covers june 2014 - bizsolindia services pvt.ltdnarendra damodardas modi is the newly minted pm....

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Bizsol UPDATE June - 2014

After a gruelling and often acrimonious election

we finally have new government. Narendra

Damodardas Modi is the newly minted PM. Modi's

sustained and systematic campaign finally earned him

his trophy. In an environment where cynicism with

the polity is all pervasive with a moribund economy

struggling to unshackle itself, it is not surprising that

everyone seems eager to welcome the new hero.

Having secured a decisive mandate for change the

task is now cut out for the new PM. By initial accounts

he has started out pretty well. His invitation to the

SAARC leaders for his swearing-in was a

masterstroke. This put even Nawaz Sheriff in a spot -

damned if you accept the invite; damned if you don't.

It should go to the credit of the PM of Pakistan for not

only accepting the invite but be very civil about the

way he conducted himself in Delhi even at the cost of

getting panned in his own country. Another important

signal which augurs well for our diplomatic initiatives

is that foreign policies will not be crafted in Chennai

or Kolkata or for that matter Mumbai. Delhi will be the

capital of India which will decide the foreign policies.

It is not every day that someone ticks off the mercurial

lady from Poes Garden. So is the case with the

Thakharays. The Shiv Sena leader even had a photo

op with the Pakistani Prime Minister. The ironies of

this election do not end here. Both the capricious

ladies from Chennai and Kolkata won handsomely

but with Modi winning an absolute majority on his own

they have almost been pushed to the margins. They

were better off with less number of MPs in the last

Lok Sabha. Jayalalithaa must have been thankful to

Mahinda Rajapaksa for making it to the swearing-in

at Delhi, for if he had not come she would have had

no excuse for not attending Modi's swearing-in

function. Attending the function would have been

difficult for this imperious lady. The CM of Tamil Nadu

does not attend any function where she herself is not

the prima donna.

FROM THE DESK OF THE CHAIRMAN

After taking the oath of office and secrecy when the

new Prime Minister Narendra Modi sat down before

the official register he took his own Mont Blanc pen to

sign the register. He, after affixing his signature, kept

the pen back in his pocket. Modi is not one to use the

pen kept on the table near the register for this historic

occasion. Nor was he going to leave his souvenir

behind after signing. After the swearing-in of all the

ministers Arun Jaitly took a step or two forward and

beckoned to the new PM in the direction of the

assembled crowd of dignitaries. True to style Modi

stopped him and shepherded him towards the dais

where the President was waiting for the photo op with

the new cabinet. If this gesture was any indication,

here is a man who knows what he wants and what he

is expected to do. Back to Modi and Mont Blanc. Indian

politicians customarily take pains to dress as shoddily

as possible in an effort to identify themselves with the

masses. Not Modi. Take a look at him. He is a

walking-talking fashion bill board. He wears Bvlgari

spectacles and has a Movado wrist watch to go with

it. The only information not known yet about the Modi

ensemble is the brand of sandals he prefers. India

has got a brand new PM who is himself a brand and

a collection of brands at the same time! If you thought

that was all there is to Modi's fashion statement, here

is some more. He carries his iPad everywhere and

communicates through Twitter. All that remains to be

seen is if the code to detonate a nuclear bomb has

already been embedded in any of the iPad apps.

The Grand Old Party (read Congress) is now in retreat

and when last heard it was doing what is called

introspection (sounds good instead of saying 'blaming

each other'). It is going to be quite a while for the

GOP to come out of hibernation. Coming to think of it

the party apparatus has been in a state of hibernation

for quite some time now. Look at the images flashing

on the TV screen in front of you during a CWC

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meeting. The venue resembles a Jurassic Park. The

Vohras, the Dhawans, the Kidwais, the list of

inhabitants of the Park is long and simply obsolete.

How does the Congress party expect the people of

India, a sizeable majority of them being youth, to

connect with them? It is true that it would be wrong to

write the obituary of the party. The party, even if it

does not have internal democracy would always be

there as a refuge to the courtiers and sycophants or

be a vibrant organisation occupying the space of an

efficient and productive opposition party. The party

has to reinvent itself to decide which it wants to go.

It may seem politically incorrect to mouth even words

of caution in this environment of euphoria. But then,

those who do not learn lessons from history are

condemned to repeat it. It is easy for Modi to get

carried away with the recent endorsement of him by

the people of this country and see himself as a cult

figure. Recent history talks of a similarly charismatic

leader who got elected to the highest office of his

country - Tayyip Erdogan. When elected as the Prime

Minister of Turkey, Erdogan was arguably the most

charismatic leader the world has seen so far of any

country. Today at one level he is paying a price for

this success. In the aftermath of his decisive electoral

victory it did not take him too long to overreach himself.

In his country's system of elections of first past the

post, like in our case, Erdogan conveniently forgot

that he was elected to rule with a mandate of only

half of the electorate. This fact is especially true for

the BJP as well. Its government is in office with only

less than one-third of the country's population voting

for it. Modi has to rule the country keeping in mind

that the overwhelming majority of its electorate did

not vote for him or his party!

Even as we celebrate the greatness of our democracy

which saw a peaceful transition of power from one

government to another after an acrimonious election

there is still one tinge of sadness which you cannot

wish away. That has something to do with the way

AAP was washed away - it is not about AAP, the party;

it is about AAP, the 'sochh' (the phrase courtesy Rahul

Gandhi). A social movement which could have

become an instrument in ushering a corruption-free

India lies in tatters thanks to the short-sightedness of

AAP, the party. If AAP, the party had been patient

enough, it could have emerged as a party with a pan

Indian appeal and relevance in due course. The party

had a chance to give a clean government at Delhi

and with that track record it could have gone national

in the 2019 national elections. In the meantime the

party would have had a chance to build a national

outfit for itself. This opportunity loss could cost the

nation dear in the long run. Time alone would tell if a

civil society movement of this kind would ever again

capture the imagination of the people of this country.

President Obama has a mind of his own and few have

a clue of how it works. He is lonely even in a crowd. In

his second term in office without having to worry about

getting re-elected, he has started out on a road less

travelled before by his predecessors. He loathes war

and is ready to lead one under compulsion only from

behind. His handling of the recent conflicts in Libya

and Syria and his eagerness to talk peace with Iran

are pointers to a style which does not showcase the

leadership style of a super power according to many,

especially his detractors. He has now done something

unthinkable. He negotiated with the Taliban militants

for the release of a soldier (many call him a deserter)

in exchange for the release of five Taliban detainees

at Guantanamo Bay. Though the details of the barter

deal remains shrouded in mystery, the deal, first of

its kind, envisages the release of the Taliban prisoners

through the Qatar government in exchange for the

release of Sgt. Bowe Bergdahl. Only the Congress is

authorised to sanction such a deal and that too in

exceptional circumstances. The world will never be

the same again. Now every American, especially the

soldiers, carries a price tag on his or her head.

America had this policy all along of not negotiating

with terrorists and militants. Consequently taking

Americans as hostages did not have much use so far

which in turn insulated theme from being ransom

targets. No more. It remains to be seen how history

would judge the Obama presidency on this score. The

defining moment of his presidency was expected to

be his making to the Oval office; but for many he may

be remembered instead for unmaking the policies that

made US the super power. The jury is still out on this

one.

It is unlikely that many would have heard of a man

called Thomas Piketty. He is the French author of

now famous tome on economics called "Capital in the

Twenty First Century". With this book he has

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challenged some long cherished theories of

Economics. He has come to the conclusion that

inequalities in wealth are growing around the world

and sops and incentives to the rich do not necessarily

trickle down all the time. In fact he has argued that

tax concessions to the rich have an exactly opposite

effect. His conclusions are primarily based on

voluminous data on tax collections over the years.

This must be music to the ears of the likes of the

Karats and the Yechuries of our land. It is time for the

communists to say déjà vu. They would be justified in

deriving vicarious pleasure in the findings of Thomas

Piketty. Piketty has empirically proven that the worst

fear of the socialists that capital is in danger of

replacing labour is indeed coming true and with

disastrous consequences. In today's world it is easy

to imagine a robot replacing a worker or a search

engine doubling as a paralegal. Piketty's work on the

subject has opened a Pandora's Box and has

demolished the most fundamental theory held sacred

by the economists around the world, particularly in

the United States. Karl Marx must be chuckling in his

grave. Piketty's proposition is so logically reasoned

that one cannot be dismissive about his conclusions.

Tax incentives to the rich results into higher wealth

for a few as the increase in income generated by the

economy is far less than what is given to the rich to

generate higher wealth. One of the startling

revelations made by him is that among the various

stages of development of an economy the inequality

in wealth tends to be highest in the primitive stage of

development of an economy and in an advanced

economy. Whoever said there is nothing in common

between Rwanda and the US? This study of Piketty

is particularly relevant to India where our romance

with socialism has not completely died down and a

vast majority of the population struggle to eke out a

living when a miniscule percentage of the rich is

actually getting richer - in fact obscenely. Some clichés

survive the test of time like the saying 'the rich get

richer and the poor get poorer'. According to Thomas

Piketty one cannot dismiss it as one of those clichéd

saying. It is true, after all!

Thank you.

Venkat R. Venkitachalam

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CUSTOMSNotifications:

Tariff

• In order to boost economic ties between Taipei

and India, both the parties agreed to provide

Temporary duty free admission of goods

intended for display or demonstration, or for use

in connection with the display of foreign products.

This is subject to certain conditions as specified

in the given notification. This is in line with

agreement between the India-Taipei Association

in Taipei (ITA) and the Taipei Economic and

Cultural Center in India (TECC) on the FICCI /

TAITRA Carnet for the Temporary Admission of

Goods. [Notification No. 10/2014-Customs,

Dated 12-May-2014].

Non-Tariff

• The Central government appoints Kiranpani Port

situated in Maharashtra as a Customs Port for

unloading and loading of imported / exported

goods, namely, Coal Sulphur, Bauxite, Mill Scale,

Iron Ore and Sugar. [Notification No. 39/2014-

Customs (N.T), Dated 07-May-2014].

• CBEC has hereby made regulations for

temporary admission of goods intended for

display or demonstration, or for use in connection

with the display of foreign products under

agreement between the India-Taipei Association

in Taipei & the Taipei Economic & Cultural Centre

in India on the FICCI/TAITRA Carnet. Necessary

procedures and forms have been notified.

[Notification No. 40/2014-Customs (N.T),

Dated 12-May-2014].

• Revised rates of allowance shall be admissible

to the officers & staff that were sanctioned the

Presidential Award of Appreciation Certificate for

exceptionally meritorious service at the risk of

life till date & to future recipients of the said award

w.e.f. 23rd May 2014. [Notification No. 43/

2014-Customs (N.T), Dated 23-May-2014].

• Tariff Value of Imported goods have been further

amended as given below:

[Notification No. 44/2014-Customs (N.T),

Dated 30-May-2014].

