Regulatory Updates #11: CBEC attempts to minimise litigation, SEBI tightens norms for Commodity Market

Bar & Bench will bring to you the latest regulatory and policy updates from different ministries and regulatory authorities. In this edition of Bar & Bench Regulatory Updates, we analyse the latest updates by CBEC and SEBI.

Higher thresholds for filing appeals in tax cases

Continuing its effort to minimise litigation and disputes, the Central Board of Excise and Customs (CBEC) has issued a press release dated 25 April 2016. The key features of the press release are as follows:

• Raising threshold limits for filing of appeals from the existing Rs. 5 lakhs and Rs. 10 lakhs in Custom Excise and Service Tax Appellate Tribunal (CESTAT) and High Courts to Rs. 10 lakhs and Rs. 15 lakhs respectively.
• Directing officers to withdraw cases in High Courts and CESTAT where there is a precedent Supreme Court decision and against which no  review is contemplated.
• Chief Commissioners/Principal Commissioners have identified 2,051 and 5,261 cases pending in appeal in the High Courts and CESTAT respectively as fit for withdrawal out of which 980 and 2,174 cases respectively have already been filed for withdrawal.
  Out of these, withdrawal has already been allowed for  250 and 202 cases in the High Courts and CESTAT respectively.
• Mandatory Pre-Show cause notice consultation with the assesee in all cases where the duty is above Rs. 50 lakhs.
• Detailed instructions with respect to the manner in which Show Cause notice is to be issued, personal hearings are to be granted and speaking adjudication orders to be issued.

Bipin Sapra, tax partner, EY India told the Economic Times that,

“The Pre Show Cause notice discussion with the assessee, if applied in true spirit, could drastically cut down litigation and, hence, the transaction cost of doing business in India“

SEBI tightens norms for commodity derivates market

To increase transparency in dealings between broker and clients in commodity derivatives market, the Securities Exchange Board of India  has now aligned the provisions relating to proprietary trading carried out by stock brokers of commodity derivates exchanges in line with the securities market.

Henceforth:

• Every broker shall disclose to his existing as well as new clients, whether he does client based business or proprietary trading as well.
• The facility of placing orders on ‘pro-account’ through trading terminals will be extended only at one location. Trading terminals located at places other than the above location shall have a facility to place orders only for and on behalf of a client by entering client code details.
• On request, the stock exchange may on a case to case basis, after due diligence, consider extending the facility of allowing use of ‘pro-account’ from more than one location.