(Set up by an Act of Parliament) Newsletter

(Set up by an Act of Parliament)

The Institute of Chartered Accountants of India

BangaloreN e w s l e t t e rBranch of SIRC

Volume 01 | Issue 02 | September, 2012 | Pages : 18 ` 5/- per copyFor Private Circulation only

Major Programmes in September

Seminar on

CPE

- Sep

t. 20

12

28

English Monthly

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SOURCE :Srimadbhaghavadgeeta (Karma Yoga, C3,V21)

Service Tax underNegative Taxation Scheme

Inauguration of - Enhance Values, Inspire Trust - 44th Regional Conference of SIRC of ICAI

Chief Guest Union Minister of Power & Corporate Affairs inaugurated the Conference. Guest of HonourDr. M. Veerappa Moily, Hon'ble Member of

Parliament, Former Deputy Chairman, Rajya Sabha delivered the Special Address. (L to R) : Regional Council Member,

Treasurer, SIRC, Vice Chairman, SIRC, President, ICAI, Chairman, B'lore Br.,

Chairman, SIRC, Vice President, ICAI, Regional Council Member,

Secretary, B'lore Br., Secretary, SIRC

Dr. K. Rahman Khan,

CA. Sumermal D Ostawal, CA. P.R. Suresh,

CA. D. Prasanna Kumar, CA. Jaydeep Narendra Shah, CA. Nithin Mahadevappa,

CA. K. Viswanath, CA. Subodh Kumar Agrawal, CA. C.S. Srinivas,

CA. S.R. Prasad, CA. P.V. Rajarajeshwaran,

2

Inauguration

Case Studies on International Taxation

Contd. on next page

Flag Hoisting

Independence Day Flag Hoisting & Celebrations

Inauguration

105th Batch of GMCS Inauguration

CA. S. Hariharan CA. Raghuraman R CA. Prashanth G.S CA. Darshan G. Parwan Mr. M.S. Ranganath, CA. Nithin Mahadevappa, Dr. N. Prabhudev,Dr. Venugopal

Speakers at Study Circle Meetings

Jurys For Elocution & QuizCA. M Ram & CA. Suresh Kumar D

Elocution Winner -Ms. Medini S Bhat

Winning Team - Quiz -Mr. Tarun & Mr. Srivatsa

CA Students' Cricket - Winners Team

Bangalore Branch of SICASA

CA. H. Padamchand Khincha CA. K. K. Chythanya Cross section of the delegates

Chief GuestCA. Narayanaswamy

Rank Holders Cross section of the participants

Chief GuestCA. Neeta Revankar

Participants of 105th Batch GMCS

Inauguration of CPT Coaching Classes at Govt. RC College

CA Students' Cricket - Runner Up Team

Chairman's Communique . . .Chairman's Communique . . .Dear Professional

Colleagues,

Greetings, I Wish all the

members and the family good

health.

I congratulate and thank each

one of you for making

“Vishwas’’ 44th Regional

Conference of SIRC a

resounding success. The

44th Regional Conference

of SIRC of ICAI-VISHWAS

Conference held on 18th and 19th August 2012 at Bangalore

Palace Grounds was a historic event for Bangalore Branch.

Over 3200 members and 150 students attended and witnessed

the grand success. I am happy to note that Bangalore Branch

being host branch was part of this memorable event and I

personally thank the Chairman of SIRC CA. K Viswanath and

his team for providing us an opportunity to host this program.

Coaching class at RC College

During the month of August 2012 Bangalore Branch has started

coaching classes at Ramanarayan Chellaram College (RC

College), Chalukya circle, Bangalore.

3 September2012

Bangalore Branch of SIRCof the Institute of Chartered Accountants of India

Contd. from previous page

With warm regards,

CA. Nithin MahadevappaChairman

This initiative was inaugurated by Bangalore UniversityVC Dr. N. Prabhudev. I congratulate and thank thePrincipal of RC College Dr. Venugopal who encouragedand was part of this great initiative. Bangalore Branch isplanning to start coaching classes in strategic locationsacross the city of Bangalore to make it more convenientto the students.

Seminar on International Taxation – Case Studies

In line with the theme of the year “PARINATI”, duringthe year Bangalore Branch organized various seminars,workshops and hands on training programs on subjects ofprofessional interest and subjects of future interest to theprofession. This seminar was one of such kind, where in70-80 participants discussed in two groups various case-studies which was followed by deliberation from expertspeakers. Today the business in India particularly inBangalore has gone global and the practice on InternationalTaxation is gaining a lot of momentum, keeping this inmind we want to continue seminars and workshops ofsimilar kind in coming months, I request members toparticipate and make the initiative of Bangalore branchsuccessful.

Independence Day celebration

On August 15, 2012, Bangalore Branch honoured all therank holders of CPT, IPCC and Final examination of ourInstitute. I deem it my duty to encourage the youngtorchbearers of the profession to take forward ourprofession with more dignity and confidence.

