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Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

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September 2011


September 2011

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Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

CALENDAR OF EVENTS - September & October 2011 Date/Day

Topic /Speaker

Venue/Time

CPE Credit

07.09.11 Wednesday

Companies Audit Report Order (CARO) CA. Vikas Oswal

Branch Premises 06.00pm to 08.00pm

09.09.11 Friday

CPE Teleconference on “Tax Audit under Section 44AB & 44AD” CA. Sanjay Agarwal, Central Council Member & CA. Siddarth Jain, New Delhi

Branch Premises 11.00am to 01.00pm

2 hrs

14.09.11 Wednesday

Revenue Recognition and Related Party Disclosures - AS9 & AS18 CA. Pradeep M S

Branch Premises 06.00pm to 08.00pm

2 hrs

16.09.11 Friday

CPE Teleconference on “Revised Schedule VI” CA. B Ganesh, Hyderabad

Branch Premises 11.00am to 01.00pm

2 hrs

21.09.11 Wednesday

Minimum Alternative Tax (MAT) CA. Prashanth G S

Branch Premises 06.00pm to 08.00pm

2 hrs

28.09.11 Wednesday

Taxation of Trust CA. S Ananthapadmanabhan

Branch Premises 06.00pm to 08.00pm

2 hrs

05.10.11 Wednesday

No Study Circle Meeting on account of Ayudha Pooja - Branch Holiday

08.10.11 Saturday

Tax holiday benefit under Section 10A & 10 B Branch Premises Computation mechanism & recent judicial controversies 10.00am to 01.00pm CA. Ishita Bhaumik & CA. Prashant Jain Delegate Fee: Rs.250/-

3 hrs

12.10.11 Wednesday

Paradigm shift for Finance CA. Manoj Ladi

2 hrs

Branch Premises 06.00pm to 08.00pm

2 hrs

Note : High Tea at 5.30 pm for programmes at 6.00 pm at Branch Premises. Advertisement Tariff for the Branch Newsletter Colour full page Outside back ` 30,000/Inside back ` 24,000/-

Inside Black & White Full page ` 15,000/Half page ` 8,000/Quarter page ` 4,000/Advt. material should reach us before 22nd of previous month.

Editor

: CA. Venkatesh Babu T.R.

Sub Editor : CA. Ravindranath S.N.

DISCLAIMER : The Bangalore Branch of ICAI is not in anyway responsible for the result of any action taken on the basis of the advertisement published in the newsletter. The members, however, bear in mind the provision of the code of ethics while responding to the advertisements. The views and opinions expressed or implied in the Branch Newsletter are those of the authors and do not necessarily reflect that of Bangalore Branch of ICAI.

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TAX UPDATES JULY 2011 CA. Chythanya K.K., B.com, FCA, LL.B., Advocate

VAT, CST, ENTRY TAX, PROFESSIONAL TAX PARTS DIGESTED: a) 16 KCTJ – Part 4 b) 41 VST – Part 5 c) 42 VST – Part 1 to 3 Reference / Description [2011] 42 VST 330 (Mad) HC : V. Win Garments v. Addl. Deputy Commercial Tax Officer - In the instant case the Madras High Court has held that to claim the exemption from sales tax in respect of sales effected outside India it was not mandatory to produce the agreement between the foreign buyer and the Indian seller. The Court opined that the claim of exemption could be considered on basis of Form H and other documents such as bill of lading furnished by dealer. The aforesaid judgement was based on the premise that all that was required on the part of the dealer was to prove the factum of the transaction and once the same is done with sufficient and satisfactory documents, the value thereof would be exempt and there was no rule/ requirement to insist upon the agreement with the foreign buyer.The above decision brings a much soughtafter relief as it may be impractical to furnish the purchase orders placed by the importers on the exporters. The assessee being a penultimate seller to the exporter, would not have the purchase orders with him. [2011] 42 VST 335 (Karn) HC: Kennametal India Ltd. v. Addl. CCT (Appeals) - In the instant case the High Court of Karnataka has held that

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transport of special commodities (namely iron and steel) without the requisite Form VAT 505 and VAT 515 was in contravention of Section 53(2) of the KVAT Act and therefore liable to penalty. It was the contention of the dealer that the goods carried were goods rejected by the buyer being returned. However the said transaction was not substantiated by means of any correspondence or documents (the documents submitted did not specifically prove that the vehicle was carrying rejected goods because the invoices were also raised on the appellant as consignor with the other party being named as the consignee). The invoices and the records indicated sale of goods. It was held that invoice or excise gate pass alone carried was not sufficient and that the levy of penalty was justified.The aforesaid decision is a pointer for understanding the importance of carrying necessary documents during the transit of goods. Non-carriage of necessary documents could result in unnecessary levy of penalty which is avoidable otherwise.

INCOME TAX PARTS DIGESTED: a) 334 ITR – Part 5 b) 335 ITR – Part 1 to 3 c) 199 Taxman – Part 4 to 7 d) 200 Taxman – Part 2 e) 10 ITR (Trib) – Part 1 to 4 f) 130 ITD – Part 5 to 9 g) 131 ITD – Part 1 to 3 h) 138 TTJ – Part 6 i) 139 TTJ – Part 1 j) 60 TCA – Part 1 k) 5 International Taxation-Part 1

Reference / Description [2011] 335 ITR 132 (Delhi) HC : CIT v. Jaypee DSC Ventures Ltd. - In the instant case the Delhi High Court has held that the interest earned on fixed deposits placed with the bank as performance guarantee; a condition for being awarded contract work, was not assessable as income from other sources. It was observed that the bank guarantee was furnished as a condition precedent to entering into the contract and was to be kept alive to fulfil the obligations. It was not the case where the assessee had made the deposit of surplus money lying idle with it in order to earn interest. The said interest was earned from the fixed deposit which was a prerequisite to securing a contract to earn income and therefore the same could not be assessed as income from other sources.The aforesaid decision has brought out the fine principle that the taxability of interest under the head ‘income from other sources’ will be only by exception and not by rule. It is only when the interest income is not found taxable under the preceding heads, the same could be brought to tax under the residuary head. Ironically, this is the decision rendered by the Courts off late in the matter of taxability of interest. The Department seems to treat interest as income from other sources in every case without exception which practice is not envisaged in the Act. [2011] 335 ITR (St.) 1 (SC) : CIT v. UWE Jarosch - In the instant case the supreme court dismissed the Department’s special leave petition against the judgment dated June 16,


Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

2009 of the Bombay High Court in ITA No. 778/2009. The High Court following 313 ITR 187 had held that when a duty was cast on the payer to pay tax at source, on failure thereof by the payer no interest could be imposed on the payee-assessee. [2011] 335 ITR (St.) 1 (SC) : CIT v. Till Becker - In the instant case the Supreme Court dismissed the Department’s special leave petition against the judgment dated July 7, 2009 of the Bombay High Court in ITA No. 1001/2009. The High Court following 313 ITR 187 had deleted the interest levied under Sections 234B and 234C. [2011] 335 ITR (St.) 3 (SC) : CIT v. Flour Daniel India (P) Ltd. - In the instant case the Supreme Court dismissed the Department’s special leave petition against the judgment dated Nov 30, 2009 of the Delhi High Court in ITA No. 1119/2008. The High Court, following 309 ITR 317, had held that the transaction was in the nature of licensing of software without transfer of “substance of rights” or proprietary rights or dilution of the proprietary right of the parent company in the software and therefore the payment made to the parent company qualified for deduction as revenue expenditure. [2011] 335 ITR 364 (P&H) HC : CIT v. Subhash Kumar Jain - In the instant case the P&H High Court has held that Revisionary powers of the Commissioner could not be exercised under Section 263, (citing the assessment order to be erroneous and prejudicial to the interests of the revenue) so far as the case where the AO had not initiated penalty proceedings in the assessment order. It has been held that where the Commissioner finds that the AO had not initiated penalty proceedings he

could not direct the AO to initiate penalty proceedings under Section 271(1)(c), by drawing powers under Section 263.Special leave petition against the said decision was dismissed by the apex court CIT v. D’Costa [1984] 147 ITR (St.) 1. The same view was reiterated by the Delhi High Court in CIT v. Sudershan Talkies [1993] 201 ITR 289 (Delhi) and followed in CIT v. Nihal Chand Rekyan [2000] 242 ITR 45 (Delhi). The Rajasthan High Court in CIT v. Keshrimal Parasmal [1986] 157 ITR 484 (Raj), the Gauhati High Court in Surendra Prasad Singh v. CIT [1988] 173 ITR 510 (Gauhati) and the Calcutta High Court in CIT v. Linotype and Machinery Ltd. [1991] 191 ITR 337 (Cal) have followed the judgment of the Delhi High Court in J. K.D’ Costa’s case [1982] 133 ITR 7 (Delhi).However, the Madhya Pradesh High in Addl. CIT v. Indian Pharmaceuticals [1980] 123 ITR 874 (MP) which has been followed by the same High Court in Addl. CIT v. Kantilal Jain [1980] 125 ITR 373 (MP) and Addl. CWT v. Nathoolal Balaram [1980] 125 ITR 596 (MP) has adopted diametrically the opposite approach.The initiation of penalty for concealment is on the basis of the satisfaction of assessing authority. Such satisfaction cannot be borrowed satisfaction or substituted satisfaction. Therefore, the Commissioner cannot consider the decision of the assessing authority of not initiating penalty as erroneous. [2011] 199 Taxman 345 (SC) (Mag.): CIT v. Deepak Verma (SLP) - In the instant case the Apex Court dismissed the Department’s special leave petition against the judgment of the Delhi High Court in CIT v. Deepak Verma [2010] 194 Taxman 265 (Delhi). The High Court had held that

in order to characterize a particular payment received from an employer on termination of employment as ‘profit in lieu of salary’, it has to be necessarily shown that the said amount is due or received as ‘compensation’. If the payment is made as ex-gratia or voluntary by an employer out of his own sweet will and is not conditioned by any legal duty or legal obligation, either on sympathetic grounds or otherwise, such payment is not be to treated as ‘profit in lieu of salary’ under subclause (i) of Section 17(3).The aforesaid decision dismisses a wrong notion that anything that is paid by the employer to the employee will have to be regarded as salary regardless of the contract of employment. Any sum paid by the employer de hors the employment contract may not partake the character of salary. [2011] 130 ITD 230 (Mum.)9 taxmann.com 96 (Mum.) : Dy. CIT v. Chaturbhuj Vallabhdas (HUF) In the instant case the Tribunal noted that the assessee acquired the right in the flats at the time of development agreement and the purchase consideration was paid in the shape of property transferred in favour of the developer. Therefore the Tribunal held that the acquisition of the property by the assessee was within the prescribed time as enumerated under Section 54 of the Act.The aforesaid decision clarifies that in a typical joint development agreement where the landlord gets his consideration in terms of residential flats, condition of section 54 shall be taken to have been complied with. [2011] 130 ITD 573 (Luck.)11 taxmann.com 24 (Luck.-ITAT): Association for Advocacy and Legal Initiatives v. CIT - In the instant case

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the Tribunal held that in view of the omission of proviso to Section 80G(5)(vi) with effect from 1-102009, approval once granted under Section 80G(5) shall continue to be valid in perpetuity unless and until a show-cause notice is issued by concerned Commissioner, showing his intention to withdraw such approval already granted. [2011] 131 ITD 22 (Visakh)9 taxmann.com 175 (Visakh.-ITAT): Assist. CIT v. Essar Steel Ltd. - In the instant case the Tribunal noted that by the amendment brought in by Finance Act, 2002, in Section 92C(2) (incorporating a proviso dealing with the buffer of 5% etc.) Circular no. 12 dated 23.08.2001, dealing with the relevant aspect among others, had become otiose. In view of above, the Tribunal held that the assessee could not place reliance on the said Circular and for the relevant year under assessment only proviso to section 92C(2), as amended by Finance Act, 2002 was applicable. Further it was held that since, in the instant case, only one price had been determined under ‘most appropriate method’ the assessee was not entitled to concession, as prescribed in proviso to Section 92C(2).It is respectfully submitted that the bandwidth provided by the proviso to section 92C(2) stands on a different footing as compared to the circular. Further, the aforesaid circular having not been withdrawn, it cannot be understood as ineffective. [2011] 131 ITD 103 (Mum.)10 taxmann.com 144 (Mum.-ITAT): ITO v. TCFC Finance Ltd. - In the instant case the Tribunal was dealing with the method of computation of book profit under Section 115JB wherein a provision has been adjusted in the balance sheet. The Tribunal

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held that if the amount set aside as provision for diminution in the value of any asset, appears on the debit side of the profit and loss account, the same implies that the amount of net profit as per the profit and loss account is after the amount of such provisions, then such amount would have to be added back to the net profit for computing the ‘book profit’ as per Explanation 1 to Section 115JB(2). The Tribunal opined that there is no other requirement in the language of the Section for the addition or nonaddition of the amount of provisions for diminution in the value of any asset to the amount of net profit as shown in the profit and loss account, depending on the way in which such provision has been shown in the balance sheet. It was held that the reflection of the amount of provision for diminution in the value of investment separately on the liability side of the balance sheet or by way of reduction from the figure of investment on the asset side of the balance sheet is totally alien for computing book profit. What is relevant for the purpose is to find out if any provision for diminution in the value of any asset has been debited to the profit and loss account. If it is so debited, the same will automatically stand added to the amount of net profit for working out the amount of book profit. [2011] 131 ITD 142 (Ahd.)11 taxmann.com 420 (Ahd.-ITAT): Amaltas Associates v. ITO - In the instant case the Tribunal was dealing with the deduction under Section 80IB in respect of infrastructure development undertakings. The Commissioner (Appeals) had upheld the findings of the AO and observed that according to development agreement between assessee and said

society, assessee was authorized to build only 94 units but it had constructed 110 units and claimed deduction on same. He further observed that for claiming deduction under said the Section maximum built up area is 1500 square feet but on basis of DVO’s report open terrace, in front of pent house which was analogous to balcony/verandah, was included in built-up area of flat; he, therefore, held that built-up area exceeded prescribed limits and rejected deduction. The Tribunal held that the definition of built-up area as provided in Act is inclusive of balcony being not open terrace. Since open terrace was not a part of balcony/ verandah it was held that the lower authorities were not justified in denying deduction to assessee by considering same as part of built-up area. [2011] 139 TTJ (Del) 48: Career Launcher (India) Ltd. v. Assist. CITIn the instant case the Tribunal was dealing with the disallowance under Section 40(a)(ia) for failure to deduct tax under Section 194C. The assessee was offering tuition to students by granting licence to franchisees to operate the professional learning centre. As per the agreement, 75 percent of the profit from the operation of the centre was to be retained by the licensee and 25 percent was to be handed over to the assessee. The Tribunal held that it was not a case where the licensee was doing any work for the assessee even within the wider meaning of the term “work” as understood in common parlance. It was a case of running of study centre and to apportion profits thereof between the assessee and the licensee and therefore the provisions of Section 194C were not applicable and consequently no disallowance


Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

under Section 40(a)(ia) was called for.In the aforesaid interesting judgement, it has been clarified that in a typical profit-sharing/revenue sharing arrangement, it is not a question of one person paying to another. Therefore, the question of deduction of tax at source does not arise. [2011] 139 TTJ (Del) (UO) 10: Dy. CIT v. MRO (India) (P) Ltd. - In the instant case the Tribunal was dealing with the liability to deduct tax under Section 195 and the consequent disallowance under Section 40(a)(ia). The Assessee had paid a New Zealand company a certain sum of money on account of services rendered by them to the assessee to facilitate to get the DNA test reports of prospective Indian immigrants required to be submitted to the US Embassy. The Tribunal noted that no material had been brought on record to suggest that the payment made by the assessee to the New Zealand company could be termed as payment for royalty or fees for technical services. The Tribunal opined that the nature of payment made by the assessee to the New Zealand company was of liaisoning and co-ordinating and therefore the Assessee was not under an obligation to deduct tax at source under Section 195 and consequently no disallowance under Section 40(a)(ia) was called for.

through an advertisement agency, intended to display a banner advertisement on portal owned by Yahoo Holdings (Hong Kong) Ltd. (YHHL) and for that purpose, it hired the services of the assessee-company to approach YHHL to provide uploading and display services for hosting banner advertisement to Yahoo Hong Kong portal. The Assessee-company, in turn, hired the services of YHHL for uploading and display of banner advertisement on its portal and made payment to YHHL for such services without deducting tax at source. The revenue authorities held that the payment was in nature of ‘royalty’ within meaning of clause (iva) of Explanation 2 to Section 9(1)(vi) and same being taxable in India in hands of YHHL, assessee was under an obligation to deduct tax at source from the said payment.The Tribunal held that since uploading and display of banner advertisement on its portal was entirely the responsibility of YHHL and the assessee had no right to access portal of YHHL, payment made by the assessee to YHHL for services rendered for uploading and display of banner advertisement of Department of Tourism of India on its portal was not in nature of royalty taxable in India and, therefore, the assessee was not liable to deduct tax at source from such payment.

[2011] 11 taxmann.com 431 (Mum.ITAT) [2011] 5 International Taxation 89: Yahoo India (P.) Ltd. v. Dy. CIT - In the instant case the assessee-company was engaged in the business of providing consumer services such as search engine, content and information on wide spectrum of topics, e-mail, chat, etc. During the year under consideration, the Department of Tourism of India,

[2011] 11 taxmann.com 43546 SOT 52 (Mum.-ITAT) (URO) [2011] 5 International Taxation 90: Atos Origin IT Services Singapore Pte. Ltd. v. Assit. DIT (Intl. Taxation) In the instant case the assessee a tax resident of Singapore had entered into a hubbing agreement for providing data processing support to Standard Chartered Bank (SCB), a non-resident company engaged in business of

banking in India. The AO on a perusal of the agreement noted that though SCB India was not in physical possession of infrastructure owned by the assessee for purpose of data processing, it did have constructive control over same because it could utilize same as per terms of the agreement. It was also observed by him that the equipments were at the disposal of SCB India and it was a case of renting out of disc space in hardware system and, therefore, payment made by SCB was royalty as per article 12(3)(a) of the DTAA between India and Singapore. On appeal, the Commissioner (Appeals) upheld order of the AO.The Tribunal held that in view of decision of the Tribunal in the assessee’s own case in IT Appeal No. 1457/Mum./2008 for assessment year 2004-05 in which the Tribunal allowed case of the assessee holding that amount receivable by the assessee was not taxable as royalty, order of the Commissioner (Appeals) was to be set aside. [2011] 11 taxmann.com 10545 SOT 494 (Mum.-ITAT)[2011] 5 International Taxation 92: Standard Chartered Bank v. Dy. DIT (IT) - In the instant case the Tribunal was dealing with the liability in respect of payment made by an Indian Company to a Singapore Company for providing data processing services. The Tribunal was of the view that unless there was material to establish that the circuit equipment through which data processing support was provided by the said Singapore Company could be accessed and put to use by the assessee by means of positive acts, consideration paid for data processing services would not fall within category of ‘royalty’ in clause (iva) of Explanation 2 to Section 9(1)(vi).

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ICAI CAMPUS INTERVIEW AT BANGALORE – A SNAPSHOT CA. K. Raghu, Chairman, CMII of ICAI & Chief Coordinator – Placement Programme The Committee for Members in Industry of the Institute conducted campus interviews at Hotel Bangalore International from 16th August to 20th August 2011. A total of 16 Companies participated in the placement programme at Bangalore Centre. The organizations participated were as under – Public Sector Companies

IT/ ITES Companies

Other Companies

• MMTC

• Wipro Ltd • Hewlett Packard

• • • • • •

Banking Sector • Bank of Maharashtra • Vijaya Bank • Corporation Bank

CA Firms • S.R Baliboi & Associates • PWC • Deloitte Haskins & Sells • BSR & Co

ITC JSW TVS Motors Titan Industries Narayana Hrudayalaya HPCL

Highlights: 1. 427 Candidates attended the Campus Interviews and received 132 offers. 129 offers were accepted by the candidates. 2. The candidates were mostly from the States of Karnataka, Kerala, Tamilnadu, Andhra Pradesh, Maharashtra, West Bengal, Uttar Pradesh and Rajasthan. 3. The highest pay package offered was Rs 13.94 lacs by ITC and average pay package offered was 6.0 lacs 4. I had the opportunity and occasion on 17th August 2011 and interacted with the executives of the companies & the candidates. This initiative was supported by the Bangalore Branch under the Chairmanship of CA T R Venkatesh Babu. We would like to wish all the candidates a very bright career ahead.

SICASA PROGRAMME – SEPTEMBER 2011 Date & Timing 10th September 2011 Saturday 04:00 pm to 07:00pm

Topic

Delegate fee

Fundamentals of MS-Access as Relevant to Audit data Analysis By Mr. Vijay Tambad B.E.

