Sessions Judge, Tis
Hazari Courts, Delhi has sentenced
two the then Sub Inspectors, Satish
Kumar Kadain & Inder Singh Rana and the
then Constable Ramesh Chand to undergo
ten years Rigorous Imprisonment with fine
of Rs. 25,000/-each and Kewal Kishan
Arora, the then Senior Scientific Officer of
Central
Forensic
Science
Laboratory(CFSL),New Delhi to undergo
three years Rigorous Imprisonment with fine
of Rs. 5,000/- in the custodial death case of
Gopi Ram. The fine of Rs. 25,000/- each
shall be paid by way of compensation to
Smt. Kashmiri Devi, widow of the deceased.
CBI registered a case relating to death of
Gopi Ram in police custody on the directions
of the Hon'ble Supreme Court of India
passed in Criminal Appeal No.280 of 1988
of Shri Sudesh Kumar. It was alleged in the
FIR No- 336/86 dated 24.08.1986 of Delhi
Police lodged by Shri Sudesh Kumar that
while he was sleeping outside his house in
the night, at about 10:45 p.m., two Sub Inspectors & two Constables of Police Station
Patel Nagar, New Delhi came and started
beating him. Hearing his shrieks, his maternal uncle Shri Gopi Ram came out and he
was also beaten by the policemen. Both,
Sudesh Kumar and Gopi Ram were taken to
PS Patel Nagar, New Delhi where they were
stripped and beaten by the policemen. Thereafter, they were taken to a Hospital and from
there to another hospital. Sh. Gopi Ram succumbed to his injuries.
Upon completion of the investigation, CBI
filed a charge sheet against two Sub Inspectors, S.K. Kadain & Inder Singh Rana and
two Constables, Jagmal Singh & Ramesh
Chand and CFSL Expert Kewal Kishan
Arora U/s 304, 323, 323, 342 r/w 34 of IPC
& also U/s 218 of IPC against Kewal Kishan
Arora on 16.9.1992. Shri Kewal Kishan
Arora, CFSL Expert manipulated Chemical
Analysis Report at the behest of vested interests. Accused Jagmal Singh had expired
during the course of trial and the case against
him was abated.
The Trial Court found the accused persons
guilty and convicted them.
ment will be stressful. Avoid any
verbal conflicts. Income will be
good. Chances of gains from real
estate and other related sources
would be high too. Love life will be
difficult and see distances too, so
let the month pass without any
damage. Health issues like severe
cough and cold is on the cards.
Remedy: Recite Gayatri mantra
108 times daily and give water to
rising sun in a copper utensil.
Career will be in a
challenging
phase. Despite the
progress
there
would be challenges as you might lose position
or status. Money matters will be
below average. Any kind of Wasteful expenses and investment should
be avoided. Love life will be good
till 27th of September and even
marriage matters will be difficult
after that. Health will be also low
as you need to avoid any kind of
injuries.
Remedy: Keep ashtdhatu shani
yantra at your place of worship
on any Saturday to negate the
malefic effects of Saturn.
Ankush Khungar
Astrologer & Tarot card reader
Cellphone : 9582577023 (Delhi),
9888491324 (Chandigarh)
mail: [email protected]
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REVENUE TRANSPARENCY TIMES
Report on
irregularities in
Customs tribunal
buried, new probe
ordered
A
year after an inquiry report
admitting irregularities in
judgments by Customs Excise and Service Tax Appellate Tribunal (CESTAT) benches and
appointment of members to the
quasi-judicial tribunal was submitted to the Finance Ministry, none of
its recommendations has been implemented.
On the contrary, the report itself
has ceased to exist in the ministry
files. In September 2011, soon after
the report was submitted, a onemember committee was set up by
the tribunal to carry out a fresh inquiry.
“The old reports are therefore no
longer valid or exist in the eyes of
law,” said a Finance Ministry note
acknowledging the same.
The two-member committee that
submitted its report in August 2011
was constituted following a contempt petition in the Supreme Court
against R K Jain, a publisher of journals on excise and customs matters,
for writing an editorial alleging
large-scale irregularities in Customs
Excise and Service Tax Appellate
Tribunal.
The petition was subsequently
dismissed as CESTAT informed the
apex court that an inquiry was underway.
In their report to the Finance Ministry, CESTAT members D N Panda
and C Satapathay said that while
they had noticed several irregularities in decisions by some of the
benches, they had not been able to
confirm allegations regarding appointment of members as the files
were processed in the ministry, except in the case of former member T
J Jayaraman.
In the draft report, the committee
had cited irregularities in appointment of members.
CESTAT has 21 members, including president and vice-president, in
10 benches across five cities that
hear appeals against orders and decisions passed by the commissioners
of Customs and Excise relating to
service tax and anti-dumping duties.
It is the final appellate authority in
these matters, though a reference
can be made on the question of law
to the high court.
Regarding the case of classification and valuation matters, appeal
can only be made to the Supreme
Court.
In the last financial year, the tribunal had dealt with the appeals of
a value of more than Rs 10,000
crore.
The basic recommendations of the
committee to check corruption such
as assigning a member to look into
complaints and to refer cases for further inquiry to the CBI, apart from a
suitable code of conduct for members, are also awaiting the ministry’s
action.
Source : The Indian Express
13
September 2012
Order of the Supreme Court in Writ Petition (Civil) No.
