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• ISSUE - IV • VOLUME - VIII • DECEMBER - 2012

December - 2012

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Bizsol UPDATE December - 2012

For all those ultra nationalists out there who constantly

complain that we ape the West, here is some good

news. Mitt Romney after he was defeated by Barack

Obama in the recent Presidential election in the US bitterly

complained that the latter had in fact bribed the voters! He

alleged that Obama gave gifts at the Government expense

to the youth in the form of lower interest on student loans,

sold dreams of sweeping reforms on immigration to the

Hispanic voters with a hint of an amnesty programme,

free contraceptives as part of Obamacare and the like.

When it comes to electoral malpractices the largest

democracy can indeed teach a lesson on or two to the

oldest democracy. This US election would be remembered

for more than one reason and history might consider it a

watershed event in some ways. One is the paradox of

Obama, one of the greatest orators of our times, almost

lost the election after the first debate in Denver with

Romney. The President who was leading in almost all the

polls till the date of the Debate with his incumbency

advantage lost ground with a somnambulistic performance.

The second important factor of this election was that despite

the clear choice of personalities and policies the electorate

had before them between the candidates both suffered

from one common problem - both of them were perceived

to be aloof. After the gruelling election campaign when

Obama addressed his close aides to thank them he had

tears rolling down his cheeks. If only he had shed those

tears before the election the electoral battle could have

been much less demanding for him. People want to see

the human side of the leaders and emotions make the

man a human. In fact emotions are who you are. The US

elections provided some serious lessons for the way it

was micromanaged by the Obama campaign. Elections

are no longer about appealing to the masses; it is about

targeting the voters and influencing them at a very personal

and micro level. According to experts a large part of the

credit for Obama's victory has to be given to the laptop

brigade in the backroom. For the Republicans the most

important lesson was the new norm that elections are more

about Aam Aadmi, whom they respectfully refer to as the

middle class and less about fund-raising.

FROM THE DESK OF CHAIRMAN

Staying with and talking of gifts and bribes let me take

you to the biggest of them all. The ambitious direct cash

transfer scheme of the Government of India to the people

of the country in an effort to eliminating the subsidies and

leakages associated with it. This is going to be a game-

changer. You may like it or hate it depending on your

perception and political bias; but you cannot ignore it. The

objective of the scheme cannot be faulted on theory. The

government may be rolling out the scheme with an eye on

the general elections in 2014. There could be teething

problems in its implementation. If it is allowed to take off it

would be a historical achievement as one of the most

important measures taken by any government, the political

undertones notwithstanding. It is generally accepted that

only a fraction of the total amount spent by the government

on subsidies actually reaches the beneficiaries. Even if

there are losses during the initial stages of implementation

of the scheme the targeted beneficiaries would still be able

to enjoy the benefits which are meant for them. Opposition

to the scheme is also natural - it is either out of political

considerations or resistance to change. Vested interest

groups are bound to try and sabotage the scheme as a

number of present unauthorised beneficiaries are bound

to lose their opportunity to loot the exchequer for their

personal benefits. Losses during the initial stages of

implementation of the scheme are bound to be less than

the current losses which go to line the pockets of those in

the distribution chain.

As of writing this piece the government has just managed

to register a win both in the Lok Sabha and the Rajya

Sabha on the Retail FDI debate. We saw the dance of

democracy all over again - only this time round it resembled

an African jungle dance replete with well orchestrated drum

beats. On the surface it was a great democratic process

at work. The debate, the discussions and the disruptions

in the House were great by any standard. How I wish one

could talk the same way about the outcome. The foundation

of democracy is built on ideology. For Indian democracy

value systems mean numerical values. We saw the

spectacle of parties denouncing vehemently the FDI policy

of the government on the floor of the House without

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bothering to register their protest in the form of a protest

vote after the end of the debate. In fact the Bahujana Samaj

Party went one step further. In the Rajya Sabha it opposed

the policy by words during the debate and supported it by

deeds by voting with the ruling party. The country

unfortunately is paying a heavy price for being illiterate. In

any decent society these parties would be treated as

pariahs. As far as the FDI issue is concerned everyone

including the Prime Minister opposed it at some time or

other. That makes this debate the most embarrassing one

in the annals of Indian parliamentary democracy. India has

great democratic processes; but no true democracy. It is

akin to the saying that the operation was successful; but

the patient dead.

Democracy as a system is both powerful and degerous at

the same time. It is powerful because of its underlying

popular mandate. It is dangerous because the elected

representatives command legitimate and unadulterated right

to exercise the power of the state or organisation. It is the

only form which legitimises the exercise of authority by

one person over another. An action taken by a dictator, in

contrast does not carry the necessary moral authority

whereas in a democracy it carries both legal and moral

authority. Consequently true democracy to succeed one

has to have a minimum level of value system coupled

with personal integrity. In the absence of these, what you

get is a skewed output. The recent spat between the Indian

Olympic Association (IOA) and the International Olympic

Committee is a case in point. Indian sports bodies have

historically been the epicentres of nepotism and corruption.

The government's efforts to reform the various sports bodies

have been met with stiff resistance from vested interest

groups. Now those in power are using the national sports

code to their advantage. This has resulted in the county

being banned from the IOC. When Indians were crying

foul when shamed by the shenanigans of those who control

the IOA, the powers that be who got elected as office

bearers of the Association were celebrating! Such is the

power of democracy that a handful is holding a billion to

ransom. And the state looks on helplessly.

Despite all the limitations on the social and political scenes

in India, the country's media had enjoyed remarkable

freedom. They were perceived to be reasonably objective

and fair. The recent arrest of the editor of Zee Television

on charges of extortion has exposed the soft underbelly of

the fourth estate. Considering the recorded evidence

provided by Navin Jindal, the MP and the business tycoon

to rebut the stand taken by the news channel that it was a

sting operation, Zee will have a lot of explanation to do.

Till now issues like blackmail and extortion by the media

were talked about in hushed whispers in the Studio

corridors. Now the media is on trial and they have a lot to

answer.

The costliest prisoner of India (read Ajmal Kasab) was

executed recently. That in itself is no news. The

Government handling of sensitive issues are normally ham-

handed. So when you wake up one fine morning to read in

the news papers that the execution has been carried out

in a swift, systematic and secret manner it is indeed big

news. Governments can, after all, do things efficiently!

There is something common between the political rivals

Nitin Gadkari and Jairam Ramesh. Both apparently suffer

from the foot-in-the-mouth disease. Recently both said the

right things - at least not anything wrong. Both got rammed

for what they said. According to Jairam Ramesh toilets

are more important today than temples. Nothing wrong.

Gadkari talked about the level of IQ of Swami Vivekananda

and Dawood Ibrahim in the same breath. In public life or

for that matter any where it is not only about what you

say; but also about how and when you say it. It is necessary

to exercise extra caution when deploying nuances of the

language especially if you are a politician. They can take

a lesson or two from Shashi Tharoor who learnt this lesson

the hard way.

The recent public outrage after the arrest of two girls in far

off Palgar has some underlying message to cheer about.

It was indeed unfortunate that two innocent girls became

victims of the high handedness of the state. The redeeming

part, however, is that there indeed was an outrage against

the action of the state. Full marks to the media for making

it a cause celebre. The draconian provision of the

Information Technology Act is all set to be amended thanks

to this incident. More importantly, the entire episode helped

to awaken the people against the whimsical exercise of

power by the police.

Finally here is homage to a man who spoke straight from

the guts. In this world of double-speak and manipulations

Bal Thackeray spoke what he thought or felt without fear

of consequences. You may love him or hate him. But you

cannot but admire him for his courage and uprightness.

Thank you

Venkat R. Venkitachalam

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CUSTOMS

NOTIFICATIONS

Anti Dumping

• No new Notifications!

Safeguard Duty

• No new Notifications!

Tariff

• Customs Duty @15% imposed on skimmed milk

powder & skimmed milk not containing added

sugar, covered under Chapter Heading-040210

or 04022100 upto an aggregate of ten thousand

metric tonnes of total imports of such goods in a

financial year." [Notification No.59/2012-Cus

dated 21/11/2012]

• Full customs duty exemption is granted on

imports of Machinery, equipment, instruments,

components, spares, jigs and fixtures, dies, tools,

accessories, computer software, raw materials

and consumables required for the purpose of Air-

to-Air Missile System (Project ASTRA) of the

Ministry of Defence. The exemption will be

available till 1st March, 2013. [Notification

No.58/2012-Cus dated 21.11.2012]

Non-Tariff

• Tariff value (US $ per Metric Tonne) of the goods

RBD Palmolein has been reduced from $889 to

$864, for Brass Scrap (all grades) reduced from

$4096 to $4010, for Gold enhanced from $556

to $561 per 10 Grams. and for Silver enhanced

from $1039 to $1096 per Kg. [Notification

No.106/2012 - Cus (N. T.) dated 30/11/2012]

• Licence granted to a Customs House Agent

under Customs House Agents Licensing

Regulations, 2004, shall be valid till such time

the authorization granted to the Customs House

Agent under the Authorised Economic Operator

Programme is valid and there shall be no fee for

renewal of a licence in respect of the CHAs

authorized under the Authorised Economic

Operator Programme. [Notification No.105/

2012 - Cus (N. T.) dated 16/11/2012]

• Condition of furnishing of Bank guarantee or cash

deposit also waived to the Customs Cargo

Service provider authorised under Authorised

Economic Operator Programme and approval

granted under Handling of Cargo in Customs

Areas Regulations, 2009 to them may be

extended for a further period of ten years at a

time. [Notification No.104/2012 - Cus (N. T.)

dated 16/11/2012]

CIRCULARS• Revised clarification guidelines are issued in

respect of Authorized Economic Operator (AEO)

programme which was originally defined as per

Board's Circular No. 37/2011- Cus., dated

23.08.2011. [Circular No.28/2012-Cus dated

16/11/2012 ]

INSTRUCTIONS

• Special Intelligence & Investigation Branch (SIIB)

would carry out surprise checks at out gate and

verify authenticity of the gate passes issued by

the custodian for avoiding the instances of

clearance of some containers without filing of Bill

of Entry and payment of Customs duty by using

forged signatures of Customs officials on manual

Out of Charge orders leading to substantial loss

of revenue to the Government exchequer results

in high cases of fraud and duty evasion, it has

been decided that Commissioners concerned

shall develop a proper gate management system

where Deputy / Assistant Commissioner of

Customs, Docks / Import Shed and Deputy /

4


Assistant Commissioner of Customs. Further,

Out of Charge orders must be computerized and

manual Out of Charge orders should be allowed

only in the rarest of rare and genuine cases. Also

specimen signature of the officers posted in

Docks / Import Shed should be made available

at the out gate for verification. Further manual

Out of Charge orders (gate passes) booklets,

official stationery, stamp etc. should be kept in

safe custody. Due care should also be taken to

verify the particulars in the Bill of Entry and other

important documents. [F.No.450/24/2012-

Cus.IV dated 29.10.2012]

• Importers can exercise the option to avail the

facility provided under Section 49 of the Customs

Act, 1962 for storing goods in warehouses

pending clearance in case where goods cannot

be cleared within a reasonable time. Further,

importer may exercise the option to de-stuff

goods from foreign containers and keep the same

in the CFS / ICD including in empty domestic

containers therein, under Customs supervision,

for subsequent clearance as per law [F. No. F.

