H&A IDT Share January 2014 - Hiregange Academy | · PDF fileallowed for marketing and sale promotion as ... Background Article 246 governs ... As copyright is also an product of the

H&A IDT Share – January 2014

Contents Eligibility of Input Service Credit – Sales Commission Service tax on Copyright Utilisation of Cenvat credit of Central Excise Duty for payment of Cess Availment of Cenvat Credit under VCES scheme- Circular No. 176 dated 20.01.2014 SSI Exemption under Central Excise Case Analysis Retailers Association of India Vs. UOI UOI vs Delhi Cloth and General Mills Co. Ltd UOI Vs Nandi Printers Pvt. Ltd. Kaira District Corporation Milk Producers Union Ltd. Collector of Central Excise, Baroda Vs MM Khambhatwala

Circulars – Service tax on Residential Welfare Association – Post circular No. 175/1/2014 In news and Training corner Knowledge Portal and Student Corner Upcoming Event

Highlights Eligibility of input service credit – Sales Commission Availment of Cenvat Credit under VCES scheme- Circular No. 176 dated 20.01.2014 Circulars – Service tax on Residential Welfare Association – Post circular No. 175/1/2014 CA IPCC results declaration - When???

(For private circulation to clients of Hiregange & Associates and Chartered Accountants only)

Contact:- Hiregange & Associates #1010, 2st floor, 26th main, (Above Corporation Bank) 4th ‘T’ Block, Jayanagar, Bangalore 560 041 Website – www.hiregange.com

Branch Office:- "Basheer Villa" H.No.8-2-268/1/16/B, 2nd Floor, Sriniketan Colony, Road No.3, Banjara Hills, Hyderabad-500 034

Newsletter designed, compiled and edited by Articled Assistants Team

Eligibility of input service credit – Sales Commission

2 (For private circulation to clients of Hiregange & Associates and Chartered Accountants only)

The cenvat credit scheme is a beneficial legislation

and allows for credits used for manufacture or

service. Sales commission is paid for the following

reasons: market creation/development,

advertisement, sales promotion activities,

identifying potential customers, negotiating with

them, sourcing / funneling of orders, increasing

sales etc.

Cenvat Credit Rules prior to 1.4.11 specifically

allowed for marketing and sale promotion as

eligible. In addition the activities relating to

business was also allowed. Post April 2011 the

activities relating to business was dropped however

the specific activity of sales promotion was

continued to be included in the definition. Several

decisions including Ambika Overseas [ 2012(25) STR

348 (P&H) affirmed this position. Further the CBEC

Circular 943/4/2011 dt 29.4.11 issued in Sl. No. 5

clarifies that inspite of the “activities relating to

business” being omitted as far as dutiable goods are

concerned as the same is specifically set out and

provisions to be read harmoniously, the eligibility

remains clear. Notification 18/09 of 7.7.09 followed

by Not. 42/12 of 29.6.12 allow commission up to

10% of FOB value of exports to be paid and not

subjected to service tax under reverse charge and

the balance eligible for refund.

The dispute got some support in the decision of

Cadilla Health Care [ 2013(30)STR 3 (Guj)] wherein

this position was questioned. It unsettled to some

extent the settled position of law that the sales

commission was clearly eligible as an activity

preceding sales. However, now a days at times the

audit officers seek to deny the same alleging that it

is a post removal expense relying on this judgment.

However, it is important to note that in this decision

no evidence was led that any sales promotion

activity was involved. It appears now that the

commission on selling goods is in a slightly better

position than that for services as far as eligibility is

concerned.

Therefore to avoid disputes in this regard the scope

of the activities for which sales commission is paid is

to be made clear in the agreements focusing on the

fact that many activities are for long term –

advertisement, road shows, business exhibitions,

sponsorships … as well as shorter term measures of

identifying customers, negotiating with them,

increasing sales by collecting orders etc. The nexus

and pre removal activities now require to be explicit

instead of implicit to avoid demands in this regard.

- CA. Madhukar N Hiregange

Either write something worth reading or do something worth writing.

–Benjamin Franklin

Service Tax on copyright


Background

Article 246 governs the subject matter of the laws

made by the Parliament and by the Legislature of

states. The matters are listed in the Seventh

Schedule to the Constitution. The seventh schedule

is classified into three lists as follows:

a. List I [referred as Union List]: This list

enumerates the matters in respect of which

the parliament has an exclusive right to make

laws.

b. List II [referred as State List]: This list


the legislature of any state has an exclusive

right to make laws.

c. List III [referred as the Concurrent List]: This list


both the parliament and subject to list I,

legislature of any state, have powers to make

laws.