Other activities of August 2012

• Independence Day Celebration

• CPE Teleconferences

• Study Circle Meeting

• Impact Seminars

• Cricket Tournament for members and students

I thank all the speakers and members who attended theseprogrammes.

September 2012 Activities

September month of any year happens to be the month ofprofessional challenge and commitment to all of ourmembers. As Chartered Accountants we have onerousresponsibility of rendering tax audit reports and help theassessees to file their tax returns and most of the membersin Industry will be busy in closing half yearly accounts.

Considering the busy schedule of our members in themonth of September, we have a fairly lean type of scheduleof programs. On 7th and 8th of September a seminar on“service tax under the negative taxation scheme” is beingorganized.

Other Programs of September 2012

• CPE Tele conference

• Study circle meetings

• Impact Seminars

Reading Rooms

Board of Studies (BOS) of The Institute of CharteredAccountants of India intends to start reading room facilitiesacross Bangalore in Association with Schools, Collegesand Libraries, etc. Wherein BOS will assist by way ofgrants for Furniture, Air-conditioning, etc. required forsuch facility. I request the members in association withsuch institutions to contact Bangalore branch to facilitatethe initiative.

Web-casting & ICAI Tube

Major programs at Bangalore Branch are live telecastedand all the programs are archived and available on demand.All the recorded programs of Bangalore branch are hostedin the Bangalore branch website, to watch them pleasevisit www.bangaloreicai.org/resources/icai-tube.

I once again thank all the members for the success of SIRCconference held at Bangalore and wish all the members aprofessionally productive and committed successful monthof Tax Audit September 2012.

4September2012

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

Note : High Tea at 5.30 pm for programmes at 6.00 pm at Branch Premises.

Advertisement Tariff for the Branch NewsletterColour full pageOutside back ` 30,000/-Inside back ` 24,000/-

Advt. material should reach us before 22nd of previous month.

Inside Black & WhiteFull page ` 15,000/-Half page ` 8,000/-Quarter page ` 4,000/-

Editor : CA. Nithin MahadevappaSub Editors : CA. Ravindranath. S.N

CA. Prasad. S.RCA. Shivakumar. H

Cover Page SubhashitaTranslation by : CA. Allama Prabhu M.S.

CALENDAR OF EVENTS - September & October 2012Date/Day Topic /Speaker Venue/Time CPE Credit

05.09.12 Works Contract Service under Service Tax Branch PremisesWednesday CA. Chandrahasa K. 06.00pm to 08.00pm

07.09.12 CPE Teleconference Programme on “XBRL” Branch PremisesFriday CA. Ravishankar Khandare and CA. Rajender Kapoor 02.30pm to 04.30pm

07.09.12 Seminar on Service Tax under Negative Taxation Scheme Branch PremisesFriday & 10.00am to 05.30pm08.09.12Saturday For details refer page no: 11

12.09.12 Issues in Tax Audit Branch PremisesWednesday CA. B. P. Sachin Kumar & CA. Kusuma Yathish 05.30pm to 08.30pm

14.09.12 CARO Branch PremisesFriday CA. Vikas Oswal 05.30pm to 08.30pm

17.09.12 CPE Teleconference Programme Branch PremisesMonday 11.00am to 01.00pm

19.09.12 HOLIDAY ON ACCOUNT OF GANESHA CHATURTHI – –Wednesday

26.09.12 CPE Teleconference Programme Branch PremisesWednesday 11.00am to 01.00pm

26.09.12 Business Responsibility Reports - Clause 55 of listing agreement Branch PremisesWednesday Mr. J. Sundaresan 06.00pm to 08.00pm

03.10.12 Taxation of Trust Branch PremisesWednesday Mr. H. Naginchand Khincha 06.00pm to 08.00pm

10.10.12 Transfer Pricing - Practical Issues Branch PremisesWednesday CA. D. S. Vivek 06.00pm to 08.00pm

3 hrs

12hrs

2 hrs

2 hrs

2 hrs

2 hrs

3 hrs

2 hrs

2 hrs

2 hrs

Live TV & ICAI TubeAll the programmes of Bangalore branch are live telecasted to watch the programme please visit :

www.bangaloreicai.org / resources/livetv.‘ICAI TUBE’ Bangalore branch’s initiative of archiving and streaming of programs

in the form of videos was well appreciated by the members. All the recorded programs ofBangalore branch are hosted in the Bangalore branch website, to watch these videos please visit

www.bangaloreicai.org/resources/icai-tube for the benefit of the members.We welcome your suggestion & feedback to serve you better.

5 September2012


TAX UPDATES JULY 2012CA. Chythanya K.K., B.Com, FCA, LL.B., Advocate

VAT, CST, ENTRY TAX,PROFESSIONAL TAX

PARTS DIGESTED:

a) 51 VST – Part 5b) 52 VST – Part 1 to 3c) 72 KLJ – Part 6 & 7

Reference / Description

[2012] 52 VST 125 (Karn. – HC);State of Karnataka v. Shyamarajuand Co. (India) Pvt. Ltd. - In theinstant case the dealer is engaged inthe business of civil works contractand development of properties. Thedealer is a registered dealer under theKarvat Act. The dealer purchasedgoods from unregistered dealers forexecution of civil contracts of its ownproperties. The dealer did not paypurchase tax and accordingly did notclaim input tax credit, on the groundthat input tax credit was not availableon goods used for own consumption.