657 of 1995 in the matter of Research Foundation for
Science, Technology & Natural Resource Policy Vs Union
of India (UOI), relating to Ship-breaking
K
ind attention is invited to
the Hon’ble Supreme
Court
order
dated
06.07.2012 and 30.07.2012 in the
Writ Petition No. 657 of 1995 relating to Ship Breaking. At present
in India the ship breaking activity
is regulated by the directives of the
Supreme Court of India in their ruling in W.P. (Civil) No. 657 of 1995
vide Order dated 6th September,
2007. A draft Ship Recycling Code
is being formulated by the Ministry
of Steel, in terms of: (i) the directions contained in the Supreme
Court Order of 2007, (ii) the recommendations of Technical Experts Committee (set up by the
Supreme Court), and; (iii) the requirements of various stakeholders, which include the concerned
Ministries/ Departments, Port authorities, Pollution Control Boards
and Recycling Industry.
2. The proposed Ship Recycling
Code is aimed at ensuring that
ships, when being recycled after
reaching the end of their operational lives do not pose any unnecessary risk to human health and
safety or to the environment. However, until the code comes into
play, various recommendations of
the CTE shall be operative by
virtue of the Hon’ble Supreme
Court order dated 6th September,
2007. As directed by the Hon’ble
Supreme Court vide the said order,
the officials of Gujarat Maritime
Board alongwith officials of the
Gujarat Pollution Control Board,
the Customs Department, National
Institute of Occupational Health
and Atomic Energy Regulatory
Board shall oversee the ship breaking arrangements and implementation of the recommendations of
CTE until further orders. The Collector of the concerned District
shall be associated when the actual
dismantling takes place. These authorities shall also vet the documents mentioned in various
chapters of the report to be submitted by the ship owner for the purpose of grant of permission for ship
breaking.
3. In this regard the following instructions are issued for guidance
and compliance by the field formations:
A) Process for Anchoring:
I. As per para 3.1 of the Supreme
Court’s order dated 06.09.2007 the
ship owner / recycler / importer
should submit the following docu-
ments well on advance of the arrival of the ship for recycling for
desk review by the Gujarat Maritime Board (GMB) in consultation
with Gujarat Pollution Control
Board (GPCB) and Customs Department: (a) Name of the Ship, (b)
IMO Identification No. (c) Flag (d)
Call Sign (e) Name of the Master
of the ship and his nationality (e)
List of the crew (f) GRT / NRT
/LDT of the ship with supporting
documents.
Assessment of hazardous waste /
hazardous substances: In the structure of the ship, and on Board as
far as practicable by reference to
the ship’s drawings, technical specifications, ship’s stores, manifest,
in consultation with the ship
builder, equipment manufactures
and others as appropriate. In the
case of ships of special concern, in
addition to identification and marking of all areas containing hazardous waste / substances would
also be necessary.
II. On receipt of all the documents
listed in A.I above, from the ship
owner / recycler / importer, the
proper authorised officer of Customs will undertake the desk review
for
recommending
permission for anchorage to GMB
within two working days. While
doing the said officer should keep
in there under, other instructions issued under the Standing Orders /
Public Notices and other allied
Acts, from time to time.
III. In case, the ship is permitted
for anchoring, the proper authorised officer of Customs shall forward
the
Desk
Review
report/opinion to the Port Officer,
GMB, alongwith a copy of thereof
to the ship owner / recycler /importer. In case of refusal for anchoring of the ship, the proper
authorised officer of Customs shall
forward the desk review report /
opinion, assigning specific reasons
for such refusal to the port officer,
GMB with a copy thereof to the
ship owner / recycler / importer.
He shall also send a copy of the
desk review report / opinion to the
jurisdictional Assistant Commissioner / Deputy Commissioner of
Customs.
IV. In case the ship owner /recycler
/ importer feels aggrieved by the
refusal for anchoring, he may file
review application before the concerned Assistant Commissioner /
Deputy commissioner, Customs,
who shall dispose of the review ap-
CUSTOMS LEVY ALSO AFFECTS GOLD DEMAND
C
ustoms duty of 4% has also
taken a toll on gold demand.
Market players said that sales
were hit during the initial part of the
quarter as jewellers pulled down shutters to protest the 1% Excise duty proposed by Pranab Mukherjee in the
Budget, which was later withdrawn.
In volume terms, demand fell to
181 tonnes, a 38% decline from 294.5
tonnes during April-June 2011, data
released by the World Gold Council,
the international agency tracking the
sector, showed. Within this, it was investment demand which faced a bigger dent recording a 51% decline to
plication within three working days
from the date of receipt of review
application. Assistant Commissioner / Deputy Commissioner
may hear the Ship owner / recycler
/ importer personally, if they so desire. In case, the ship owner / recycler/ importer feels aggrieved by
the order of review passed by the
Assistant Commissioner / Deputy
Commissioner he may file an appeal before joint / Additional Commissioner in charge, shall dispose
of the same within a period of five
working days from the date of receipt of appeal, after dully following the principles of natural justice.
B) Process of Beaching:
I. The modalities of beaching permission is discussed in para 3.2 of
Hon’ble Supreme Court Order. At
the anchorage the ship should be
boarded by officers of Customs
and the Customs officer should
physically verify the data / submissions provided by the ship owner /
importer, which was submitted for
desk review along with representatives of other agencies. On the
basis of verification report submitted by the boarding officer, proper
authorised officer of Customs in
charge shall decide whether the
ship can be permitted for beaching
or not. Before giving the permission for beaching the proper authorised officer of Customs shall keep
in mind all relevant provisions of
Customs Act, 1962, Rules and
Regulations made there under and
Standing Orders and Public Notices issued on the subject of ship
breaking and other relevant allied
acts from time to time.