Accordingly, if the subject matter is covered under

List I to the said Seventh Schedule, then the Union

Legislature has powers to legislate it. On the other

hand if the matters are covered under List II of the

said Schedule, then the State Legislature has

powers to legislate and if it is covered by List III,

both state and union have powers to legislate. The

service tax is subject matter in Union List. The VAT

is a state subject in India acquired from Entry 54 of

the state list which levies Taxes on the sale or

purchase of goods other than newspapers, as well

as other than sale or purchase of goods (other than

newspapers) in the course of inter-State trade or

commerce.

Whether copyrights is liable to VAT or service tax?

Copyright and VAT

As per Section 3(1) of K-VAT Act, tax is levied on

sale of goods in the State by a registered dealer or

dealer liable to be registered. The term ‘sale’ is

defined in Section 2(29) as follows:

“(29) "Sale" with all its grammatical variation and

cognate expressions means every transfer of the

property in goods (other than by way of a

mortgage, hypothecation, charge or pledge) by

one person to another in the course of trade or

business for cash or for deferred payment or

other valuable consideration and includes,-

(a) A transfer otherwise than in pursuance of a

contract of property in any goods for cash,

deferred payment or other valuable consideration;

(b) A transfer of property in goods (whether as

goods or in some other form) involved in the

execution of a works contract;

(c) A delivery of goods on hire purchase or any

system of payment by instalments;

(d) A transfer of the right to use any goods for

any purpose (whether or not for a specified

period) for cash, deferred payment or other

valuable consideration.”

In order to constitute a sale liable to VAT, there

should be transfer of property in goods from one

person to another for cash, deferred payment or

other valuable consideration. Sale also covers a

transfer of the right to use any goods for any

purpose. The VAT is payable by dealer on



The permanent transfer of Intellectual property

rights (IPR’s) such as copyright is a sale of goods

which is excluded from service tax levy as clarified

in circular no.80/10/2004-ST. So long as the

transaction does not amount to sale or permanent

transfer, it is only a temporary transfer of copyright

or permit its use by another person for a

consideration.

At the same time question arises whether the

temporary transfer of copyright which is leviable to

VAT can also be levied to service tax? As per

decision of the Supreme Court in BSNLs case 2006

(2) S.T.R. 161 (S.C.), which held that service tax and

VAT are mutually exclusive, a view is possible that a

transaction for granting the right to use copyrights

etc., which can be construed as a transaction in

goods. Once the transaction is one of goods and

what is involved is the transfer of the right to use

those goods, the same would be subject to

VAT/sales tax rather than service tax.

Discussion on recent decision

In AGS Entertainment Pvt Ltd vs UOI(2013-TIOL-

521-HC-MAD-ST) the challenge in these writ

petitions was whether the levy of service tax on the

temporary transfer or permitting the use or

enjoyment of copyright is ultra vires the

Constitution?

The petitions were dismissed holding that

the Parliament is within its legislative competence

and Section 65(105)(zzzzt) is not ultra vires the

Constitution. From the production of the

taxable turnover as per rates set out in Section

4(1)(a), (b) and (c) and given in Schedules to Act.

On a perusal of Third schedule to the KVAT Act

2003, it sets out Entry 34-Exim scrips, REP

licenses, special import licenses(SIL), value based

advance licenses(VABAL), export quotas, DEPB

licences, copyrights, patents and the like[including

software licenses by whatever name called].. The

applicable rate is 5%.

Copyright service

Under earlier service tax law, it levied service tax

on the taxable services set out in Section 65(105)

sub-clauses. The services of copyright are taxable

wef 1.7.2010.

It is to be stated that the permission to use and

transferring temporarily or enjoy the intangible

goods such as designs, patents and trademarks

were subject matter of levy to service tax from

2004. Though copyright is also once such

intangible item, it was excluded from the scope

vide section 65 (55a).

As per section 65(105)(zzzzt), any service provided

or to be provided to any person by any other

person, the under mentioned activity of any

copyright as defined in the Copyright Act, 1957.

Transferring temporarily or Permitting the use or

enjoyment . The definition of the taxable service

specifically excludes copyright in respect of the

following classes of works: original literary,

dramatic, musical, artistic works.



cinematograph film till it is exhibited, there are host

of commercial activities. Service tax is the value

added tax, which applies to the business

transactions for consideration involving commercial

activities. Over all, there is a huge rise in business of

film industry and huge money is involved. The

temporary transactions of copyrights or the

permission to use or enjoyment of the copyright

cannot be brought either under Entry 54 of List II or

Entry 92A of List I. Held that the Parliament is well

within its legislative competence in levying service

tax resorting to Entry 97 of List I.