Rs.100

Venue ITT South Centre, # 216, “SanjayTowers”, II Floor, Subbarama Chetty Rd, Netkalappacircle, Basavanagudi, Bangalore-560004

For registration please contact: Ms. Rajalakshmi, Tel:080-3056 3509, email:blrsicasa@icai.org

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Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

RECENT JUDICIAL PRONOUNCEMENTS IN INDIRECT TAXES N.R. Badrinath, Grad C.W.A., F.C.A. Madhur Harlalka, B. Com., F.C.A SERVICE TAX  The appellant was selling SIM cards

to its franchisees and was paying the sales tax to the state, activating SIM cards in the hands of the subscribers on a valuable consideration and paying service tax only on the activation charges. The Department of Sales Tax, Kerala sought to levy sales tax on the activation charges and the Department of Central Excise sought to levy service tax on the value of SIM cards. Being aggrieved, the appellant filed appeals before the respective appellate authorities under the KGST Act and Central Excise Act, 1944. The appeals were held against the appellant by the lower appellate authorities. The appellant proceeded to file appeal before the Kerala High Court. As regards the sales tax issue, the sales tax authorities conceded the position before the High Court that no assessment of sales tax would be made on the value of SIM card supplied by the appellant to their customers irrespective of the fact whether they have filed the returns and remitted tax or not. The High Court held, further, it also cannot be disputed that even if sales tax was wrongly remitted and paid that would not absolve them from the responsibility of payment of service tax, if otherwise there is a liability to pay the same. The honourable High Court with respect to the service tax issue held that, both the selling of SIM cards and the process of activation are

‘services’ provided by the mobile cellular telephone companies to the subscriber, and squarely fall within the definition of ‘taxable service’ as defined in section 65(72)(b) of the Finance Act. They are also exigible to service tax on the value of ‘taxable services’. Aggrieved by the High Court’s order, the appellant approached the Supreme Court, which held that, the High Court has given cogent reasons for coming to the conclusion that service tax is payable inasmuch as SIM card has no intrinsic value and it is supplied to the customers for providing mobile service to them. The value of SIM cards forms part of the activation charges as no activation is possible without a valid functioning of the SIM card and the value of taxable services is calculated on the gross total amount received by the operator from the subscribers. Therefore, the Supreme Court held that the appeal did not have any merit and the same was dismissed. [Idea Mobile Communication Ltd Vs. CCEx, Cochin (2011-TIOL-71-SC-ST)] 

The appeal was filed by the CCE, Hyderabad against the order of the Commissioner (Appeals) sanctioning service tax refund to the respondent, who exported goods through a merchant exporter. The adjudicating authority had rejected the refund claim partially on the ground that relevant respondent had not produced proof of export. The respondent produced copies of the Form ARE-1

to the Commissioner (Appeals) as the originals were retained by the merchant exporters to settle their bond accounts with the Department. Based on the proofs submitted, the Commissioner (Appeals) granted the refund. The appellant contended that exports through merchant exporters are not eligible for refund as per Board’s supplementary instructions and the lower appellate authority erred in holding that, there should not be any co-relation between inputs used and goods exported The Tribunal held that having established the fact that the goods cleared from the factory premises under relevant ARE-1s were exported and accepted by the department at the merchant exporter’s place, the lower authorities were correct in granting the refund. As regards the refund of the Cenvat credit on input services, a plain reading of the provisions of Rule 5 of the Cenvat Credit Rules read with Notification No.5/2006 as amended makes it very clear that there is no requirement for co-relation between inputs used and the goods exported. If that be so, the question of restricting the refund claim to the extent of input services used/ consumed during the month/ quarter seems to be misplaced. Hence, the appeal was dismissed. [CCE, Hyderabad vs. M/s Ravi Foods Limited 2011-TIOL-CESTAT-Bangalore]  The Appellant is engaged in the business of manufacturing and repairing Hydraulic Service Trolley (HST). The Appellant was registered under service tax laws as a provider of service under the category “Maintenance and Repair”. M/s HAL Bangalore had entered into a contract for maintenance and repair of HST owned by the Indian Air Force. They had subcontracted this activity to the Appellant. For the period 29-09-04 to

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03-03-2005, the Appellant received Rs.72,17,994/- from HAL for maintenance and repair done by the Appellant. The Appellant did not pay service tax on the said amount under the belief that sub-contractors do not have to pay service tax as per clarifications given by CBEC in a booklet published as “Frequently Asked Questions and Answers”. The Appellant had intimated this stand to the department along with the bill numbers under which the said amount was received. The Appellant did not include the amount in the ST-3 return filed by them. The Appellant was issued with a Show Cause Notice dated 10-03-2006, demanding service tax amounting to Rs.7,36,236/- on the said amount of Rs.72,17,994/-. In adjudication proceedings this demand was confirmed along with interest. Further a penalty equal to the said amount was imposed under section 76 of Finance Act 1994. The Appellant filed an appeal with the Commissioner of Central Excise who confirmed the duty demand but set aside the penalty. Aggrieved by the order of the Commissioner (Appeal) the appellant filed an appeal before the Tribunal. The appellant submitted that the show cause notice was time barred as it was not issued within one year from the date of issuing the invoice. The revenue contended that the time limit of one year is applicable from the date of filing the ST-3 return and not the date of issuing the invoice. The Tribunal on analyzing the provisions of section 73, held that the ‘relevant date’ for deciding the time limit would be last date on which the return is to be filed. Hence, the show cause notice is not time barred. Further, the appellant contended that they were not the main contractors but were only subcontractors, thus they

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were not liable to pay service tax. The Tribunal considering the decision in the case of Semac Pvt Ltd vs. CST2006 (4) STR 475 Tri (Bang) held that if the main contractor has paid service tax, the sub-contractor need not pay tax again on the same service. But, in the appellant case this argument did not arise, but if evidence was produced to this effect then the demand on the appellant is not maintainable. The appellant also contended that the work executed by them involved supply of materials and hence they were eligible for exemption under Notification 12/ 2003-ST for the value of material supplied. But this claim was not made in the adjudication proceedings; they made this claim in the first appeal alongwith necessary supporting documents to prove the value of materials sold. However, the Commissioner (Appeals) did not consider this plea. The Tribunal relied on the decision of the Apex Court in Share Medical care vs. UOI-2007 (209) ELT 321 wherein it was held that exemption can be claimed at any stage of proceedings. It was held that the commissioner (Appeals) erred in not considering the claim of the Appellant for exemption when evidence regarding value of goods sold was apparently produced by the Appellant. The Tribunal set aside the order and remanded the matter to the adjudicating authority to take into consideration the arguments of the Appellants and to decide whether the impugned activity carried out by the Appellant would fall within the definition of ‘Maintenance and Repair’ as it stood at the relevant time.[M/s Indfos Industries Ltd vs. CCE, Noida 2011-TIOL-929-CESTAT-Delhi]  The appellant is engaged in the execution of works contract and has

filed an appeal against the order of the revenue demanding service tax to the tune of Rs. 18,96,429. This demand partly relates to the levy of service tax on material supplied by the contractee. The appellant contended that the material shall not form part of the assessable value of taxable service since the appellant has no ownership of the material for which he does not retransfer the same by providing the service warranting a demand. The taxability of the value of material supplied by contractee in respect of the service provided under Finance Act, 1994,has been decided by Tribunal against assessee in the case Jaihind Projects Ltd. vs. Commissioner of Service Tax, Ahmedabad reported in 2010(18)STR-650(Tri.-Ahmd.), Ahmebabad. But when similar such matters came up before Delhi Bench, members of Bar mentioned that the issue in principle being under challenge before Hon’ble High Court of Delhi, we are not insisting predeposit on the controversy. The Tribunal ordered a waiver of requirement of pre-deposit in respect of demand of Rs.4,14,743 composed in the demand of Rs. 18,96,429/-. With respect to the balance demand, the appellant contended that the services which are taxable under different entry have suffered tax under the entry commercial or industrial construction service and construction of complex service. Therefore, pre-deposit may not be insisted for wrong classification and taxation. The Tribunal held, that intention of the Revenue behind issuing the Board’s Circular No. 128/10/2010-ST dated 24.08.10 was to provide a more convenient classification of the past activity considered to be taxable under the frame of works contract. Prior to the introduction of ‘works


Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

contract’ service, the long term service rendered was to be classified under appropriate heading depending on the nature of the activity carried out by the assessee. Prima facie this does not alter the levy by any argument of retrospectivity or any prospectivity of application of the law. Hence, there is no reason to waive the requirement of pre-deposit.[Ved Contractors Pvt Ltd vs. CCE, DelhiII 2011-TIOL-1008-CESTAT-Delhi] 

The appellant was given a subcontract by M/s. Noida Toll Bridge Company Ltd. (NTBC ) for specified functions relating to operations of Delhi-Noida toll bridge ( DND bridge). The appellant was permitted and authorized by NTBCL to collect toll from the persons who are using the bridge. NTBCL under an agreement with Noida authority under the Government of UP by an agreement executed construction of two bridges connecting Delhi and Noida under Built, Operate, Own and Transfer (BOOT) basis. Under the said agreement, NTBCL were assigned and authorized to recover pre-determined fee from the users of the said road and NTBCL were also at liberty to sub-contract aforesaid assigned function to other persons also. In terms of such assignment, the appellant entered into contract with NTBCL to collect the fees from the users of the bridge and also to carry out various specified functions. In terms of the contract, NTBCL allowed the appellant to retain 11% of the actual gross fees collected from the users of DND Bridge. The appellant took over the operation and maintenance of DND bridge. The Commissioner came to the conclusion that the agreement entered by the appellant with NTBCL clearly indicates that the appellant is required

to carry out various services which would fall under the category of BAS mainly “any customer care services provided on behalf of client” upto 10/ 9/2004 and post 10/9/2004, it would fall under the category of any customer care services provided on behalf of the client and or a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vii) of BAS. The Adjudicating Authority-Commissioner confirmed the demand and imposed a penalty of Rs. 1 Crore. Aggrieved by the order, the appellant appealed before the Tribunal. Tribunal found that NTBCL was declared as owner of the DND bridge by the Noida authority under the Govt. of UP. The owner had given rights of collection of toll tax to the appellant and to retain a percentage of it and remit the balance. It can be seen that the appellant herein is collecting an amount as toll from the users of the DND bridge. The users of toll fee paid bridge cannot be considered as customers. The persons who are using the DND bridge do not fall within the purview of definition of ‘customer’ as defined in the Advanced Law Lexicon. The Tribunal also held that, first and foremost, it is to be noted that NTBCL is not a client of the appellant as the appellant is not promoting any customer care service of NTBCL. There is no visible activity done to please the user of the DND bridge to take care of their needs or something which is done, which induces them to come again and again to the said DND bridge. It may be noted that the users of DND bridge may be paying the toll fees reluctantly as that is the only means to connect the two banks of the rivers. The Tribunal found strong force in the contention raised by the respondent that the activity of the appellant would be covered under the ‘Management, Maintenance and Repair of immovable property

services’. Such services are liable to be taxed from 16/06/2005. A category which is specifically covered under the service tax liability from a specific date cannot be taxed under any other headings prior to that date is the law which has been settled by the High Court of P&H in the case of CCE Vs. Lal Path Lab (P) Ltd. Therefore, the appeal was allowed. [M/s Intertoll India Consultants Pvt Ltd vs. CCE, Noida 2011-TIOL-1005-CESTAT-DEL] CENTRAL EXCISE AND CUSTOMS 

The appellant commenced production of Texturised Polyester Filament Yarn from July 2008. They did not take Central Excise registration and filed a declaration dated 2.6.2008 under Rule 9 of Central Excise (No.2) Rules, 2001 intimating the Deputy Commissioner that they are availing full exemption from payment of whole of Central Excise duty under Notification No.30/ 04-CE dated 9.7.2004. They cleared the goods for home consumption as well as exports without payment of duty of excise by availing exemption under Notification No.30/04 upto 01.09.2009 and thereafter the goods were exported under the DEPB scheme. The appellant obtained registration on 09.10.2009 and filed a refund claim on 26.10.2009. The lower adjudicating authority rejected the refund claim on the ground that the goods were not exported under a bond or letter of undertaking and also, the appellant was not registered with the Central Excise. The lower appellate authority also rejected the refund claim. The appellant filed an appeal with the Tribunal. The Tribunal for the purpose of deciding whether the appellant is eligible for Cenvat credit for the period when they were not registered, relied upon the

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September 2011

decision of J.R. Herbal Care India Limited vs. CCE, Noida – 2010 (253) ELT 321 (Tri. – Del) and held that the action of the appellants in taking credit has to be upheld. Even in case of clandestine removals, even if duty is paid subsequently, Cenvat credit on inputs will be available to the assessee/ manufacturer subject to the condition that proper documents showing the payment of duty are available. The second ground taken for rejection is that the goods were not exported under bond or LUT. The Tribunal relied upon the decisions of the Himachal Pradesh High Court in the case of CCE vs. Drish Shoes Limited and Rajasthan High Court’s decision in the case of Commissioner vs. Suncity Alloys Pvt Ltd wherein it was held that refund of input credit is admissible when exempted goods are executed without execution of bonds and when exempted goods are cleared for export on payment of duty, manufacturer can claim rebate. The Tribunal based on the judicial precedents held that procedural requirements should not come in the way of legitimate claim for refund. Accordingly, the appeal was allowed.[M/s Well Known Polyesters Ltd vs. CCE, Vapi 2011-TIOL-989CESTAT-Ahmedabad ]

proviso to Section 11A of the Central Excise Act on the ground that the respondent had suppressed information from the revenue. The Tribunal held that in the instant case, the respondents were filing all periodical returns and submitted documents to audit. The revenue failed to demonstrate what had been suppressed from the revenue by the assessee. The Tribunal relied on the judgement in the case of Honourable Supreme Court in the case of Pushpam Pharmaceuticals Co. vs. Collr of C.E., Bombay [1995 (78) ELT 401 (SC)] wherein it was held that mere omission to disclose the correct information is not a suppression of facts unless it was deliberate to escape from payment of duty. Where the facts are known to both the parties, it cannot be held that there was suppression of facts. The Tribunal held that there is no justification for invoking the extended period under the provisions of Section 11A resulting in making demands barred by limitation. Therefore, the appeal filed by the revenue was dismissed. [CCE, Ahmedabad vs. M/ s Midco Ltd 2011-TIOL-990CESTAT-Ahmedabad]

 The appeal was filed by the revenue

 The appellant had imported second

against the order of the Commissioner (Appeals) who held that the show cause notice issued by the appellant for recovery of demand is fully barred by limitation and the imposition of penalty and demand of interest was set aside. The show cause notice was issued on 1.2.05 demanding dues from 2000-2001 onwards. The audit report was made available as early as in July 2002 and the respondents were filing RT-12 or ER-1 without any delay. The revenue invoked the extended period of limitation under

hand goods (shuttleless looms), which was confiscated by the Customs authorities on the ground that their import requires a licence, with option to redeem on payment of a fine and imposition of penalty. The confiscation was under Section 111(d) and penalty was imposed under Section 112(a) of the Customs Act, 1962. The appellant had sought clarification from the DGFT regarding requirement of coverage under a licence as the machines were shipped prior to the date of release of

12

the new EXIM policy under which restrictions on the age of machine were lifted. The office of the Dy. DGFT had clarified that in the case of the present appellants, date on which Bill of Entry has been filed should be considered as the cut off date for deciding the importability of the item and not the Bill of Lading, in general, for import effected with the payment of duty and not under any of the export promotion scheme. Therefore, the Tribunal held that licence was not required for the import of shuttleless loom imported by the appellants and set aside confiscation and penalty and allowed the appeal. [M/s Raj fabrics vs. Commissioner of customs, Tuticorin 2011-TIOL-1002-CESTAT-Madras] 