II. In case, the ship is permitted for
beaching, the proper authorised officer of Customs in charge shall
forward his report / opinion to the
port Officer, GMB, alongwith a
copy thereof to the ship owner / recycler / importer. In case the proper
authorised officer of Customs refuse permission for beaching, he
should forward his report with specific reasons for such refusal to
port Officer of GMB and shall endorse a copy of this report to jurisdictional Assistant Commissioner/
Deputy Commissioner, Bhavnagar
and Ship Owner / Recycler importer. In case the ship owner / recycler / importer feels aggrieved by
the decision of proper authorised
officer of Customs the ship Owner
/ Recycler / Importer he may file
review application before jurisdic56.5 tonnes. Investment demand is
measured in terms of sales of coins
and medallions. Jewellery that accounts for a much larger share of purchase in India witnessed a 30% fall
during the period with demand
adding up to around 125 tonnes.
“We had expected that demand
would bounce back in May-June,
which is wedding season. But it re-
tional Assistant Commissioner /
Deputy Commissioner, who shall
pass order on review application
within 3 days from the receipt of
review application after dully following the principles of natural
justice.
III. If the Ship Owner / Recycler /
Importer feel aggrieved by the review order passed by the jurisdictional Assistant Commissioner/
Deputy Commissioner, he may file
appeal before the jurisdictional Additional Commissioner/ Joint Commissioner, who shall dispose the
application within a period of five
working days from the date of receipt of appeal, application after
dully following the principles of
natural justice.
IV. In case of ships of special concern i.e. ships which are mentioned
in Para 3 of the Supreme Court
judgment, the proper authorised officer of Customs should himself
participate in the boarding and
process of physical verification of
the data / submissions provided by
the ship owner / recycler / importer
which was submitted for desk review along with representatives of
other agencies. The proper authorised officer of Customs should
submit his verification report to the
jurisdictional Assistant Commissioner / Deputy Commissioner.
The permission for beaching of the
special concern vessels should be
accorded by the jurisdictional Assistant Commissioner / Deputy
Commissioner after considering
the verification report received. In
such cases, the process of review
and appeal shall be carried about
by the jurisdictional Joint / Additional Commissioner.
C. The jurisdictional Assistant
Commissioner/ Deputy Commissioner, and the proper authorised
officer of Customs, shall also associate with the other agencies in
overseeing the ship-breaking
arrangements and implementing
the recommendations of CTE as
directed by the Hon’ble Supreme
Court until further orders.
D. All concerned authorities shall
ensure strict compliance of the
Hon’ble Supreme Court Orders
and the procedure laid down in the
order dated 06.09.2007, before permitting entry of any vessel into Indian Territorial Waters for breaking
purposes.
F.No. 405/2/2001-Cus.III
mained flat,” said MMTC GM N.
Balaji. The poor demand in India
along with a weak show in China,
which together accounted for 45% of
second quarter international sales, impacted global performance. During
the second quarter, global sales were
down 7% to 999 tonnes. World Gold
Council said.
[Source : The Times of India, /ELT]
September 2012
14
REVENUE TRANSPARENCY TIMES
APPROACH INDIRECT TAX OMBUDSMAN FOR
PUBLIC GRIEVANCES AGAINST THE CUSTOMS,
CENTRAL EXCISE AND SERVICE TAX DEPARTMENT
A
n ombudsman is
someone who investigates
complaints
made by people against the
government or any public organization. An Ombudsman
has become a standard part of
the machinery of any democratic government in the modern world. The institution of
ombudsman originated in
Scandinavian countries.
The Government of India
has designated several ombudsmen for the redressal of
grievances and complaints
from individuals in the banking, insurance and other sectors being serviced by both
private and public bodies and
corporations.
In the flush of power, the administration very often exhibits a tendency to ignore
individual rights and interest
in the name of public good. It
is not eccentric to finish off
that if there is more administration, there will be more
mal-administration.” In these
circumstances, the pursuit for
an effective control mechanism over the administration
has led the people to the institution of ombudsman.
The Govt of India has created the Indirect Tax Ombudsman Guidelines 2011 and has
come into force from 11th
May, 2011 with the objective
of enabling the resolution of
complaints relating to public
grievances against the Customs, Central Excise and
Service Tax Department and to
facilitate the satisfaction or
settlement of such complaints.
POWERS
I. The Ombudsman shall have
the powers to –
a) receive complaints from
taxpayers on any matters specified in clause 9;
b) consider such complaints
and facilitate their satisfaction
or settlement by agreement,
through conciliation and mediation between the Customs,
Central Excise and Service
Tax Department and the aggrieved parties or by passing
an “award” in accordance with
the Guidelines;
c) require the Customs, Central Excise and Service Tax
Authority complained against
or any other related Customs,
Central Excise and Service
Tax Authority to provide any
information or furnish certified copies of any document
relating to the subject matter
of the complaint which is or is
alleged to be in its possession;
provided that in the event of
failure of such authority to
comply with the requisition
without any sufficient cause,
the Ombudsman may, if he
deems fit, draw the inference
that the information, if provided or copies if furnished,
would be unfavorable to the
concerned Customs, Central
Excise and Service Tax Authority;
d) suggest remedial measures
for redressal of grievances;
and e) report his findings to
the Secretary, Department of
Revenue, Government of India
and the Chairman CBEC for
appropriate action against
erring officials;
f) Ombudsman shall not have
any authority over the Central
Board of Excise and Customs
and Directorates under Central
Board of Excise and Customs
as these are Attached offices of
Central Board of Excise and
Customs.
