TIOL-DDT 1626 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1626</font><br> 09.06.2011<br> Thursday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Minimum Export Price of Onions </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended Notification No 41(RE – 2010)/2009-2014 dated 31.03.2011 read with Notification No 24(RE – 2010)/2009-2014 dated 18.02.2011 to stipulate that the Minimum Export Price (MEP) of onions other than Bangalore Rose Onions and Krishnapuram onions will be USD 200 per Metric Ton F.O.B. It was USD 170 per Metric Ton as notified on 31.03.2011. There shall be no change in the MEP of Bangalore Rose Onion and Krishnapuram onion, which continues to be USD 350 per Metric Ton F.O.B. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not056.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 56 (RE-2010)/2009-2014, Dated: June 08, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FM's Concern over Avoidable Litigation </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADDRESSING</strong> the Chief Commissioners and DGs of Customs and Central Excise in Delhi yesterday, Finance Minister Pranab Mukherjee expressed concern over avoidable litigation with taxpayers which has been continuously growing over the years. He said that this is not a healthy trend and requires introspection especially about routine filing of appeals. He asked the CBEC officers to make an honest endeavour to address the problems faced by their stakeholders in the quickest possible time. </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_1626.jpg" alt="Legal Corner Icon" width="480" height="282" hspace="5" border="0" align="center"></font></p> <p align="center"><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">[The FM addressing the Chief Commissioners. Also seen in picture are Secretary (Revenue & Finance) Sunil Mitra and CBEC Chief Dutt Mazumder] </font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">It all Starts with Show Cause Notice, Mr. FM </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> whole malady of litigation starts with the Show Cause Notice and any action, you wish to take should start here. The Show Cause Notice is to be issued by the Adjudication Authority. This itself creates a contradiction. How can an officer who issued the Show Cause Notice drop it? Later somebody may accuse him of not applying his mind while drafting the Show Cause Notice! Actually, most of the officers never do; the Show Cause Notices are drafted by the lower level officers and the draft is put up for approval and signature of the adjudicating authority. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now once a Show Cause Notice is issued, nobody has the guts to drop it; even if there is an isolated soul somewhere ready to see reason and drop a Show Cause Notice, the Department will religiously go in appeal. This is what the adjudicating authority thinks, “Anyway this order will be appealed against – either by the Government or by the party; let it be appealed by the party; why should I invite suspicion from my boss?” And so the notice gets confirmed and from then the irritant litigation often goes all the way up to the Supreme Court. Sir, even after the Supreme Court gives its verdict, your officers are not prepared to accept the Apex Court decision as final. They will make you go to Parliament for a retrospective amendment for the simple reason that they did not know how to draft the law when they first did it. There are instances where retrospective legislation had to be done twice, as even the second time around, they got their drafting wrong. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And you tell your Chief Commissioners to avoid routine appeals! They will never listen to you. All the laudable campaigning by Finance Ministers on avoiding unwanted litigation over the years has fallen over deaf ears. You can provide some relief to the assessees, if you can scrap altogether adjudication by Departmental officers other than Commissioners – at least the assessees are saved from the torture of one stage of appeal and pre-deposit and make it mandatory that the order should be delivered to the party within a week of the hearing. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A thousand cases start with the first Show Cause Notice and it is here that you have to apply the brakes. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Five years ago, the Supreme Court in <em>Hindustan Poles Corporation v Commissioner Of Central Excise, Calcutta </em>– <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2006/2006-TIOL-29-SC-CX.htm" target="_blank"><font size="1">2006-TIOL-29-SC-CX</font></a></strong>, observed, </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Before issuance of show cause notices the Revenue must carefully take into consideration the settled law, which has been crystallized by a series of judgments of this Court. The Revenue must make serious endeavour to ensure that all those who ought to pay excise duty must pay but in the process the Revenue must refrain from sending of indiscriminate show cause notices without proper application of mind. This is absolutely imperative to curb unnecessary and <strong>avoidable litigation</strong> in Courts leading to unnecessary harassment and waste of time of all concerned including Tribunals and Courts. </font></em></p> </blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Supreme Court or FM, the <strong>Field Marshalls</strong> have their own standards! </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">MCA - Green Initiatives in Corporate Governance - participation by shareholders or Directors in meetings through electronic mode </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> had been clarified by MCA that a shareholder or a director of the company may participate in meetings under the provisions of the Companies Act, 1956 through electronic mode. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is now further clarified that: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ It is not mandatory for companies to provide its directors, the facility to attend meetings through video conferencing. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In respect of shareholders meetings to be held during financial year 2011-12, video conferencing facility for shareholders is optional. Thereafter, it is mandatory for all listed companies. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The company is free to select Video Conferencing facility of any agency but the chairman of the meeting and Secretary of the company has to ensure that there is a proper Video Conferencing equipment/facility which enables all persons participating in that meeting to communicate concurrently with each other without an intermediary, and to participate effectively in the meeting. </font></p> </blockquote> <p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/mca_cir_35_2011.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MCA General Circular No. 35/2011, Dated: June 6, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">MCA - Fast Track Exit mode for defunct companies </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> are a number of companies, which are registered under the Companies Act, 1956, but due to various reasons, they are inoperative since incorporation or commenced business but became inoperative or defunct later on. Such companies may be desirous of getting their names struck off from the Register of Companies maintained by Registrar of Companies. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per section 560 of the Companies Act, Registrar of Companies may strike off the name of companies on satisfying the conditions therein. As per present practice, a company desirous of getting its name struck off has to apply to Registrar of companies in e-form 61. All pending statutory returns are required to be filed along with e-form 61. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To give an opportunity for fast track exit by a defunct company, for getting its name struck off from the register of companies, the Ministry has decided to modify the existing route through e-form – 61 and has prescribed new Guidelines. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">‘Defunct Company' is one which has nil asset and liability and </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ has not commenced any business activity or operation since incorporation; or </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ is not carrying over any business activity or operation for last one year before making application under FTE. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Any defunct company desirous of getting its name strike off the Register under Section 560 of the Companies Act, 1956 shall make an application in the Form FTE, annexed electronically on the Ministry of Corporate Affairs portal namely <a href="http://www.mca.gov.in"><strong>www.mca.gov.in</strong></a>; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If pending prosecutions are only for non-filing of Annual Returns under section 159 and Balance Sheet under section 220 of the Companies Act, 1956, such application may be accepted provided the applicants have already filed the compounding application. However, steps for final strike of the name of the company will be taken only after disposal of compounding application by the competent authority. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Company shall also file a Statement of Account in Annexure C, prepared as on date not prior to more than one month preceding the date of filing of application in Form FTE, duly certified by a statutory auditor or Chartered Accountant in whole time practice. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/mca_cir_36_2011.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MCA General Circular No. 36/2011, Dated : June 7, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">MCA - Balance Sheet in XBRL Mode </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> following class of companies have to file the Financial Statements in XBRL Form from the year 2010-11: - </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ All companies listed in India and their Indian subsidiaries; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ All companies having a paid up capital of Rs. 5 crore and above </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ All companies having a turnover of Rs. 100 crore and above. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, banking companies, insurance companies, power companies and Non-Banking Financial Companies (NBFCs) are exempted for XBRL filing, till further orders. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/mca_cir_37_2011.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MCA General Circular No. 37/2011, Dated : June 7, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">What is XBRL? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>XBRL</strong> is a language for the electronic communication of business and financial data, which is revolutionizing business reporting around the world. It provides major benefits in the preparation, analysis and communication of business information. It offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data. XBRL stands for eXtensible Business Reporting Language. It is already being put to practical use in a number of countries and implementations of XBRL are growing rapidly around the world. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">XBRL is an open, royalty-free software specification developed through a process of collaboration between accountants and technologists from all over the world. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What is the future of XBRL?</strong> XBRL is set to become the standard way of recording, storing and transmitting business financial information. It is capable of use throughout the world, whatever the language of the country concerned, for a wide variety of business purposes. It will deliver major cost savings and gains in efficiency, improving processes in companies, Governments and other organisations. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Does XBRL cause a change in accounting standards?</strong> No. XBRL is simply a language for information. It must accurately reflect data reported under different standards - it does not change them. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>How does XBRL work?</strong> XBRL makes the data readable, with the help of two documents - Taxonomy and instance document. Taxonomy defines the elements and their relationships based on the regulatory requirements. Using the taxonomy prescribed by the regulators, companies need to map their reports, and generate a valid XBRL instance document. The process of mapping means matching the concepts as reported by the company to the corresponding element in the taxonomy. In addition to assigning XBRL tag from taxonomy, information like unit of measurement, period of data, scale of reporting etc., needs to be included in the instance document. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>More information about XBRL:</strong> Please visit <a href="http://www.xbrl.org"><strong>www.xbrl.org</strong> </a></font></p> <p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/mca_cir_37_2011.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MCA General Circular No. 37/2011, Dated : June 7, 2011</font></strong></a></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"> – Friday's cases</font></strong></font></strong></font></p> <p align="justify"><strong><font color="#663399" 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">Service Tax</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether appellant is required to establish integral connection between service and manufacture of final products for availment of CENVAT Credit – CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ELIGIBILITY</strong> of CENVAT Credit on input services – Whether appellant is required to establish integral connection between the service and manufacture of final products for availment of CENVAT Credit or the appellant is required only to show that services relate to their business to avail CENVAT Credit – Matter goes to Third Member. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether Sec 80IB benefits are available to job worker on job work and labour charges, and also scrap generated out of such activities - YES, says Delhi HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> claimed deduction u/s 80IB of the Income tax Act on the gross receipts of Rs. 1,55,26,740/- which included scrap sales of Rs.79,45,411/-, labour charges of Rs.20,82,637/- and job work charges of Rs.11,86,895/- - AO held that as the assessee's industrial undertaking was set up for the purpose of manufacture of steel, forging, transmission gears and parts and accessories of motor vehicles, it could not be permitted deduction on sale of scrap, job work and labour charges as the same were attributable to the business carried on by the assessee, but not derived from the profits of industrial undertaking. </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">Although order is wrong, it need not be set aside since error only is in mentioning wrong notification - CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADJUDICATING</strong> authority incorrectly granting the benefit of section 11C notification to intermediate goods viz. gold potassium cyanide arising during manufacture of imitation jewellery – however, after passage of O-in-O another section 11C notification issued covering impugned goods – although order is wrong, it need not be set aside since the error only is in mentioning the wrong notification number and no purpose would be served by remanding the matter for a fresh order. </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"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p> </body> </html>