Sl. Chapter/ heading/ Tariff value

No. sub-heading/ Description of goods US $ (Per

tariff item Metric Tonne)

1 1511 10 00 Crude Palm Oil 897

2 1511 90 10 RBD Palm Oil 945

3 1511 90 90 Others - Palm Oil 921

4 1511 10 00 Crude Palmolein 953

5 1511 90 20 RBD Palmolein 956

6 1511 90 90 Others - Palmolein 955

7 1507 10 00 Crude Soyabean Oil 962

8 7404 00 22 Brass Scrap (all grades) 3890

9 1207 91 00 Poppy seeds 3255

10 71 or 98 Gold, in any form, in res- 408 per

pect of which the benefit 10 grams

of entries at serial number (US $)

321 and 323 of the Notifi-

cation No. 12/2012-Cus-

toms dated 17.03.2012 is

availed

11 71 or 98 Silver, in any form, in res- 617 per

pect of which the benefit kilogram

of entries at serial number (US $)

322 and 324 of the Notifi-

cation No. 12/2012-Cus-

toms dated 17.03.2012

is availed

12 080280 Areca nuts 1908

(US $ Per

Metric Tons )

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Anti-Dumping Duty:

• Anti-dumping duty on "Vitamin-E all forms

excluding natural forms", falling under Chapter

29 or 23, originating in or exported from the

People's Republic of China imposed vide

Notification No. 33/2009-Customs (ADD) dated

27-Mar-2009 valid till date 27-Mar-2014 has

been further extended & shall remain in force up

to and inclusive of the 26-Mar-2015, unless

revoked earlier. [Notification No. 16/2014-

Customs (ADD) Dated 09-May-2014]

• Anti-dumping duty on "Flax Fabric", falling

under Chapter 53, originating in or exported from

the People's Republic of China & Hong Kong

imposed vide Notification No. 142/2009-Customs

(ADD) dated 21-Dec-2009, has been further

extended & shall remain in force up to and

inclusive of the 25-Mar-2015, unless revoked

earlier. [Notification No. 17/2014-Customs

(ADD) Dated 09-May-2014]

• Anti-dumping duty on "All Fully Drawn or Fully

Oriented Yarn/Spin Draw Yarn/Flat Yarn of

Polyester (non-textured and non - POY)",

falling under Chapter 54, originating in or

exported from the People's Republic of China,

Thailand and Vietnam imposed vide Notification

No. 124/2009-Customs (ADD) dated 11-Nov-

2009, has been further extended & shall remain

in force up to and inclusive of the 25-Mar-2015,

unless revoked earlier and shall be payable in

Indian currency. [Notification No. 18/2014-

Customs (ADD) Dated 09-May-2014]

• Anti-dumping duty on imports of "Glass Fiber",

falling under the sub-heading 7019, originating

in or exported from China PR, have been


(ADD) dated 04-Mar-2011, valid till date 14-Jul-

2015. Description of glass fibre has been

amended as given in the explanation to the

notification. [Notification No. 19/2014-Customs


• Anti-dumping duty on "Cold Rolled Flat

Products of Stainless Steel" falling under the

heading 7219, originating in or exported from the

People's Republic of China, Korea RP, European

Union, South Africa, Taiwan (Chinese Taipei),

Thailand and United States of America (USA)


(ADD) dated 20-Feb-2010, has been further

extended & shall remain in force up to and

inclusive of the 21-Apr-2015, unless revoked



• Anti-dumping duty on "Nylon Tyre Cord Fabric

(NTCF)", falling under Chapter 59, originating

in or exported from the People's Republic of

China imposed vide Notification No. 41/2009-

Customs (ADD) dated 29-Apr-2009, has been

further extended & shall remain in force up to

and inclusive of the 28-Apr-2015, unless revoked



• Anti-dumping duty on "Peroxosulphates" also

known as "Persulphates", falling under Chapter

28, originating in or exported from the Taiwan,

Turkey and the United States of America has

been imposed for a period of 5 Years from the

date of publication of this notification & shall be

payable in Indian Currency. [Notification No.

22/2014-Customs (ADD) Dated 16-May-2014]

• Anti-dumping duty on "Phenol", falling under

Chapter 29, originating in or exported from

Chinese Taipei and the United States of America

has been imposed for a period not exceeding 6

Months from the date of publication of this

notification & shall be payable in Indian Currency.

[Notification No. 23/2014-Customs (ADD)

Dated 16-May-2014]

• Anti-dumping duty on "Methylene Chloride"

also known as "Dichloromethane", falling under

Chapter 29, originating in or exported from the

European Union, United States of America and

Korea RP has been imposed for a period of 5

Years from the date of imposition of the

provisional anti-dumping duty, i.e., 21st October,

2013 and shall be payable in Indian currency.

[Notification No. 24/2014-Customs (ADD)

Dated 21-May-2014]

Circulars / Instructions:

• The Board has instructed field formation to ensure

6


proper utilization of Duty Credit Scrip issued

under Chapter 3 of DGFT. The instruction has

been issued as the board had noticed incorrect

utilization of scrip. E.g. goods specified under

Appendix 37B cannot be imported by utilizing

Duty Free Scrip and the same should not be

allowed to be cleared by paying duties from the

duty scrip. [F.No.603/ 13 /2013-DBK dated 27th

May 2014]

CENTRAL EXCISE

Notifications

Tariff

• No New Notifications

Non-Tariff

• No New Notifications

Circulars• Classification of rice par-boiling machine and

dryer is to be made under CETH 8419 instead

of previous classification under CETH 8437. This

is after decision of Tribunal in case of M/s Jyoti

Sales Corporation [2011(272) E.L.T. 689 (Tri-

Del) & 2011-TIOL-1498-CESTAT-DEL].

Departmental officers are instructed to take

necessary action to protect the interest of

revenue for past clearance of rice par-boiling

machine and dryer under CETH 8437. [Circular

No. 982 / 06 / 2014 - CX]. Even though Board

circular has been rescinded holding classification

of such goods under CETH 8437 no demand can

be raised till the issue of new circular. In any case

penalty will not be applicable.

Instructions

• No New Instructions

SERVICE TAX

Notifications• No new notifications!!

Circulars / Instructions• No new circulars / instructions!!

FOREIGN TRADE POLICY

Notifications:No New Notification

Public Notices:

• List of agencies which can issue certificate of

origin (preferential) as per Bilateral/Regional

Trade Agreements has been specified. Entire

Appendix 4D has been revised.Two new

agencies have also been authorized to issue

Certificate of Origin (Preferential), namely Marine

Products Export Development Authority

(MPEDA) for marine products under all trade

agreements and Textiles Committee for textiles

and made ups under India-Japan

Comprehensive Economic Partnership

Agreement (IJCEPA). [Public Notice No. 59

(RE:2013)/2009-2014 dated 15/05/2014]

• DGFT has authorized Trade Promotion Council

of India to issue Certificate of Origin (Non

Preferential) and its name has been added in

the list of agencies Authorized to issue certificated

of Origin-Non-Preferential) to Handbook of

Procedure at Serial No. 12 (Delhi) of Appendix

4C. [Public Notice No. 60 (RE:2013)/2009-2014

dated 15/05/2014]

• Tobacco Board has also been authorized to

issue Certificate of Origin for Tobacco products

under Global System of Trade Preferences

(GSTP) with immediate effect. [Public Notice

No.61/2009-2014 (RE-2013) dated 3rd June

2014]

Trade Notice

• Separate online complaint resolution system

relating to EDI issues has been established on

DGFT website. If the issue is not resolved in 5

working days email may be sent to Shri Anil

Kumar Sinha, DDG (NIC) - [email protected].

Below is the format of registering the issue,

IEC

Issue

e-Mail

[Trade Notice No.10/2014 dated 4th June

2014]

7


INCOME TAX

Notification:• Department has issued new forms for "Forms

SAHAJ (ITR-1), ITR-2, SUGAM (ITR-4S) and

ITR-V" the "Forms SAHAJ (ITR-1), ITR-2,

SUGAM (ITR-4S) and ITR-V".

Political Parties can File ITR 7 in case it is

furnished under Sec 139 (4B), only electronically

under digital signature.

Partnership Firm who are required to get

Audited under Section 44AB can file ITR 5

return only electronically under digital signature.

Partnership Firm who are required to get

Audited Under Section 44AB can submit the

return in any of the following mode :

(i) furnishing the return electronically under

digital signature;

(ii) transmitting the data in the return

electronically and thereafter submitting the

verification of the return in Form ITR-V;

[Notification 24/2014 dated 1st April 2014]

• National Bank for Agriculture and Rural

Development established under section 3 of the

National Bank for Agriculture and Rural

Development Act, 1981 has been notified as

"approved body corporate / establishment" for

purpose of claiming deduction under section

36(1)(xii) in relation to expenses for providing

and regulating credit and other facilities for

promotion of agriculture and rural development.

[Notification 25/2014 dated 29th April 2014]

• New form has been issued by the government

for allotment of PAN. [Notification 26/2014

dated 16th May 2014]

• M/s Temad. 28 km Karaj Makhous Road, Iran is

notified as foreign company for Sec 10 (48) of

Income Tax Act 1961 provided that the said

foreign company shall not engage in any activity

in India other than receipt of income in India

under the agreement aforesaid on account of

sale of Codeine Phosphate. [Notification 27/

2014 dated 23rd May 2014]

• An assessee required to furnish a report of audit

specified under section 10AA , section 44DA,

section 50B or section 115VW of the Act, shall

furnish the said report of audit and the return of

Income electronically for AY 2014-15 and

onwards.

Income tax department has issued new forms

for FORM ITR-3, FORM ITR-4, FORM ITR-5,

FORM ITR-6 and FORM ITR-7. [Notification

28/2014 dated 30th May 2014]

Circular:No New Circular

MVATNo new notification

Trade Circular:No New Circular

COMPANY LAW

Notification• The powers & functions vested, under the

following sections of the Companies Act, in

Central Government has now been delegated

to the Regional Directors at Mumbai, Kolkata,

Chennai, Noida, Ahmedabad, Hyderabad and

Shillong, subject to the condition that the Central

Government can revoke such delegation of

powers or may itself exercise the powers under

the said sections, if in its opinion such a course

of action is necessary in the public interest, with

effect from the date of publication of this

notification in the Official Gazette. [F. No. 1/6/

2014-CL.-V]S.O. 1352(E) Dated 21st May 2014

Section Powers & Functions Delegated

Sec. 8(4) (i) Approval for alteration of provisions

of the company's memorandum or

articles in case of conversion into

another kind of company.

Sec. 8(6) To revoke the license granted to a

company registered under this

section if the company contravenes

any of the requirements or any of the

conditions subject to which a license

is issued or the affairs of the

company are conducted fraudulently

or in a manner violative of the

8


objects of the company or prejudicial

to public interest, direct the company

to convert its status and change its

name to add the word "Limited" or

the words "Private Limited", as the

case may be, to its name. Provided,

no such order shall be made unless

the company is given a reasonable

opportunity of being heard & further

provided that a copy of every such

order shall be given to the Registrar.

Sec. 13 (4) Approval for alteration of the

memorandum relating change in the

place of the registered office from

one State to another.

Sec. 13 (5) To dispose of the application

received under sub-section (4) within

a period of sixty days and before

passing any order to satisfy itself that

the alteration has the consent of the

creditors, debenture-holders and

other persons concerned with the

company or that the sufficient

provision has been made by the

company either for the due

discharge of all its debts and

obligations or that adequate security

has been provided for such

discharge.