II a) In cases where action is to
be taken by the CBEC and
the Directorates under the
CBEC which are attached offices of the CBEC, the Indirect
Tax Ombudsman shall only
have powers of recommendation.
b) The Indirect Tax Ombudsman shall not have jurisdiction
in cases where proceedings
have been initiated under Conservation of Foreign Exchange
and Prevention of Smuggling
Activities Act, 1974 and Prevention of Illicit Traffic in
Narcotic Drugs and Psychotropic Substances Act,
1988.
books of account or other documents are relevant are completed;
(i) non adherence to prescribed
working hours by Customs,
Central Excise and Service
Tax officials;
(j) unwarranted rude behaviour of Customs, Central Excise and Service Tax officials
with assessees;
(k) any other matter relating to
violation of the administrative
instructions and circulars issued by the Central Board of
Excise and Customs in relation
to Customs, Central Excise
and Service Tax administration.Provided that, if on any of
the grounds above, the responsibility for taking action is
with the Central Board of Excise and Customs or on a Centralized authority
eg.,
{Director General (Systems)
}, then the Ombudsman shall
not have the power to pass an
award as specified in para 13
below. In such cases, the decision of the Ombudsman
shall be recommendatory in
nature and shall be forwarded
in writing to the Revenue Secretary or the Chairman, CBEC
or the centralized authority,
as the case may be.
II Central Board of Excise and
Customs may include any
other ground on which a complaint may be filed with the
Ombudsman.
PROCEDURE FOR REDRESSAL OF GRIEVANCE
Grounds on which complaint
shall be filed:I. A complaint on any one or
more of the following grounds
alleging deficiency in the
working of the Customs, Central Excise and Service Tax
Department may be filed with
the Ombudsman:
(a) delay in the issue of refunds or rebate beyond time
limits prescribed by law or
under the relevant instructions
issued from time to time by the
Central Board of Excise and
Customs;
(b) delay in adjudication;
(c) delay in registration of tax
payers;
(d) delay in giving effect to
Appellate orders;
(e) non adherence to the principle of “ First Come First
Served” in sending refunds;(f)
non adherence to the rules prescribed for disbursement of
drawback;
(g) non acknowledgement of
letters or documents sent to the
department;
(h) delay in release of seized
books of account and assets,
after the proceedings under the
Customs, Central Excise and
Service Tax statutes in respect
of the years for which the
PROCEDURE FOR FILING THE COMPLAINT
I. Any person, who has a
grievance against the Customs, Central Excise & Service Tax Department under the
Government of India-s Department of Revenue, may,
himself or through his authorized representative, if any,
make a complaint against the
concerned Customs, Central
Excise and Service Tax official
in writing to the Ombudsman
having jurisdiction over that
office.
II. a. The complaint shall be
duly signed by the complainant or his authorized representative, if any, and shall
clearly state the complainant-s name and address,
the name of the office and official of the Customs, Central
Excise and Service Tax office
against whom the complaint is
made, the facts giving rise to
the complaint supported by
documents, if any, relied on by
the complainant and the relief
sought from the Ombudsman;
b. A complaint made through
electronic means shall also be
accepted by the Ombudsman
and a print out of such complaint shall be taken on the
record of the Ombudsman;
c. A printout of the complaint
made through electronic
means shall be signed by the
complainant at the earliest
possible opportunity before
the Ombudsman takes steps
for conciliation or settlement.d. The signed printout
shall be deemed to be the complaint and it shall relate back
to the date on which the complaint was made through electronic means.
III No complaint to the Ombudsman shall lie unless:(a) the complainant had, before making a complaint to the
Ombudsman, made a written
representation to the Grievance Cell of the concerned
Customs, Central Excise and
Service Tax office and did not
receive any reply within one
month from the date of its receipt by the Grievance Cell.
(b) where the complainant had
made a complaint in writing to
the Grievance Cell of the concerned indirect tax office and
he is not satisfied with the
reply given to him.
(c) where the complainant had
before making a complaint to
the Ombudsman, made a written representation to the Customs, Central Excise and
Service Tax authority superior
to the one complained against
and either such authority had
rejected the complaint or the
complainant had not received
any reply within a period of
one monthafter such authority
had received his representation
or the complainant is not satisfied with the reply given to
him by such
authority;
(d) the complaint is made not
later than one year after the
complainant has received the
reply of the concerned Customs, Central Excise and Service Tax office to his
representation or, in case,
where no reply is received, not
later than one year and one
month after the representation
to the Customs, Central Excise
and Service Tax Authority;
(e) the complaint is not in respect of the same subject matter which was settled through
the Office of the Ombudsman
in any previous proceedings
whether or not received from
the same compainant or any
one or more of the parties concerned with the subject matter;
and
(f) the complaint is not frivolous or vexatious in nature.
IV. No Complainant shall be
made to the Indirect tax Ombudsman on an issue which
has been or is the subject matter of any proceeding in an
appeal, revision, reference or
writ before any Customs,
Central Excise and Service
Tax Authority or Appellate
Authority or Court.