The Karnataka High Court observedthat under Section 3(2) of the KarvatAct, if a registered dealer purchasestaxable goods from a person who isnot registered and uses them for hisown consumption personally, thenthere is no liability to pay tax. Butonce he uses those taxable goods ‘inthe course of his business’, he is liableto pay purchase tax.

The Court further observed that thedealer carried on the business of civilworks contracts and alsodevelopment of properties. Taxablegoods were purchased fromunregistered dealers for developmentof its own property. That developmentof its own property was done ‘in thecourse of business’.

Therefore, the Court held that thedealer was liable to pay tax underSection 3(2) of the Karvat Act[2012] 52 VST 350 (Gauh. – HC);State of Tripura and others v. H.R.S.Agency and another - In the instantcase the Petitioner was denied thesupply of Form F required for makingdeclaration in respect of inter-Statetransfer of the taxable goods from oneState to another State for the reasonthat the Revenue had doubted/suspected that the nature oftransaction was to evade tax.The Gauahati High Court held thatwhatever the suspicion that may invadethe mind of the Revenue that wouldnot give them authority to refuseissuance of Form F for making thedeclaration within the prescribed timeto the appropriate authority in the Statewhere the transactions claimed to beinter-State transfer have originatedfrom. If the department has doubts asregards the nature of transaction, theyare entitled to set enquiry in motion andnot to deny Form F.

INCOME TAXPARTS DIGESTED:a) 345 ITR – Part 4 to 7b) 208 Taxman – Part 1 to 4c) 16 ITR (Trib) – Part 6d) 17 ITR (Trib) – Part 1 to 4e) 137 ITD – Part 1 to 3f) 39 CAPJ – Part 1 & 2g) 44-A BCAJ – Part 4h) 61 TCA – Part 1i) 7 International Taxation-Part 1

Reference / Description

[2012] 345 ITR 193 (Del. - HC); CITv. Triumph International Finance (I)

Ltd. - In the instant case the BombayHigh Court held that the repaymentof loan/deposit through journal entriesviolated the provisions of Section269T of the Act. However, in theabsence of any finding recorded in theassessment order or in the penaltyorder to the effect that the repaymentof loan/deposit was not a bona fidetransaction and was made with a viewto evade tax, the cause shown by theAssessee was a reasonable cause and,therefore the Court held that in viewof Section 273B of the Act, no penaltyunder Section 271E could be imposedfor contravening the provisions ofSection 269T of the Act.

[2012] 208 Taxman 22 (Karn. - HC);21 taxmann.com 458 (Karn. - HC);CIT v. P.N. Panjawani - In the instantcase there was a partnership firmwhich constituted in 1961. It acquiredcertain land in 1967. It originallyconsisted of three partners andAssessee was one of them. On01.04.1995, the firm revalued itsassets. On 12.10.1995, the firm wasreconstituted whereby four newpartners were inducted, whocontributed cash as their capitalcontribution. As a result ofreconstitution, the assets hithertoowned by the firm of three partnerswere made over to the reconstitutedfirm of seven partners. The result wasthat the three partners of the erstwhilefirm in the immovable property wasreduced from 1/3rd to 1/6th or 16.67per cent.

The Assessing Officer held that therewas relinquishment of right andinterest, as 50% of the interest of eachof the partners in the erstwhile firmwas made over to the reconstitutedfirm which amounted to transfer

6September2012

within the terms of Section 2(47) ofthe Act. The erstwhile three partners,each after reconstitution hadwithdrawn some money. TheAssessing Officer held that the saidamount represented capital gain forrelinquishment of their 50% share inthe erstwhile firm and its assets.

The Karnataka High Court held thatthe property was owned by the firmand not by the erstwhile partners.Since property was not owned byerstwhile partners, it could not be saidthey transferred 50% in favour ofincoming partners. Thus it was heldthat any amount received by them didnot represent consideration receivedfor such transfer. It was held that theerstwhile partners are not liable to taxon capital gains under Section 45(1)as they did not transfer capital assets.

Further the Court held that there is noprovision in the Act for levyingcapital gains tax on considerationreceived by a partner for reduction ofhis share in partnership firm oninclusion of new partners.

[2012] 208 Taxman 47 (Guj. - HC);22 taxmann.com 243 (Guj. - HC);CIT v. Gem Art - In the instant casethe Gujarat High Court held thatpremium paid by a firm for partnersunder Keyman insurance policy isrevenue expenditure deductible underSection 37 of the Act.

[2012] 23 taxmann.com 3 (Kar. –HC); [2012] 208 Taxman (BN – III)Part 2; Prakash Leasing Ltd. v.DCIT - In the instant case theKarnataka High Court held that thelease rentals may consist of twocomponents, i.e., capital receipt aswell as financing charges, and it isonly financing charges which

represents real income which has tobe offered for tax.