Sec. 16 Direct the company to change its

name or new name as the case may

be, if the name is identical with or

too nearly resembles the name by

which a company in existence had

been previously registered or

resembles to a registered trade

mark.

Sec. 87 Rectification in register of charges

due to omission to file any charge

with the registrar within time or to give

any intimation or any mis-statement

with respect to any charge.

Sec. 111(3) Non-circulation of members

resolution, if the regional director, by

order, declares that the rights

conferred by this section are being

abused to secure needless publicity

for defamatory matter on the

application either of the company or

of any other person who claims to

be aggrieved.

Sec. 140 (1) Prior approval to be given to remove

auditor appointed u/s 139 from his

office before the expiry of him term.

Sec. 399(1) (i) Documents delivered with a

prospectus in pursuance of Sec. 26

can be inspected by any person after

14 days from the date of publication

of prospectus only with the

permission of regional director.

• The powers & functions vested, under the

following sections of the Companies Act, in

Central Government has now been delegated

to the Registrar of Companies, subject to the

condition that the Central Government can

revoke such delegation of powers or may itself

exercise the powers under the said sections, if

in its opinion such a course of action is necessary

in the public interest, with effect from the date of

publication of this notification in the Official

Gazette. [F. No. 1/6/2014-CL.-V] S.O. 1353(E)

Dated 21st May 2014


Sec. 4 (2) Name stated in the memorandum &

its use by the company is not

undesirable.

Sec. 8 (1) Formation of companies with

charitable objects, etc.

Sec. 8 (4) (i) Approval for alteration of provisions

of the company's memorandum or

articles.

Sec. 8 (5) Allow the company to be registered

u/s. 8 subject to such conditions as

the Central Government deems fit

and to change its name by omitting

the word "Limited" or "Private

Limited", as the case may be, from

Section Powers & Functions Delegated Section Powers & Functions Delegated

9


its name and thereupon register

such company under this section.

Sec. 13 (2) Change in the name of the company

subject to the provisions of Sec. 4

(2) & (3) shall have effect only with

the written approval of the Registrar,

provided no such approval shall be

necessary where the only change in

the name of the company is the

deletion therefrom, or addition

thereto, of the word "Private",

consequent on the conversion of

class of companies.

• The powers and functions of the Central

Government in respect of allotment of Director

Identification Number under Sections 153 and

154 of the said Act has been delegated by the

Central Government to the Regional Director,

Joint Director, Deputy Director or Assistant

Director posted in the office of Regional Director

at Noida, with effect from the date of publication

of this notification in the Official Gazette. [F. No.

1/6/2014-CL-V] S.O. 1354(E) Dated 21st May

2014

Circular

• 46 e-forms including 3 general e-forms will be

available for filing w.e.f. 28th April 2014. 3

General e-Forms will be used for filing 17 forms

which are not available as e-forms as on

date.These 17 Forms will be required to be

submitted physically and after getting it duly

signed/certified by the professionals, if applicable,

as per the requirement of the forms. Please refer

article by Mr. Ashok Nawal for details of 17 forms.

[General Circular No. 09 /2014, dated: 25/04/

2014]

• Ministry of Corporate Affairs has empowered the

Registrar / Regional Director to conduct quick

enquiry against professionals and officers where

it is observed that any e-form/document/

information /application certified contains

incomplete information, false or misleading

information or omission of material information.

Such cases shall be referred to e-governance

cell MCA which shall also refer the case to the

concerned Institute for conducting disciplinary

proceedings as well as debar the errant

professional from filing any document on the

MCA portal. [General Circular No. 10 /2014,

dated: 07/05/2014]

• One time opportunity of extension in period of

reservation of name with due date of expiry

between 1st April 2014 to 28th April 2014 has

been extended to 31st May 2014 and this date

is further extended for another 15 days period

from the date of issue of impugned Circular i.e.

from 23.05.2014i.e 06.06.2014. Since new forms

were not available on MCA portal for

incorporation of Company. [General Circular

No. 11 /2014, dated: 12/05/2014 and 13/2014,

dated 23/05/2014]

• After considering difficulties being faced by the

Foreign Nationals while filling Incorporation Form

(INC-7) due to mandatory requirement of

submission of PAN details of intending Directors,

it has been clarified that PAN details are

mandatory only for those Foreign Nationals who

are required to possess "PAN" in terms of

provisions of the Income Tax Act, 1961 on the

date of application for incorporation. If Intending

Director who is Foreign National is not required

to compulsorily possess PAN, it will be sufficient

to furnish his/her Passport Number alongwith

undertaking, that provisions of mandatory

applicability of PAN are not applicable to him/

her. [General Circular No. 12/2014, dated 22/

05/2014]

FEMA (Important Circulars)• As per A.P. (DIR Series) Circular No. 38 dated

September 6, 2013, a non-resident (NR) or Non

Resident Indian (NRI), who has acquired and

continues to hold control in an Indian company

in accordance with SEBI (Substantial Acquisition

of shares and Takeover) Regulations, has been

permitted, under the FDI scheme, to acquire

shares of that company on a stock exchange in

India through a registered broker.

It has now been decided that in cases where the

NR investor (including an NRI) acquires shares

on the stock exchanges in terms of the aforesaid


1 0


A.P. (DIR Series) Circular No. 38 dated

September 6, 2013, the investee company would

have to file form FC-TRS with the AD Category-

I bank. Also now, the AD Category-I bank may

approach Regional Office of RBI to regularize

the delay in submission of form FC-TRS, beyond

the prescribed period of 60 days and in all other

cases, form FC-TRS shall continue to be

scrutinised at AD bank level as per existing

practice.

[RBI/2013-14/577 (A.P. (DIR Series) Circular

No.127) May 7, 2014]

• As per A.P. (DIR Series) Circular No.33 dated

February 09, 2010, AD Category - banks were

permitted to approve changes/modifications in

the drawdown/repayment schedule of the ECBs

already availed, both under the approval and

automatic routes. However, any elongation /

rollover in the repayment on expiry of the original

maturity of the ECB required the prior approval

of the Reserve Bank.

In order to simplify these procedures, it has been

decided to delegate the power to the designated

AD Category - I bank to allow re-schedulement

of ECB due to changes in draw-down schedule

and/or repayment schedule with the following

conditions:

i. There should not be any increase in the rate

of interest and no additional cost (in foreign

currency / Indian Rupees) should be

involved. Changes, if any, in all-in-cost (AIC)

can only be on account of the change in

average maturity period (AMP) due to re-

schedulement of ECB and post re-

schedulement, the AIC and the AMP are in

conformity with applicable guidelines. Also,

the re-schedulement is allowed only once,

before the maturity of the ECB.

ii. If the lender is an overseas branch of a

domestic bank, the prudential norms

applicable on account of re-schedulement

should be complied with.

iii. The changes on account of re-

schedulement should be reported to DSIM

through revised Form 83.

iv. The ECB should be in compliance with all

applicable guidelines related to eligible

borrower, recognised lender, AIC, AMP, end-

uses, etc.

v. The borrower should not be in the default /

caution list of RBI and should not be under

the investigation of Directorate of

Enforcement.

These provisions do not apply to FCCBs. [RBI/

2013-14/584 (A.P. (DIR Series) Circular No.

128) May 9, 2014]

• As per the Circular DBOD.No.BP.BC.107/

21.04.048/2013-14 dated April 22, 2014,

repayment of Rupee loans availed of from

domestic banking system through ECBs

extended by overseas branches / subsidiaries

of Indian banks is not permitted.

It has now been decided that eligible Indian

companies will not be permitted to raise ECB from

overseas branches/subsidiaries of Indian banks

for the purpose of refinance/repayment of the

Rupee loans raised from the domestic banking

system in respect of the following:

I. Scheme of take-out financing: Reference

A.P. (DIR Series) Circular No. 04 dated July

22, 2010.

II. Repayment of existing Rupee loans for

companies in infrastructure sector:

Reference A.P. (DIR Series) Circulars Nos.

25 and 111 dated September 23, 2011 and

April 20, 2012 respectively.

III. Spectrum allocation: Reference A.P. (DIR

Series) Circulars Nos. 28 and 54 dated

January 25, 2010 and November 26, 2012

respectively.

IV. Repayment of Rupee loans: Reference

A.P. (DIR Series) Circulars Nos. 134, 26,

78 and 12 dated June 25, 2012, September

11, 2012, January 21, 2013 and July 15,

2013 respectively.


No.129) May 9, 2014]

• As per A.P. (DIR Series) Circular No. 05 dated

August 01, 2005, A. P. (DIR Series) Circular No.

11 dated September 07, 2011, A.P. (DIR Series)

1 1


Circular No. 29 dated September 26, 2011, and

A.P. (DIR Series) Circular No. 31 dated

September 04, 2013 regarding ECBs, ECBs from

direct Foreign Equity Holders (FEHs) are

considered both under the automatic and the

approval routes. ECBs from indirect equity

holders and group companies and ECBs from

direct FEH for general corporate purpose are,

however, considered under the approval route

only. Further, any request for change of the ECB

lender in case of FEH requires RBI's approval.

To simplify the same, it has been decided to

delegate powers to AD banks to approve the

following cases under the automatic route:

I. Proposals for raising ECB by companies

belonging to manufacturing, infrastructure,

hotels, hospitals and software sectors from

indirect equity holders and group

companies.

II. Proposals for raising ECB for companies in

miscellaneous services from direct / indirect

equity holders and group companies.

Miscellaneous services mean companies

engaged in training activities (but not

educational institutes), research and

development activities and companies

supporting infrastructure sector. Companies

doing trading business, companies providing

logistics services, financial services and

consultancy services are, however, not

covered under the facility.

III. Proposals for raising ECB by companies

belonging to manufacturing, infrastructure,

hotels, hospitals and software sectors for

general corporate purpose. ECB for general

corporate purpose (which includes working

capital financing) is, however, permitted only

from direct equity holder.

IV. Proposals involving change of lender when

the ECB is from FEH - direct / indirect equity

holders and a group company.

Other aspects of the ECB policy such as

eligible borrower, recognised lender,

permitted end-use, amount of ECB, all-in-

cost, average maturity period, pre-payment,

ECB liability:equity ratio, refinance of

existing ECB, reporting arrangements, etc.

shall remain unchanged.


No.130) May 16, 2014]

• As per Foreign Exchange Management (Transfer

or Issue of any Foreign Security) Regulations,

2004 notified by the Reserve Bank vide

Notification No. FEMA.120/RB-2004 dated July

07, 2004.

It has now been decided that a Limited Liability

Partnership (LLP), registered under the Limited

Liability Partnership Act, 2008 (6 of 2009), as an

"Indian Party" under clause (k) of Regulation 2

of the Notification ibid. Accordingly, an LLP, may

henceforth undertake financial commitment to /

on behalf of a JV / WOS abroad in terms of the

extant FEMA provisions. Necessary amendment

to the Notification ibid has been issued vide

Notification No. FEMA.299/2014-RB dated March

24, 2014 (copy enclosed), which is effective from

the date of publication in the Gazette i.e. May

07, 2014.

