Pr in Politics.The reason behind Mr. Narendra Modi's success.
Covers June 2014 - Bizsolindia Services Pvt.LtdNarendra Damodardas Modi is the newly minted PM....
Transcript of 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
imposed vide Notification No. 30/2011-Customs
(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
(ADD) Dated 09-May-2014]
• 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)
imposed vide Notification No. 14/2010-Customs
(ADD) dated 20-Feb-2010, has been further
extended & shall remain in force up to and
inclusive of the 21-Apr-2015, unless revoked
earlier. [Notification No. 20/2014-Customs
(ADD) Dated 12-May-2014]
• 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
earlier. [Notification No. 21/2014-Customs
(ADD) Dated 16-May-2014]
• 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
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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
[Trade Notice No.10/2014 dated 4th June
2014]
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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
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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
Section Powers & Functions Delegated
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
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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
Section Powers & Functions Delegated
1 0
Bizsol UPDATE June - 2014
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.
[RBI/2013-14/585 (A.P. (DIR Series) Circular
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
Bizsol UPDATE June - 2014
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.
[RBI/2013-14/594 (A.P. (DIR Series) Circular
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.
[RBI/2013-14/595 (A.P. (DIR Series) Circular
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
Bizsol UPDATE June - 2014
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.
[RBI/2013-14/597 (A.P. (DIR Series) Circular
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
Bizsol UPDATE June - 2014
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.
[RBI/2013-14/600 (A.P. (DIR Series) Circular
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
Bizsol UPDATE June - 2014
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.
[RBI/2013-14/616 (A.P. (DIR Series) Circular
No.136) May 28, 2014]
1 5
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
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
Bizsol UPDATE June - 2014
Bizsolindia provides consultancy in the following areas through
associate companies and professional firms of the Directors
Bizsolindia Services Private Limited Consultancy & Audit in the area of
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Authorization, DFIA, Duty Drawback, Brand Rate Fixation)• EOU / EHTP / STP /BTP• SEZ• Project Consultancy (Industrial Parks, Clusters , Agro Economic Zone, Food
Park, etc)• New Business Set up in India• Valuation including Business Valuation• Internal Audit• Corporate Law & Procedures
Bizsolindia Outsourcing Pvt. Ltd. Knowledge Process Outsourcing in the area of
• Indirect Taxation• Accounts• Inventory management• Fixed Assets Management• Implementation of Company Law Matters
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• Specialized Software for EOUs and SEZs• Expert in Application programming using Java and ERP Connectivity• Data Migration• Offers bucket of Add On Products for EXIM related solutions for the• Complete industry needs• ERP Consulting / Implementation
Bizsolindia Forex Services Pvt. Ltd. Forex Services dealing with :
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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.
Behede Joshi & Associates, Practicing Chartered Accountants, Statutory Audit & Tax Audit, VAT Audit,Chartered Accountant Transfer Pricing.
R. Venkitachalam, Company Secretary Practicing Company Secretary.
Nawal & Sonaje Associates, Cost Accountants Practicing Cost accountants, Cost Audit
Bizsol Projects & Infrastructure Solutions LLP Infrastructure Consultancy, Project Management Services in respect of RealEstate solution for Industrial, Residential, Trade & Commerce & Consultancyrelated to Finance & Investments
O U R S E R V I C E S
3 5
Bizsol UPDATE June - 2014
NOTES
3 6
Bizsol UPDATE June - 2014
NOTES