No.450/95/2012-Cus.IV dated 20/11/2012]

CENTRAL EXCISE

NOTIFICATIONS

Tariff

• Excise duty is exempted on Equipments and

stores if used for systems and sub-systems of

project ASTRA of the government of India in the

ministry of finance, if the others conditions as

specified are fulfilled. This exemption shall have

effect till 28th March 2013. [NOTIFICATION NO.

39/2012 CE DATED 19/11/2012]

Non -Tariff

• No new notification!

CIRCULARS• The jurisdiction of Commissioners of Central

Excise of Bangalore - I, II & III & Belgaum has

been modified. [CIRCULAR NO. 30/2012

DATED 20/11/2012]

INSTRUCTIONS

• Orders passed by the Commissioners were

review by the Committee of Two Commissioners

formed and was observed that most of the orders

passed by the Commissioners Appeal were

dismissed on the technical grounds. Review

Committee of Commissioners have been issued

instructions for precautions to be taken care of

while dealing with review files. [F NO. 390/

Review/2/2012-JC DATED 23/11/2012]

SERVICE TAX

NOTIFICATIONS

• Person providing output services or liable to pay

service tax totally or partially as receipient of

service under Reverse Charge Mechanism needs

to amend registration selecting 120 categories

of services even in the New Era of Negative List

of Services [Notification no. 48/2012ST dated

30.11.2012]

CIRCULARS

• "Old wine in new bottle!"; Earlier service

categories have been re-brought and accounting

code for collection, interest, penalty for each

category of services are different. Similarly

accounting codes for education cess and

secondary higher education cess are specified.

[Circular No.165/16/2012 -ST DT 20/11/12] -

PLEASE READ DETAILED ARTICLE ON THIS

SUBJECT.

FOREIGN TRADE POLICY

NOTIFICATION

• Notification No. 17 of 1st October, 2012 is

amended with immediate effect. Certain

procedure and conditions for registration of

contracts for export of cotton under Tariff Item

HS code 5201 & 5203 [ Sl. Nos. 197 & 199 of

ITC(HS) Classification of Export & Import Items]

are amended. Thereby maximum limit for

obtaining Registration Certificate is increased to

30,000 bales and multiple RCs can be applied

within this eligibility. Few RA are designated for

5


issue of RCs for export of cotton. [Notification

No. 26 (RE-2012)/2009-14 DT- 30/11/2012]

• Milk Powders including Whole Milk Powder, Dairy

Whitener and Infant Milk Foods [Tariff Item HS

Code 0402] can now be exported freely, earlier

there was prohibition on export of this item.

[Notification No. 25 (RE-2012)/2009-14 DT- 22/

11/2012]

PUBLIC NOTICE• Existing SION C-469 has been modified. Non Alloy

Cold Rolled Steel is added as an input. Based

upon the thickness of the export product, quantity

of corresponding inputs has been prepared in

tabular form as mentioned in Engineering Tables

1A, 1B and 1C.

Two new SIONs are notified for export products

"Cold Rolled colour coated non alloy steel

sheets" (C-2054) and "Cold Rolled Zinc &

Aluminium Silicon Alloy Coated Colour Coated

Non Alloy Steel Sheets" (C-2055). Engineering

Table 1 is substituted by comprehensive

Engineering Tables 1A, 1B, 1C, 1D, 1E, 1F and

1G which denote the export product and

corresponding inputs. [Public Notice No. 33(RE-

2012)/2009-14 DT 30/11/2012]

• The form ANF 5B prescribed for application of

redemption of EPCG license has been modified

to make it more specific and user friendly. [Public

Notice No. 32 (RE-2012)/2009-14 DT 27/11/

2012]

• Now the recipient of the goods will be able to

claim TED refund on production of suitable

disclaimer from supplier, in the format prescribed

in Annexure IV to ANF-8. [Public Notice No.

31(RE-2012)/2009-14 DT 21/11/2012

• Certain arrangements are made with a view to

promote Indo-Myanmar Border Trade and there

by 22new commodities / items are added to the

existing list. [Public Notice No. 30 (RE-2012)/

2009-14 DT 12/11/2012]

• Amendment in Note for Guidance attached to

the Appendix 25B of HoP (Vol.1) i.e. Legal

Agreement/Undertaking has been made & where

it is specified that LUT shall be executed by

paying stamp duty prescribed by state

Government and Bank Guarantee (B.G.) would

require execution by the surety Bank (Guarantor)

and LUT by Exporter/Importer. [Public Notice

No. 29 (RE-2012)/2009-14 DT 12/11/2012]

CIRCULARNo new circulars!

Trade Notice

No new trade notice!

INCOME TAX

NOTIFICATIONS

• Rajiv Gandhi Equity Savings Scheme, 2012 has

been notified for claiming deduction on account

of investment in eligible securities u/s 80CCG,

wherein the objective of the Scheme is to

encourage the savings of the small investors in

domestic capital market. [Notification No. 51 /

2012 dated 23-11-2012]

• Double taxation Agreement - Agreement for

avoidance of double taxation and prevention of

fiscal evasion Uzbekistan has been amended,

wherein the Tax on Dividend, Interest, Royalties,

Technical Fees has been reduced from 15% to

10%. Also, clauses w.r.t Exchange of Information

has been amended and clause w.r.t Assistance

in Collection of Taxes has been included in the

agreement. [Notification No. 49/2012 dated

7-11-2012]

• M/s. India Land & Properties Pvt. Ltd. have been

notified as Industrial park u/s 80IA (4) by the

Central Government. [Notification No. 48/2012

Dated 06/11/2012]

• M/s. Ferani Hotels Pvt. Ltd. have been notified

as Industrial park u/s 80IA (4) by the Centeral

Government. [Notification No. 47/2012 Dated

06/11/2012]

• Central Government have authorized specified

public sector entities to issue bonds subject to

the conditions specified, interest from which will

be exempted to the Investors u/s 10(15).

[Notification No. 46/2012 Dated 06/11/2012]

6


CIRCULARSNo new circulars!

MVAT (Maharashtra VAT)

NOTIFICATIONS

• The due date for submission of VAT Audit Report

in Form 704 have been extended from "within

eight months" to "within nine months and fifteen

days" from the end of the financial year.

[Notification No. VAT / 1512 / CR 139 /

Taxation-1 Dated 21/11/2012]

CIRCULARS

• It has been clarified that submission of returns,

refund application, audit report, or any other

documents required to be submitted and

payment of taxes, interest or any other amount

payable will be considered to be submitted or

paid within due date, if such submission /

payment is done on the next working day

immediately after Sunday / public holiday if the

due date falls so. [Circular No. 19T of 2012

Dated 09/11/2012]

• The facility of Refund under MVAT through ECS

is now restricted to dealers of Greater Mumbai

which was previously made available to all the

dealers of Mumbai. Further Mandate Form for

availaing the benefit of refund remittance through

ECS is to be submitted physically in place of

uploading it on the website. [Circular No. 20T

of 2012 Dated 19/11/2012]

GVAT (Gujarat VAT)

• No new circulars / Notifications due to code of

conduct on account of election in Gujarat.

COMPANY LAW

NOTIFICATIONS:

• New Rule 4, 5 and 6 regarding filing of Balance

sheet and Profit and Loss Account and Cost Audit

Report and Cost Compliance certificates in XBRL

mode & Annexure III in respect of "Extensible

Business Reporting Language (XBRL) Taxonomy

for Compliance Report and Cost Audit Report

as required under section 209(1) (d) and 233B

of the Companies Act, 1956 has been inserted

in Companies (Filing of Documents and Forms

in Extensible Business Reporting Language)

Rules, 2011 [G.S.R. (XBRL) Notification dated

30/11/2012]

CIRCULARS:

• It is clarified that, the underlying idea behind filing

of Balance sheet and other documents is to

publicly disclose the information which reflects

various aspects of working of the company so

that the companies public accountability is

maintained, it is neither intended nor feasible for

the Registrar to Scrutinize or verify the contents

of filing except on a random basis. Therefore the

companies and its Directors and officials are

liable to be penalized for any incorrect, false or

misleading information that such filing disclose.

[General Circular No.37/2012 dated 06/11/

2012]

• In continuation of the General Circular No. 15/

2011 dated 11th April 2011, MCA issued

procedure & guidelines in respect of Appointment

of Cost Auditor by Companies effective from

01.04.2013:

(a) After receipt of approval from Central

Government in Form 23C for appointment

of auditor, the company shall, within thirty

days from the date of approval, issue formal

letter of appointment to the cost auditor, as

approved by the Board.

(b) The cost auditor shall, within thirty days of

the date of formal letter of appointment

issued by the company, inform the Central

Government in the prescribed form 23D,

along with a copy of such appointment.

(c) In case of change of cost auditor caused by

the death of existing cost auditor, companies

are allowed to file fresh e-form 23C, without

any additional fee, within 90 days of the date

of death. The additional fee shall become

applicable after expiry of the said 90 days.

Accordingly, e-forms 23C and 23D are

being modified to capture such details.

7


(d) In case of change of cost auditor for

reasons other than death of the existing cost

auditor, companies are required to file fresh

eform 23C with applicable fee & additional

fee, clearly specifying the reasons of

change. In case of change due to

resignation of the existing cost auditor, e-

form 23C should be accompanied by the

resignation letter of the existing cost auditor.

In case of change due to the management

policy of periodical rotation, then attach a

copy of the Board approved rotational policy

with the e-form 23C. In any other case, the

change should be duly justified and

supported with the relevant documents.

(e) In order to ensure compliance of section

224(1-B) of the Companies Act 1956,

required changes are being made in the

MCA21 system to restrict the number of cost

audit approvals to the limits specified in

section 224(1-B) through a counter on the

membership number of the sole proprietor

or partner of the firm.

(f) In MCA21 system, no changes are

permitted in the approved e-forms.

Therefore, all companies and cost auditors

are hereby informed to carefully verify all

particulars before uploading e-forms 23C or

23D on the MCA21 portal.

(g) If a company or the cost auditor

contravenes any provisions of this circular,

the company and every officer thereof who

is found to be in default, and the cost auditor

in case he is in default, shall be punishable

as per applicable provisions of the

Companies Act, 1956.