[2012] 23 taxmann.com 10 (Kar. –HC); [2012] 208 Taxman (BN – IV)Part 2; CIT v. John BrownTechnologies India (P) Ltd. - In theinstant case the Karnataka High Courtheld that the activities undertaken byassessee, engaged in business ofproviding engineering drawing anddesigns, which were client specificbrought a new and distinct productand design into existence. Therefore,held that Section 80-AI benefit couldnot be denied.

[2012] 208 Taxman 137 (AAR);[2012] 21 taxmann.com 371 (AAR);‘A’ Systems, The Netherlands, In re- In the instant case the Applicant, aGerman Company is engaged inbusiness of executing contracts forassembly and supervision of paintshop, including supply of materialsand supervision of installation forvarious automobile companies. Agroup of company enters into anagreement to carry out the researchand development programme. As perthe agreement, each member shallindividually spend on research anddevelopment and such research anddevelopment will be undertaken byany or all parties with a situation thatApplicant to be the administrator andto allow other to use the product onpayment of consideration.

The Authority for Advance Rulingobserved that in terms of agreement,it appears that it is only an agreementto share product of research anddevelopment allegedly withoutpayment of royalty, but paying aconsideration for use described ascontribution towards costs of researchincurred by researching party. This

payment occurs only on use ofproduct of research and not otherwise.Though all parties are joint owners ofintellectual property rights, rights areregistered in the name of theApplicant, and payment for use ofproduct is made to the Applicant.

The Authority ruled that the paymentmade by any part to the Applicant canonly be understood as a considerationfor use of process or formuladeveloped by researching memberand therefore, consideration, thoughdescribed as allocation of cost, isactually royalty as it is paid on use ofproduct of research and not otherwise.Hence, it was held that the amountwas taxable as royalty under Article12 of Indo-Germany DTAA andSection 9(1)(vi) of the Act.

[2012] 208 Taxman (St.) 108; PressRelease dated 10.07.2012 –Deductors must comply with theirobligations to ensure correct creditto persons from whose income tax isdeducted at source - In case theincome on which tax has beendeducted at source is assessable in thehands of a person other than thedeductee, the deductee must file adeclaration with the deductor thatcredit for the TDS shall be given tothe other person and not to thedeductee. The declaration filed by thedeductee must contain the name,address, Permanent Account Numberof the person to whom credit is to begiven and reasons for giving credit tosuch person. The deductor must, inthe TDS statement, report the taxdeduction in the name of such otherperson and also issue the TDScertificate in the name of the personin whose name credit is shown in theTDS statement.

7 September2012


[2012] 208 Taxman 204 (Kar. - HC); [2012] 23taxmann.com 35 (Kar. - HC); Prakash Leasing Ltd. v.DCIT - In the instant case, the Karnataka High Court heldthat merely because vehicles are used by lessees in theirbusiness, Assessee, being a financing and leasing companycannot be denied depreciation where lease rentals aresubjected to tax in Assessee’s hand.

Further it held that the law recognizes dual ownership inrespect of motor vehicles. The person, who is in possessionof hire purchase agreement or agreement of lease oragreement of hypothecation, is also recognised as theowner apart from the persons in whose name the motorvehicles stand registered. The purchase receipt and thelease agreement shows that the assessee is the owner andthe lessee who was put in possession under the agreementis also owner under the Act.

[2012] 208 Taxman 208 (Kar. - HC); [2012] 22taxmann.com 157 (Kar. - HC); Smt. A Kowsalya Bai v.UOI - In the instant case the Karnataka High Courtobserved that Section 206AA is contrary to Section 139Aof the Act for the reason that it appears to be discriminatoryas if it is over riding Section 139A introduced earlier.

The Court held that though the intention of the Legislatureis to bring the maximum persons under the net of incometax, when necessarily it provides for exemption up totaxable limit, it may not insist such persons whose incomeis below the taxable limit to compulsorily go for PAN.

Therefore, the Court held that in view of the specificprovision – Section 139A of the Act, Section 206AA ofthe Act is made inapplicable to small investors and readdown from the Statute in respect of those whose incomeis less than the taxable limit as per the Finance Act, 1991.However, it is made clear that, Section 206AA of the Actwould of course, be made applicable to persons whoseincome is above the taxable limit.

It further held that the banking and financial institutionsshall not invariably insist upon PAN from such smallinvestors as well as from persons who intend to open anaccount in the bank or financial institution.

[2012] 208 Taxman 322 (Del. - HC); [2012] 21taxmann.com 535 (Del. - HC); C.B. Richards EllisMauritius Ltd. - In the instant case, the assessment orderunder Section 143(3) was passed on 28.02.2001 for the

AY 1998-99. Reassessment notice under Section 148 wasissued on 30.03.2009, i.e., after expiry of nine years fromrelevant assessment year. Revenue contended thatlimitation period prescribed on first day of assessment yearwould determine time period for issue of notice underSection 147/148 and hence, amendment made in Section149 by the Finance Act, 2001, with effect from 01.06.2001,restricting the time period for issuance of notice underSection 148 to six years, was not applicable.