‘Mineral’ water
liable to Excise
duty : Tribunal
W
ater treated for impurities so as to make it
potable does not involve transformation of
water into a different commercial product
known to the market, the litmus test applied for determining whether a product is liable to Excise duty or
not, held the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore.
In VBC Industries and Hindustan Coca-Cola Beverages Pvt. Ltd. v. Commissioner of Customs & Central Excise (Appeals) Visakhapatnam, the issue
revolved around demands of duty on ‘treated water’
brought from the appellants’ factories to their own
vending outlets where the water was converted to aerated water through addition of syrup and the finished
product was marketed.
The process of filtration, purification, labelling,
etc. to be sure are deemed to be manufacture in terms
of the relevant chapter notes but the Tribunal was not
swayed by this. Instead, what weighed with it was the
fact that the water thus treated was not for sale in the
market but for own consumption at various other locations.
The Tribunal quoted with approval another Tribunal judgment on similar facts where it had drawn a
careful distinction between packaged/mineral water
and treated water.
The former involved value addition in the form of
minerals being added, thus resulting in a different
commercial product known to the market as mineral
water whereas there was evidently no market for
treated water with water remaining water, post processing.
[Source : www.thehindubusinessline.com, /ELT]
CHINESE CELLPHONE
SMUGGLING NETWORK
JAMMED
AHMEDABAD: The Gujarat commercial tax department officials have unearthed an Rs 100-crore
Value Added Tax (Vat) evasion scam and virtually
jammed a rampant Chinese cellphonesmuggling network in the state. The department has found that two
cellphone dealers, Ahmedabad-based Anjali Group
and DP Impex of Surat, have in the last one year imported over Rs 100 crore worth of Chinese cellphones
at Mumbai air cargo and illegally smuggled them into
the city to evade Vat.
In a joint operation with Maharashtra Vat officials,
the Gujarat officials raided offices of four Mumbaibased customs house agents who had facilitated the
imports for the two dealers.
"The imports were carried using import-export
codes (IEC) taken on dummy names. In one of the
case, code was taken on name of a person who needed
money for his ailing daughter and in exchange of financial help he gave his personal documents to open
a bank account and a power of attorney to carry out
the trade," said a vat official involved with the operation.
Ankur Jain TNN
REMEMBRANCE
Shri Rajiv Dubey (July 15,
1960 — Sept 2, 1989)
An excellent
friend and
superb
human
being who
will always
remain in
our hearts.
REVENUE TRANSPARENCY TIMES
CBI arrests a S.I of Chandigarh Police
for accepting a bribe of 5 Lakh
T
he Central Bureau of Investigation has arrested a Sub Inspector, working in Economic
Offences Wing of Chandigarh Police
and a private person for demanding &
accepting a bribe of Rs. Five lakh from
the complainant.
A complaint was received in CBI,
alleging demand of bribe for Rs.10
lakh by a Sub Inspector, Economic Offences Wing, Chandigarh Police,
through a mediator (a private person).
The complainant alleged that a false
case was registered against him at
Economic Offences Wing, Chandigarh
Police and the Sub Inspector was Investigation Officer of the case. The
Sub Inspector introduced him to the
mediator and told to approach him for
any help in the case. It was also alleged that the complainant had joined
Investigation.But a NBW was ob-
tained against him and his wife. The
mediator told the complainant that he
has to pay a handsome amount to Sub
Inspector for help in the bail matter of
his wife. After discussing the matter,
the accused demanded a bribe of Rs.
10 lakh. On complainant's expressing
the amount to be very heavy, it was
agreed to accept first installment of
Rs.5 lakh on 5.9.2012 and remaining
amount after completion of his work.
CBI, registered a case under Prevention of Corruption Act against the
Sub inspector and the mediator. Both
the accused were arrested for demanding and accepting bribe from the complainant.
Searches were conducted at the residential premises of both the accused.
Documents recovered during searches
are being scrutinized for further investigation.
CHALLENGING TO-DO LIST FOR
THE NEW CBEC CHIEF
P
raveen Mahajan has taken over
as the first woman chairperson
of the Central Board of Excise
and Customs (CBEC). As a professional Indian Revenue Service officer,
who has climbed up the ladder diligently, she might choose to ride the
momentum rather than do anything
spectacular. However, there is abundant scope for her to make a mark during her tenure, as the head of a
seven-member board that would comprise only women from the beginning
of next year.
Mahajan takes over at a time when
raising revenue takes the highest priority. Her task is made somewhat easier by a hike in central excise duty and
service rates, each by two per cent, in
this year’s Budget; wider coverage
through introduction of service tax on
all services except those on a negative
list and significant depreciation of
rupee that would bring in more customs duties. However, the advantage
is somewhat lost due to the slowdown
in economic growth rate.
The next priority would be to ensure
a smooth transition to the Goods and
Services Tax (GST). Though more difficult decisions holding up the GST
have to be taken by the political leadership, CBEC would have to do most
of the preparatory work; set out the details; assist states in putting the required laws in place; and educate its
workforce and taxpayers to ensure
proper implementation.
The present finance minister is
renowned for taking measures that impose heavy compliance costs. Fringe
benefits tax, education cess and secondary higher education cess are ready
examples of nuisance taxes, which
bring in more ill will than revenues.
While taxpayers understand the revenue compulsions and would not mind
a hike in taxes, they would resent un-
necessary paperwork and expenses in
modifying software. They would expect the CBEC chairperson to stand up
to the finance minister and insist on a
simpler tax regime.