[General Circular No.36/2012 dated 05/

11/2012]

• MCA directed to all the Cost Auditors who have

not intimated their appointment to Central

Government vide Form 23D as per revised

procedure, to file the same immediately upto 16th

Dec 2012, otherwise the names of such

defaulting members will be sent to the Institute

on 17th Dec 2012 to initiate the Disciplinary

Proceedings against them under the relevant

provisions of Cost and Works Accountants Act,

1959. [General Circular No.35/2012 dated

05/11/2012]

FEMA/RBI

Circular NumberDate of

IssueDepartment Subject Meant for

RBI/2012-2013/312A.P. (DIR Series)Circular No.56

27.11.2012 Foreign ExchangeDepartment

Exim Bank's Line ofCredit of USD 13.095million to the Govern-ment of the Republic ofTogo

All Category - IAuthorised DealerBanks

RBI/2012-2013/311

A.P.(DIR Series)Circular No.55


Liaison Office (LO) /Branch Office (BO) inIndia by Foreign Entities- Reporting to IncomeTax Authorities

All Authorised DealersCategory - I Banks

RBI/2012-2013/310A.P.(DIR Series)Circular No.54


External CommercialBorrowings (ECB) Policyfor 2G spectrum alloca-tion

All Category - IAuthorised Dealer Banks

RBI Circulars

8


RBI 2012-2013/309

DBOD.No.BP.BC.63/21.04.048/2012-13

26.11.2012 Department ofBanking Opera-tions and Devel-opment

Review of the PrudentialGuidelines on Restructur-ing of Advances byBanks/Financial Institu-tions

All Scheduled Commer-cial Banks (excludingRRBs)

RBI/2012-2013/305DNBS(PD).CC. No /03.10.42 /2012-13

22.11.2012 Department ofNon Banking Su-pervision

Implementation of Section51-A of UAPA, 1967-Up-dates of the UNSCR 1988(2011) Sanctions List

All Non Banking Finan-cial Companies / Residu-ary Non Banking Compa-nies

RBI/2012-2013/304

DBOD.BP.BC.No. 62/21.04.103/2012-13


Second Quarter Reviewof Monetary Policy 2012-13 - Non-Performing As-sets (NPAs) and Re-structuring of Advances


RBI/2012-2013/303

DPSS.CO.EPPD. No. 825/04.03.02/2012-13

21.11.2012 Department ofPayment andSettlement Sys-tem

National / Regional Elec-tronic Clearing Service(NECS / RECS) - Exten-sion of service to remain-ing branches

The Chairman and Man-aging Director / Chief Ex-ecutive Officers AllNECS participant banks

RBI/2012-2013/302

DBOD.BP.BC.No.61/21.04.103/2012-13


Second Quarter Reviewof Monetary Policy 2012-13 - Unhedged ForeignCurrency Exposure ofCorporates


RBI/2012-2013/301A.P. (DIR Series)Circular No. 53


Deferred Payment Proto-cols dated April 30, 1981and December 23, 1985between Government ofIndia and erstwhileUSSR


RBI/2012-2013/300DBOD No. BAPD.BC. 59/22.01.003/2012-13


Acquisition of Accom-modation on Lease /Rental basis by Com-mercial Banks for theiruse (i.e. for Office andResidence of Staff)

All Commercial Banks(excluding RRBs)

RBI/2012-2013/299DBOD.NO.BAPD.BC. 60/22.01.001/2012-13


Branch AuthorisationPolicy- Opening of Ad-ministrative/ControllingOffices in Tier 1 Centres

All Domestic ScheduledCommercial Banks (ex-cluding RRBs)

RBI/2012-2013/298A.P.(DIR Series)Circular No. 52


Export of Goods andSoftware - Realisationand Repatriation of ex-port proceeds -Liberalisation




RBI/2012-2013/297DBOD.BP.BC.No. 58/08.12.014/2012-13


Second Quarter Reviewof Monetary Policy 2012-13 - Definition of 'Infra-structure Lending'

All Scheduled Commer-cial Banks (excludingRRBs) and Select All In-dia Financial Institutions(AIFIs) (NHB, NABARD,EXIM Bank and SIDBI)

9


RBI/2012-2013/296DBOD.No.Dir.BC.57/13.03.00/2012-13


Bank finance for pur-chase of gold


RBI/2012-2013/295DBOD.AML.No.7299/14.06.001/2012-13


Implementation of Sec-tion 51-A of UAPA, 1967-Updates of the UNSCR1267(1999) / 1989(2011)Committee's Al QaidaSanctions List

The Chairmen / CEOs ofall Scheduled Commer-cial Banks (ExcludingRRBs)/ Local AreaBanks / All India Finan-cial Institutions



Know Your Customer(KYC) norms/Anti-Money Laundering (AML)standards / Combatingthe Financing of Terror-ism (CFT) Obligation ofAuthorised Persons un-der Prevention of MoneyLaundering Act, (PMLA),2002, as amended byPrevention of MoneyLaundering (Amend-ment) Act, 2009 Moneychanging activities

All Authorised Persons inForeign Exchange

RBI/2012-2013/293DBS.FrMC.BC.No. 04/23.04.001/2012-13

15.11.2012 Department ofBanking Supervi-sion

Frauds - Classificationand Reporting

The Chairmen & ChiefExecutive Officers of allScheduled CommercialBanks (excluding RRBs)and All India Select Fi-nancial Institutions

RBI/2012-2013/292UBD.BPD.(PCB) Cir No.24 /09.18.300/2012-13

9.11.2012 Urban Banks De-partment

National Telecom Policy,2012 Migration of currentversion of Internet Proto-col IPv4 to IPv6

The Chief Executive Of-ficers All Primary (Urban)Co-operative Banks

RBI/2012-2013/289DNBS(Inf.).CC. No 309/24.01.022/2012-13


Readiness of major ser-vice providers to migratefrom IPv4 to IPv6

All Non Banking Finan-cial Companies /Residu-ary Non Banking Compa-nies



Memorandum of Instruc-tions governing MoneyChanging Activities

All Authorized Persons



RBI/2012-2013/286A.P.(DIR Series)Circular No. 49


Money Transfer ServiceScheme - List of SubAgents

All Authorised Persons,who are Indian Agentsunder Money TransferService Scheme.

RBI/2012-2013/285DBOD.BP.No.56/21.04.098/2012-13


Liquidity Risk Manage-ment by Banks

The Chairmen and Man-aging Directors / ChiefExecutive Officers of AllCommercial Banks (Ex-cluding RRBs and LABs)

1 0


RBI/2012-2013/284A. P. (DIR Series)Circular No.48


External CommercialBorrowings (ECB) Policy- ECB by Small Indus-tries Development Bankof India (SIDBI)


RBI/2012-2013/280DNBS.PD/CC.NO.308/03.10.001/2012-13


Standardisation and En-hancement of SecurityFeatures in ChequeForms - Migrating toCTS 2010 Standards

All NBFCs

RBI/2012-2013/279DBOD.CO.BP.BC No. 55/21.04.178/2012-13


National Telecom Policy,2012- Migration of currentversion of Internet Proto-col IPv4 to IPv6

The Chairman/ ManagingDirector/Chief ExecutiveOfficer All ScheduledCommercial Banks (ex-cluding Regional RuralBanks) and Local AreaBanks

RBI/2012-2013/278DBOD.No.BP.BC. 54 /21.06.007/2012-13


Prudential Guidelines onCapital Adequacy andMarket Discipline - NewCapital AdequacyFramework (NCAF) -Change of name of FitchRatings to India Ratingsand Research PrivateLimited (India Ratings)

The Chairman / CMD /MD / CEO All ScheduledCommercial Banks (ex-cluding LABs and RRBs)

RBI/2012-2013/277DBOD.No.FSD.BC. 53/24.01.001/2012-13


Corporate Bond Market -Permission to banks formembership in SEBI ap-proved Stock Ex-changes


RBI/2012-2013/276UBD.BPD (PCB) Cir. No. 23/14.01.062/2012-13


Implementation of Sec-tion 51-A of UAPA, 1967-Updates of the UNSCR1988 (2011) SanctionsList - Primary (Urban)Co-operative Banks

The Chief Executive Of-ficer of All Primary (Ur-ban) Co-operative Banks




Urban Banks De-partment

Implementation of Sec-tion 51-A of UAPA, 1967-Updates of the UNSCR1267 (1999) /1989 (2011)Sanctions List - Primary(Urban) Co-operativeBanks




Implementation of Sec-tion 51-A of UAPA, 1967-Updates of the UNSCR1988 (2011) SanctionsList - Primary (Urban)Co-operative Banks


1 1


CBEC Notified Exchange Rate for Conversion of Foreign Currency w. e. f.

17th November, 2012 (Notification 99/2012-Customs (NT) dt. 16.11.2012)

SCHEDULE-I

S.No. Foreign Currency

Rate of exchange of one unit of foreign currency

equivalent to Indian rupees

(For Imported Goods) (For Export Goods)

1. Australian Dollar 57.85 56.45

2. Bahrain Dinar 150.25 141.8

3. Canadian Dollar 55.65 54.1

4. Danish Kroner 9.55 9.25

5. EURO 70.90 69.25

6. Hong Kong Dollar 7.15 7.05

7. Kenya Shilling 66.4 62.3

8. Kuwait Dinar 200.95 189.05

9. New Zealand Dollar 45.35 44.05

10. Norwegian Kroner 9.7 9.4

11. Pound Sterling 88.25 86.15

12. Singapore Dollar 45.6 44.4

13. South African Rand 6.35 6

14. Saudi Arabian Riyal 15.1 14.25

15. Swedish Kroner 8.25 8.00

16. Swiss Franc 59.05 57.4

17. UAE Dirham 15.4 14.55

18. US Dollar 55.5 54.55

S.No. Foreign Currency

Rate of exchange of 100 units of foreign currency

equivalent to Indian rupees

SCHEDULE-II

(For Imported Goods) (For Export Goods)

1. Japanese Yen 69.55 67.65

1 2


NEW ERA OF SERVICE TAX - SIMPLIFICATION

LEADS TO COMPLEXITIES

By CMA Ashok Nawal

New Era of Service Tax based on Negative List of

Services is made effective from 01.07.2012 and it was

very clearly stated in the Board Circular n. 161/12/

2012 dated 6th July 2012 that there will be single

accounting code and single accounting code no.

0041001089 was given along with different code for

education cess, secondary and higher education cess,

interest and penalty. Ministry of Finance Department

of Revenue, it determined to implement GST and

therefore, towards the path of reaching GST single

accounting code was given for "Services" and same

was also clearly stated in the letter issued by Joint

Secretary (TRU) dated 16.03.2012. Considering the

path to be achieved, following actions were initiated:

1. New registration was granted only under one

service category i.e. "Services other than

Negative List"

2. Date of filing ST-3 for the period April to June

was extended upto 25th November, 2012.

Every Assessee has made changes in computerized

system / ERP package for capturing the data for the

followings:

1. Tax liability to be captured on the services

provided / to be provided as output service

provider

2. Tax liability to be captured on services received

by him from various service providers where

Reverse Charge Mechanism will apply

3. Mapping of all transactions appearing in various

accounts and linking with service providers

Master Data, so as to capture correct liability of

service tax

4. Accounting codes were created

5. Mapping of all transactions for entitlement /

availment of Cenvat Credit.

All this exercise will have to undergo lot of change

since, Board has issued a Circular for Restoration of

Service specific of accounting code for payment of

service tax thereby stating that:

1. Descriptions of taxable services given in the

annexure are solely for the purpose of statistical

analysis.

2. On the advice of the office of the C & AG, a

specific sub-head has been created for payment

of "penalty" under various descriptions of

services.

3. Henceforth, the sub-head "other receipts" is

meant only for payment of interest payable on

delayed payment of service tax.

4. Accounting Codes under the sub-head "deduct

refunds" is not to be used by the taxpayers, as it

is meant for use by the field formations while

allowing refund of tax.

5. Registrations obtained under the positive list

approach continue to be valid.

6. New taxpayers can obtain registrations by

selecting the relevant description/s from among

the list of 120 descriptions of services given in

the Annexure.

