TIOL-DDT 1332 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1332</font><br>
06.04.2010 <br>
Tuesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC–ICAI tie up for Certified Facilitation Centres for ACES </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=10597" target="_blank">TIOL-DDT 1320 17.03.2010</a></strong> we reported that the Finance Minister had approved a proposal to set up Certified Facilitation Centres (CFCs) for ACES throughout India with effect from April 2010 by the Institute of Chartered Accountants of India (ICAI) and that the CBEC was in the process of entering into an MOU with ICAI shortly. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this MOU has become a reality. On March 31, 2010, CBEC entered into an MOU with ICAI to facilitate setting up of Certified Facilitation Centres (CFCs) by practising Chartered Accountants and proprietary concern(s)/firm(s) of Chartered Accountants in practice, at various locations throughout the country to facilitate transactions in ACES like e-filing of returns and other documents by assessees of Central Excise and Service Tax. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The salient features of the MOU are as follows: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The name of the scheme will be ‘Scheme for Certified Facilitation Centres (CFCs) under the Automation of Central Excise and Service Tax (ACES) Project of CBEC'. The Scheme shall take effect from the 1st of April, 2010 and shall remain valid for an initial period of one year, unless renewed/revised/modified/cancelled earlier. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. A CFC for ACES is a facility (and has nothing to do with physical front offices or Facilitation Centres of CBEC) which may be set up and operated by a practising Chartered Accountant or a proprietary concern/firm of Chartered Accountants in practice to whom a certificate is issued under the ACES project, where the assessees of Central Excise and Service Tax can avail the facility to file their returns and other documents electronically along with associated facilitation on payment of specified fees . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The Certificate of Registration for a CFC under the Scheme will be valid for a period of one year, unless the scheme is modified or withdrawn or the Certificate is suspended or cancelled before that as per the provisions of this scheme. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The CFCs should have certain basic physical and technical facilities (infrastructural requirements) and shall also appropriately display the Certificate issued by ICAI in this regard. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. The CFCs will provide services on payment basis and the service charges shall not exceed the amount indicated in the schedule of charges indicated in the scheme (see table below) and it must prominently display the details of service charges chargeable by the CFC in respect of various services. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. The CFCs will undertake work on behalf of its client, after obtaining legally valid authorization on behalf of the management of the client, the original copy of which should be kept by the CFC on records for at least a period of five years, or such other period as may be prescribed by CBEC, from time to time, for verification by the authorized persons of CBEC/ICAI. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. The CFCs can charge the fees for services rendered to their customers at the maximum rates indicated below: </font></p>
</blockquote>
<table width="450" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sr. No. </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service </font></strong></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Rates / Charges </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Data Entry of Returns (Filling-up of e-Returns)</font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs. 50/- per page subject to a maximum rate of Rs. 600/- per Return </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Data Entry of Forms other than Returns </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs. 100/- per page </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Scanning of Documents and conversion to PDF format </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs. 5/- per page </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Laser Printing (B&W) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs. 5/- per page </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Uploading Returns with ACES </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs. 200/-per return </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Attaching Documents with e-Form </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs. 1/- per page </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Viewing Documents </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs. 50/- per 30 minutes </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Apply for and procurement of DSC for users </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs. 100/- per DSC </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Use of DSC by CFC operator to facilitate e-filling for the client along with Disclaimer </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs. 20/- for each signature use. </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Services other than those listed above as may be offered by the CFC </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At market-driven rates </font></p></td>
</tr>
</table>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">The question that immediately cropped up after a quick glance through the MOU is whether the service provided by CFC a taxable service? It appears that the nature of activity undertaken by a CFC under this MOU could be classifiable as BSS. If it is so, why is the MOU silent on this aspect or is it implied that a CFC maintained by a practising Chartered Accountant or a firm of Chartered Accountants would be liable to pay service tax if the said Chartered Accountant or a firm of Chartered Accountants is already registered with the service tax authorities and discharging service tax for the other services rendered by them. If they are liable to pay service tax, will it be regarded as ‘input service' to the assessees who avail the services of CFCs? Will the Board clarify? </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">And why are CWAs and CSs excluded from this scheme? Let there be equal opportunity for professionals like CAs, CWAs and CSs. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/MOU_CBEC.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MOU of CBEC-ICAI, Dated: March 31, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Liberalization of Overseas Investments </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> terms of Paragraph 3 of A.P. (DIR Series) Circular No. 48 dated June 03, 2008, Indian entities are permitted to invest in overseas unincorporated entities in the oil sector, up to 400 per cent of the net worth of the Indian company, under the automatic route. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As a measure of further liberalisation, it has now been decided by the RBI in consultation with the Government of India, to allow Indian companies to participate in a consortium with other international operators to construct and maintain submarine cable systems on co-ownership basis under the automatic route. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accordingly, AD Category - I banks may allow remittances by Indian companies for overseas direct investment, after ensuring that the Indian company has obtained necessary licence from the Department of Telecommunication, Ministry of Telecommunication & Information Technology, Government of India to establish, install, operate and maintain International Long Distance Services and also by obtaining a certified copy of the Board Resolution approving such investment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All such investments would be subject to the reporting requirements as prescribed in Regulation 15 (iii) of <em>Notification No. FEMA 120/RB-2004 dated July 7, 2004</em> [Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004], as amended from time to time. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2009/rbi09cir045.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A.P. (DIR Series) Circular No. 45/RBI., Dated : April 1, 2010</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Why only taxpayers have to pay price for ignorance of law, what about taxmen? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IMAGINE</strong> a situation where the exemption for a particular tax was withdrawn from 1st April, 2010 and the assessee, due to mere ignorance of that fact, continued to avail exemption for a couple of days more. He would be made liable to pay the tax along with interest and penalties under all the sections of the Act, which may be equal to or double the tax amount. But, what if the officers of the department are ignorant of the changes in law? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a recent workshop organised by the Department of Central Excise, a senior officer addressing a huge audience told that exemption from service tax on transportation of goods by rail was withdrawn from 1st April 2010 and the service tax has to be paid from 1st April 2010 onwards on this service. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But, by 30th March 2010, a new set of Notifications were issued extending the exemption by three more months, which was prominently covered by the print and electronic media (including Taxindiaonline.com), and the ‘learned' senior officer was totally ignorant of the latest developments. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ironically, these are the very officers who ruthlessly penalise the assessees on the ground that “ignorance of law is not an excuse”. Therefore, the point to be noted is - however high the officer may be, to err is human. So the high and mighty officers should only realize that this equally applies to the other side i.e. trade and industry. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Seminar on Budget 2010 & GST at Vizag </font></strong></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/vizag_pic2.jpg" alt="Legal Corner Icon" width="450" height="300" hspace="5" border="0" align="center" /></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> one day seminar conducted by <strong>TIOL</strong> in association with Tax Law Research Group at Visakhapatnam received tremendous response from the trade and industry. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. S. Dutt Majumder, Member (CBEC) was the Chief Guest on this occasion. Mr. Chandrahas Mathur, Chief Commissioner, Visakhapatnam Zone and Mr. Nagendrakumar, Commissioner (LTU), Bangalore also graced the occasion. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In his key note address, Mr. Majumder highlighted the benefits of the new GST regime for the trade and industry and was hopeful that it would be successfully rolled out from April 1, 2011. Mr. Mathur and Mr. Nagendra kumar also spoke on the occasion highlighting the importance of industry participation in ACES and benefits of LTU scheme, respectively. Leading Advocates and Tax practitioners Jai kumar and Prabhakara Sastry enlightened the audience on the implications of the proposals in Budget 2010 and the proposed GST regime. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dr. P. Sri Sudha, a law lecturer sent me a mail, <em>“Today attended the seminar, it was so
informative on GST” </em></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBI and FIU–India sign MOU under Prevention of Money Laundering Act </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> Bureau of Investigation and Financial Intelligence Unit – India (FIU-IND) in the Ministry of Finance, signed today a Memorandum of understanding to facilitate better exchange of information against the Economic offenders and to improve the anti-money laundering regime. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per this MOU, the FIU – IND will make available to CBI, suspicious transaction reports relating to suspected cases of crime and cash transaction reports relating to the suspicious transaction reports. Whereas, CBI will make available to FIU – IND the list of offenders or suspected offenders available so as to facilitate tracing of proceeds of crime. Both parties also agreed to appoint a nodal officer to interact with each other. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">FIU – IND will endeavour to obtain information from Financial Intelligence Units of other countries. Both parties to this MOU will endeavour to provide each other with access to their database. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> – Wednesday's cases</font></strong></font></strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"><strong><font color="#663399">Income Tax</font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income tax - Recovery u/s 226 - Order of attachment only places restrictions in dealing with property and does not authorise encashment of fixed deposits: Allahabad HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> search and seizure u/s 132 was conducted on the business and the residential premises of 'P' who was the proprietor of a firm and was engaged in money lending business. During the aforesaid search jewellery worth Rs. 34.33 lakhs was seized. P on 16-09-03 applied for release of the aforesaid seized jewellery on the ground that the same belonged to third parties and was in custody of the firm as pawned articles. The CIT vide order dated 07-11-03 directed the assessing authority to release the same on Bank Guarantee of Rs. 34,00,000/- for a period of one year subject to renewal. P offered certain fixed deposits of the petitioners which were with the Bank as security for furnishing Bank Guarantee. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Adjudicating authority imposing penalty on buyers of goods under rule 25 whereas SCN invoked rule 26 - Commissioner(A) holding that no penalty is liable to be imposed under rule 25 and allowing appeal – Appellate authority did not care to read tenor of OIO – Non-application of mind – Matter remanded: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> demand of Central Excise duty was raised on M/s Finolex Industries Ltd. by denying them the benefit of exemption <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=29&filename=notification/excise/2004/etariff04_003.htm"><strong><em>Notification 3/2004-CE</em></strong> </a>in respect of PVC pipes cleared. One of the conditions attached to the notification was that a certificate from the Collector of the Revenue District where the pipes were intended to be used in the execution of water supply scheme should be obtained through the buyer of the goods. The PVC pipes in question were sold to the respondents, who obtained such certificates from the District Collector and furnished to the manufacturer of PVC pipes (M/s Finolex Industries Ltd.), who, on the strength of such certificates, effected duty-free clearance of the pipes by availing the benefit of the above notification. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs</strong> </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Import of Chrysler Sedan modified in New Zealand – vehicle is required to be assessed in form it is presented – neither the Appraiser nor Commissioner have expertise to certify seating capacity – failure to produce Type Approval Certificate – redemption fine and penalty reduced – Vehicle to be released after obtaining undertaking: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant filed a Bill of Entry for import of a CHRYSLER 300C SEDAN RHD car and claimed that as the vehicle had a seating capacity of 12 persons including Driver, the same is classifiable under CTH 8702 90 99 attracting Basic Customs Duty of 10%. Incidentally, the car imported by the appellant was a modified version and in its original version without any modification, the seating arrangement had a capacity of less than 10 and would have attracted BCD of 60%. The car was imported from US WORLD DIRECT, USA and modified in New Zealand . </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></font></p>
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