The Delhi High Court held that the matter involved wasof procedure which was in respect of time period in whichassessment or reassessment proceedings could be initiatedand, therefore, time period/limitation period as prescribedin Act on date of issue notice would apply and not thefirst day of relevant assessment year. Therefore, the Courtheld that since notice under Section 148 was issued on30.03.2009, amended provisions of Section 149 wouldapply and consequently, impugned notice was to bequashed being barred by limitation.

Advertisement

8September2012

RECENT JUDICIALPRONOUNCEMENTS ININDIRECT TAXESCA. N.R. Badrinath, Grad C.W.A., F.C.A.CA. Madhur Harlalka, B.Com., F.C.A

CENVAT CREDIT:

1. Directing the original authorityby the Commissioner (Appeals)for re-quantification of refunddoes not amount to remand: Therespondent is an exporter oftaxable services and has claimedrefund of unutilised CENVATcredit under Rule 5 of theCENVAT Credit Rules, 2004. Thelower adjudicating authority haspartly allowed refund and partlydisallowed on the allegation thatthere is no nexus between certaininput services with the outputservices. Being aggrieved with thepartial disallowance of refund, anappeal was preferred before theCommissioner (Appeals), who hasaccepted the nexus between inputservices with output services.Accordingly, the Commissioner(Appeals) directed the lowerauthority to re-quantify the amountof refund of unutilised CENVATcredit on the basis of CharteredAccountant’s certificate to beproduced in terms of Board’sCircular No.120/1/2010 dated19.01.2010. The service taxdepartment alleging that the orderof the Commissioner (Appeals) isof remand, being aggrieved withthe same, preferred an appealbefore the Tribunal on thecontention that the Commissioner(Appeals) does not have the powerto remand. It was contested that the

power to remand (for theCommissioner (Appeals)) hadbeen taken away by Parliament byamending Section 35A of theCentral Excise Act, 1944 w.e.f11.05.2001. However, theTribunal has taken cognizance ofthe nexus between the inputservices and output service andrefund was admitted in principle.Accordingly, the case wasremitted to the lower authority forlimited purpose of quantificationof the refund amount in terms ofthe Board’s Circular No. 120/1/2010 dated 19/01/2010. Further,the Tribunal has ruled that theorder of the Commissioner(Appeals) cannot be characterizedas one of remand since theoriginal authority was merelyrequired to re-quantify theamount of refund. [CCE,Bangalore Vs M/s. MavenirSystems Private Limited, 2012-TIOL-966-CESTAT-BANG]

2. CENVAT credit of input serviceutilized by one unit cannot beclaimed by another unit: Therespondent had two differentunits registered separately underthe Central Excise. Unit-I claimedCENVAT credit of service taxpaid on “Consulting Engineer’sService” used for setting up ofUnit II. The department objectedthat Unit I is not eligible forclaiming the CENVAT credit of

service tax paid on input servicesused for setting up of Unit-II asboth the units are registeredseparately. The respondent is alsonot registered as input servicedistributor. It is held that Unit-Ishould not have claimed the creditwithout an invoice issued by UnitII as a registered input servicedistributor. [CCE, Guntur Vs M/s. Nelcast Ltd, 2012-TIOL-1054-CESTAT-Bang]

3. CENVAT refund allowable evenin case of deemed exports: Theissue before the Tribunal waswhether credit on input servicesattributable to deemed exports areeligible to be granted as refund.In this regard, the Tribunal hasheld that the unutilized CENVATcredits are to be allowed as refundeven in cases where the output isnot physical exports but aredeemed exports. [KaypeeElectronics & Associates (P) LtdVs CC, Bangalore (2012-TIOL-1036-CESTAT-BANG)]

SERVICE TAX:

4. Penalty cannot be imposed fordelay in remitting taxes and alsofiling of returns on ownascertainment: The appealbefore the Tribunal is against levyof penalty for delay in remittingtaxes and also the delay in filingperiodical returns under Section76 & 77 of the Finance Act, 1994.The Tribunal has held that theprovisions of Section 73(3) of theFinance Act, 1994 provides thatthe show cause notice is notrequired to be issued when servicetax along with interest is paid onown ascertainment by the assesseeand also the returns were filed.The same was clarified by the

9 September2012


Board’s circular No. 137/167/2006-CX dated 03.10.2007.Accordingly, no penalty isleviable. [M/s. Gupta Coal Field& Washeries Limited Vs CST,Nagpur 2012-TIOL-908-CESTAT-MUM]