The commerce ministry is fond of
coming up with more and more duty
credit schemes and relaxations in the
export promotion schemes that can
leak revenues without necessarily
boosting exports. The finance ministry
has been playing along, bungling the
details in drafting some of the consequential notifications and amendments.
A lot of interest would centre on
how CBEC tackles the demands of the
commerce ministry and gives effect to
the schemes through its notifications,
interpretations and instructions.
The service tax law based on a negative list is quite new and the central
excise law went through a dramatic
simplification 11 years back, but the
Customs law, made at a time when
duty rates were very high and smuggling quite rampant, is now 50 years
old. Although the laws have gone
through several changes over the
years, there is enough scope to take a
fundamental review of the laws and, if
necessary, rewrite them to enable the
average taxpayer understand and comply with the laws without requiring
specialists.
Finally, while her own staff would
expect Mahajan to push through the
cadre restructuring exercise, she must
insist for a sensible balance between
trade facilitation, enforcement and revenue collection in return. She will be
substantially judged by whether she
makes life easier at the operating levels and whether litigations come
down.
T N C Rajagopalan
Email: [email protected]
Source Business Standard
15
September 2012
AMENDMENT TO PROVSION RELATING
TO DEDUCTION OF LIC PREMIUMS PAID
FROM GROSS TOTAL INCOME
S
ection 80C provides for deduction in respect of life insurance
premia, contribution to provident fund, etc.At present, section
80C(3) provides that the provisions of
section 80C(2) shall apply to the
amount of any premium or other payment made on an insurance policy,
other than a contract for a deferred annuity, eligible amount for deduction is
limited to 20% of the actual capital
sum assured [ i.e., premium paid in excess of 20% of capital sum assured will
not qualify for the said deduction ].In
computing the said capital sum assured, no account shall be taken: (a) of
the value of any premiums agreed, to
be returned, or (b) of any benefit by
Gireesh Bhalla
way of bonus or otherwise over and
above the sum actually assured, which
is to be or may be received under the
policy by any person. Under the
amendment of section 80C(3), w.e.f. 14-2013 (assessment year 2013-14 and
onwards), provides that the existing
provisions of section 80C(3) will be
applicable to such policy issued on or
before 31-3-2012. Newly inserted section 80C(3A), w.e.f. 1-4-2013 (assessment year 2013-14 and onwards),
provides that the provisions of section
80C(2) shall apply to the amount of
any premium or other payment made
on an insurance policy, other than a
contract for a deferred annuity, issued
on after 1-4-2012, eligible amount for
deduction is limited to 10% (as against
20%) of the actual capital sum assured
[ i.e., premium paid in excess of 10%
of capital sum assured will not qualify
for the said deduction]. For the purpose of section 80C(3A), “actual capital sum assured” in relation to a life
insurance policy will mean the minimum amount assured under the policy
on happening of the insured event at
any time during the term of the policy,
not taking into account: (a) the value
of any premium agreed to be returned,
or (b) any benefit by way of bonus or
otherwise over and above the sum actually assured, which is to be received
or may be received under the policy by
any person.
GST rollout likely to miss April 2013 deadline
N
EW DELHI: The government's plan to roll out the
Good and Services Tax (GST)
by next April is unlikely to be met as
an expert has suggested not to rush
through with the country's most ambitious tax reform initiative. This may
bring some relief to the UPA as it will
provide more time to thrash out a consensus on the issue and get all the state
governments on board.
The delay in the report of the parliament's standing committee on finance,
which is reviewing the Constitutional
Amendment bill needed to implement
GST, has also provided some breathing space to the government to stitch
together a consensus on the issue.
"This tax will be in place for the
next 50 years. It should not be rushed
through unless all the nuts and bolts
are in place," an expert who has forwarded his views said, when asked
whether the government would be able
to implement the rollout by April,
2013. "It is better to be prepared and
ensure that everything has been put in
place. There cannot be any scope for
reworking the plan once you implement it," the expert, who did not wish
to be identified, told TOI. While no decision has been taken so far to postpone the launch, indications are that it
is likely to be delayed.
The government is going ahead with
the preparations needed for the launch
of this initiative as it awaits the report
of the standing committee and the empowered group of state finance ministers builds a consensus on the tax
reform that is expected to usher in
massive gains for the economyand
help create a common market.
Work is on for setting up the GST
Network (GSTN). Former finance
minister Pranab Mukherjeein his 201213 budget speech in March had said
that the GSTN would be set up as a
National Information and Utility and
would be operational by November,
2012. Mukherjee had hoped that the
government would be able to implement GST by next April.
Chairman of the parliament's standing committee on finance Yashwant
Sinha said the panel's report on the
constitution amendment bill is unlikely
to be presented in the monsoon session, which ends on September 7, as
the finance ministry had delayed the
reply to questions sought by the committee. "So, obviously because of the
delay by the ministry of finance we are
not in a position to submit the report in
the monsoon session," Sinha told TOI,
adding that the panel had not finalized
any fresh date when the report would
be submitted.
He said the amendment was a very
crucial one and will have to be "very
carefully considered". "It is a complex
subject which seeks to change what the
fathers of the constitution had ordained," Sinha said.
The government has identified the
rollout of GST as one of the key reform measures that will help signal the
government's commitment to reforms
and help boost revenues and growth.