The AD banks shall report the financial

commitment/s undertaken by an LLP in Form ODI

Part I and II and also other reporting (APR,

disinvestments, etc.) as per the existing reporting

requirements.


No.131) May 19, 2014]

• As per sub-regulation (2) of Regulation 16 of the

Foreign Exchange Management (Export of

Goods and Services) Regulations, 2000, notified

vide Notification No.FEMA.23/RB- 2000, dated

3rd May 2000, prior approval of the Reserve Bank

is required to be obtained by an exporter for

receipt of advance where the export agreement

provides for shipment of goods extending beyond

the period of one year from the date of receipt of

advance payment. Also, in terms of A.P. (DIR

Series) Circular No.81 dated February 21, 2012

AD Category- I banks have been permitted to

allow exporters to receive advance payment for

export of goods which would take more than one

year to manufacture and ship and where the

'export agreement' provides for the same.

1 2


To help exporters in this regard, it has now been

decided to permit AD Category- I banks to allow

exporters having a minimum of three years'

satisfactory track record to receive long term

export advance up to a maximum tenor of 10

years to be utilized for execution of long term

supply contracts for export of goods subject to

the conditions as under:

I. Firm irrevocable supply orders should be in

place. The contract with the overseas party/

buyer should be vetted and clearly specify

the nature, amount and delivery timelines

of products over the years and penalty in

case of non- performance or contract

cancellation. Product pricing should be in

consonance with prevailing international

prices.

II. Company should have capacity, systems

and processes in place to ensure that the

orders over the duration of the said tenure

can actually be executed.

III. The facility is to be provided only to those

entities that have not come under the

adverse notice of Enforcement Directorate

or any such regulatory agency or have not

been caution listed.

IV. Such advances should be adjusted through

future exports.

V. The rate of interest payable, if any, should

not exceed LlBOR plus 200 basis points.

VI. The documents should be routed through

one Authorized Dealer bank only.

VII. Authorized Dealer bank should ensure

compliance with AML / KYC guidelines and

also undertake due diligence for the

overseas buyer so as to ensure it has good

standing / sound track record.

VIII. Such export advances shall not be permitted

to be used to liquidate Rupee loans, which

are classified as NPA as per the Reserve

Bank of India asset classification norms.

IX. Double financing for working capital for

execution of export orders should be

avoided.

X. Receipt of such advance of USD 100 million

or more should be immediately reported to

the Trade Division, Foreign Exchange

Department, Reserve Bank of India.

In case Authorized Dealer banks are required to

issue bank guarantee (BG) / Stand by Letter of

Credit (SBLC) for export performance, the

following guidelines may also be adhered to:

I. Issuance of BG / SBLC, being a non-funded

exposure, should be rigorously evaluated

as any other credit proposal keeping in view,

among others, prudential requirements

based on board approved policy. Such

facility will be extended only for guaranteeing

export performance.

II. BG / SBLC may be issued for a term not

exceeding two years at a time and further

rollover of not more than two years at a time

may be allowed subject to satisfaction with

relative export performance as per the

contract.

III. BG/SBLC should cover only the advance on

reducing balance basis.

IV. BG/SBLC issued from India in favour of

overseas buyer should not be discounted

by the overseas branch / subsidiary of bank

in India.


No.132) May 21, 2014]

• On the basis of A.P. (DIR Series) Circular No. 25

dated August 14, 2013 on restriction on Gold

imports, the Government of India & RBI have

been receiving representations from the

jewellers, bullion dealers, AD banks, and trade

bodies to rationalize the guidelines for import of

gold.

Hence, it has now been decided to modify the

guidelines for import of Gold by the nominated

banks / agencies / entities. These revised

guidelines which will come into force with

immediate effect are as under:

Star Trading Houses / Premier Trading Houses

(STH/PTH) which are registered as nominated

agencies by the Director General of Foreign

Trade (DGFT) may now import gold under 20:80

scheme subject to the following conditions:

I. The STH/PTH should have imported gold

1 3


prior to the introduction of 20:80 scheme.

STH / PTH should get the required

verification done by the Department of

Customs at any port where they have

imported gold consignment in the past.

II. The first lot of gold under this scheme would

be based on the highest monthly import

during any of the last 24 months prior to the

RBI's notification dated August 14, 2013,

subject to a maximum of 2000 Kgs.

III. As in the case of other nominated agencies,

the eligible quantity may be imported by STH

/ PTHs from any port, subject to their

eligibility limit / maximum quantity allowed

to them.

IV. For proper compliance, before import, they

must submit the import plan, port-wise and

quantity-wise, to the concerned Customs

office, where the verification of the figures

of past performance was done. This

information will be sent to all the other ports

from which imports are permitted. The

overall discipline of exporting 20% of each

imported consignment before the next

consignment is imported will be equally

applicable to such STH/PTH importers.

Further, it has been decided to permit the

nominated banks, to give Gold Metal Loans

(GML) to domestic jewellery manufacturers

out of the eligible domestic import quota of

80% to the extent of GML outstanding in

their books as on March 31, 2013.


No.133) May 21, 2014]

• As per the Foreign Exchange Management

(Foreign Exchange Derivative Contracts)

Regulations, 2000 dated May 3, 2000

(Notification No. FEMA/25/RB-2000 dated May

3, 2000), A.P. (DIR Series) circular no. 32 dated

December 28, 2010, and A.P. (DIR Series)

circular no. 114 dated March 27, 2014 relating

to hedging of currency risk of probable

exposures based on past performance, resident

importers were allowed to book contracts up to

25 % of the eligible limit. The eligible limit is

computed as the average of the previous three

financial years' import turnover or the previous

year's actual import turnover, whichever is higher.

In order to provide importers with greater

flexibility in hedging facility, it has now been

decided to allow importers to book forward

contracts, under the past performance route, up

to 50 % of the eligible limit. Importers that have

already booked contracts up to previous limit of

25 % in the current financial year shall be eligible

for difference arising out of the enhanced limits.

All other operational guidelines, terms and

conditions shall apply mutatis mutandis.

[RBI/2013-14/613 (A.P.(DIR Series) Circular

No.135) May 27, 2014]

• As per subsections (1) and (5) of Section 26(A)

of the Banking Regulation Act, 1949 (10 of 1949)

has formulated the Reserve Bank (Depositor

Education and Awareness Fund) Scheme, 2014.

This Fund will be credited with the credit

balances of any account in India with a banking

company which has not been operated for a

period of ten years or any deposit or any amount

remaining unclaimed for more than ten years

within a period of three months from the expiry

of ten years.

With the objective of aligning the instructions in

respect of foreign currency accounts with the

above scheme, the RBI has issued Foreign

Exchange Management (Crystallization of

Inoperative Foreign Currency Deposits)

Regulations, 2014 vide Notification No. FEMA

10A/2014-RB dated March 21, 2014 under

Foreign Exchange Management Act (FEMA),

1999 relating to inoperative foreign currency

deposits.

Accordingly, Authorised Dealer banks shall

crystallise, that is, convert the credit balances in

any inoperative foreign currency denominated

deposit into Indian Rupee, in the manner

indicated below:

I. In case a foreign currency denominated

deposit with a fixed maturity date remains

inoperative for a period of three years from

the date of maturity of the deposit, at the

end of the third year, the authorised bank

shall convert the balances lying in the

1 4


foreign currency denominated deposit into

Indian Rupee at the exchange rate

prevailing as on that date. Thereafter, the

depositor shall be entitled to claim either the

said Indian Rupee proceeds and interest

thereon, if any, or the foreign currency

equivalent (calculated at the rate prevalent

as on the date of payment) of the Indian

Rupee proceeds of the original deposit and

interest, if any, on such Indian Rupee

proceeds.

II. In case of foreign currency denominated

deposit with no fixed maturity period, if the

deposit remains inoperative for a period of

three years (debit of bank charges not to

be reckoned as operation), the authorised

bank shall, after giving a three month notice

to the depositor at his last known address

as available with it, convert the deposit from

the foreign currency in which it is

denominated to Indian Rupee at the end of

the notice period at the prevailing exchange

rate. Thereafter, the depositor shall be

entitled to claim either the said Indian Rupee

proceeds and interest thereon, if any, or the

foreign currency equivalent (calculated at

the rate prevalent as on the date of payment)

of the Indian Rupee proceeds of the original

deposit and interest, if any, on such Indian

Rupee proceeds.


No.136) May 28, 2014]

1 5


CBEC Notified Exchange Rate for Conversion of Foreign Currency w. e. f.6th June 2014 [Notification No.45/2014-Customs (N.T) Dated 5th June 2014]

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 55.80 54.45

2. Bahrain Dinar 162.00 153.05

3. Canadian Dollar 54.90 53.50

4. Danish Kroner 11.00 10.65

5. EURO 81.70 79.75

6. Hong Kong Dollar 7.75 7.60

7. Kuwait Dinar 216.70 204.45

8. New Zealand Dollar 50.75 49.45

9. Norwegian Kroner 10.05 9.75

10. Pound Sterling 100.55 98.30

11. Singapore Dollar 47.80 46.60

12. South African Rand 5.70 5.35

13. Saudi Arabian Riyal 16.30 15.40

14. Swedish Kroner 9.05 8.80

15. Swiss Franc 67.05 65.20

16. UAE Dirham 16.65 15.70

17. US Dollar 59.85 58.85

S.No. Foreign Currency

Rate of exchange of 100 units of foreign currency

equivalent to Indian rupees

(For Imported Goods) (For Export Goods)

1. Japanese Yen 58.60 57.15

2. Kenya Shilling 69.85 65.90

SCHEDULE-II

1 6


Corporate Employees & Professionals –

Be Aware, MCA is Watching

By CMA Ashok B. Nawal

You may be aware that w.e.f. 28th April 2014 46 e-forms including 3 general e-forms are available for filing by

the stake holders on MCA Website i.e. http://www.mca.gov.in/ and 3 general e-forms to be used for filing 17

forms which are not available as e-forms on this site. I give below the list of 46 forms:

Description e-Form Form Versionupdated on

Form of application to the Central Government for appointment of Form 23C 02-June-2014cost auditor

Form for filing application or documents with Central Government Form CG-1 28-Apr-2014

Approval Services (Regional Director)

Application to Regional director for conversion of section 8 company Form INC-18 28-Apr-2014into company of any other kind

Application to Regional Director for approval to shift the RegisteredOffice from one state to another state or from jurisdiction of one Form INC-23 02-June-2014Registrar to another Registrar within the same State

Memorandum of Appeal Form ADJ 02-June-2014

Form for filing Application to Central Government (Regional Director) Form RD-2 02-June-2014

Applications made to Regional Director Form RD-1 28-Apr-2014

Approval Services (Registrar of Companies)

One Person Company- Application for Conversion Form INC-6 02-June-2014

Application for approval of Central Government for change of name Form INC-24 29-May-2014

Application to Registrar for obtaining the status of dormant company Form MSC-1 14-May-2014

Application for seeking status of active company Form MSC-4 7-May-2014

Applications made to Registrar of Companies Form GNL-1 02-June-2014

Application for striking off the name of company under the Fast Track Form FTE –Exit(FTE) Mode