7. Where registrations have been obtained under

the description 'All Taxable Services', the

taxpayer should file amendment application

online in ACES and opt for relevant description/

s from the list of 120 descriptions of services

given in the Annexure.

8. If any applications for amendment of ST-1 are

pending with field formations, seeking the

description 'all taxable services', such

amendment may not be necessary and the

officers in the field formations may provide

necessary guidance to the taxpayers in this

regard.

9. Directorate General of Systems will be making

necessary arrangements for display of the list of

1 3


120 descriptions of services and their

corresponding Accounting Codes in Form ST-1

and Form ST-2 as may be necessary.

Notification no.48/2012 has already been issued to

amend / obtain service tax registration incorporating

each of the category of the services as applicable.

It is very clear from the Circular that following steps

needs to be taken with immediate effect and

implement the same w.e.f. 01.07.2012

1. Each person have to make a classification of

Services, if such person is service provider as

well as recipient of services where Reverse

Charge is made applicable , i.e. liability to pay

service tax is casted on recipient of services

totally or partially.

2. Since such classification made by the person is

not of statutory nature and even if payment is

made under one or other heading no tax can be

demanded, however, how such person will be

insulated from unnecessary litigation, letters from

Lower Field Formation of the Department?

3. Principles of classification which was prevalent

earlier, will be still applicable even if such Section

65A of Finance Act, 1994 has made inapplicable

4. Though earlier Section 65(105)(a to zzzzw) has

been made inapplicable, still those have to be

remembered

5. Even interest on delayed payment also to be

calculated for each of such services since, there

are different codes for interest for different

categories of services.

6. Every person have to obtain registration for

inclusion number of services considering output

services provided by him and different services

received by him where such person is liable to

pay service tax totally or partially being recipient

of services under Reverse Charge Mechanism

after analyzing each transaction made / to be

made by such person

We reproduce below the Annexure enclosed to the Board Circler no. 165/16/2012 ST dated 20.011.2012 and

also part of Notification no. 48/2012 ST dated 30.11.2012:

1 (a) Stockbroker service 440008 440009 441298 440121

* (b) Telegraph authority-telephone connection [(b) wasomitted w.e.f.01.06.2007 and clubbed under (zzzx)] 440003 440119 441296 440122

* (c) Telegraph authority-pager[(c ) was omittedw.e.f.01.06.2007 and clubbed under (zzzx)] 440015 440020 441301 440021

2 (d) General insurance service 440005 440006 441297 440120

3 (e) Advertising agency services 440013 440016 441299 440017

4 (f) Courier agency service 440014 440018 441300 440019

5 (g) Consulting engineer services 440057 440058 441310 440059

6 (h) Custom House Agent service 440026 440027 441302 440028

7 (i) Steamer agent services 440029 440030 441303 440031

8 (j) Clearing and forwarding agent services 440045 440046 441306 440047

9 (k) Manpower recruitment/supply agency service 440060 440061 441311 440062

* (ka) Goods Transport Operator [This description is not to beused since omitted and clubbed under (zzp) Transport ofgoods by road - goods transport agency service - (zzp)] 440067 440068 441313 440069

No.

Finance

Act,1994

erstwhile

Section

65(105)

Descriptions of Taxable ServicesTax

Collection

Other

Receipts

(interest)

Penalties

Deduct

Refunds

(for use by

the field

formations)

Accounting Codes

1 4


10 (l) Air travel agent services 440032 440033 441304 440034

11 (m) Mandap keeper service 440035 440036 441305 440037

12 (n) Tour operator services 440063 440064 441312 440065

13 (o) Rent-a-cab scheme operator services 440048 440049 441307 440050

14 (p) Architect services 440072 440073 441314 440074

15 (q) Interior decoration/ Designer services 440076 440077 441315 440078

16 ( r) Management or business consultant service 440116 440117 441325 440118

17 (s) Chartered accountant services 440092 440093 441319 440094

18 (t) Cost accountant service 440096 440097 441320 440098

19 (u) Company secretary service 440100 440101 441321 440102

20 (v) Real estate agent service 440104 440105 441322 440106

21 (w) Security/ detective agency service 440108 440109 441323 440110

22 (x) Credit rating agency service 440088 440089 441318 440090

23 (y) Market research agency service 440112 440113 441324 440114

24 (z) Underwriter service 440084 440085 441317 440086

* (za) Mechanised slaughterhouse service[omitted videFinance Act, 2001] 440080 440081 441316 440082

25 (za) Scientific & technical consultancy services 440125 440126 441326 440127

26 (zb) Photography service 440129 440130 441327 440131

27 (zc) Convention service 440133 440134 441328 440135

* (zd) Telegraph authority - leased circuit [omittedw.e.f.01.06.2007 and clubbed under (zzzx)] 440137 440138 441329 440139

* (ze) Telegraph authority - telegraph service [omittedw.e.f.01.06.2007 and clubbed under (zzzx)] 440141 440142 441330 440143

* (zf) Telegraph authority - telex service [omittedw.e.f.01.06.2007 and clubbed under (zzzx)] 440145 440146 441331 440147

* (zg) Telegraph authority - facsimile service [omittedw.e.f.01.06.2007 and clubbed under (zzzx)] 440149 440150 441332 440151

28 (zh) Online information and database access service and / orretrieval service through computer network 440153 440154 441333 440155

29 (zi) Video production agency/video tape production service 440157 440158 441334 440159

30 (zj) Sound recording studio or agency services 440161 440162 441335 440163

31 (zk) Broadcasting service 440165 440166 441336 440167

32 (zl) Insurance auxiliary service in relation to general insurance 440169 440170 441338 440171

33 (zm) Banking and other Financial services 440173 440174 441339 440175

34 (zn) Port service (major ports) 440177 440178 441341 440179

35 (zo) Service for repair, reconditioning, restoration, ordecoration or any other similar services, of any motorvehicle[(zzj) omitted w.e.f 16.6.05] 440181 440182 441343 440183

No.

Finance

Act,1994

erstwhile

Section

65(105)


Collection

Other

Receipts

(interest)

Penalties

Deduct

Refunds

(for use by

the field

formations)

Accounting Codes

1 5


* (zp) Body corporate other than banks in relation to bankingand other financial services [ omitted w.e.f. 10.09.04 andclubbed under (zm)] ----------- -------------- ----------- -------------

36 (zq) Beauty parlours /beauty treatment 440209 440210 441361 440211

37 (zr) Cargo handling service 440189 440190 441348 440191

38 (zs) Cable operators 440217 440218 441366 440219

39 (zt) Dry cleaning service 440221 440222 441369 440223

40 (zu) Event management 440197 440198 441353 440199

41 (zv) Fashion design 440213 440214 441363 440215

42 (zw) Health club and fitness centre service 440205 440206 441358 440207

43 (zx) Life insurance service 440185 440186 441346 440187

44 (zy) Insurance auxiliary service concerning life insurancebusiness 440185 440186 441346 440187

45 (zz) Rail travel agent's service 440201 440202 441356 440203

46 (zza) Storage and warehousing services 440193 440194 441350 440195

47 (zzb) Business auxiliary service 440225 440226 441371 440227

48 (zzc) Commercial training or coaching 440229 440230 441374 440231

49 (zzd) Erection, commissioning and installation 440233 440234 441376 440235

50 (zze) Franchise service 440237 440238 441384 440239

51 (zzf) Internet café 440241 440242 441386 440243

52 (zzg) Maintenance or repair service 440245 440246 441388 440247

53 (zzh) Technical testing and analysis service 440249 440250 441389 440251

54 (zzi) Technical inspection and certification agency service 440249 440250 441389 440251

* (zzj) Authorised service station [omitted w.e.f 16.6.05 andclubbed under (zo)] --------- ----------- ------------ ----------

55 (zzk) Foreign exchange broker service 440173 440174 441339 440175

56 (zzl) Other port (minor port) service 440177 440178 441341 440179

57 (zzm) Airport services by airport authority 440258 440259 441391 440260

58 (zzn) Transport of goods by air 440266 440267 441393 440268

59 (zzo) Business exhibition service 440254 440255 441390 440256

60 (zzp) Transport of goods by road / goods transport agency service 440262 440263 441392 440264

61 (zzq) Construction services other than residential complex, in-cluding commercial/industrial buildings or civil structures 440290 440291 441399 440292

62 (zzr) Services by holder of intellectual property right providingintellectual property services other than copyright 440278 440279 441396 440280

63 (zzs) Opinion poll agency service 440274 440275 441395 440276

64 (zzt) Outdoor catering 440051 440052 441308 440053

65 (zzu) Services by a programme producer 440286 440287 441398 440288

66 (zzv) Survey and exploration of mineral 440270 440271 441394 440272

No.

Finance

Act,1994

erstwhile

Section

65(105)


Collection

Other

Receipts

(interest)

Penalties

Deduct

Refunds

(for use by

the field

formations)

Accounting Codes

1 6


67 (zzw) Pandal or shamiana service 440054 440055 441309 440056

68 (zzx) Travel agent for booking of passage(other than air/rail travel agents) 440294 440295 441400 440296

69 (zzy) Services provided by recognised/registered associationsin relation to forward contracts 440282 440283 441397 440284

70 (zzz) Transport of goods through pipeline or other conduit 440302 440303 441430 440304

71 (zzza) Site formation and clearance, excavation, earth movingand demolition services 440306 440307 441431 440308

72 (zzzb) Dredging of rivers, ports harbours, backwaters,estuaries, etc. 440310 440311 441432 440312

73 (zzzc) Survey and map making service 440314 440315 441433 440316

74 (zzzd) Cleaning services 440318 440319 441434 440320

75 (zzze) Club or association service 440322 440323 441435 440324

76 (zzzf) Packaging service 440326 440327 441436 440328

77 (zzzg) Mailing list compilation and mailing service 440330 440331 441437 440332

78 (zzzh) Construction of residential complex service 440334 440335 441438 440336

79 (zzzi) Service provided by a registrar to an issue 440338 440339 441439 440340

80 (zzzj) Service provided by a share transfer agent 440342 440343 441440 440344

81 (zzzk) Automated Teller Machine operations, maintenance ormanagement service 440346 440347 441441 440348

82 (zzzl) Service provided by a recovery agent 440350 440351 441442 440352

83 (zzzm) Selling of space or time slots for advertisements 440354 440355 441443 440356

84 (zzzn) Sponsorship service provided to body-corporate or firmincluding sports sponsorships 440358 440359 441444 440360

85 (zzzo) Transport of passengers embarking on domestic/inter-national journey by air 440362 440363 441445 440364

86 (zzzp) Transport of goods by rail including transport of goodsin containers by rail (for the present, transport ofpassengers by rail in air-conditioned class/first class alsomay be paid under this description/accounting code) 440390 440391 441446 440392

87 (zzzq) Business support service 440366 440367 441447 440368

88 (zzzr) Auction service 440370 440371 441448 440372

89 (zzzs) Public relation management service 440374 440375 441449 440376

90 (zzzt) Ship management service 440378 440379 441450 440380

91 (zzzu) Internet telecommunication services (includes internettelephony Service which became taxable from 1-5-2006) 440382 440383 441451 440384

92 (zzzv) Transport of persons by cruise ship 440386 440387 441452 440388

93 (zzzw) Credit card, debit card, charge card or other paymentcard related services 440394 440395 441453 440396

94 (zzzx) Services of telegraph authority in relation to telecommunication service 440398 440399 441454 440400

No.

