TIOL-DDT 1655
20.07.2011
Wednesday
CBEC has notified new ER-1 and ER-3 Forms. ER-1 is the monthly return for production and removal of goods and other relevant particulars and CENVAT credit and ER-3 is the quarterly return to be filed by SSI Units.
It is not really known why the CBEC had to change these forms, because there is hardly any change. Assessees who pay more than Rs. 10 Lakhs duty will anyway file the returns electronically; so it is only the small manufacturers who will have to get the new forms printed.
In the new ER-1, in Sl.No. 8 - Details of CENVAT credit taken and utilized ; there is no column for Secondary and Higher Education Cess - there is only one column for Education Cess. Has the Board merged Education Cess and SHE Cess? Even in the Instructions at the end of the form, SHE Cess has been omitted. In Sl. No. 12 of the instructions, the other duties are specified. Even here there is only Education Cess and no SHE Cess.
Does it mean that the two cesses are merged? If so, it is a good gesture. In fact they could simply make it as the duty inclusive of cesses. If the duty is 10 percent, it can be shown as 10.3 percent inclusive of the two cesses. That will save a lot of work and unnecessary accounting confusion.
But the Board seems to have forgotten one simple aspect - As per Rule 3(7)(b) of the CENVAT Credit Rules, the Credit of SHE Cess can be used only for payment of SHE Cess. Now how are they going to monitor this when the two cesses are clubbed in the return?
The Column for “Credit utilized for payment of amount in terms of Rule 6 of the CCR”, is omitted. CAN CENVAT CREDIT BE USED FOR PAYMENT OF 5 PERCENT AMOUNT AS SPECIFIED UNDER RULE 6(3)(i) OF THE CENVAT CREDIT RULES?
Notification No. 16/2011-CENT, Dated: July 18, 2011
New Registration For Existing LTUs - Registration with Assistant Commissioner/Superintendent
AS per Notification No. 20/2006-Central Excise (N.T), dated the 30th September, 2006, in case a new factory or service provider or input service distributor or first or second stage dealer of a unit in LTU becomes liable to be registered, the application shall be made before the Chief Commissioner of the LTU. Now the Government has amended this notification to make registration under Central Excise before the Assistant Commissioner/Deputy Commissioner and under Service Tax before the Superintendent in the LTU.
Notification No. 17/2011-CENT, Dated: July 18, 2011
Utilizing Refunded SAD for Duty Payment (DEPB) Extended by Two Months
CBEC Circular No 27/2010-Customs, dated 13.08.2010,provided the facility of manual filing of Bill of Entry for utilizing the amount of re-credited 4%CVD(SAD) refunds for payment of duty in case of re-creditedDEPB/ Reward Schemescripsupto30.12.2010. However several representations have been received from trade and industry to extend the timeup to30th June, 2011 for using re-credited 4%CVD(SAD) amount inDEPBas they have not been able to utilize the re-creditedDEPB/ Reward Scheme scripswithin the stipulated time.
By Circular No.11/2011-Customs, dated 24.02.2011, Government had extended this time till 30.06.2011. Still there are representations that the trade could not use this facility within the stipulated time.
So a benign Government has now extended it till 15.09.2011, with a rider that no further extension shall be given.
CBEC Circular No. 30/2011-Cus., Dated: July 19, 2011
Export Warehousing - Tijara of Alwar district included
BY Circular No. 581/18/2001-CXdated 29th June, 2001, CBEC has specified places where warehouses may be established.
Representations have been received from the trade to include Tijara Tehsil of Alwar District in the state of Rajasthan in the list of places mentioned in the said Circular.
Board is of the view that extension of the facility of export warehousing toTijara Tehsil of Alwar District in the state of Rajasthan would facilitate the trade and industry and so it is included the list.
This Circular had been amended about 15 times and new places are added.
The places where warehouses may be established and registered are:-
1. Ahmedabad,
2. Bangalore,
3. Kolkata,
4. Chennai,
5. Delhi,
6. Hyderabad,
7. Jaipur,
8. Kanpur,
9. Ludhiana,
10. Mumbai,
11. The districts ofPuneandRaigadin the state of Maharashtra,
12. The district of EastMidnaporein the state of West Bengal,
13. The district ofKancheepuramin the state ofTamilnadu,
14. The district of Indore in the state of Madhya Pradesh,
15. ThetalukaAnkleshwarin the district ofBharuchin the state of Gujarat,
16. NaviMumbai in the district of Thane in the state of Maharashtra,
17. Sholinghurin the district of Vellore in the state ofTamilnadu,
18. Bidadiin the Bangalore Rural District, Karnataka,
19. Thedistrict ofThiruvallurin the state ofTamilnadu,
20. The district of Gautam Budh Nagar in the state of Uttar Pradesh,
21. The district of Nagpur in the state of Maharashtra and
22. The Tehsil of Tijara of Alwar district in the state of Rajasthan
Now, the list is interesting - it basically covers the places, which have no ports; understandably so. But the list has cities like Chennai, Kolkata and Mumbai, which have ports. And the list does not cover port cities like Kochi, Mangalore, Vizag etc.,
Why?
CBEC Circular No. 949/10/2011-CX, Dated: July 19, 2011
Service Tax on deputation of ONGC officers in Directorate General of Hydrocarbons - CBEC Clarifies
REPRESENTATION has been received seeking clarification on applicability of service tax under Manpower Recruitment and Supply service in respect of employees sent on deputation by ONGC to Directorate General of Hydrocarbons (DGHC).