Change Services

Application for reservation of name Form INC-1 02-June-2014

One Person Company- Nominee consent form Form INC-3 02-June-2014

One Person Company- Change in Member/Nominee Form INC-4 02-June-2014

Notice of situation or change of situation of registered office Form INC-22 02-June-2014

Conversion of public company into private company or private company Form INC-27 28-Apr-2014into public company

Notice to Registrar of any alteration of share capital Form SH-7 02-June-2014

Particulars of appointment of Directors and the key managerial Form DIR-12 02-June-2014personnel and the changes among them

1 7


Return of alteration in the documents filed for registration by foreign Form FC-2 02-June-2014company

Annual accounts along with the list of all principal places of business in Form FC-3 02-June-2014India established by foreign company

Charge Management

Application for registration of creation, modification of charge (other Form CHG-1 02-June-2014than those related to debentures)

Particulars for satisfaction of charge thereof Form CHG-4 17-May-2014

Notice of appointment or cessation of receiver or manager Form CHG-6 02-June-2014

Application for registration of creation or modification of charge fordebentures or rectification of particulars filed in respect of creation or Form CHG-9 02-June-2014modification of charge for debetures

Details of persons/directors/charged/specified Form GNL-3 02-June-2014

DIN Forms

Application for allotment of Director Identification Number Form DIR-3 02-June-2014

Intimation of change in particulars of Director to be given to the Central Form DIR-6 02-June-2014Government

Incorporation services

Application for reservation of name Form INC-1 02-June-2014

One Person Company- Application for Incorporation Form INC-2 02-June-2014

One Person Company- Nominee consent form Form INC-3 02-June-2014

Application for Incorporation of Comapny (Other than OPC) Form INC-7 02-June-2014

Notice of situation or change of situation of registered office Form INC-22 02-June-2014

Particulars of appointment of Directors and the key managerial Form DIR-12 02-June-2014personnel and the changes among them

Application by a company for registration under section 366 Form URC-1 7-May-2014

Information to be filed by foreign company Form FC-1 02-June-2014

Compliance Related Filing

Statement of amounts credited to investor education and protection Form 1INV –fund

One Person Company- Intimation of exceeding threshold Form INC-5 28-Apr-2014

Declaration prior to the commencement of business or exercising Form INC-21 02-June-2014borrowing powers

Return of allotment Form PAS-3 21-May-2014

Letter of offer Form SH-8 30-May-2014

Return in respect of buy-back of securities Form SH-11 21-May-2014

Filing of Resolutions and agreements to the Registrar Form MGT-14 23-May-2014

Notice of resignation of a director to the Registrar Form DIR-11 14-May-2014

RoC Document- ScheduleIV, ScheduleII, MoA and AoA Form GNL-2 29-May-2014

Annual Return of a Foreign company Form FC-4 02-June-2014

Description e-Form Form Versionupdated on

1 8


Return of dormant companies Form MSC-3 14-May-2014

Statement of unclaimed and unpaid amounts Form 5INV –

Form for Information by Cost Auditor to Central Government Form 23D 02-June-2014

Persons not holding beneficial interest in shares Form MGT-6 02-June-2014

Statutory Report Form 22 02-June-2014

Form for filing XBRL document in respect of cost audit report and other Form I-XBRL –documents with the Central Government

Form for filing XBRL document in respect of compliance report and Form A-XBRL –

other documents with the Central Government

Informational Services

Intimation to Registrar of revocation/surrender of license issued under Form INC-20 30-May-2014

section 8

Notice of Order of the Court or any other competent authority Form INC-28 02-June-2014

Information to be furnished in relation to any offer of a scheme or Form 35A –

contract involving the transfer of shares or any class of shares in the

transferor company to the transferee company

Investor Services

Form for filing complaint(s) against the company Investor 02-June-2014

Complaint Form

Provisions related to Mangerial personnel :

Form of application to the Central Government for approval of

appointment or reappointment and remuneration or increase in

remuneration or waiver for excess or over payment to managing Form MR-2 29-May-2014

director or whole time director or manager and commission or

remuneration to directors

Return of appointment of MD/WTD/Manager Form MR-1 14-May-2014

Annual filing eForms

Form for filing annual return by a company having a share capital with Form 20B 02-June-2014

the Registrar

Particulars of annual return for the company not having share capital Form 21A 02-June-2014

Form for filing balance sheet and other documents with the Registrar Form 23AC –

Form for filing Profit and Loss account and other documents with the Form 23ACA –

Registrar

Form for submission of compliance certificate with the Registrar Form 66 –

Form 67 (Addendum)

Form for filing addendum for rectification of defects or incompleteness Form 67(Add.) –

Annual filling-XBRL-eForms

Form for filing XBRL document in respect of balance sheet and other Form 23AC- –

documents with the Registrar XBRL

Description e-Form Form Version

updated on

1 9


Form for filing XBRL document in respect of Profit and Loss account Form –

and other documents with the Registrar 23ACA-XBRL

Limited liability partnership (LLP) forms

Form for intimating to Registrar of Companies of conversion of the Form 14 02-June-2014

company into limited liability partnership (LLP).

Refund eForm

Application for requesting refund of fees paid Refund Form 02-June-2014

Bank Account eForm

Application for simplifying bank account opening process as user shall Form 02-June-2014

not be required to submit any physical application form. BankACC

Attachments

Notice of appointment of auditor by the company Form ADT-1

Application for removal of auditor(s) from his/their office before expiry Form ADT-2of term

Notice of Resignation by the Auditor Form ADT-3

Application to Central Government for extension of time for filingparticulars of registration of creation / modification / satisfaction of Form CHG-8charge OR for rectification of omission or misstatement of anyparticular in respect of creation/ modification/ satisfaction of charge

Application for surrender of Director Identification Number Form DIR-5

Form of application for removal of disqualification of directors Form DIR-10

Circular or circular in the form of advertisement inviting deposits Form DPT-1

Return of deposits Form DPT-3

Statement regarding deposits existing on the commencement of the Act Form DPT-4

Application for grant of License under section 8 Form INC-12

Notice of situation or change of situation or discontinuation of Form MGT.3situation, of place where foreign register shall be kept

Return of Statutory Compliances Form NDH-1

Application for extension of Time Form NDH-2

Half Yearly Return Form NDH-3

Information Memorandum Form PAS-2

Private Placement Offer Letter Form PAS-4

Declaration of Solvency Form SH-9

Out of these 46 forms, following forms are required to be certified by Chartered Accountant in Practice or Cost Accountantin Practice or Company Secretary in Practice:

Form No. Purpose

35A Information to be furnished in relation to any offer of a scheme or contract involving(to be certified by the transfer of shares or any class of shares in the transferor company to theAuditor) transferee company

Description e-Form Form Version

updated on

2 0


CHG-1 Application for registration of creation, modification of charge (other than those relatedto debentures) including particulars of modification of charge by Asset ReconstructionCompany in terms of Securitization Reconstruction of Financial Assets and Enforcementof Securities Interest Act, 2002 (SARFAESI)

DIR-5 Application for surrender of Director Identification Number

Form 5 INV Statement of unclaimed and unpaid amounts Form for filing XBRL document in respect(under Companies of cost audit report and other documents with the Central GovernmentAct, 1956)

Form FTE Fast Track Exit

Form I-XBRL Form for filing XBRL document inForm for filing XBRL document in respect of cost(to be certified audit report and other documents with the Central Governmentby Cost Auditor)

List of 17 forms, which cannot be filed online and needs to be downloaded and get it duly signed / certified by theprofessionals and thereafter attached these forms with the prescribed general e-forms online. This arrangement willcontinue till 17 forms are made available as e-forms.

Sr. General Form to be attached Subject / Purpose of form to be attached

No. e-Form with General e-Form

1. GNL – 2 PAS-2 Information Memorandum

2. GNL – 2 PAS-4 Private Placement offer letter

3. GNL – 2 SH-9 Declaration of Solvency

4. GNL – 2 DPT-1 Circular Of Advertisement For Deposits

5. GNL – 2 DPT-3 Return of Deposits

6. GNL – 2 DPT-4 Return of Deposit existing at Commencement

7. GNL – 2 ADT-1 Notice of appointment of auditor by company

8. GNL – 2 ADT-3 Notice of resignation by auditor

9. GNL – 2 DIR-9 Report By Company to Roc For Din Of Existing Director

10. GNL – 2 NDH-1 Return of statutory compliances by Nidhi Company

11. GNL – 2 NDH-3 Half yearly return by Nidhi company

12. CG - 1 DIR-10 Form of application for removal of disqualification

13. RD – 1 CHG – 8 Application to CG for condonation of delay

14. RD – 1 MGT-3 Notice of situation or change of situation of registeredoffice and verification

15. RD – 1 ADT-2 Application for removal of auditors

16. RD – 1 DIR-5 Application for surrender of DIN

17. RD – 1 NDH-2 Application for extension of time to RD

Your kind attention is also invited on General Circular

No. 10/2014 dtd. 7th May 2014. Unfortunately, MCA

have not referred our Institute ICAI but it is referred

as ICOAI which is absolutely wrong and needs to be

objected by our Institute very strongly.

In accordance with the said circular Chartered

Accountant in Practice or Cost Accountant in Practice

or Company Secretary in Practice are required to

authenticate correctness and integrity of the docu-

ments being filed by them with MCA in electronic form.

2 1


Kindly note that, in accordance with Rule 10 of The

Companies (Registration, offices and Fees) Rules

2014, Registrar to examine e-forms or non e-form

attached and file with general forms on MCA Portal

to verify whether all the requirement have been

complied with and all the attachment to the form have

been duly scanned and attached in accordance with

the requirement of the said rule.

During examination of documents / returns, registrar

needs to take following action:

1. In case of discrepancies in filing of the

documents or returns etc. containing False or

misleading information or omission of

material fact or incomplete information is

observed, it is directed to the Registrar to conduct

the enquiry against the professionals who has

certified the forms and signatory thereof including

an officer in default who appears prima facie

responsible for submitting False or misleading

information or omission of material fact or

incomplete information. The notice will be

issued and such persons will have to offer

explanation / clarification within 15 days of receipt

of such notice.

2. Regional Director or Registrar will submit the

report in respect of enquiry initiated, irrespective

of outcome to the e-Governance Cell of the

MCA within 15 days of expiry of the period

given for submission of the explanation with

recommendation for initiating the action u/s

447 & 448 of The Companies Act 2013.

3. Reference of such matter also will be given to

the Institute of concern professionals i.e. Institute

of Chartered Accountants of India or Institute of

Cost Accountants of India or Institute of

Companies Secretary of India as the case may

be for initiative disciplinary action / proceedings.

Provisions of Sec 447 & 448 of The Companies Act

2013 are reproduced below:

447: Punishment for fraud

Without prejudice to any liability including repayment

of any debt under this Act or any other law for the

time being in force, any person who is found to be

guilty of fraud, shall be punishable with imprisonment

for a term which shall not be less than six months but

which may extend to ten years and shall also be liable

to fine which shall not be less than the amount

involved in the fraud, but which may extend to three

times the amount involved in the fraud:

Provided that where the fraud in question involves public

interest, the term of imprisonment shall not be less than

three years.