Implications of decision under negative list based

taxation

The Finance Act, 2012 introduced Section 66B as

the new Charging Section wef 1.7.2012 for the levy

of service tax on all services other than those

services specified in the Negative list. The term

service is defined to include declared service.

The declared services at Section 66E has the

following entry which could be relevant:

(c) temporary transfer or permitting the use or

enjoyment of any intellectual property right;

As copyright is also an product of the intellect, it is

covered in this declared services entry.

Notification No.25/2012 at Sl. No. 15 exempts the


enjoyment of a copyright covered under clause (a)

or (b) of sub-section (1) of Section 13 of the Indian

Copyright Act relating to original literary, dramatic,

musical or artistic works.

At the same time it also exempts the temporary

transfer or permitting the use or enjoyment of a

copyright of cinematograph films for exhibition in

a cinema hall or theatre. Earlier, till 31.3.2013, it

exempted temporary transfer or permitting the

use or enjoyment of a copyright covered under

clause (a) or (b) of sub-section (1) of Section 13 of

the Indian Copyright Act relating to

cinematograph films also.

In other words, the levy of service tax on

Copyright Services (Section 65(105)(zzzzt) is

revived from 1.4.2013 with the exception of

Section 13(1)(a) or Cinematograph films for

exhibition in a cinema hall or a cinema theatre.

In light of the decision mentioned above, which

has upheld the levy of service tax on the

temporary transfer or permitting use or enjoying

of copyright with a view that the transfer of right

to use the goods[copyright] or permission to use

the copyright or enjoyment of copyright operate

in different fields. It may be difficult to take a

stance that as VAT is paid on the right to use, the

service tax need not be paid on the same.

Unless this matter is finally decided by Apex Court

it may lead to demand of both VAT and service tax

on same transaction. In passing, there may be a

need to examine at this juncture whether the


enjoyment of a computer programme by license

which is covered in literary works as per Copyright

Act is exempted from service tax.

- CA Roopa Nayak


Introduction:

Central Excise Duty is a duty on the manufacture of

Excisable Goods in India. The manufacturer who is

manufacturing the Excisable goods in India requires

to charge a Duty of Excise on the clearance of the

excisable goods. However, merely for the

administrative purposes, duty requires to be paid at

the time of removal of goods. In addition to the

payment of Excise Duty, the assessee requires to

charge and collect ‘Education Cess and Secondary

Education Cess’ which is levied under Finance Act.

Further, the CENVAT Credit Rules, 2004 is framed

to avoid the cascading effect of taxes and as per the

provisions of CENVAT Credit Rules, assessee is

allowed to use the CENVAT Credit paid on the

purchase of various Inputs / Capital Goods and

Inputs Services for the payment of Central Excise

Duty on the output goods. However, w.e.f 01-04-

2011, the assessee would be having an

accumulated balance of CENVAT Credit of Central

Excise Duty, but not having the balance of

Education Cess / SHE Cess. This is due to import of

goods from abroad where the assessee would pay

only the CVD portion and payment of Education

Cess and SHE Cess not applicable w.e.f. 01-04-2011.

In such a scenario, the question arises whether the

manufacturer can use the balance of CENVAT Credit

of Excise Duty for the payment of Education Cess. In

this article, the paper writer examines validity of

this option and also discussed important judicial

precedents in this regard.

Provisions under Rule 4 of CENVAT Credit Rules:

Rule 4 of the CENVAT Credit Rules, 2004 allows

the assessee to use the CENVAT Credit for the

payment of “a) any duty of Excise on any final

product”. Hence, from the analysis of rule 4 of

CENVAT Credit Rules, 2004, it is clear that the

CENVAT Credit can be used for payment of any

duty of Excise. Hence, if the Education Cess levied

under section 91 / 93 of Finance Act is a Duty of

Excise, then the assessee can use the CENVAT

Credit of Central Excise Duty for the payment of

Education Cess.

Whether the Education Cess is a Duty of Excise:

The Section 93 of the Finance Act governs the levy

of Education Cess on the manufacture of Excisable

Goods. This section specifically held that the

Education Cess charged on Excisable goods shall

be a Duty of Excise. The relevant provision is as

follows.