5. Service tax on services providedbetween companies involved inamalgamation: In the presentcase, issue before the Tribunal iswhether service tax is payable forservices provided between thecompanies involved inamalgamation during the periodbetween the appointed date andthe effective date. Tribunal heldthat the appointed date asapproved by Honorable HighCourt is the date of amalgamationand not the date on which entireformalities were completed /application filed with the ROC.Therefore, the services renderedbetween the companies involvedin amalgamation during the periodfrom appointed date to effectivedate is to be considered asprovided to himself and in whichcase no service tax liability wouldarise. The reliance is placed on thedecision of Honorable SupremeCourt in the case of M/s. MarshallSons & Co. (India) Ltd, Vs. ITO– 1997 (223) ITR 0809 SC. [CST,Delhi–I Vs. ITC Hotels Ltd, 2012(27) S.T.R. 145 (Tri.– Del)]

CENTRAL EXCISE:

6. Relevant date for refund: In thepresent case, issue before theHonourable Andhra Pradesh HighCourt was whether interest ispayable after the expiry of threemonths from the date of paymentof duty or from the date of makingan application for refund. In this

regard, the High Court has heldthat interest on refund is payablefrom the date immediately afterthe expiry of three months fromthe date of filing the refundapplication till the date of refund.The reliance was placed on thejudgment of Honorable SupremeCourt in the case of Union of IndiaVs. M/s. Shreeji Colour ChemIndustries [2008 (230) E.L.T 199].[M/s. Kanyaka ParameshwariEngineering Ltd Vs. CCCE[2012], 36 STT 44/22 410(Andhra Pradesh)]

7. Post sale transportation andinsurance charges are notincludible in assessable value: Inthe present case, the issue beforethe Tribunal is whether thetransportation and transitinsurance charges on the dispatchof goods to customers areincludible in assessable value as inthe case of similar charges incurredwhen the goods are transportedfrom factory to the stock yards. Therevenue’s contention is that in caseof sale to customers, freight andtransit insurance charges were tobe included in the assessable valueeven if they are otherwise chargedseparately. The Tribunal held thatthe transportation and transitinsurance charges are notincludible in the assessable valuewhen the sale is at the factory gateafter considering the provisions inrespect of “place of removal”. TheTribunal placed the reliance onHonorable Supreme Court’sjudgement in the case of M/s. JCBEscorts Ltd. Vs CCE Delhi. [2002(146) ELT 31 (SC)] [M/s. SteelAuthority of India Ltd Vs CCE,Salem, 2012-TIOL-962-CESTAT-Mad]

CUSTOMS:

8. Tribunal is bound to follow thedecision of Supreme Courtunder principle of Doctrine ofPrecedent: The Tribunalconfirmed pre-deposit against theapplication made by appellantwithout giving due considerationto the decision of the HonourableSupreme Court in case of CC Vs.Sayed Ali [[2011] 7 GSTR 338(SC)] and M/s. Impex PrivateLimited., Vs. CC [[2011] 10GSTR 193 (SC)] and the decisionof the co-ordinate Bench in thecase of Nylex Traders Vs. CC[[2012] 12 GSTR 327 (Tri–Mum)]. Being aggrieved with theorder above, an application wasmade before the Tribunal seekingfor modification of its order bygiving reference to the decision ofApex Court in the above cases. Inthe modification application filedbefore the Tribunal by relying onMaina Khemka Vs. UOI [2004]170 ELT 3 (Bom.)] that amodification of the order canalways be sought within thepermissible limits and parameterslaid down in law. However, theapplication for modification wasdismissed by the Tribunal. TheHonourable High Court held thatTribunal has erred in deciding theapplication for waiver of pre-deposit without considering thejudgements of the HonorableSupreme Court and decision of theco-ordinate Bench. TheHonorable Supreme Court heldthat the Tribunal is duty bound tofollow the doctrine of precedentand should not have differed withthe judgment of Supreme Court asa matter of constitutionalprinciple. Consistency and

10September2012

certainty is an important elementin the judicial process and arefoundations of the rule of lawwhich form part of constitutionalprinciple and are binding asprecedent. Accordingly, the orderof the Tribunal was set aside andthe application for waiver of pre-deposit was restored to the file ofthe Tribunal for freshconsideration on merits. [M/s.Tejus Proprietary Concern ofTejus Rohitkumar Kapadia Vs.UOI and Others [2012] 15 GSTR280 (Bom)]

9. CVD under Section 3(5) isexempted if the sales tax/VAT isexempt: The issue before theTribunal is whether CVD in lieuof sales tax paid under Section3(5) of Customs Tariff Act, 1985is refundable under NotificationNo.102/2007–Cus dated14.09.2007, when the sales tax /VAT is exempt on such goods. Therevenue’s contention was that therefund of CVD is subject onpayment of the Sales Tax / VATas per the condition 2(d) of thesaid Notification. The Tribunal

has held that when the importedgoods are exempted from SalesTax / VAT, the CVD should havealso been exempted and theabatement cannot be taken awayindirectly. [CC, Patna Vs M/s.Katyal Metal Agencies 2012-TIOL-1053-CESTAT-Kol]

VALUE ADDED TAX:

10. Pre-sale expenses are liable toVAT and should be included intaxable turnover: In the presentcase, the issue before theHonourable Karnataka HighCourt was whether pre-saleexpenses should be included intaxable turnover and the same aresubject to VAT. The appellant hascollected charges for pumping ofRMC at customer’s site. However,the same was not included in thetaxable turnover on the groundthat it is not obligatory to pumpRMC from vehicle to customer’ssite and the option is given tocustomers who may or may notutilize such services. TheHonourable High Court held thattaxable turnover means aggregate

amount for which the goods aresold or distributed or delivered orotherwise disposed of in any of theways as referred in the definitionof SALE under Section 2(29) ofthe Karnataka Value Added TaxAct, 2003. The amount for whichsuch goods are sold shall includeany sums charged for anythingdone by the dealer in respect ofthe goods sold, at the time of orbefore the delivery thereof.Therefore, all the expensesincurred by the dealer at the timeof delivery or before the deliveryare to be included in the taxableturnover. Consequently, thecharges collected for pumpingRMC is includable in the taxableturnover. The HonourableKarnataka High Court relied onthe decision of HonorableSupreme Court in the case ofKukunta and Seram StonesPrivate Limited Vs. State ofKarnataka [[1992] 87 STC 105(Kar)] [M/s. ACC Ltd Vs. State ofKarnataka, [2012] 52 VST 129(Kar)]

RANK HOLDERS FOR MAY 2012 EXAMPCC MAY 2012 EXAM

Sl.No Reg.No Roll.No Name Marks Obtained Rank1 SRO0238535 401541 PREETHI.D 369 112 SRO0230564 401956 PRITHVIRAJ.C.S 356 203 SRO0251032 401629 SACHIN SONI 351 234 WRO0251380 401695 DEEPAK TARACHAND MANTRI 349 255 SRO0239014 401652 RAMACHANDRA.M 347 276 NRO0202296 401548 CHUNCHUN KUMAR 345 297 SRO0218341 401608 RANJITHA.R 340 348 SRO0214072 402013 SIDDHARTH GUPTA 338 36

IPCC MAY 2012 EXAM1 SRO0352734 211215 PRIYA.K 564 112 SRO0345944 209117 VARSHA SHRIDHAR 543 28

11 September2012


on Friday, 7th & Saturday, 8th September 2012at Branch Premises

Day 1 - Friday, 07th September 2012

Timing Topics Speakers

10.00 A.M to 11.15 A.M - Overview of Indirect Tax structure in India CA. K.S. Ravishankar- Importance of service tax in Indian Economy.- What is service in the new regime?

11.15 A.M to 11.30 A.M Tea/Coffee break

11.30 A.M to 01.15 P.M - Declared Services; CA. V. Raghuraman- Negative list and exempted services

01.15 P.M to 01.45 P.M Lunch

01.45 P.M to 03.30 P.M Classification and Valuation of Taxable services CA. T.R. Rajesh Kumar

03.30 P.M to 03.45 P.M Tea/Coffee break

03.45 P.M to 05.30 P.M - Point of taxation CA. Naveen Rajpurohit

Day 2 - Saturday, 08th September 2012

10.00 A.M to 11.30 A.M Place of Provision of Service Rules Mr. G. Shivadass(import/export of service rules)

11.30 A.M to 11.45 A.M Tea/Coffee break

11.45 A.M to 01.15 P.M - Reverse charge mechanism & CA. C. R. RaghavendraJoint Charge Mechanism

- Service Tax Procedure

01.15 P.M to 01.45 P.M Lunch

01.45 P.M to 03.15 P.M Cenvat Credit Rules under CA. N. AnandNegative Taxation Scheme

03.15 P.M to 03.30 P.M Tea/Coffee break

03.30 P.M to 05.30 P.M Practical aspects of Departmental interaction Mr. Anirudha R J Nayak– replies to Department and Appellate procedures

Two Day Seminar onService Tax under Negative Taxation Scheme

12 hrsCPE

Delegate fees: For Members: Rs.1,000 /- Non Members: Rs.2,000/- Students: Rs.500/-Cash/cheque in favour of “Bangalore Branch of SIRC of ICAI”

Restricted to 200 delegates on First Come First Serve basis.

For further details please contact: Ms.Geetanjali D, Tel: 080-30563500/513, E-mail: [email protected]

12September2012

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13 September2012


14September2012

IMPORTANT DATES TO REMEMBER DURING THE MONTH OF SEPTEMBER 2012

5th September 2012 Payment of Excise Duty for August 2012.Payment of Service Tax for August 2011 by Corporates

6th September 2012 E-Payment of Excise duty for August 2012E-Payment of Service Tax for August 2012 for Corporates

7th September 2012 Deposit of TDS/TCS Collected during August 2012STPI Monthly Returns.