The appellant filed the appeal against the show cause notice issued by the revenue, wherein duty has been demanded from the appellants on the samples drawn by them for testing purpose, which were not cleared by them; thereafter, the demands were confirmed against the applicants. The Tribunal in the applicant’s own case for the earlier period had observed that if the samples have been drawn and the same has been retained in the factory for testing purpose and the assessee is maintaining a record of the same and the goods get destroyed during testing, no duty is payable by the assessee. Considering this case, the Tribunal in the instant case held that prima facie the applicants do not have any liability to pay duty on the samples drawn by them for testing purposes and retained the same in their factory. Therefore, the entire demand of duty, interest and penalty was waived. [Hindustan Coca-Cola Beverages Pvt Ltd vs. CCE, thane 2011-TIOL-923-CESTAT-Mumbai]


Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

Details of Certificate Course on IFRS at Bangalore Centre We are pleased to announce that 7th Batch at Bangalore Centre of Certificate Course on IFRS is scheduled to take place From 24th September 2011 subject to the minimum registration of 50 candidates. The other details are mentioned below: • Days of Class Room Each consecutive Saturday/Sunday total four weeks • Duration of the course 100 Hours consisting of: 60 Hours of E-Learning 40 Hours of Class Room Teaching

• CPE Hours The CPE credit of 90 Hours (30 Structured + 60 Unstructured) will be given to the participants. • Venue of the Course: Would intimated in due course • Fee Structure Participation fee (members) - Rs. 30,000/Non Members – Rs. 50, 000/-

Course Coordinator for Bangalore Centre: CA. K. Raghu, Central Council Member, ICAI Email: kraghu9999@gmail.com kraghu@kraghu.com The Demand draft may be drawn in favour of “The Secretary, The Institute of Chartered Accountants of India”, payable at New Delhi. Candidates may kindly send the Registration Form duly filled in all respect (available at the website of the Institute at: http://www.icai.org/addupdate/regform.php) duly filled in along with the fee to: The Nodal Officer, Certificate Course on IFRS, Technical Directorate, The Institute of Chartered Accountants of India, ICAI Bhawan, Indraprastha Marg, Post Box. No. 7100, New Delhi - 110 002, Email: ifrs@icai.org For Registration & other details contact : Assistant Secretary, ICAI, Bangalore, Ph : 30563541 / 542

Details of Certificate Course on International Taxation We are pleased to announce that 2nd Batch at Bangalore Centre of Certificate Course on International Taxation is scheduled commence from 24 th September 2011 subject to the minimum registration of 50 candidates. The other details are mentioned below: A. General The Certificate Course on International Taxation shall comprise of a course of theoretical/ practical training and a certificate in the appropriate form shall be granted to those who qualify for the same, as hereinafter provided. B. Duration of the Course 200 hours consisting of Workshop (including case study) 100 hrs Self Study 100 hrs C. Eligibility for Admission No candidate shall be admitted to the said course unless he is a member of the ICAI at the time of admission. D. Names of the cities where the course is to be conducted The above-mentioned Certificate Course being organized by the Committee on International Taxation of ICAI at various places across the country initially at Delhi, Mumbai, Hyderabad, Chennai, Bangalore, Kanpur, Kolkata and thereafter in other

cities. E. Registration Registration will be on first come first serve basis. The registration form along with the requisite fee may be sent to the Nodal Officer at the mentioned address. F. Overall scheme The participants would be required to attend the workshop on Saturday and Sunday. They would also be required to devote time for self study and case study given to them. Participants would be grouped for preparing case studies. The participants must complete the self study hours and case study for appearing in the Assessment test. G. Course fee Rs. 25000/- (Rupees Twenty five thousand only) inclusive of first assessment fee shall be payable at the time of Registration. Course fee once paid is non-refundable under any circumstances. H. Evaluation Participants who successfully complete the workshop with at least 90% of attendance would be eligible to appear in the Assessment test. I. Periodicity of Examinations Assessment shall be conducted after the completion of workshop at such date and time as may be decided by the Committee.

J.Eligibility to qualify A candidate has to secure 60% marks in aggregate in the Assessment test. K. Limit to the number of attempts for the Assessment test There will be no limit to the number of attempts for the assessment test. The participants can re-appear for the test and the re-appearance fee will be Rs. 1000/-. The participants will be allowed to re-appear for the test only after six months from the first attempt. L. No. of seats For every session -50 M. CPE Hours 100 CPE Hours will be provided to all the registered members as per the CPE guidelines. Course Coordinator for Bangalore Centre: CA. K. Raghu Central Council Member, ICAI Email: kraghu9999@gmail.com For further details please contact Committee on International Taxation ICAI Bhawan, A-94/4, Sector -58, Noida-201301 Tel :0120-3045923, Email: citax@icai.org or For Registration & other details contact : Assistant Secretary, ICAI, Bangalore Ph : 30563541 / 542

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September 2011


PCC / IPCC AND FINAL PRE-EXAM CRASH COURSE FOR NOVEMBER 2011 EXAM We are glad to know that you have registered for PCC / IPCC / CA Final Course and would be appearing for Nov 2011 exams. Few of you might have taken coaching classes at our Institute. Many students have requested us for organizing special classes; Pre-exam crash course for the benefit of the students appearing for Nov 2011 examinations, apart from the regular coaching classes. Accordingly we have fixed up special sessions on the following subjects and have invited renowned faculty members to conduct the sessions. PCC / IPCC Timings: 10.00 am to 06.00 pm SL No DATE

DAY

SUBJECT

MEMBERS OF THE FACULTY

06.09.11

TUESDAY

COSTING & FINANCIAL MANAGEMENT

CA. VINAYAK ASUNDI - BELGAUM

07.09.11

WEDNESDAY

COSTING & FINANCIAL MANAGEMENT

CA. VINAYAK ASUNDI - BELGAUM

08.09.11

THURSDAY

BUSINESS & CORPORATE LAWS

Mr. M. K. BHASKAR – CHENNAI

09.09.11

FRIDAY

BUSINESS & CORPORATE LAWS

Mr. M. K. BHASKAR – CHENNAI

3.

10.09.11

SATURDAY

ADVANCED ACCOUNTING

CA. K. SHANMUGHANATHAN - CHENNAI

11.09.11

SUNDAY

ADVANCED ACCOUNTING

CA. K. SHANMUGHANATHAN - CHENNAI

4.

12.09.11

MONDAY

INCOME TAX

CA. P. RAMASAMY - CHENNAI

13.09.11

TUESDAY

INCOME TAX

CA. P. RAMASAMY - CHENNAI

14.09.11

WEDNESDAY

INFORMATION TECHNOLOGY

CA. ANAND P. JANGID – BANGALORE

15.09.11

THURSDAY

INFORMATION TECHNOLOGY

CA. ANAND P. JANGID - BANGALORE

1.

2.

5.

FINAL Timings: 10.00 am to 06.00 pm 1.

14.09.11

WEDNESDAY

INFORMATION SYS CONTROL & AUDIT

Mr. B.V.N. RAJESHWAR - CHENNAI

15.09.11

THURSDAY

INFORMATION SYS CONTROL & AUDIT

Mr. B.V.N. RAJESHWAR - CHENNAI

16.09.11

FRIDAY

ACCOUNTS

CA. MALAY KUMAR PANDA - BANGALORE

17.09.11

SATURDAY

ACCOUNTS

CA. MALAY KUMAR PANDA - BANGALORE

3.