Finance

Act,1994

erstwhile

Section

65(105)


Collection

Other

Receipts

(interest)

Penalties

Deduct

Refunds

(for use by

the field

formations)

Accounting Codes

1 7


95 (zzzy) Mining of mineral, oil or gas service 440402 440403 441455 440404

96 (zzzz) Renting of immovable property services 440406 440407 441456 440408

97 (zzzza) Works contract service 440410 440411 441457 440412

98 (zzzzb) Development and supply of content for use in telecomservices, advertising agency, etc. 440414 440415 441458 440416

99 (zzzzc) Asset management including portfolio management andfund management 440418 440419 441459 440420

100 (zzzzd) Design service other than interior decoration and fashiondesigning 440422 440423 441460 440424

101 (zzzze) Information technology software service 440452 440450 441461 440451

102 (zzzzf) Services provided by an insurer of life insurance underUnit Linked Insurance Plan(ULIP) 440430 440431 441462 440432

103 (zzzzg) Services provided by a recognized stock exchange inrelation to transaction in securities 440434 440435 441463 440436

104 (zzzzh) Services provided by recognised/registered associationsin relation to clearance or settlement of transactionsin goods or forward contracts 440438 440439 441464 440440

105 (zzzzi) Services provided by a processing and clearinghouse inrelation to securities, goods and forward contracts 440442 440443 441465 440446

106 (zzzzj) Services provided by any person in relation to supply oftangible goods 440445 440447 441466 440448

107 (zzzzk) Cosmetic and plastic surgery service 440460 440463 441467 440466

108 (zzzzl) Transport of goods by coastal shipping (services by wayof transportation of goods by inland waterways is placedin the negative list) 440470 440473 441468 440476

109 (zzzzm) Legal consultancy service 440480 440483 441469 440486

110 (zzzzn) Promotion, marketing, organizing or assisting inorganizing games of chance including lottery, etc. 440595 440596 441470 440597

111 (zzzzo) Health services by a clinical establishment, healthcheck-up/diagnosis , etc. 440598 440599 441471 440600

112 (zzzzp) Maintenance of medical records 440601 440602 441472 440603

113 (zzzzq) Service of promotion or marketing of brand of goods/services/events 440604 440605 441473 440606

114 (zzzzr) Service of permitting commercial use or exploitationof events 440607 440608 441474 440609

115 (zzzzs) Electricity exchange service 440610 440611 441475 440612

116 (zzzzt) Copyright service - transfer temporarily/ permit use orenjoyment 440613 440614 441476 440615

117 (zzzzu) Special services provided by builders 440616 440617 441477 440618

118 (zzzzv) Restaurant service 441067 441068 441478 441069

119 (zzzzw) Service of providing accommodation in hotels, inn,guest house, club or campsite whatever name called. 441070 441071 441479 441072

No.

Finance

Act,1994

erstwhile

Section

65(105)


Collection

Other

Receipts

(interest)

Penalties

Deduct

Refunds

(for use by

the field

formations)

Accounting Codes

1 8


120 Other taxable services [services other than the 119listed above] 441480 441481 441485 441482

EDUCATION CESS

OtherSl.No. Description Tax receipts Penalties Deduct

collection (interest) refunds

1 Primary Education Cess 00440298 440299 441486 440300

2 Secondary and Higher Education Cess 00440426 440427 441487 440428

ALL TAXABLE SERVICES

OtherDescription Tax receipts Penalties Deduct

collection (interest) refunds

All Taxable Services (registrations obtained under thisdescription should be amended online by selectingappropriate description/s from the list of 120descriptions given in this Annexure) 00441089 441090 441093 441094

No.

Finance

Act,1994

erstwhile

Section

65(105)


Collection

Other

Receipts

(interest)

Penalties

Deduct

Refunds

(for use by

the field

formations)

Accounting Codes

When Government wants to reduce the cost of

collection and cost of compliances, complexities has

been imposed on the persons at their cost only for

the statistical purpose of been perforated that

monitoring of correct payment of service tax and

categories of service providers where probable

evasion takes place will not be known in the "Single

Code System". When Department will stop working

on suspicion and introduce record based transparent

system. This will not serve any purpose of either

monitoring the tax or searching the tax invaders, since

the data available will be only of amount paid through

cash after utilizing total Cenvat. Therefore, we are

afraid, then perhaps new ST-3 Return may be devised

to collect the data for Cenvat availment of each

category of service received and Cenvat availed

thereto which will be more complexes. Moreover, if

this logic is extended then perhaps object of GST will

never be achieved.

However, whatever may be one's observation and

grievances, such person have to forget the same and

work towards the directions made by such Board

Circulars.

1 9


CENTRAL EXCISEv Area based exemption under Notification

No.56/2002-CE not available for Education

Cess and Higher Education Cess, it is

applicable only to the duty of Excise:

Exemption under Notification No.56/2002-CE

applicable only to excise duty payable under

Section 3(1) of CE Act, 1944, additional duty of

Excise payable under Additional Duties of Excise

(Goods of Special Importance) Act, 1957 an

Additional Duty of Excise leviable under Additional

Duties of Excise ( Textiles and Textile Articles)

Act, 1978 while education cess is levied under

Section 93 of Finance Act, 2004, Secondary and

Higher Education Cess is levied under Finance

Act, 2007, therefore benefit of said notification

not available for the same. [2012(285)ELT 106

(Tri.-Del]

v Provision of Notification cannot override the

provisions of section of the Act passed by

parliament: goods exported are exempted from

whole of the duty of excise unconditionally and

applicant paid the duty as per notification which

specifies the concessional rate of duty and

claimed the rebate. Government in revision

application held that as provision of sub-section

(1A) of Section 5A of Central Excise Act, 1944,

no duty shall be paid when goods are absolutely

exempted. Contention of applicant that they have

an option to avail notification which suits them if

more than one notification exist not accepted and

rejected the rebate claims. [2012(285) ELT

155(G.O.I)]

v Condition of depositing 50% of tax amount

for condoning the delay is illegal: There is

no legal provision which provides for condoning

the delay in filing the appeal on a condition of

depositing of 50% of tax amount. Delay in filing

the appeal is condoned or refused depending

upon the sufficiency of cause for delay. If the

party is found to be prevented by a sufficient

cause to satisfaction of the appellate authority /

tribunal the delay is condoned and if not found

to be prevented by a sufficient cause, the delay

is not condoned. Tribunal directed to decide the

application for condonation of delay on its merit

without insisting to deposit 50% of tax amount.

[2012(285) ELT 182 (MP HC)]

v Credit reversed before its utilization amounts

to not utilized: Cenvat credit availed on inputs,

reversed before its utilization either by reversing

or by cash payment with interest has to be

treated as if assessee had not availed the credit

and benefits of DFIA cannot be denied while

transferring the same. [2012(285) ELT 161

(Bom. HC)]

v Cenvat Credit not deniable for inadvertent

error in accounting: Receipts of inputs not

recorded in RG 23A Part-I, appellant produced

records of inward register maintained at security

wherein they specifically recorded receipt of

copper tube at various dates in the month of Aug.

2003, said inward register not disputed but the

only dispute is regarding overwritting or scoring

on said stock inward registers. Justification of the

appellant for scoring out the description and

mentioning the correct description is acceptable

as the said inward register is maintianed at the

security gate wherein peopple involved are not

much literate. Thus appellant received the inputs

and due to inadvertent error failed to record in

RG 23A Part-I register while the input stage credit

of Central Excise amount paid on iputs has been

correctly entered in RG 23A Part-II register. So

credit cannot be denied due to inadvertent error

in accounting. [2012(285) ELT 210 (Tri. Ahmd.)]

v An option available to pay only 25% penalty

if duty paid within 30 days from the date of

Final order: If Demand confirmed by CESTAT

and duty is paid within 30 days from the date of

order assessee can exercise an option of paying

2 0


penalty of 25% of duty liability. [2012(285) ELT

274 (Tri. Ahmd.)]

v Pan Masala Packing Machines were sealed

for continuous period of 36 days claim for

abatement of duty is fully justified: As per

Rule 10 of Pan Masala Packing Machines

(Capacity Determination and Collection of Duty)

Rules, 2008 as assessee is entitled to abatement,

provided that there has been no production in

the factory for a continuous period of 15 days.

Rule nowhere provides that continuous non-

production of excisable goods should be during

a given calendar month. In this case there was

no production in the factory of assessee for a

continuous period of 36 days and all the forty

Gutkha sealing machines were sealed, therefore

claim for abatement is fully justified. [2012(285)

ELT 247 (Tri. Del.)]

v Mega Power Projects exemption benefit is

available in absence of any specific

condition that it is available subject to

provisions of Exim policy: Exemption to goods

supplied against international cometitive bidding

under Notification No.6/2006-CE, condition 19

provides that if the goods are exempted from

the duties of customs and additional duties

leviable under section 3, when imported into India

and as per provisions of Notification No.21/2002-

Cus, the goods required for setting up of any

Mega Power Project are exempted from payment

of Customs duty subject to condition that the

same are to be certified by an officer not below

the rank of a Joint Secretary to the Govt. Of India

in the Ministry of Power. Notification 21/2002

does not provide any condition that benefit is

available subject to provisions of Exim Policy and

in absence of such condition exemption benefit

not denied. [2012(285) ELT 273 (Tri. Mum.)]

v Tahsildar is the only authority to verify

whether the factory is in rural area or not:

When the Tahsildar of the concerned area

certified to the effect that the factory falls under

rural area and the same has also not been

challenged by revenue before any of the

Revenue Authorities, Tribunal is bound by the

certificate issued by Tahsildar concerned.

[2012(285) ELT 300 (Tri. Chennai)]

v No challenge against wrong classification

done by department, does not mean that for

future same will continue: There was wrong

classification done by department and assessee

not challenging the same, it cannot mean that

for future also wrong classification will continue.

It cannot be said that the issue had attained

finality & classification cannot be interfered with.

[2012(285) ELT 365 (Tri.-Del)]

v Cenvat Credit permissible when duty paid on

non-excisable items under compulsion from

Revenue: Duty paid on non-excisable items

under compulsion from Revenue and credit

thereof taken and utilized, availment of Modvat

credit was justified as assessee was compelled

to pay Central Excise Duty. Department could

not recover the same Credit permissible.

[2012(285) ELT 343 (AP HC)]

v No Cenvat credit can be denied for failure to

maintain separate account for input and

input service: It was held that there is no

provision for segregation credit on input / input

service for payment of service tax. No

requirement for one to one co-relation. Credit

cannnot be denied for failure to maintain

separate account for input and input service

availed for providing output service. [2012(285)

ELT 356 (Tri.-Mum.)]

v Fixing of Stickers, barcodes, assortments,

de-bundling and bundling of goods not a

manufacture: Activities of affixation of different

stickers, barcodes, assortments, de-bundling

and bundling of different goods in warehouse

cannot be regarded as Manufacture, value

addition is the relevant consideration, no value

addition happening where the original labels

including the declaration of MRP/RSP is not being

altered by applicant. [2012(285) ELT 449

(A.A.R.)]

v Without cross-examination of evidences on

record case cannot be established: Allegation

in this case to be only on the basis of invoices

without receipt of inputs. Assessee contending

that main supplier had factory to manufacture

inputs, cleared them on payment of duty, and

transported through road to factory. Department

2 1


having as evidence only statements of the

brokers who were the third parties. It is held that

without cross examination of the brokers to

esablish truthfullness of their statements, case

cannot be established against the assessee.