10th September 2012 Monthly Returns for Production and Removal of Goods and CENVAT Credit for August 2012Monthly Return of excisable Goods Manufactured & Receipt of Inputs & Capital Goods by Units inEOU,STP,HTP for August 2012Monthly Returns of Information relating to Principal Inputs for August 2012 by Manufacturer ofSpecified Goods who Paid Duty of Rs.1 Crore or More during Financial Year 2011-12 By PLA/CENVAT/Both

15th September 2012 Payment of EPF Contribution for August 2012Return of Employees Qualifying to EPF during August 2012Monthly Return (VAT 120) and Payment of VAT/COT for the month of August 2012.Payment of Second installment of Advance Income Tax by Corporate assessee and First such installmentby non-corporate assessees.

20th September 2012 Monthly Return and Payment of Profession Tax Collected During August 2012Monthly Return (VAT 100) and Payment of CST and VAT Collected During August 2012.

21st September 2012 Deposit of ESI Contributions and Collections for August 201225th September 2012 Consolidated Statements of Dues and Remittances Under EPF and EDLI for the August 2012

Monthly Returns of Employees Joined & Left the organisation during August 2012 under ESI30th September 2012 Filing of Return of income/wealth by

a) Corporate Assesseesb) Individual or HUF carrying on business or profession subject to compulsory audit u/s 44AB.c) Firm or Co-operative society or AOP/BOI subject to auditd) Individual or HUF being working partner in a firm subject to audite) Return of Net wealth by assessee subject to audit.

Announcement for GMCS-I CourseThe General Management & Communication Skills (GMCS) Course, presently being organized for 15 daysfor the CA students shall be organized twice during the period of articled training as under:

(i) GMCS-I (15 days) - during 1st year of articled training

(ii) GMCS-II (15 days) - after completion of 18 months of trainingbut before completion of articled training

In view of the above, students, who have registered for Articled Training on or after 1st May, 2012 arerequired to undergo GMCS-I Course during the 1st year of articled training.

The eligible students are required to register for GMCS-I Course at the respective Regional Council andBranch, since it is a regulatory requirement and part of the articled training.

(Vijay Kapur)Director, Board of Studies

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17

InvocationCA. Aishwarya

Nityananda

CA. K. ViswanathChairman, SIRC

CA. NithinMahadevappa

Chairman, B'lore Br.

Dr. M. Veerappa Moily,Union Minister

of Power &Corporate Affairs

Hon'bleDr. K. Rahman Khan,

Member of Parliament,Former Deputy

Chairman, Rajya Sabha

CA. JaydeepNarendra Shah,President ICAI

CA. Subodh KumarAgrawal,

Vice President, ICAI

CA. K. Viswanath Honoring theChief Guest

Dr. M. Veerappa Moily

CA. K. Viswanath Honoring theGuest of Honour

Dr. K. Rahman Khan

CA. K. Viswanath Honoring thePresident, ICAI

CA. Jaydeep Narendra Shah

CA. K. Viswanath Honoring theVice President, ICAI

CA. Subodh Kumar Agrawal

Release of Souvenir

CA. Vijay S. IyerInauguration of Stalls Sri. AshishkumarChauhan

CA. C.S. Srinivas, CA. V. Raghuraman, CA. K.K. Chytanya,CA. Rajendra Kumar P., CA. Vishnu Moorthi H., CA. S. Venkataramani

Sri. JosephVellapalli

CA. P.R. Ramesh Honoring Chartered Accountants who havecompleted 60 years of practice

Masters of Ceremony Grand Gala Entertainment - Guru Kiran Live

Sri SwamiNirbhayanada Saraswathi

CA. Girish Ahuja CA. Phalguna Kumar E, CA. Suresh Senapathy, CA. K.S. Ravishankar,CA. Venugopal C. Govind, CA. T.V. Mohandas Pai, CA. Shyam Ramadhyani

Sri. B.S. Raghavan Sri. Keith Prabhu

CA. B.P. RaoPast President, ICAI

Chairmen of 36 Branches of SIRC of ICAI for the year 2012-13 Best Branch Award - SIRC of ICAI

Best SICASA Award - SIRC of ICAI Branch Staff Cross section of Delegates

44th Regional Conference of SIRC of ICAI

18

Advt.

BANGALORE BRANCH OF SIRC NEWS LETTER - English Monthly

No. MAG(3) / NPP / 155/ 2012 -13 : KARENG04331

Bangalore Branch of SIRC News LetterBangalore Branch of SIRC of ICAI

EDITOR: CA. Nithin Mahadevappa

English Monthly Printed & Published & Edited by CA. Nithin Mahadevappa, Chairman, on behalf of., No.16/O, 'ICAI Bhawan', Millers Tank Bed Area, Vasantnagar, Bangalore-560052, Karnataka

Printed at:Published at: ,

Tel : 080 - 3056 3500, Fax : 080 - 3056 3542, www.bangaloreicai.org e-mail : [email protected] Mudranalaya Pvt. Ltd., 44/1, K.R. Road, Basavanagudi, Bangalore-560 004, Ph : 080-26617243, e-mail : [email protected]

No.16/O, 'ICAI Bhawan', Millers Tank Bed Area, Vasantnagar, Bangalore-560052, Karnataka

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