The rollout of GST has missed several
deadlines in the past. Initially, it was
scheduled to be launched in April,
2010, but the date was shifted as consensus eluded the government. Several
states have expressed concern on various issues linked to GST and the empowered group has been trying to
enlist support for this reform measure.
Source The Times Of India
ICICI BANK SOLD BRANDED GOLD COINS WITHOUT PAYMENT OF DUTY
A
cting on an information,
officers of hdqr. anti evasion unit of this commissionerate
investigated
the
manufacture and clearance without payment of duty on customised gold coins by M/S ICICI
BANK LTD. having its head office
at icici bank towers, bandra-kurla
complex, mumbai – 400051[.]
during inquiry it revealed that
M/S ICICI BANK LTD. have
manufactured branded gold coins
through job-worker for their corporate customers and sold/ re-
deemed through their branches located throughout india during
01.03.2011 to 16.03.2012 without
payment of duty violating notification no.
01/2011-ce dated
01.03.2011 as amended and
thereby evaded Central Excise
duty to the tune of rupees
45,79,291=00 (as per their submitted documents)[.] rule 12aa of the
Central Excise rules, 2002 of the
relevant period envisages liability
of payment of duty alongwith observance of central excise procedures on the part of either
jobworker or the brand owner[.]
M/S ICICI BANK LTD. being the
brand owner have admitted the
facts and implication and paid an
amount of rupees. 53,08,600=00
towards their duty liability including interest of rupees 7,29,309=00
through e-payment[.] further investigation is in progress [.]
(S. K. DAS)
Commissioner
Kolkata-I Commissionerate.
Incident report no. 3 /2012
September 2012
REVENUE TRANSPARENCY TIMES
16
RARE FEAT BY AN
EX-DEPARTMENTAL OFFICER
GK Sarkar
ANENDRA KISOR SARKAR
known as G K Sarkar has
recently been awarded
Ph.D by JAMIA MILLIA ISLAMIA for his thesis on Customs
and Excise Laws and problem of
enforcement in India.
Sarkar in his thesis has critically
examined & analysed the enforcement problems going deeply into
the historical aspects of the taxes
and the socio-economic aspects involved along with the provisions
of search, seizure, arrest and prosecution as provided in the Customs Act and Central Excise Acts
with other mechanisms for enforcement of the said laws , Judicial approach and Constitutional
safeguards protecting individual’s
rights against the action of search,
seizure, arrest and prosecution has
also been critically analysed.
Sarkar in his thesis has also narrated the stringent provisions that
are being misused sometimes by
the officers empowered with such
powers at the indication of their
masters. However at the same
time due to liberal Govt. policies
and loopholes in our laws, the influential section of our society either manages to escape or delay
the process of law.
Sarkar further has gone into the
origin of Excise levy since the
days of Mauryan Empire in about
the fourth Century BC. when the
white traders of East India Company seized power in India and established their position after 1857.
Salt was found to be most alluring
article for raising revenue from its
manufacture for the purpose of
Consolidating the British Rule in
India and this necessitated the enactment of the Indian salt Act,
1882, the forerunner of which was
the sea Customs Act, 1878, to provide, inter-alia, for levy of duty on
salt “manufactured in, or imported
into, British India”. By the year
1943, there were ten separate enactments on Excise levy in addition to five statutes dealing with
salt. By consolidating a single Act
was passed as “The Central Excise
and Salt Act, 1944 and that Customs Duty have its origin in
G
British period which established
its first Board of Revenue in 1786
at Calcutta.
Sarkar further elaborated the enforcement provisions in the Customs and Excise Laws of which
the most stringent provisions are
the power of Summoning, Search,
Seizure and Arrest. Main tool for
investigation is the summoning
power of the Gazetted officers of
Customs and Excise. Statements
recorded are valid evidences, since
they are not police officers.
Searches and seizures, on reasonable belief, is permitted to unearth
evasion of duties. Arrest is the
most deterrent and stringent action
of which the public in general and
evaders in particular are afraid of.
To safe guard misuse of this
power, written permission from
the Head of the office not below
the rank of Commissioner is to be
obtained for arresting a person.
The suggestions made by Sarkar
in his thesis include suggestion of
speedy disposal of cases by the
CESTAT/Courts, speedy and unbiased adjudication orders to be
passed. The quality of investigation and issue of Show Cause Notice is to be upgraded for better
success before the Tribunal/
Courts. Mobilization of man and
machinery in proper perspective is
required. Indiscriminate filing of
appeals by the department will not
help in minimizing pendency. To
avoid allegation of corruption, discretionary power is to be reduced
and judgments to be pronounced at
the earliest after conclusion of
hearing. To avoid misuse of Anticipatory Bail overriding provisions may be incorporated in the
relevant section relating to arrest
(sec. 104 in Customs and sec. 13
in Central Excise) to the effect that
“no Anticipatory Bail can stand in
the way of arrest unless notice of
the same is given and heard the
concerned Investigating Agency”.
Prosecution is to be launched only
after adjudication of cases to avoid
undue hardship. In the end, it may
be stated that the enforcement
mechanism for implementing Customs and Excise laws require
some changes and revamping of
machinery as suggested.
Sarkar's study in his thesis
would be useful to not only those
who administer the law, but also to
those who make the laws and to
academicians who examine the
statutory provisions and the judicial decisions critically. RTT team
congratulates Dr. Sarkar for his
valiant effort.