[2012(285) ELT 382 (Tri.-Ahmd.)]

v Evidentiary Value: statement furnished by

persons may not lose its evidentiary value, but a

conclusion cannot be arrived at safely based on

the said statements unlesss corroborated by

other material particulars. Evidence is weighed

and not numbered is the cardinal principle of rule

of evidence. [2012(285) ELT 401 (Tri.-

Kolkata.)]

v Suo Moto re-credit not permissible: Assessee

has discharged duty by debiting in Cenvat credit

account on wrong advice of Departmental officers

and the said mistake was noticed after lapse of

more than one year. In such cases suo motu re-

credit cannot be taken after a lapse of 1 and half

years from the date of payment. Assessee needs

to file refund claim which would have to pass test

of unjust enrichment. [2012(28) S.T.R.219

(Tri.Mum.)]

v Wrong availment of cenvat credit: Cenvat

credit of duty was entered in the books of account

but never utilized by the assessee to discharge

to duty payable. When irregularity was pointed

out the credit was reversed then it amounts to

cenvat credit not taken. Hence, when admittedly

no duty is payable, the question of payment of

interest on the delayed payment of duty would

not arise. [2012(28) S.T.R.214(Kar.)]

v Circulars issued by the CBEC could be

considered as evidence: Any Circulars issued

by the Department are in the nature of guidance

to Quasi Judicial Authorities. Such authorities

have to act on the basis of all the materials

available on record including the evidences and

the Assessing Authority has come to an

independent findings on its own. Quasi Judicial

authorities exercising their powers to perform

quasi judicial functions and have to their

independent mind impartially considering

evidence before them including C.B.E.C.

Circulars which are also to be considered as

evidence. [2012(28) S.T.R. 193(S.C.)].

v Assessee is not expected to know about law

laid down by Judicial pronouncement unless

he comes across the judgement itself: Once

the Order passed by the adjudicating authority

in favour of assessee attain finality, it gave

assessee the impression that their conduct was

right. It is immaterial that subsequently, in another

case, Apex court had taken contrary view against

the assessee. As assessee has discharged their

obligation to pay Excise duty in accordance with

legal interpretation prevailing at relevant time.

Hence, it is not a case of fraud, concealment or

suppression and therefore extended period of

limitation cannot be invokable in the present

case.[2012(284) E.L.T. 561 (Tri. Del.)]

v No time limit for refund of accumulated

credit: Benefit of refund is an alternative provided

to assessee when they finds that credit cannot

be adjusted in any other manner and therefore

they can claim accumulated credit as a refund.

Entitlement of refund was a vested right and it

has arisen, it could not have been taken away

by provisions relating to the lapse of the credit.

Statutory provisions do not come in the way of

refund of accumulated credit attributable to goods

which have been exported. [2012(284)

E.L.T.593 (Tri. Kolkatta)]

v Just because by subjecting a material to

some process, a product with a new name

emerges, the process cannot be called

manufacture: "Prasad" and "Mishri" made from

sugar, their form, character and usage of was

same as of sugar. Both products had more than

90% sucrose and were used for sweetening

foods and beverages, which was same as use

of sugar. Therefore, both are just a form of sugar.

To manufacture to take place, the resulting

product must have a new commercial identity

and must have character and usages different

from the character and usages of the material

from which it has been made. Hence, making of

"Prasad" and "Mishri" from sugar does not

amount to manufacture and they neither be

charged to duty by classifying under another sub

headings. [2012(284)E.L.T. 628(Tri.Del.)]

v Ex-party order without an effective hearing is

breach of Principal of Natural Justice- Appellant

2 2


received an hearing memo providing 4 dates in

a single correspondence and appellant had

sought an adjournment and commissioner has

passed the ea-party order without giving any

findings for not granting adjournment, held that

the ex-party order without granting an effective

hearing is nothing but a breach of principal of

natureal justice, appeal allowed by way of

remand back order. [2012-TIOL-1751-CESTAT-

KOL]

v Unless s duty liability is confirmed, interest

liability cannot be confirmed: Goods cleared

for export from factory were lying in the

warehouse at JNPT when there was a fire and

the goods got destroyed. Appellant was asked

to pay C.Ex duty on the goods and which they

paid, subsequently they filed a remission claim

but their claim was rejected by Addl. Commr and

against this order they filed an appeal before

Commr(A) and which is pending - department

issuing another demand for interest on delayed

payment and which demand was confirmed.

Appeal filed against this order with a request that

since appeal in respect of remission is pending

before Commr(A) instant matter be sent to the

same authority. The request rejected by

Commr(A) on the ground that appellate authority

is different and unless a final decision is taken

on liability to pay duty, interest liability cannot be

confirmed. [2012-TIOL-1749-CESTAT-MUM]

v Cenvat Credit allowed on MS/ Steel Plates

received during construction stage: Primarily

CENVAT credit denied on the ground that the

appellant has availed credit of the inputs which

were received prior to 10.09.04 and there is a

delay in taking the credit even after the

registration was granted, but there is no dispute

that the appellant has received the MS/steel

plates in their factory premises during the

construction stage which was later granted a

registration as a factory refinery. Further in

another matter involving similar allegations,

credit was allowed and that order has become

final. Prima facie case for waiver of pre-deposit.

[2012-TIOL-1746-CESTAT-AHM]

v Valuation of Cars: Cars sold at price below the

cost of production and not Normal Price held that

price based on costing to be assessable value.

[2012-TIOL-110-SC-CX]

v Reversal of entire credit with interest before

issuance of SCN penalty U/S.11AC not

invoked: 100% CENVAT Credit taken on capital

goods instead of 50% in a financial year.

Appellants reversed the entire credit with interest

before issue of the Show Cause Notice. The

appellants are having sufficient CENVAT credit

balance in their account - No case for imposing

penalty under Section 11AC. [2012-TIOL-1733-

CESTAT-MAD]

v If the capital goods are used for

manufacturing of exempted as well as

dutiable goods then there cannot be any

denial of CENVAT Credit of Central Excise

duty paid on the capital goods: Denial of

CENVAT Credit on Capital Goods following the

decision of Sterlite Industries (I) Ltd - (2005-TIOL-

305-CESTAT-MUM-LB). If an assessee is

functioning under Notification No.214/86-CE and

if the ultimate principal manufacturer is

discharging Central Excise duty liability after

consumption of job worked goods, it has to be

held that the said notification does not exempt

the goods manufactured on job work by an

assessee. It is settled law that if the capital goods

are used for manufacturing of exempted goods

as well as the goods which are liable to duty,

then there cannot be any denial of CENVAT

Credit of Central Excise duty paid on the capital

goods. [2012-TIOL-1721-CESTAT-AHM]

v In absence of satisfactory explanation on

shortage gives rise to inference that there

was clandestine removal of goods: Excesses

and shortages found during the physical stock

verification - Partial relief granted by the

Commissioner (Appeals) is not proper - As per

the decision of Madras High Court that shortage

of goods during physical verification in absence

of satisfactory explanation on such shortage

gives rise to the inference that there was

clandestine removal of goods, and appreciating

the cogent evidence available on record against

respondent -1, the first appellate authority needs

to redecide the matter - Matter remanded.

[2012-TIOL-1703-CESTAT-MAD]

2 3


v When vendors are manufacturing goods as

per specification of the manufacturer they

are to be treated as job worker: Cenvatted

moulds & dies cleared without payment of duty

to the vendors. Revenue alleging that since

vendors are not job workers benefit of rule 4(5)(b)

of the CCR, 2004 not available & duty

demanded. Held that when vendors are

manufacturing goods as per specification of the

manufacturer they are to be treated as job

worker. Pre-deposit waived and stay petition

allowed. [2012-TIOL-1695-CESTAT-MUM]

v Supplies to SEZ developers are to be treated

as exports: Supplies to SEZ developers are to

be treated as exports, provisions of rule 6(6) of

the CCR, 2004 come into picture and there is no

cause for payment of an amount of 10% in case

no separate accounts have been maintained,

decision in Sujana Metal Products Ltd . 2011-

TIOL-1173-CESTAT-Bang followed. [2012-

TIOL-1613-CESTAT-MUM]

CUSTOMSv Brand rate of drawback is available on excise

duty paid on indigenous inputs only if such

input are not specified in relevant SION: In

case of entitlement of duty drawback on inputs

used in tractors exported under DEPB-cum-

drawback shipping bills, brand rate of drawback

is available on excise duty paid on indigenous

inputs only if such inputs are not specified in

relevant SION, since the inputs on which brand

rate is being claimed are specified in SION as

such rendered the applicant ineligible for brand

rate of drawback in terms of Board Circular

No.27/2001-Cus. [2012(285)ELT 144(G.O.I.)]

v Mere variation in description of goods in

Shipping bills & ARE-1 cannot question the

export: Examination and export sealing has

been done at the factory gate by the

Jurisdictional Excise Authorities and the ARE-1

gives the description of goods which are covered

by the export consignments. ARE-1 number and

date are indicated in corresponding shipping bills

under which the goods have been exported.

Customs have not examined the goods again

but on the basis of Central Excise examination

allowed the goods to be exported mere variation

in description given in shipping bill cannot lead

to demand duty as same goods are not

exported. [2012(285)ELT 88(Tri.-Mumbai)]

v Demurrage and detention charges not

payable by importer when no space available

in bonded warehouse: In this case departments

plea that vide letter dated 20.07.2009 the

respondent were advised to shift the goods to

bonded warehouse, not acceptable as in

compliance of said letter the respondent

approached the bonded warehouse but as there

was no space in bonded warehouse same was

already intimated to department therefore

respondent not liable to pay detention and

demurrage charges. [2012(285) ELT 294 (Tri.

Chennai)]

v Customs component of AIR of DBK available

even if Rebate has been taken under Rule

18: Customs component of All Industry Rate of

Drawback available even if the rebate of Central

Excise duty paid on raw materials used in

manufacture of exported goods had been taken

in terms of Rule 18 of Central Excise Rules, 2002.