18.09.11

SUNDAY

CORPORATE LAW

CA.S. SRIKANTH - CHENNAI

19.09.11

MONDAY

CORPORATE LAW

CA.S. SRIKANTH - CHENNAI

4.

20.09.11

TUESDAY

MAFA

CA. VINAYAK ASUNDI - BELGAUM

21.09.11

WEDNESDAY

MAFA

CA. VINAYAK ASUNDI - BELGAUM

22.09.11

THURSDAY

INCOME TAX

CA. SURESH T. G. - CHENNAI

23.09.11

FRIDAY

INCOME TAX

CA. SURESH T. G. - CHENNAI

6.

24.09.11

SATURDAY

COST MANAGEMENT

CA. K. HARIHARAN - CHENNAI

25.09.11

SUNDAY

COST MANAGEMENT

CA. K. HARIHARAN - CHENNAI

7.

26.09.11

MONDAY

INDIRECT TAXES

CA. A.S. HARIHARA KUMAR - CHENNAI

27.09.11

TUESDAY

INDIRECT TAXES

CA. A.S. HARIHARA KUMAR - CHENNAI

8.

28.09.11

WEDNESDAY

QUANTITATIVE TECHNIQUES

Mrs. MALATHY SUNDARARAJAN - BANGALORE

29.09.11

THURSDAY

QUANTITATIVE TECHNIQUES

Mrs. MALATHY SUNDARARAJAN - BANGALORE

2.

5.

THE FEE FOR THE PRE EXAM CRASH COURSE IS AS FOLLOWS:

Final:Both Group Subjects Rs.2000/-, II Group Subjects Rs.1500/-, I Group Subjects

Rs.1000/-, Single Subject

Rs.500/-

IPCC and PCC : All the Subjects Rs.1200/-, Single Subject

Rs.400/-

Mode of payment: CASH / DD in favour of “BANGALORE BRANCH OF SIRC OF ICAI” PAYABLE AT BANGALORE. To register please contact: Ms. Rajalakshmi / Ms. Geethanjali (080-30563509/513 / blrregistrations@icai.org) CA. Venkatesh Babu T R Chairman

September 2011

14

CA. Shivakumar H Chairman, SICASA

CA. Ravindranath S N Secretary


Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

CENTRAL EXCISE DUTY EXEMPTION ON CAPTIVE CONSUMPTION OF CAPITAL GOODS Badrinath NR. B.Com., Grad C.W.A., F.C.A. Siddeshwar Yelamali, B.Com., A.C.A As you are aware, Central Excise is a duty payable on manufacture of excisable goods. However, in respect of goods cleared from the factory, a legal fiction has been infused in terms of which the payment of duty is deferred till such time, the goods are removed from the factory. Nevertheless, amongst others, in respect of capital goods which are not cleared from the factory but are captively consumed within the factory of manufacture, an exemption is provided in Notification 67/95 CE dated 16.03.1995 subject to the condition that the Capital Goods are manufactured and used within the factory. Analysis From the above, the following emerge:  The goods in question should

qualify as ‘capital goods’ under the CENVAT Credit Rules.  The capital goods should be

manufactured within the factory  The

capital goods so manufactured should be used captively in the factory

Insofar as it relates to the condition as to its use within the factory, it is generally understood as, that the capital goods should have been manufactured by the manufacturer of final products himself on his own account and the same should be used within the factory. This has usually been the stance taken by the departmental officials. The relevant text of the notification imposing this condition

is indicated hereunder for better appreciation – “capital goods as defined in the CENVAT Credit Rules, 2002, manufactured in a factory and used within the factory of production”. From the reading of the notification, it is noted that the capital goods should be “manufactured in a factory” and the “capital goods should be used within the factory of production”. While a plain reading of the condition suggests that the capital goods should be manufactured by the manufacturer of final products on his own account and should be used within the same factory for further production, a thread bare analysis of the notification, suggests a variation to the understanding, viz., even such capital goods which are manufactured by the manufacturer of final products, but not on his own account but at the instance of the buyer of capital goods and the final products, shall be eligible for the exemption, however, subject to the condition that the capital goods are used by the manufacturer captively within his factory. It must be noted that:  The Notification does not stipulate

that, to be eligible for the benefit of exemption under Notification No. 67/95, the Capital Goods should be manufactured by the manufacturer of final products himself on his own account;  The language used in the

notification suggests that it would suffice if the Capital Goods are used captively within the factory

of production for further manufacture of other goods;  The exemption is available based

on the place of use of capital goods, viz., within the factory of production, and that the ownership of capital goods and the arrangement for manufacture of the same is not relevant. The Hon’ble Tribunal has analysed the same in the case of Elcon Clipsal India Ltd, (2002 (146) E.L.T. 360 (CESTAT Delhi)), wherein it was held that the exemption is available on the basis of place of the use of capital goods, viz., “within the factory of production” and that the exemption cannot be denied on the ground that the manufacturer issued invoices to their customers for getting payment against the same. An illustration of exemption on excise duty under this notification is provided as follows - X enters into a contract for manufacture of certain capital goods (as defined in Rule 2(a) of CENVAT Credit Rules) within the factory premise of Y for use within the factory of Y. Capital goods manufactured by X are not removed from the factory of Y, but are used by Y in further manufacture of final products within the same factory. Subsequently X issues an invoice on Y for the goods sold to X. As long as the capital goods are within the factory of Y, the exemption of excise duty under this notification cannot be denied on the ground that goods have been sold by X to Y. Thus, the exemption from payment of Central Excise Duty under this notification can be availed on capital goods, irrespective of whether the capital goods (as defined in Rule 2(a) of CENVAT Credit Rules) are manufactured by a supplier

15

September 2011


for captive use or manufactured by a dealer on his own account. However, it is necessary that such capital goods are captively used within the factory of production and such capital goods are not removed from the factory of production, viz., the factory where such capital goods were manufactured. Other Remarks: The exemption under this notification would be available to

captively consumed capital goods even if such Capital Goods are used in the manufacture of exempted final products. This benefit is apparently unavailable to goods other than capital goods under this notification, viz., if other goods which are manufactured within the factory are captively used and if the final products are exempt from Central Excise Duty, this exemption is unavailable for captively used goods.

The Notification refers to ‘Capital Goods’ as defined under CENVAT Credit Rules, 2002. It is to be noted that the CENVAT Credit Rules, 2002 has since been rescinded and replaced with CENVAT Credit Rules, 2004 with effect from 10.09.2004. In this regard, it is our view that the same has to be harmoniously read as ‘Capital Goods as defined under the CENVAT Credit Rules. 2004’.