Board Clarifies:-
++ The activity of ONGC of providing its staff on deputation to DGHC for a remuneration in the form of reimbursement from DGHC, is chargeable to service tax under 'Manpower Recruitment or Supply Agency's Service' in terms of Section 65 (105) (k) of the Finance Act.
++ As per Section 65 (68) of the Finance Act, Manpower Recruitment or Supply agency means any person engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to any other person.
++ In the said definition the key words are, any person; directly or indirectly; in any manner; and temporarily or otherwise.
++ It thus appears that organisations that make available their staff to other entities would be covered under the said definition.
++ The motive for providing such manpower is of no consequence.
++ The requirement for taxability is that the person should be engaged in an activity that is covered under Section 65 (105)(k) ibid.
++ The volume of activity undertaken or the presence or absence of the profit motive is irrelevant.
CBEC Letter F No. F. No.137/35/2011 - Service Tax., Dated: July 13, 2011
No Prosecution of Nominee Directors of FIs and Banks
NORMALLY Directors nominated by Government in Companies are generally exempted from prosecution. This facility is now extended to nominee directors on behalf of Public Financial Institutions, Financial Institutions and banks on the board of companies.
MOC General Circular No. 47/2011-Cus., Dated: July 14, 2011
No Profit Companies Can Hire High Cost Managers
At present, listed companies and their subsidiaries companies, which are not having profits or having inadequate profits, have to seek approval of the Government for payment of remunerations exceeding Rs. 4 lakh p.m. even to professional managerial person, who has no interest in the capital or any relation with the directors of the company.
Now this condition is waived subject to the condition that is the manager
++ Is not having any direct or indirect interest in the capital of the company or its holding company or through any other statutory structures at any time during last two years before or on the date of appointment and
++ Is having a graduate level qualification with expert and specialized knowledge in the field of his profession.
MOC General Circular No. 46/2011-Cus., Dated: July 14, 2011
India US Strategic and Economic Partnership - Hillary-Pranab Meet
UNION Finance Minister Pranab Mukherjee said that India gives high importance to India-US Strategic and Economic Partnership. He was speaking on the occasion when an official US delegation led by the US Secretary of State, Hillary Clinton called on him, yesterday. He stated that India is carrying its reforms agenda further by making major change in the tax sector - involving both direct and indirect taxes. Mukherjee said that in the field of direct taxes, efforts are on to make Direct Tax Code (DTC) effective w.e.f. 1st April, 2012. In field of indirect taxes, efforts are also on to build a consensus among all the stakeholders including state governments to make Goods and Services Tax (GST) effective at the earliest. He said that Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) are expected to finalize the guidelines of Infrastructure Debt Fund soon, which would help in expediting investment, by the US companies in India.
Speaking on the occasion, US Secretary of State Hillary hoped that the relationship between India and US in the field of trade, infrastructure investment, business, defence and strategic matters would be further strengthened. She said that US India have excellent working relationship especially in field of economic and financial partnership. She said that India can play a major role in enhancing regional economic cooperation and optimizing the large potential available in this region. She specifically mentioned that India can play a major role in the economic development of Afghanistan.
The US delegation consisted of Robert O' Blake, Asstt. Secretary, Daniel B. Poneman, Deputy Secretary, Energy, Elizabeth Littlefield, Head of Overseas Private Investment Corporation among others. The Indian delegation included among others Meera Shankar, India's Ambassador to US, R.S. Gujral, Revenue Secretary and Dr. Kaushik Basu, Chief Economic Advisor.
Jurisprudentiol - Thursday's cases
Central Excise
Limitation - Initial burden is on Department to prove that there is short levy of duty on account of fraud, collusionetc,- Limitation on taking Credit twice on same invoice - Matter remanded: HC
THE initial burden is on the Department to prove that there is short levy of duty on account of fraud, collusion or any wilfulmis-statement or suppression of facts, or any of the conditions mentioned in the provision and thereafter the burden shifts on the assessee, once the Department can produce to show material that the appellant is guilty of.
Income Tax
Whether when assessee transfers distribution business against commission which is allowed as business expenditure, Revenue is right in treating same commission income as income from other sources in case of assessee - NO, says High Court
THE assessee was carrying on business of distribution of Acer products, such as computers, laptops, desktops, etc for about two years. It incurred heavy losses. The assessee company decided to transfer the distribution to M/s. “SIL”, for which M/s. Acer India Pvt. Ltd. had also consented, by virtue of a written agreement between the assessee and SIL. The distribution of the products was to be taken over by SIL on certain terms and conditions, including payment of commission on sale at the rate of one per cent. The assessee offered the commission income gained from its business as ”business income” and set off the same against the business losses incurred in the same business. The AO treated the income of the assessee from commission as income from other sources and declined to set off against the brought forward business losses. The CIT called for the comments of the AO under Rule 46A. The CIT(A) allowed the Assessee's appeal. The Tribunal dismissed the Revenue's Appeal.
Customs
Provisional release of seized goods - The guideline that value of bank guarantee shall not exceed twice amount of duty not to apply to a case involving a serious fraud: High Court
THE Petitioner, obviously, cannot rely on the guidelines contained in the Manual to the effect that the value of the bank guarantee shall not exceed twice the amount of duty since that part of the guidelines is not to apply to a case involving a serious fraud. In this view of the matter, the basis on which the Petitioner has claimed a benefit under the guidelines contained in the Manual is without any foundation. No case for interference under Article 226 of the Constitution is made out.
See our columns Tomorrow for the judgements
Until Tomorrow with more DDT
Have a Nice Day.
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