Explanation. — For the purposes of this section —

i. “fraud” in relation to affairs of a company or

anybody corporate, includes any act, omission,

concealment of any fact or abuse of position

committed by any person or any other person

with the connivance in any manner, with intent

to deceive, to gain undue advantage from, or to

injure the interests of, the company or its

shareholders or its creditors or any other person,

whether or not there is any wrongful gain or

wrongful loss;

ii. “wrongful gain” means the gain by unlawful

means of property to which the person gaining

is not legally entitled;

iii. “wrongful loss” means the loss by unlawful means

of property to which the person losing is legally

entitled.

448: Punishment for false statement

Save as otherwise provided in this Act, if in any return,

report, certificate, financial statement, prospectus,

statement or other document required by, or for, the

purposes of any of the provisions of this Act or the

rules made thereunder, any person makes a

statement,—

a) which is false in any material particulars, knowing

it to be false; or

b) which omits any material fact, knowing it to be

material, he shall be liable under section 447.

E-Governance Cell of MCA shall process each case

and issue necessary instruction for initiating the action

u/s 447 & 448 of The Companies Act 2013 wherever

prima facie case are made out.

E-Governance Cell which thereafter referred to the

cases to the concerned Institute for conducting

disciplinary actions, proceedings against the errant

members as well as debarred, the concerned

professional from filing of any document on MCA

2 2


PROFORMA FOR FORTNIGHTLY REPORT BY ROC

SL. NAME OF THE MEMBER OF THE MEMBERSHIP DETAILS OF REMARKS

No. PROFESSIONAL INSTITUTE NO /CP NO. THE CASE

PROFORMA FOR MONTHLY REPORT BY RD

Sr. NAME OF ROC DETAILS OF MEMBERSHIP FACT OF THE REMARKS

No. PROFESSIONAL NO /CP NO. CASE

Portal in future, which includes compliance audit by

Company Secretary, Financial Audit (Statutory Audit)

by Chartered Accountant, Cost Audit and Compliance

Audit by Cost Accountant as the case may be.

Proforma of monthly report to be filed by registrar on

or before 7th of every month is given below:

Conclusion:

1. Ensure there are no mistakes even of clerical nature.

2. Form should not be incomplete.

3. Ensure there is no omission

4. No misleading information including that of interpretation, if any

5. No false information

6. Keep supporting documents as evidence

Since there is risk element, reward also should be proportionate of the risk taken by you. However do not take

any risk if it falls in 1 to 5 above.

2 3


CENTRAL EXCISEv Extended period of limitation not invocable

unless there are positive evidences of duty

evasion: For initiation of proceedings for denial

of Cenvat Credit extended period of limitation not

invocable unless there are positive evidences

towards evasion of duty. [2014(303) E.L.T.530

(Guj.)]

v Cenvat Credit of Capital goods: Assessee has

availed credit of 100% of duty paid on capital

goods in the year in which capital goods

procured. Assessee not entitled to take credit of

more than 50% in the year in which capital goods

procured. No credit availed in subsequent year.

Assessee not required to reverse entire credit

but required to pay interest for the intervening

period having availed credit in advance and

penalty for committing an error. [2014

(303)E.L.T.587 (Tri. Mumbai)]

v Penalty under Section 11AC of the Central

Excise Act, 1944 not imposable when no

deliberate act : Assessee has availed

abatement available under Notification No.14/

2008-CE(N.T.). After pointed out by Department,

regarding excess abatement Assessee has paid

differential duty alonwith interest. In the show

cause notice issued by the Department, it was

alleged that they have availed the abatement

wrongly. Since word 'wrongly' means that there

was no deliberate act by the Assessee and

therefore due to absence of clear cut violation of

Section 11AC ibid penalty not imposable. [2014

(303)E.L.T.551(Tri- Mumbai)]

v Input-Output Norms may be followed strictly

unless there are specific reasons for

variations: Assessee has used duty free inputs

in the manufacture of exempted goods meant

for export under Notification No. 43/2001-

CE(N.T.) r.w. Notification No. 34/2001-C.E.(N.T.).

Department's allegation was that input-output

ratio for subject finished goods is required to be

100:100, as Department found some shortage

of inputs in the present case. But Department

has not given any reason as to why the Para

2.2.2 Part VI Chapter 7 of the Central Excise

Manual stating about variations in the Input

Output norms, should not be taken into

consideration. Since there was neither any

allegation nor evidence of removal of duty free

inputs and after keeping in view of the nature of

final product i.e. EAU De Perfume such shortage

of inputs can be condoned. Hence, Demand not

sustainable in the present case. [2014

(303)E.L.T.569 (Tri.-Del.)]

v Imposition of personal penalty: In this case

manufacturing unit has been penalized for

removal of goods clandestinely. When

manufacturing unit is being penalized, there is

no justification for imposition of a separate

penalty upon the Partner of the Manufacturing

Unit. Hence, personal penalty upon the Partner

imposed under Rule 25 of the Central Excise

Rules, 2002 is set aside. [2014(303)E.L.T.547

(Tri.Del)]

v No need to reversal of cenvat credit on

Sludge emerged from Effluent Treatment

Plant: Sludge was emerged from effluent

treatment plant in the nature of waste. Assessee

has sold that sludge on marginal consideration

basis. Department has demanded the duty

considering sludge as manufactured product.

Hon'ble CESTAT held that Sludge emerged from

effluent treatment plant cannot be considered as

manufactured product and therefore, there

cannot be a demand to reverse any cenvat credit

on the ground that a part of the input is covered

under in the waste that arises. [2014(303)

E.L.T.557 (Tri. Chennai)]

v Reference to Larger Bench not required when

there are Apex Court and High Courts

Decisions: On verification of the Stock of the

2 4


Assessee, it was found that the raw materials

and the finished goods were in excess of the

quantity recorded in the statutory records. Hence

the goods were seized. If presence of goods is

not entered in any records maintained in usual

course of business, goods are liable to

confiscation under Rule 25(b) of the Central

Excise Rules, 2004.

"With intent to evade payment of duty" in clause

(d) of Rule 25 of Central Excise Rules, 2004

cannot be incorporated in clauses (a), (b), (c) of

Rule 25 ibid wherein penalty is imposable without

reference to intention to evade of duty.

Further, it is also held that when there is marginal

conflict with previous decisions of the Tribunal

and if there are Apex Court and High Court's

Decisions are present contrary to those previous

decisions, then there is no necessity to refer the

matter to Larger Bench of Tribunal. [2014(303)

E.L.T.240(Tri.Del.)]

v Input Includes all things which are necessary

in making of final product marketable except

consumables: Definition of "Input" defined

under Rule 2(k) of the Cenvat Credit Rules, 2004

includes all things which are necessary to make

the final product marketable, excluding goods

which are in the nature of consumables. Since

Tool Kits and first aid kits are to be supplied to

buyers alongwith vehicle manufactured as per

the statutory requirements of the Motor Vehicles

Act, 1988 and Central Motor Vehicles Rules,

1989. Thus, both the tool kit and first aid kit would

be covered by the definition of "input" and hence,

cenvat credit is admissible to the Assessee.

[2014(303)E.L.T.193 (P&H)]

v Clandestine removal : Department has raised

demand of clandestine removal on the basis of

some invoices supplied by an unidentified

informer. No disclosure was made regarding

receipt of such invoices and no evidences were

produced to reflect upon the clandestine

manufacture and clearance of final product, by

the Department. Hence Order dropping the

charges of the clandestine removal of goods has

been upheld by the Hon'ble CESTAT. [2014

(303) E.L.T.236(Tri.Del.)]

v Accident and Medical Insurance Premiums

paid for employees is an input Service, but

when paid for family members of employees

it does not qualify as input services: When

employees are at work in factory, if accident

happens, employer is liable to pay compensation

and prudent businessman will be interested in

taking accident insurance policy for his worker

to cover business risk. Hence, taking of such

insurance by employer is in relation to

manufacturing activity and within broad definition

of Input Service given under under Rule 2(l) of

the Cenvat Credit Rules, 2004. But since Accident

and Medical Insurance Premium for family

members of employees does not have any direct

nexus with manufacturing activity and hence it

will not qualify as input services. [2014(34)

S.T.R.583 (Tri.Chennai)]

v Pest Control and AMC for ST Plant for

sewage disposal are input services eligible

for Cenvat Credit: Pest Control and AMC for

ST Plant for sewage disposal is input service and

entitled to take credit of service tax paid on the

same. Further, AMC for Air conditioners for

instrumentation room for testing of products has

nexus with manufacture of excisable products

as testing of products was imperative pre-

clearance requirement and hence, cenvat credit

on the said service is admissible. It is also held

that the statutory liability of providing canteen

facility under Section 46 of the Factories Act,

1948 does not exist in case where Assessee

does not have 250 or more employees/workers

during material period and in that case Assessee

is not entitled to take credit of Service Tax paid.

[2014(34)S.T.R(Tri.Bang.)]

v Distribution of credit by head office without

taking registration as Input Service

Distributor not deniable: Assessee has taken

cenvat credit on the basis of invoices which were

in the name of their Head office of the Assessee.

Department has denied the credit on the ground

that Head office of the Assessee has distributed

the credit without taking registration as 'Input

Service Distributor'. In this matter, Department

has not disputed the fact of rendering of service

and there is no allegation that Assessee has

availed cenvat credit more than the eligible

cenvat credit of the service tax paid. Further, prior

to 17.05.2012 there was no such provisions for

distribution of cenvat credit proportionately to

2 5


various units. Since there is no such violation of

any condition, Cenvat credit not deniable.

[2014(34)S.T.R. 758(Tri.Ahmd.)]

v Cenvat Credit of Service Tax on the basis of

invoices in the name of Head Office:

Department has rejected the cenvat credit of

service tax on the ground that input service

invoices were issued in the name of Head office

but credit was taken by unit at Mohali. Department

has not disputed the receipt of service or service

tax paid, hence procedural violation cannot result

in denial of substantive right of Cenvat credit.

[2014(34) S.T.R.751 (Tri.Del.)

v Cenvat Credit on Rent-a-Cab Service:

Assessee has used rent a cab service for

providing cabs to customers who are required

to come and inspect the goods as regards the

quality and specification before they are

removed. Since this is an activity required to be

completed before removal of goods, Assessee

is eligible for cenvat credit on the same.

v Duty payment alongwith interest before

issuance of Show Cause Notice: Assessee

instead of reversing the CENVAT credit actually

taken, paid duty on the transaction value at the

time of clearance of inputs. Revenue found it as

wrong procedure and imposed penalties under

Rule 15(1) and 15(2) of Cenvat Credit Rules,

2004 for short payment and for failure to apply

rules correctly for the purpose of assessment.

In this case, Assessee has paid the duty along

with interest before issuance of show cause

notice and besides short payments as there were

also some excess payments made by them.