Allowing rebate of duty when drawback of

customs portion is availed will not amount to

double benefit even after availment of cenvat

credit of duties of central excise as paid for the

inputs used in manufacture of such exported

goods which were cleared on payment of duty

of Central Excise. [2012(285) ELT 461 (G.O.I.)]

v Pre-deposit waived on the basis of different

view of Apex Court for interpretation of

Customs Notification: Apex court found to

have given different view on interpretation of

Customs Notification. In such case correct

interpretation in facts of the case has to be

decided only at the time of final disposal of the

case. On facts the importer found to have already

deposited the differential duty at the time of

investigation so pre-deposit waived. [2012(285)

ELT 369 (Tri.-Mum.)]

v Conversion of Free Shipping Bills to Export

Promotion Scheme Allowed: Fact of export was

proved and documents verified fulfillment of

conditions to the scheme available. Essential

2 4


requirements in CBEC Circular No.36/2010-Cus

dated 23.09.2010 for conversion of Shipping bills

from one scheme to another scheme were

fulfilled. Further there was no dispute regarding

description of goods, value and export for fulfilling

export obligation. Therefore department plea

rejecting the conversion that shipping bill did not

have all requisite details and ARE-1 procedure

was followed not acceptable and such

conversion is allowed. 2012(285) ELT 363 (Tri.-

Bang.)]

v Power of Commissioner(Appeals) to remand

the matter: Though there is no specific power

to the Commissioner (Appeals) under Section

128 of the Customs Act, 1962 to remand matter

back to the adjudicating authority, it is inbuilt

therein and therefore plea of the revenue that

after amendment of Section 35A of the Central

Excise Act, 1944 Commissioner(Appeals) has

been divested of power to remand for de-novo

adjudication is rejected. [2012(284) E.L.T.554

(Tri.Del.)]

v Limitation for recovery of drawback claim

erroneously paid: Department has issued a

show cause notice after a period of three years

to the assessee to recover the differential amount

of drawback erroneously paid. Though there is

no any period prescribed under Rule 16 of the

Customs, Central Excise and Service Tax Duties

Drawback Rules, 1995, a reasonable period has

to be read into it. Revenue has not taken any

efforts to recover the drawback paid to the

assessee at the relevant time therefore, the show

cause notice held to be bad on the ground of

being time barred. [2012 (284)E.L.T. 490 (Guj.)]

SERVICE TAXv Amount collected from customer for

registration of vehicle with RTO liable to

Service Tax: Extra amount collected from

customers towards activities relating to

registration of vehicle with RTO which falls under

the Business Auxiliary Service and hence it is

liable to service tax.[2012(28)S.T.R.(Tri. Bang.)]

v Valuation of services received from Foreign

Service Provider: Receipt of Technical and

Project Consultancy Services from foreign

services provider. According to Rule 7(1) of

Service Tax (Determination of Value) Rules,

2006, measure of value for taxation of services

under Section 66A of the Finance Act, 1994 shall

be amount equal to actual consideration charges

for services provided or to be provided. The

Expression what is "actual consideration charged

for service provided or to be provided" shall

depend on the fact and circumstances of the each

case. But in the present case consideration

inclusive of Income Tax deducted at source to

be assessable value of service recipient. [2012

(28) S.T.R.150 (Tri. Chennai)]

v Exemption Notification to be interpreted

based on language used therein: The

Exemption Notification No. 4/2004-S.T. came into

force much before the Special Economic Zone

Act or the Rules made thereunder came into

force. If the intention of the Legislature was to

align the exemption with Sections of the SEZ Act

or Rules under SEZ Rules, then Notification ibid

would have been amended to reflect the same.

As there is no such amendment has been carried

out in the said Notification, it should be

interpreted based on the language used therein.

[2012(284)E.L.T.505(TRi.Mum.)]

v Service tax liability on Franchise service for

Non profit Organization: Society was non-profit

making organization and carrying non

commercial activities, their obligation was to

maintain high standard of education and it was

merely collaborative effort for providing their

expertise for establishment of schools here plea

rejected and assessee liable to pay service tax

when providing such franchise services.

[2012(28) S.T.R.225(RAJ HC)]

v No penalty when assessee ignorant about

law: Appellant obtained Service Tax registration

as provider of business auxiliary service, but

neither paid Service Tax nor filed returns till

detection of non-payment. But immediately after

pointing out their tax liability appellant paid entire

Service Tax along with interest. Appellant claim

for waiver of penalty on the ground of small scale

service provider and not aware of the provisions

of law and financial difficulty. Penalty waived.

2 5


[2012(28)S.T.R. 286(Tri-Del.)]

v Services qualified as Input Service:

Transporting staff from residences to factory and

back; ( ii) waste management, a statutory

requirement to remove waste from factory to

treatment plant, (iii) garden maintenance (iv)

Repairs of fan in factory (v) Photography of

machines for insurance, (vi) Dry-cleaning of

uniforms, (vii) construction of factory premises,

(viii) Brokerage for selling products, (ix) Architects,

(x) Courier Services, (xi) Catering Services ,

(xii)Manpower Recruitment, (xiii) Advertisements

(xiv) Telephone Services (xv) Machine / ETP

Cleaning. (xvi) Repair and Maintenance held that

all these services qualified as input services.

[2012(28)S.T.R. 291(Tri-Del.)]

v Except for daily stock account assessee

entitled to maintain account in convenient

format including in computer: Rejection of

refund claim for failure to maintain proper

account for input services. No indication in lower

authority order of non fulfillment of requirements

of law in maintaining account in computer, except

daily stock account, assessee entitled to maintain

account in convenient format therefore , no valid

reason to reject claim. [2012(28) S.T.R 253 (Tri

- Ahmd.)]

v Pre-deposit waiveable when demand raised

after 3 years: Assessee cannot be heard to say

that they are not liable to pay service tax under

'Club or Association Service' they have been able

to make out a prima facie case against the

impugned demand of service tax on the ground

of limitation. Show cause notice issued after a

lapse of three years since the relevant period.

Waiver of pre-deposit granted and stay of

recovery allowed. [2012(28) S.T.R 289 (Tri -

Bang)]

v Adjudication on Non-speaking order:

Commissioner felt it necessary to decide this

matter ex-parte on the ground that appellant

were deliberately prolonging the process of

inspection of documents, at least a speaking and

reasoned order should have been passed,

Commissioner summarily arrived at conclusions

without recording any reasons and without

discussing evidence on record, on which the

conclusion are based. The Order passed after

15 years is an Ex-party and non speaking order

supposed to have been issued by an officer who

had retired long time back. Matter remanded for

de novo adjudication fixing the outer limits of

time, matter involving huge revenue being now

15 years old, considered it appropriate to direct

the chairman of Central Board of Excise &

Customs to monitor de-nova adjudication of this

matte. [2012(28) S.T.R 327 (Tri-Del)]

v Incomplete Levy and collection: Requirement

of filling returns and form thereof did not have

retrospective effect, in that view , GTA was liable

to remit tax only from 13.05.2005, Plea that

definition of assessee in charging section 66,

68(2) and 69(2)2005, ibid was sufficient for levy

of tax from 1.01.2005, rejected as provisions of

levy and collection are not complete without

requirement to file prescribed return and forms.

Thus levy and collection are incomplete without

provision prescribing filing of return and forms.

[2012(28)S.T.R. 244 (Ker.)]

v Appellate authority cannot reject already

sanctioned claim without allegation: Review

Cell should have randomly verified the payments

of service tax and ascertained that in respect of

some invoices, the respondent obtained refund

but did not pay the same. In absence of such an

allegation the Appellate Authority cannot reject

already sanctioned claim on the ground that

random check of actual payment of service Tax

was not done. [2012(28)S.T.R. 294 (Tri. Ahmd.)]

v Rejection of Refund Claim on the ground of

failure to receive consideration in convertible

foreign currency is unwarranted: Assessee's

bankers certificate confirms payment of

Canadian Company converted into India

Currency and thereafter paid to the assessee.

In view of the said certificate and legal

requirement submitted rejection of refund claim

mere on the ground of failure to receive

consideration in convertible foreign currency is

unwarranted. [2012(28)S.T.R. 253 (Tri. Ahmd.)]

v Service Tax cannot be demanded on on

training rendered outside India: Service Tax

2 6


on Commercial Coaching or Training service

availed from foreign service provider. No infirmity

in the order of Commissioner (Appeals) that no

amount was paid to the service provider and

expenditure in foreign currency was only towards

travel and accommodation etc. Even if any

amount was paid for the service, service tax

cannot be demanded on training rendered

outside India as per provisions of Taxation of

Services (Provided from outside India and

received in India) Rules, 2006. [2012-TIOL-1739-

CESTAT-MAD ]

v When issue involves is interpretation of law

penalty not imposable: Services utilised in

residential colony set up by the appellant so that

personnel are available 24 hours near the

factory. CENVAT Credit not available on such

welfare activity in view of precedent decisions of

High Courts in Manikgarh Cement and Gujarat

Heavy Chemicals Ltd., however, since there

were also Tribunal decisions in favour, appellant

could have entertained a belief that they were

entitled to credit. Further demand beyond a

period of one year not sustainable but interest

payable. Penalty not imposable as issue involves

interpretation of law. [2012-TIOL-1702-

CESTAT-AHM]

v Input Service credit allowed on ISD Invocies

issued by HO: ISD invoices issued by HO

pertaining to Input Services not used at

appellant's plant, since in the appellant's own

case for the earlier period on an identical issue

the CESTAT has held that the appellant is entitled

for Input Service credit, the Bench is not required

to go into the details of arguments advanced by

the Revenue. Order set aside and appeal

allowed. [2012-TIOL-1707-CESTAT-MUM]

v Renting of Immovable Property Service,

electricity charges collected from tenenats

not form part of taxable service: Applicant

collecting rent and paying service tax under the

category of 'Renting of Immovable Property

Service' - however, electricity charges collected

from tenants not included in value of taxable

service - as electricity is 'goods', said charges

may not form part of taxable value in terms of

notfn. 12/2003-ST. [2012-TIOL-1688-CESTAT-

MUM]

v ISD- Proportionate distribution is not required

till the amendment of relevant Rules from

01.04.2012: Proportionate distribution is not

required till the amendment of relevant Rules

from 01.04.2012.Matter remanded in the light of

Karnataka High Court judgement in case of ECOF

Industries Pvt Ltd. [2012-TIOL-1635-CESTAT-

MAD ]

EOUv Pendency of Government dues cannot be a

ground to deny Central Excise and

Warehousing licences to transferee: Earlier

lessee (previous owner of premises) being

defaulter of government dues whose recovery

was pending and had not obtained cancellation

of i) license under Section 58 and 65 of Customs

Act, 1962 ii) Central Excise Registration, and iii)

debonding of 100% EOU hence licence to

subsequent transferee is denied. Held that

according to Section 6 of Central Excise Act,

1944, Rule 9 of Central Excise Rules, 2002 and

Notifications issued thereunder, which

contemplate that person must be registered,

these provisions neither for enforcing dues of

Department nor do they grant implied power of

denial of registrations. Right of revenue is to

subsist with recovery of dues both against

defaulter or the transferee. [2012(285) ELT82

(Tri.Ahmd.)]

v Waste not treatable as manufactured

product: "Soft Cotton Waste"is short fibres

obtained in the course of carding and combing

of ginned cotton. The revenue has not produced

any evidence to show that said product emerged

during manufacture process is commercially

distinct from cotton with different character and

usages and hence, revenue's contention to treat

the same as an excisable, only on the fact that,

during the disputed period, tariff heading 5202

covered "cotton waste" would not make this

product excisable.