Congratulations RANK HOLDERS - BANGALORE BRANCH OF SIRC OF ICAI PCC MAY 2011 EXAM Sl.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Reg.No. SRO0260939 SRO0232890 SRO0209254 SRO0242741 SRO0273037 SRO0249313 SRO0209221 SRO0222378 SRO0143031 SRO0243746 SRO0253875 SRO0247885 SRO0270475 SRO0224070 SRO0224518 SRO0257952 SRO0224595 SRO0248745 SRO0253053 SRO0229584 SRO0163594

Roll.No. 23911 24112 23936 23888 23969 24559 24572 24629 24660 24033 24404 24048 24062 24658 24500 24056 24584 24476 23923 23933 24416

Sl.No. Reg.No. 1 SRO0308532 2 SRO0319044 3 SRO0287966

Roll.No. 128890 130155 128532

NAME PRADEEP.S.M PRANAV PANSARI PRAVEEN.C.P SWETHA.S NIRANJAN.L GOWRAV SOUMYA.S.S.V SWETHA.G SOWMYA.P LALIT ANTHONY BRAGANZA PRADEEP JAIN.R RAMYASHREE.S.M RAGHAVENDRA PRASAD.D YESHWANTHA.R SABARIDAS.M VANDANA.B AMRUTA PRASAD KULKARNI VANI.G.K PRANEET BHAT SANJAY SINDHIA.M.H SUBHASH.S.NAYIK

Marks Obtained 382 370 364 363 359 353 353 353 349 348 346 344 344 344 343 341 341 340 339 339 339

Rank 8 19 25 26 30 36 36 36 40 41 43 45 45 45 46 48 48 49 50 50 50

% 63.67 61.67 60.67 60.50 59.83 58.83 58.83 58.83 58.17 58.00 57.67 57.33 57.33 57.33 57.17 56.83 56.83 56.67 56.50 56.50 56.50

Marks Obtained 526 518 508

Rank 24 30 40

% 75.14 74.00 72.6

IPCC MAY 2011 EXAM

September 2011

16

NAME NUPUR KEDIA SWETHA.S GANESH.B


Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

MK.DANDEKER CONSULTING PRIVATE LIMITED

SAVE LONG TERM CAPITAL GAINS TAX

WE ARE REGISTERING AUTHORITY FOR TCS DIGITAL SIGNATURE.

CONTACT US FOR• INVESTMENTS IN 54 EC BONDS LIKE REC- RURAL ELECTRICIFICATION CORPORATION LTD AND NHAI-NATIONAL HIGHWAY AUTHORITY OF INDIA.

Get TCS Digital Signature [DSC] within 30 minutes.** for Rs 250.00 per DSC. use at MCA21 and/or e-Filing of Income Tax Returns For A.Y 11 12.

• INVESTMENTS IN TOP RATED

MUTUAL FUND SCHEMES. ** log on to WWW.dandekerconsulting.in . Contact us : email  mkd.bengalur@gmail.com.

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1580, 1st Floor,16th A Main Road, 2 Phase, J P Nagar, Bangalore-560078 Mob-9844128984 E Mail-ancaps@gmail.com nd

Advt.

KUMARASWAMY C .V, ANCAPS WEALTH MANAGEMENT,

Talk to Alamelu on 9740079967 between 9.30 AM to 06.0 PM. Deepti khurana 9886583002 between 01.30 PM to 4.30 PM Hema Malini on 9663203860 between 4.30 PM to 7.30 PM .

Advt.

• INVESTMENT PLANNING & WEALTH MANAGEMENT SOLUTIONS

Empanelment of CA's - Hon'ble Company Court We are hereby informed by Official Liquidator, High Court of Karnataka, Ministry of Corporate Affairs, Govt. of India that the Hon’ble Company Court desires to constitute a new panel of CA s for the purpose of utilizing their services in Company Court. The format to apply for the aforesaid assignment is given below. Format to Apply: Notice Applications are invited from the practicing Chartered Accountants to reconstitute a new panel by Hon’ble High Court of Karnataka (Company Court). Bio – Data 1) 2) 3) 4) 5) 6)

Name of the applicant Address for communication Email ID and Mobile No for contact Registration No. Work Experience Any other information (Signature of the applicant)

Nature of work involved 1. Filing of Income Tax returns of the Companies under liquidation (Presently there are about 311 companies in Liquidation) 2. E-Filing of TDS 3. Attending all Tax appeal matters / Tribunals in Income Tax Department 4. Scrutinizing the records and submitting a report for Misfeasance 5. Scrutinizing of claims received from the secured creditors/workmen etc. 6. Scrutinizing of Books and records for submission of report under Section 391-394(1) Sub-section(2) of the Companies Act, 1956 7. Any other work entrusted by the Hon’ble High Court / Official Liquidator Your application should be sent to (on or before 15-09-2011) : Sri. S. Ramakantha, The Official Liquidator, High Court of Karnataka, Corporate Bhavan, 12th Floor, Raheja Towers, M G Road, Bangalore-1

17

September 2011


IMPORTANT DATES TO REMEMBER DURING THE MONTH OF SEPTEMBER 2011 5th Sept. 2011 6th Sept. 2011 7th Sept. 2011 10th Sept. 2011

15th Sept. 2011

20th Sept. 2011 21st Sept. 2011 25th Sept. 2011 30th Sept. 2011

Payment of Excise Duty for August 2011 Payment of Service Tax for August 2011 by Corporates E-Payment of Excise duty for August 2011 E-Payment of Service Tax for August 2011 for Corporates Deposit of TDS/TCS Collected during August 2011 STPI Monthly Returns Monthly Returns for Production and Removal of Goods and CENVAT Credit for August 2011 Monthly Return of excisable Goods Manufactured & Receipt of Inputs & Capital Goods by Units in EOU, STP, HTP for August 2011 Monthly Returns of Information relating to Principal Inputs for August 2011 by Manufacturer of Specified Goods who Paid Duty of Rs.1 Crore or More during Financial Year 2010-11 By PLA/ CENVAT/Both Payment of EPF Contribution for August 2011 Return of Employees Qualifying to EPF during August 2011 Monthly Return (VAT 120) and Payment of VAT/COT for the month of August 2011. Payment of Second installment of Advance Income Tax by Corporate assessee and First such installment by non-corporate assessees. Monthly Return and Payment of Profession Tax Collected During August 2011 Monthly Return (VAT 100) and Payment of CST and VAT Collected During August 2011 Deposit of ESI Contributions and Collections for August 2011 Consolidated Statements of Dues and Remittances Under EPF and EDLI for the August 2011 Monthly Returns of Employees Joined & Left the organisation during August 2011 under ESI Filing of Return of income/wealth by a) Corporate Assessees b) Individual or HUF carrying on business or profession subject to compulsory audit u/s 44AB. c) Firm or Co-operative society or AOP/BOI subject to audit d) Individual or HUF being working partner in a firm subject to audit e) Return of Net wealth by assessee subject to audit.

An appeal to the members

OBITUARY

XIX Batch of Course on Corporate Accounting, Finance & Business Laws Duration: October 2011 to March 2012 (78 Sessions) Timings: 08.30am to 01.30pm (only on Saturdays) Course Fee: Rs. 20000/Course Contents: • Corporate Finance • Strategic Cost Management • Financial Reporting and Analysis • Financial Services • Concepts and Practice of Automated Information Systems • Corporate Business Laws

September 2011

18

For Whom: The course is open for Non members who are currently working in the field of Finance/Accounts. Applicants for this course should have at least 2 years experience in the finance function. Knowledge of accounting terms, principles and procedures are essential as the course will cover areas that are comparatively advanced in nature. We request you to pass on this information to your clients: Finance/ Accounts Executives to avail the benefits of this course. For details contact Branch on Tel. 080-30563511/512 e-mail: blrprogrammes@icai.org

We deeply regret to inform sad demise of our member CA. Vandana Khemka ( M.No. : 410136) on 12.07.2011 May her soul rest in peace.


Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

19

September 2011


September 2011

20


Newsletter for the moth of september - 2011