Hence, it cannot be said that there was mis-

declaration or suppression of facts by the

Assessee. Therefore, revenue could not have

invoked extended period and cannot impose

penalty under Rule 15(2) ibid read with 11AC of

Central Excise Act 1944. Since Assessee was

expected to apply the relevant Rule correctly and

they had clearly misunderstood the legal

provisions relating to clearance of inputs, penalty

under Rule 15(1) is upheld by the Hon'ble

CESTAT. [2014-TIOL-881-CESTAT-BANG]

v Demand on clandestine removal of goods:

Department has raised demand of duty on

account of difference between the production

figures shown in RT 12 Returns and Annual

Financial Accounts maintained by the Assessee.

The identical dispute of clandestine removal of

goods was settled in favour of the Assessee in

their own case. Considering the same ratio,

demand of duty set aside by the Hon'ble

CESTAT. [2014-TIOL-901-CESTAT-KOL]

v Admissibility of Cenvat credit on cable

operator service, repair and maintenance

service, manpower supply service, pest

control service, telephones, Business

Auxiliary Service used/received in the

residential colony located outside the

factory: Hon'ble Tribunal is bound by the

decision of Bombay High Court in case of

Manikgarh Cement 2010-TIOL-720-HC-MUM-

ST which is the jurisdictional High Court wherein

it is held that any service availed in residential

colony has no nexus with the manufacturing

activity of the Assessee and credit is not

admissible. Appeal dismissed by the Hon'ble

CESTAT. [2014-TIOL-833-CESTAT-MUM]

v Utilization of common input services of

telecom, Chartered Accountant, Business

Auxiliary Services, Management Consultancy

and General Insurance Services used for

manufacture of dutiable and exempted

products: The option of maintaining separate

account and inventory in respect of the above

services cannot be forced upon assessee as it

is practically impossible for them. Moreover, on

account of retrospective amendment to Rule

6(3) of Cenvat Credit Rules, 2004 Assessee has

option to reverse proportionate credit which the

assessee is following. Hence, demanding an

amount of 5%/10% of the sale value of exempted

goods is not sustainable. Assessee has strong

prima facie case in their favour. [2014-TIOL-941-

CESTAT-DEL]

v Clandestine Removal: It is well settled law that

charges of clandestine removal cannot be made

on the basis of alleged consumption of one of

the raw materials. Hence, in the absence of any

direct or corroborative evidences, finding of

clandestine removal cannot be upheld. [2014-

TIOL-906-CESTAT-DEL]

v Refund of accumulated CENVAT Credit:

Procedure prescribed and the conditions to be

fulfilled for claim of cash refund of accumulated

CENVAT Credit under Rule 5 of the Cenvat Credit

2 6


Rules, 2004 and for claiming rebate in respect

of export of services in term of Rule 5 of the

Export of Service Rules, 2005 are totally different.

In this case lower authorities are mixing up the

two issues with each other. Notification No. 12/

2005-ST issued under Rule 5 of Export of

Service Rules, 2005 has no application in the

present case of Refund under Rule 5 of the

Cenvat Credit Rules, 2004. Order has been set

aside and matter remanded to original authority.

[2014-TIOL-693-CESTAT-DEL]

v Interest under Sec 11 BB of the Central Excise

Act, 1944 on delayed refund: Department has

denied interest on the refund amount, on the

ground that the Petitioner had given in writing

that they would not claim any interest of refund

amount. A bare perusal of Section 11BB of the

Act, reveals that the payment of interest is not

depended on the claim by the party. But It is

automatic. In case, if refund is not paid within

three months from the date of receipt of the

application, the authority concerned is under

obligation to pay the interest. In Section 11BB of

the Act the word used is "there shall be paid to

the applicant." It means that it is not discretionary

and has to pay. The payment of interest is

statutory and automatically. The waiver of the

interest by the party has no relevance and on

the said ground payment of interest cannot be

denied. [2014-TIOL-676-HC-ALL]

v Substantial benefit should not be denied if

conditions are fulfilled: Assessee filed refund

claim on 31.03.2009 i.e. the last date for filing

refund claim for the period July 2008 to

September 2008 as per the Notification No.41/

2007-ST. The said refund claim was returned

for deficiency of documents and rectified claim

re-submitted on 27.04.2009, which was rejected

on the ground of limitation. Appellate Authority

has rejected the refund claim on the ground that

the refund application should be filed within

limitation period accompanying with all

documents and hence the application filed on

the last date is not correct in absence of the

documents. In this case it is undisputed fact that

assessee is eligible for refund claim and had

resubmitted the application with all documents.

Hence, substantive benefit should not be denied

to an assessee if conditions are fulfilled. [2014-

TIOL-737-CESTAT-BANG]

v Payment of bills made at discounted value

by Assessee to service provider: No evidence

has been brought on record by the Revenue to

indicate that reduced service tax has been paid

by the assessee to the service provider. Hence,

cenvat credit of full service tax shown to have

been paid on the duty paying document will be

admissible to the Assessee. [2014-TIOL-739-

CESTAT-AHM]

CUSTOMSv Royalty and remuneration for training not

includible in the assessable value of goods

manufactured by Assessee: Assessee is

importing goods from their parent company,

Besides importing goods they are also allowed

to manufacture the same goods in India for which

Parent Company were charged Royalty for

technical Know how and remuneration on

account of training. Department has added the

element of royalty as well as remuneration on

account of the training in relation to manufacture

of the goods. Cost of royalty and remuneration

for training is includible in Assessable value of

goods only if such payment constitutes a condition

pre-requisite for sale of goods. Since Technology

License Agreement for Technical Know how and

training therein, related to manufacturing of

identical articles in India and having no

connection with trading of imported goods,

Royalty and remuneration for training not

includible in the Assessable value of the Goods.

[2014(303)E.L.T.582(Tri.-Mumbai)]

v Partners and Partnership Firms - both

simultaneously not liable to Penalty:

Partnership Firm is not juristic entity and does

not have existence independent of its Partners.

Penalty levied on Partners is recoverable from

each Partner individually, while penalty on

Partnership Firm is also recoverable from

partners. Hence, Partners are penalized twice

for same offence. Section 26 of the Partnership

Act, 1932 falls in Chapter IV thereof which deals

with relations of partners with third parties. Hence

it cannot be relied on to say that firm has

independent existence than that of partners for

imposition of penalty.

2 7


But under Customs Act, 1962 particularly under

Section 112(a), simultaneous penalties can be

imposed on both Partner and Partnership Firm.

Hence, whether Jupiter Exports [2007(213)

E.L.T.641 (Bom.)] holding that separate penalty

on partnership firm and partner cannot be

imposed or later Division Bench's decision in the

matter of Textoplast Industries [2011(272)

E.L.T.513(Bom.)] holding that it was permissible

to impose penalty separately on partnership firm

and partner, particularly in adjudication under

Customs Act, 1962 was correct law hence,

Matter referred to larger Bench for opinion.

[2014(303)E.L.T.161(Bom.)]

v Re-opening of assessments for denial of duty

drawback: Assessee has imported goods and

re-exported them after 100% examination and

verifying the identification of imported goods.

Department has re-opened the assessment of

goods holding that identity of goods re-exported

is not established. In the present matter, there is

no case that imported goods were diverted

elsewhere and were completely substituted by

the Assessee with indigenous manufactured

goods. Further, Documentary evidences

produced by Assessee in support of their claim

of re-export of imported goods not distinguished

by the Department. Hence, Export incentives not

deniable on the basis of presumption and doubts.

[2014(303)E.L.T.263(Tri.Ahd.)]

v Brand Rate fixation for benefit of Drawback

under Customs, Central Excise Duties and

Service Tax Drawback Rules, 1995: Engines

manufactured by the Assessee were mentioned

in the AIR of Draw Back but same was not

applicable to the goods exported in discharge of

export obligation against advance authorization

in terms of para 7(b) of the Notification No. 36/

2005-Cus(N.T). Therefore there was only one

option remained for claiming Brand Rate under

Rule 6 or Rule 7 ibid and Assessee has claimed

Brand rate under Rule 6 ibid. But Department's

contention was that when All Industry Rates of

Draw Back has been notified in respect of the

goods exported, in such cases Application was

to be filed under Rule 7 ibid. In this case the

condition of Rule 6 ibid that Brand rate of Draw

Back could be filed only where amount of rate of

drawback has not been determined is not

violated hence, benefit of drawback scheme

cannot be denied merely because application

was filed under Rule 6 ibid and not under Rule7

ibid. [2014(303)E.L.T.305(G.O.I.)]

v Conversion of free shipping bill to drawback

shipping bill: High Court of Mumbai in the case

of Repro India Ltd - 2007-TIOL-795-HC-MUM-

CX has specifically laid down in Para 8 that the

intentions of the Government is not to export

taxes but only to export the goods. In the case in

hand, if the duty drawback is not allowed to the

Assessee, the Assessee is perforce required to

export the taxes, which gets included in the FOB

value. This being not the intention, conversion

of free shipping bills into drawback shipping bills

needs to be allowed. [2014-TIOL-754-CESTAT-

AHM]

SERVICE TAXv Refund not deniable on the ground that

amount in question was not reflected in

balance Sheets as receivable from Revenue:

Service Tax was deposited by the Assessee in

advance relating to services which were to be

provided by them to Service receiver. But said

services were actually not provided on account

of cancellation of an agreement and service tax

was not required to be paid by the Assessee.

Assessee has refunded entire consideration

received by them to the Service Receiver

alongwith service tax amount. In such situation,

refund of the Service Tax amount cannot be

rejected on the sole technical ground that same

amount was not shown in the balance sheet as

receivable from Revenue. Irrespective of non-

reflection of tax amount in the Balance Sheet the

same is required to be refunded in as much as

the same was not required to be paid by the

Assessee. [2014(34)S.T.R.586(Tri.Del.)]

v Transfer of property in goods in execution

of Works Contract is deemed to be Sale of

goods: Transfer of property in goods (Whether

as goods or in some other form) involved in

execution of Works Contract has been enlarged

ordinary understanding of 'goods' by bringing

within its fold goods in form other than goods

viz. Goods which have ceased to be chattels or

movables or marchandise and become attached

or embedded to earth. Goods which have by

2 8


incorporation become part of immovable property

are deemed as goods. Hence transfer of Property

in goods is deemed to be sale of goods involved

in execution of works contract by person making

transfer and purchase of those goods by person

to whom such transfer is made.

"Tax" on the sale or purchase of goods" in Entry

54 of List II of Seventh Schedule of Constitution

of India read with definition of Article 366(29A)

includes tax on transfer of property in goods

whether as goods or in form other than goods

involved in execution of works contract. Hence

restricted meaning of "Sale" has been undone

by 46th Constitutional Amendment so as to

include work contract. After this amendment sale

element of contracts covered by six sub clauses

of clause (29A) of Article 366 are separable and

may be subjected to sales tax by States under

Entry No. 54 of List II and there is no question of

applying dominant nature test.

Taxing the sale of element in a works contract is

permissible even after incorporation of goods

provided tax is directed to the value of goods at

the time of incorporation and does not purport

to tax the transfer of immovable property.

Further, it is also directed that the Maharashtra

Government has to bring clarity in Rule 58(1A)

of MVAT Rules so that the valuation of goods

provided under Rule 58(1A) can be done after

meeting above criteria. [2014(34) S.T.R.