If there is change in the tariff structure of Chapter

52 by introducing a new heading which would

2 7


change the position with regard to duty on DTA

clearance of soft cotton waste, then Department

should have advised to the assessee, and non

payment of duty on DTA clearance cannot be

considered as fraud, as Department was aware

of the fact. [2012(284) E.L.T.572(Tri.Del.)]

v DTA Clearances in excess of permitted

clearances not eligible for concessional rate:

DTA clearances made by the appellant were in

excess of the permitted clearances and the same

cannot be said to be in accordance with the

provisions of para 6.8 of the Foreign Trade Policy

and hence such clearances would not be eligible

for concessional rate of duty. So also clearances

for the later period without any permission from

the Development Commissioner is prima facie

not entitled for the benefit of notfn 23/03-CE as

in the absence of the Development

Commissioner's letter, it cannot be said that

during this period the appellant had achieved

positive NFE or that DTA clearances were within

50% of the FOB value of the exports. [2012-

TIOL-1735-CESTAT-DEL]

v In view of Para 9.24 of the HOP, 100% EOU is

entitled to clear the goods manufactured by

it in totality to the DTA and not with to

specific items only: Benefit of Notification 2/

95-CE denied and demand of duty confirmed on

the ground that the 100% EOU had permission

to sell only 'panel meters' in DTA whereas they

have cleared other goods too. Development

Commissioner has clarified that as per paragraph

9.24 of the Handbook of Procedures, assessee

is entitled to clear the goods manufactured by it

in totality to the DTA and not with reference to

specific items, similar issue decided in favour by

Tribunal in appellant's own case and order

upheld by Bombay High Court. [2012-TIOL-

1727-CESTAT-MUM]

v Supplies to EOUs should be treated as

exports is not acceptable as the goods are

not taken out of India: The appellant could not

produce proof even after remanding in the first

round that the goods were exported. Appellant's

contention that supplies to EOUs should be

treated as exports is not acceptable as the goods

are not taken out of India. Orders passed by the

lower authorities require no interference. [2012-

TIOL-1704-CESTAT-MAD ]

INCOME TAXv Principle of Proportionality holds in case of

Section 80 IB - In case of composite housing

project, Sec 80IB(10) benefits are to be allowed

based on the principle of proportionality if

conditions are partly satisfied by the assessee.

Just because sizes of some of the blocks of the

housing project exceeds 1500 sq.ft. assessee

cannot be denied benefit of all the other blocks,

which are satisfying conditions prescribed u/s

80IB(10). [2012-TIOL-948-HC-MAD-IT]

v Construing of transaction by the AO on its own -

The expenditure incurred towards lease of 'Plant

and Machinery' cannot be denied as revenue

expenditure and in the absence of any

documentary evidence to that effect it cannot be

considered as hire-purchase agreement by the

AO on its own. [2012-TIOL-944-HC-KAR-IT]

v Onus on the assessee - The bad debts written

off in respect of suppliers and job workers

advances, which have never been considered

in computation of income cannot be allowed as

deduction u/s 36(2). The non-recovery of

business advances qualifies for deduction under

section 37 of IT Act and the onus to prove that

these advances were given for genuine business

requirement and the same is clearly not

recoverable is on the assessee. [2012-TIOL-

717-ITAT-AHM]

v Deduction u/s 35 - The transfer of machines

which were acquired in earlier years to the R &

D Department can be construed as incurring of

"expenditure incurred" as envisaged in section

35. Deduction u/s 35 is allowed for expenditure

incurred which means actual spending/paying of

money, hence the transfer of machine which

were acquired in earlier years could not be

construed as incurring of expenditure incurred

as envisaged in section 35. [2012-TIOL-723-

ITAT-AHM]

v Deductions u/s 10B and 24 - Expenditure

incurred on maintaining leased premises cannot

be allowed as separate deduction in addition to

2 8


deduction claimed u/s 24 of the Act, when

assessee earns maintenance income from the

tenant in addition to rental income, even when

the same has been taxed under the head of

income from other sources. However,

depreciation on electrical installation at the

leased premised cannot be deemed to be

included in deduction u/s 24 and separate

deduction for it is allowed. Electrical Installations

should be considered while calculating Plant &

Machinery as definition of plant & Machinery in

itself includes electric installation, office

equipment and or vehicles. The contention that

electric installations carried different rates of

depreciation as compared to plant & machinery

does not carry any weight as mere classification

for depreciation purposes cannot alter the nature

of electric installations which indeed is part of

plant & machinerrther preparation of one P&L A/

c for EOU and other units of a company cannot

be a ground for disallowance eof deduction u/s

10B. [2012-TIOL-618-ITAT-DEL]

v Doctrine of proportionality - Common head office

expenses incurred for general running of units,

can be apportioned to the various units on the

basis of their respective turnover for calculation

of deduction u/s 10B and Chapter VIA of the Act,

even though the assessee has maintained

separate accounts for each unit. [2012-TIOL-

876-HC-MAD-IT]

v Deduction u/s 10B vs brought forward losses -

Claim u/s 10B has to be allowed without setting

off of brought forward loss of earlier years of the

non-export oriented units. [2012-TIOL-627-

ITAT-MAD]

v Approval as Charitable Trust - Rejection of

approval on the ground that the expenditure

incurred by the Trust in relation to Building

maintenance, free food, Festival prayer & daily

expenses, is religious expenditure and the Trust

is hit by proviso (iii) of Section 80G(5) is not

correct. Worshipping of Lord Shiva, Hanumanji ,

Goddess Durga and maintaining of temple,

cannot be regarded for the advancement support

or propagation of a particular religion. It is not

denied that in the building the assessee was

carrying yoga centre, tailoring training centre as

well as food for the needy and optical centre for

the poor. Therefore, these objects cannot be

regarded to be the religious objects. [2012-TIOL-

641-ITAT-NAGPUR]

v Sale of carbon credit to be treated as revenue

or capital - Income earned from sale of

accumulated 'Carbon Credits', which is a

transferable intangible asset, is not to be treated

as revenue receipt. Carbon credits cannot be

created by carrying on business, it simply

accrues due to environmental concern. Carbon

credit is mere entitlement and can only be

construed as capital in nature. Income earned

from sale of Certified Emissions Reductions are

to ve considered as capital receipt. [2012-TIOL-

637-ITAT-HYD]

MISCELLANEOUSv Malafide Transfer of handicapped Assistant

Commissioner on allegation of harassing

Assessee: Chief Commissioner with malafide

intention recommended transfer of handicapped

Assistant Commissioner and his wife, alleging

that harassment to assessee by the said AC.

While as per Call Records, said Chief

Commissioner found to be in constant touch at

odd hours with said assessee while on leave and

also no records found to show that assessee

initially contacted immediate superiors of the

Assistant Commissioner to complain against him.

As the said transfer found to be done with

malafide intention hence, the same order has

been quashed and the respondents are directed

to allow to the assessee to join as before.

[2012(284)E.L.T.495(CAT)]

2 9


h CESTAT Members Mathew John transferred

from Delhi to Chennai, Saheb Singh moves form

Mumbai to Delhi and SK Gaule transferred from

Kolkata to Mumbai

h Mathew John & PG Chacko to sit in Bangalore

Bench on Fortnightly basis

h ITAT Vice-President Veerbhadrappa transferred

from Mumbai to Kolkata

h Lipika Majumdar Roy choudhary is Member

Service Tax in CBEC

h Income Tax Officer Hans Raj arrested by CBI in

Jammu for corruption and bribe taking

h Income Tax Officer Madhavi Chavan arrested

by CBI in Thane for demanding bribe of Rs 6

Lakh from a Builder

h SKS Somvanshi to be Indirect Tax Ombudsman

in Kolkata

h Kaushal Srivastava is Chief Commissioner of

Central Excise Delhi

h Rakesh Mishra is Chief Commissioner of Central

Excise Ahmedabad

h Arun Tandon is Chief Commissioner of Central

Excise Mumbai-I

h AK Kaushal is Chief Commissioner Customs

Mumbai-I

h BS Vasudev is Chief Commissioner Customs

Mumbai-III

h IP Lal is Chief Commissioner of Central Excise

Chennai

h C Dube is Chief Commissioner Central Excise

Meerut

h AK Agarwal is CC CX Lucknow

h Sanjeev Behari is CC Customs & Excise Pune

h PJR Sekhar is CC CX Bhuvaneshwar

h Ananya Ray is CC CX Shilling

h S Subramanian is CC CX Kochi

h KA Padmanabhan is CC(Preventive) Chennai

h BB Prasad is DG Safeguard

h Ram Tirath is DG Export Promotion

h Vanjana Sarna is DGICCE

h MVB Rao is DG Valuation Mumbai

h Neerja Shah is DG-HRD

h SK Sinha is CDR CESTAT

3 0


h GS Sarna is CC TAR Delhi

h Ranjit Sinha appointed as Director of CBI

h CFO of Bharti Walmart Pankaj Madan & Legal

Team suspended after bribery enquiry by Global

HO

h Deputy Commissioner of Excise DK Nag raided

by Vigilance in Cuttack-cash of Rs 47 Lakh

recovered

h Ex-CESTAT Member Gowri Shanker finally

raided by CBI in Mumbai for allegedly taking

kickback of 5 Lakh US Dollars only from MNC

Pride Foramer for passing favourable order in

RIG Import Customs demand - Gowri found to

have purchased several properties in Mumbai,

Goa & Ahmedabad-Top Customs Consultant *PB

Ranadive & Middleman SR Sunder Raj also on

hit list of CBI-Government sending Letter

Regoratory to Foreign Countries to trace trail of

banking transactions.

h A web journalist and a presidential awardee,

former Customs Officer were among the list of

people illegally tapped by the Directorate of

Renenue Intelligence (DRI).

h HC to hear Centre's plea challenging the bailable

warrant issued by Central Administrative Tribunal

(CAT), Mumbai against R.S.Gujaral who was

Secretary Revenue in Central Finance Ministry

on plea of Excise Official.

h CBI files charge-sheet against Anup Kumar

Srivastava, Former Commissioner of Central

Excise, Delhi and four others to face in bribery

case.

h Excise Officer Krishna Mahadik, suspended

Superintendent of the office of the Director

General of Central Excise & Customs

(Intelligence), Pune regional unit acquitted in

blackbuck case.

i India's exports down to 1.63% in October, 2012

i To err on revenue side is not always safe -

Tribunal terms such attitude as 'Intellectual

dishonest' and imposes cost of Rs 25,000

i Fin Min says country is witnessing tough

economic situation and all

i Ministries will have to share the burden-Ministries

asked to avoid transfers and foreign & domestic

visits to cut expenses

i Income relating to SEZ unit at Mumbai is to be

excluded while computing book profit u/s.115JB

of the Act for assessment year 2008-09-AIT-

2012-318-ITAT

i Service Tax Online Certification Course

beginning 5th November 12

i Direct Tax Collections of Rs 2,65,417 Crore - till

15th November 12

i CBDT issues promotion order of FIVE CCITs +

also issues posting-cum-transfer order of 8

CCITs; Mr T K Shah is New CCIT-I in Mumbai

i FIPB okays IKEA's proposal to invest Rs 10500

Crore in single brand Retail

3 1


THE COMPUTER CONSULTANT

A mainframe computer on which everyone in the

office depended suddenly went down.

They tried everything but it still wouldn't work.

Finally they decided to call in a high-powered

computer consultant.

He arrived, looked at the computer, took out a small hammer and tapped

it on the side.

Instantly the computer leapt into life.

Two days later the office manager received a bill from the consultant for

$1000.

Immediately he called the consultant and said, "One thousand dollars for

fixing that computer? You were only here five minutes! I want the bill

itemized!"

The next day the new bill arrived.

It read, "Tapping computer with hammer: one dollar. Knowing where to

tap: 999 dollars.

3 2


NOTES

December - 2012

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