Legendary Customs officer Daya Shankar no more
W
ell known Customs officer Daya Shankar, who
took the anti-smuggling
fight right into the den of the
Mumbai underworld in the 1980s,
passed away in Australia in the
early hours of Sunday, 12thAugust
2012. He was 58.
Mr. Daya Shankar was a 1978
Batch officer of the Indian Revenue Service (Customs & Central
Excise) and his monumental tirade
against gold smugglers along the
Western Coast in Mumbai, Goa
and Gujarat have remained till date
a shining example of the honesty,
devotion to duty and courage of the
Indian Customs officer. Mr. Daya
Shankar was an embodiment of absolute integrity and sheer raw
physical and moral courage. His
life and work have inspired many a
Bollywood movies.
A condolence meeting to mourn
the untimely demise of Mr. Daya
Shankar was organized in New
Delhi on Friday, 17th August 2012
by the IRS(C&CE) Officers’Association. Mr. Y.G. Parande, former
Member, Central Board of Excise
and Customs were amongst the
senior officers who were present
and shared their professional memories of Mr. Daya Shankar. The
contributions of Late Mr. Daya
Shankar were cherished and ways
and means to ensure that the legacy
of this legendary Customs official
endures for the new generations of
Customs officers to draw inspiration from were discussed.
Mr. Daya Shankar had sought
voluntary retirement in 2005 and
had since been serving as a Professor at the Deakin University, Melbourne, Australia.
Inputs from
IRS(C&CE)
Officers’ Association.
Commissioner Bangalore denied principle of
natural justice to the ace cricketer Rahul Dravid
BANGALORE :
The appellant (Rahul Dravid) filed
two appeals against Service Tax
demands of Rs.51,39,288/- and
Rs.50,05,937/-, for the periods
2008-09 and 2009-10, respectively,
determined by the Commissioner.
The appellant as a player of cricket
received fees from M/s Royal
Challengers Sports Pvt. Ltd.
(Royal Challengers) for playing
IPL tournaments. Royal Challengers are the franchisee of the
BCCI. Royal Challengers had also
executed MOU with commercial
establishments such as M/s United
Breweries Ltd., M/s United Spirits
Ltd., etc for display of the latters'
logo/mark/sign on the uniform of
the cricketers including the appellant. The case of the Department as
made out in the relevant SCNs is
that the appellant was rendering
Business Auxiliary Service (BAS)
to Royal Challengers by sporting
the aforesaid logo/mark/sign
which, according to the Department, were in the nature of advertising the products of the aforesaid
companies.
The Tribunal Observed –
It is evident from the records of
the case that the contentions raised
by the assessee in his replies to the
show-cause notices were not
heeded by the adjudicating authority which chose to rely on
Wikipedia and other materials
without referring to the contentions
of the assessee. It appears,
Wikipedia was elaborately referred
to in the impugned order without
putting the assessee on notice,
which, by all means, amounts to
violation of natural justice. Further,
the case of department considered
by the learned Commissioner was
mainly based on the MOUs executed by Royal Challengers with
the owners of logo/mark/sign
which were displayed by the cricketer on his uniform during the
course of the tournaments, but no
copy of any such MOU was supplied to the assessee, nor even
mentioned in the list of relied-upon
documents attached to the SCNs.
This is yet another instance of denial of natural justice to the appellant. In these circumstances, we are
of the considered view that these
matters have to be remanded for de
novo adjudication in accordance
with law.
Rs 1.7cr siphoned under CBI’s nose
NEW DELHI: Central Bureau of
Investigationofficers, busy investigating mega scams across the
country, seem to have left their
own backyard unguarded. In an
embarrassing rip-off, a data entry
operator was found to have illegally withdrawn Rs 1.67 crore in
instalments from the official salary
account of the country's premier
investigation agency.
The man dared to defraud the
agency by forging the signatures of
its pay and accounts officers of between 2010 and 2012. A baffled
CBI brass believes some of its own
employees may have helped the
accused pull off the fraud.
It all started in 2010, when the
agency outsourced work to a data
entry operator, identified as
Prashant Kumar Jha, in its pay and
accounts office (PAO). According
to sources, Jha found out that the
agency's official salary account in
State Bank of India had funds running into crores with no proper
records being maintained.
The data operator allegedly
roped in some persons known to
him and opened fake bank accounts to transfer some of the
money.
Jha, who has been arrested by
CBI along with seven other accused, forged the signatures of two
CBI officers in PAO, Balbir Singh
and Abhay Singh, and started making cheques ranging between Rs 7
to 9 lakh.
"He did not make any cheque of
Rs 10 lakh or above as he knew
that two signatories are required
for that," said a CBI officer.
From 2010 to 2012, Jha allegedly
forged 21 cheques, through which
Rs 1.67 crore was transferred into
the accounts of his accomplices.
The theft came to light when the
agency recently noticed a lot of
money had disappeared from its
salary account.
Investigations led to Jha and he
was arrested. His accomplices
were identified as Amit Ranjan
Mishra, Pawan Kumar Mishra,
Amol Kumar Rai, Nand Lal Ram,
Mahender Khukri, Jolen Khess and
Jitender. They were all taken into
custody and questioned. The
agency also reportedly carried out
searches in Bihar.
All eight accused have been
charged with cheating, forgery and
criminal conspiracy. CBI has so far
recovered about Rs 67 lakh while
there's accounting for Rs 1 crore,
which the agency believes has
been invested in properties.
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