481(S.C.)]

v Assessee acting in dual role: Assessee acting

as Dealer of Motor Vehicle and as well as

Authorized service Station. Assessee has utilized

GTA services for transport of vehicle to their

premises relate to their activities as a Dealer.

This service cannot be treated as Input Services

for activities as Authorized Service Station.

Circular No. 699/15/2003-CX dated 05.03.2003

issued by C.B.E.C also supports this view.

[2014(34)S.T.R.797(Tri.Bang.)]

v Landmark Decision -Supreme Court

Constitution Bench overrules Larger Bench

decision - Indivisible composite contract for

sale and installation of goods is "Works

Contract" and not a contract for sale of

goods: Assessee has entered into composite

contract for manufacture, supply and installation

of lifts in a building. Issue was whether this

contract will cover under "Contract for sell of

goods" or under "Works Contract". Hon'ble Apex

Court in their earlier decision in the matter of Kone

Elevators [2005(181)E.L.T.156(S.C.)] holding

that taking note of customers obligation to do

civil construction and time schedule for delivery

as a contract for sale and not a works contract

has been overruled by the Apex Court in the

present decision. In this case Hon'ble Apex Court

has held that since Company had brouchurs for

various types of lifts and order was required to

be placed with regard to building. Nature of these

contracts exposits supply of goods/material and

installation of lift on certain norms, parameters,

various technical and other aspects which

requires considerable skill and experience.

Individually manufactured goods such as lift car,

motors, ropes, rails etc. are components of lift

which are eventually installed at site for lift to

operate in building. After goods were assembled

and installed with skill and Labour at site, it

became permanent fixture of building. Hence,

fundamental characteristic of works contract is

satisfied and hence present contract involving

transfer of property and element of service will

cover under Work Contract.

State Government's plea that element of labour

and service can be deducted from total contract

value without treating composite contract as

works contract, is rejected by the Hon'ble Apex

Court as it would frustrate constitutional

provision. [2014(34)S.T.R.641(S.C.)]

v Value of Goods and Materials supplied free

of cost by Service Recipient shall not be

included in the gross amount charged:

Service recipient has supplied goods and

materials free of cost to the provider of the

taxable construction service. Since the said issue

is no longer res integra the value of goods and

materials supplied free of cost by Service

Recipient shall not be included in the gross

amount charged. [2014-TIOL-946-CESTAT-

DEL]

v Refund claim under Notification No. 17/2009-

ST: Assessee has filed refund claim under

Notification No. 17/2009-ST after exporting the

goods. The said Refund claim was filed as per

Notification No. 17/2009-ST for the period of April

2 9


2009 to June 2009. The said Refund Claim was

sanctioned but in review proceedings the refund

was denied on the ground that Assessee has

not complied with condition of earlier Notification

No. 41/2007-ST. Hon'ble CESTAT after

considering the ratio in the case of Havells India

Ltd. 2013-TIOL-1732-CESTAT-DEL wherein

after considering the the Board Circular dt.

01.01.2010 it was held that the scheme

prescribed under Notification No. 17/2009-ST

would be applicable even for such export taken

prior to its issuance, hence, discrepancies raised

by the Appellate Authorities that condition of

Notification No. 41/2007-ST are to be complied

with are not required to be fulfilled by the

Assessee. Appeal allowed by the Hon'ble

CESTAT. [2014-TIOL-900-CESTAT-MUM]

v Consideration received towards cheque

bouncing charges, on foreclosure charges,

towards operating lease/hire purchase

transactions: There are conflicting views and

conclusions on the issue whether foreclosure

charges fall within the ambit of "banking and

financial" services. Further, in the matter of

financial leasing services, adjudicating authority

has failed to deal with the claim made by the

assessee of exemption under Notification 4/

2006-ST. Hence, prima facie invocation of

extended period is not justified. [2014-TIOL-935-

CESTAT-DEL]

EXPORT ORIENTED UNITv Remission of duty destroyed in the Fire

Accident: Assessee a 100% EOU procuring duty

free imported and indigenous goods for use in

manufacture of bulk drugs/pharmaceuticals

products. Since finished goods as well as raw

materials destroyed in fire Assessee has sought

for remission of Customs duty as well as Excise

duty under section 23 of Customs Act, 1962 and

Rule 21 of Central Excise Rules, 2002. But

Department has issued Show cause notice

demanding Customs duty on raw materials in

terms of the provisions of Section 72 of the

Customs Act read with conditions laid down in

the B-17 bond executed. In this case Hon'ble

CESTAT held that one of the conditions of the

Licence and warehousing bond executed by the

Assessee is that they will insure the goods

deposited in the warehouse against theft,

pilferage, fire accident and other natural

calamities, etc. at least for a value equal to the

Customs duty by a warehousing insurance policy

drawn in favour of the Commissioner of Customs.

By failing to insure the imported materials which

were deposited in the warehouse for that part of

the value representing Customs duty on the

imported goods, there is a clear breach of

Sections 58 & 65 of the Customs Act, 1962.

Further it is also held that Section 23 is a general

provision whereas Sections 58 & 65 are specific

provisions and they have to be complied in toto

and preferred over the general provision.

Assessee cannot seek benefit of remission under

Section 23 of the Customs Act, 1962 hence,

customs duty on raw materials correctly

demanded. Similarly, in respect of raw materials

procured in terms of Notification No. 1/95-CE &

by following the procedure prescribed under the

Central Excise (Removal of Goods at

Concessional Rate of Duty for Manufacture of

Excisable Goods) Rules, 2001, Explanation to

Rule 6 mandates that if the goods have not been

used for the intended purpose and duty thereon

is required to be paid & Rule 21 of the Central

Excise Rules, 2002 cannot come to the rescue

of the Assessee. [2014-TIOL-933-CESTAT-

MUM]

INCOME TAXv Foreign Education expenses of whole time

director is allowable expenditure: Foreign

education expenses of the whole time director is

allowable expenditure when in pursuance of the

Board resolution an agreement between the

assessee and the Director was signed according

to which after studies the Director will work for

two years after his return from USA and there

was no dispute about the fact that this agreement

was also acted upon. [2014-TIOL-270-ITAT-

AHM]

v The tenant would be entitled to the same benefits

of depreciation as would be applicable to the

owner of the building. [2014-TIOL-884-HC-

KERALA-IT]

v When the department has accepted the TDS

certificates, books of account and also accepted

3 0


that the petitioner was not exigible to sales tax

for the job work carried out by him, the only issue

is that AO will verify as to whether the amount

shown in TDS certificates has been deposited in

the Government's account by the deductee and

cannot be considered a case of unjust

enrichment. [2014-TIOL-883-HC-ALL-CT]

v The instructions of 2011 of the Board providing

for revised monetary limits for filing the appeals

to the Tribunals, High Courts and Supreme

Court, would not apply to all pending cases and

will apply to only appeals filed on or after 9th

February. [2011-AIT-2014-56-HC]

VATv VAT can be imposed on sale of goods and

not on service: Hon'ble High Court held that

where element of service has been declared and

brought under the Service Tax vide Government

of India notification dated 06.06.2012, (i.e. 40%

of bill amount to the customers having food or

beverage in the restaurant was made liable to

service tax) no Value Added Tax can be imposed

thereon. Since Service can be taxed by Service

Tax Laws and the authority competent to impose

service tax has also assumed competence to

declare what is service. [AIT-2014-63-HC]

MISCELLANEOUSv Statutory period for the purpose of an act in

a court or office: Whenever a period is

prescribed by a statute for the purpose of an act

in a court or office and the period expires on a

holiday, then according to Section 10 of the

General Clauses Act, the act should be

considered to have been done within the period

prescribed if it is done on the next working day

on which the court or office is open. In this case

petitioner deposited the amount on the next

working day i.e. 5th November, 2005 and

consequently did not commit any default in

depositing the excise duty under Rule 8 of the

Central Excise Rules, 2002. Hence order has

been quashed by the Hon'ble High Court.

[AIT-2014-80-HC]

3 1


v India becomes THIRD Largest Economy in world after USA & China: World Bank

v CBEC reduces Tariff Value for Gold, Silver, Oils & Other

v CBDT allows deputation posting to Ravishankar Srivastav as CGM with SEBI & Amitabh

Shukla as ADG (Pragramme) with Doordarshan

v 54 Indian companies figure in Forbes list of 2000 top companies in world

v Promotion to Commissioner-rank: CBEC wraps up DPC in Mumbai; Last name is N Sridhar

v RBI urges income tax payers to pay dues in advance; tax can be paid through 29 authorized

bank branches

v PM directs his Cabinet colleagues to work on 100-day Agenda

v Arun Jaitley keen to hold meeting with State FMs to fast-track GST roll-out

v Marine products exports surpasses USD 5 bn mark last fiscal

v Government appoints former IB Chief Ajit Doval as National Security Adviser

v Pending Cases in CESTAT reaches 100,000 Mark

v India ranks Second in Global Textiles Exports

v CBEC goes for reshuffle of Members' charge - Joy Kumari Chander gets P&V and Mala

Srivastava given Customs with Additional charge of L& J

v RBI Governor makes no change in key interest rate but reduces SLR by 50 basis point

v PM gives additional charge of Munde's Rural Development Ministry to Gadkari

v Ministry of Finance notifies constitution of SIT on Black Money

3 2


v Chennai CBI traps Deputy Director of Ministry of Shipping in corruption case

v DRI detects commercial fraud to the tune of over Rs.3,100 crore

v MoF directs Public Sector Banks to focus on recovery

v Ahmedabad DRI again seizes 8.8 kg gold worth Rs 2.64 Cr smuggled through sea route

v Smuggling- Two Customs Officials under lens

v CBI Court gives 1 year jail to 2 Customs Officials for bribe

v Guwahati Airport Customs seizes 3.6 lakh foreign cigarettes

v CBI books 46 cases in Chit Fund Scam

v Presidential Award: CBEC sanctions additional allowance of Rs 2,500/- in addition to

Rs. 3,000/- allowance per month to officers for fresh act of meritorious service at risk of life.

3 3


v Responsible Employee

Employer : "In this job we need someone who is responsible."

Applicant : "I'm the one you want. On my last job, every time

anything went wrong, they said I was responsible."

v Funny business jokes - Client at a bank

A client comes to a bank:

My cheque was returned with a remark: "Insufficient

funds". I'd like to know whether it refers to mine or the

Bank?

v Lazy Employee

The owner of a large factory decided to make a surprise visit and check up on his staff.

Walking though the plant, he noticed a young man leaning lazily against a post.

"Just how much are you being paid a week?" said the owner angrily.

"Three hundred bucks," replied the young man.

Taking out a fold of bills from his wallet, the owner counted out $300, slapped the money into

the boy's hands, and said "Here's a week's pay -- now get out and don't come back!"

Turning to one of the supervisors, he said "How long has that lazy bum been working here

anyway?"

"He doesn't work here," said the supervisor. "He was just here to deliver a pizza!"

3 4


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Bhagwati Shipping Private Limited Custom House Agent (11/578), Custom Clearance of Export and Importconsignments

A.B. Nawal & Associates, Cost Accountants Practicing Cost Accountant, Cost Audit, Central Excise, Adjudication matters

up to CESTAT, VAT Audit.

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3 5


NOTES

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NOTES