“93. Education Cess on Excisable Goods - (1) “The

Education Cess levied under section 91, in the case

of goods specified in the First Schedule to the

Central Excise Tariff Act, 1985, being goods

manufactured or produced, shall be a duty of

excise………………….,

Hence, from the above analysis of the provisions

of section 93 of Finance Act, it is clear that the

Education Cess is a Duty of Excise. Further, as per

the provisions of Rule 4 of CENVAT Credit Rules,

2004, the assessee can utilize the balance of

Utilization of CENVAT Credit of Central Excise Duty for the payment of Cess


CENVAT Credit can be utilised for the payment of

Duty of Excise. Further, there is no bar provided

under the provisions of CENVAT Credit Rules, 2004

for usage of CENVAT Credit balance of Excise Duty

for the payment of Education Cess. The only bar

provided under CENVAT Credit Rules is in proviso to

Rule 3 i.e. restriction on cross utilization of

Education Cess balance with Secondary Education

Cess. Accordingly, as per the view of the paper

writer the CENVAT Credit of Central Excise Duty can

be used for the payment of Education Cess / SHE

Cess due to the following reasons :

1. The Education / SHE Cess levied on excisable

goods is a Duty of Excise as per the provisions

provided under Finance Act.

2. As per Rule 4 of CENVAT Credit Rules, 2004,

CENVAT Credit (as provided under Rule 3) can

be used for payment of Duty of Excise.

3. There is no specific bar / restriction provided

under the provisions of CENVAT Credit Rules.

Conclusions:

As per the verbatim reading of the provisions of

law, in the view of the paper writer, the assessee

can use the balance of CENVAT Credit of Central

Excise Duty for the payment of Education Cess.

However, there exists a contradictory decision on

this subject and the issue has not reached finality.

Accordingly, if the assessee wants to use the

balance of CENVAT Credit of Excise Duty for the

payment of Education Cess (with a objective of

limiting the cash payment and increasing the

working capital of the company), then the same

could be done by initial intimation to the

department to avoid suppression of facts / intent

to evade payment of duty from the department.

However, if the amount involved, is not material

to the size of the company, in the view of the

paper writer, the assessee could pay the

Education Cess by cash when they are not having

the CENVAT Credit balance of Cess, to avoid

unnecessary objections from the department.

- CA Sriharsha KM

Introduction:-

Ministry of Finance Vide Circular No. 176/2/2014 -

ST dated the 20th January, 2014.

As per this circular, cenvat credit would be

admissible to the declarants under this scheme

who have made a declaration under VCES and

who have got conclusive evidence which is issued

in terms of Rule 7 of Service Tax VCES Rules 2013.

The conclusive evidence is Form VCES – 3. The

acknowledgement is to be issued within a period

of 7 working days from date of furnishing of

details of payment of tax dues in full along with

interest, if any, by the declarant.

Availment of Cenvat credit under

VCES scheme- Circular No. 176

dated 20.1.14.

Utilization of CENVAT Credit of Central Excise Duty for the payment of Cess


It appears that the department is trying to extend

the benefit of availing the cenvat credit to the

declarants only after the issuance of Form VCES – 3

i.e. after making full payment under the scheme by

the declarant.

Is the stand in Circular legally tenable?

No, the reason being that, the provider of output

service and who is paying his “tax dues” under

Section 73A is legally eligible to take the cenvat

credit on the basis of the following documents as

per Rule 9 of Cenvat Credit Rules, 2004.

1. An invoice issued by a manufacturer for

clearance of inputs or capital goods

2. A supplementary invoice, issued by a

manufacturer or importer of inputs or capital

goods in terms of the provisions of Central

Excise Rules, 2002

3. A bill of entry

4. A certificate issued by an appraiser of customs

in respect of goods imported through a Foreign

Post Office;

5. A challan evidencing payment of service tax,

by the service recipient as the person liable to

pay service tax.

6. An invoice, a bill or challan issued by a provider

of input service on or after the 10th day of,

September, 2004;

7. An invoice, bill or challan issued by an input

service distributor under rule 4A of the Service

Tax Rules 1994.

From this we can clearly say that, as per rule 9 (v)

the declarant under VCES scheme is eligible to

avail cenvat credit . This view is been clarified by

the department vide their Circular No. 170/5

/2013 - Service Tax, dated 08.08.2013 as well as in

answer to the question no 22 (a) (b) of the FAQ`s

issued by the CBEC under the authority of Ministry

of Finance on 8th August, 2013.

Therefore in our view, cenvat credit is eligible as

per Cenvat Credit Rules, 2004 and not as per the

conclusive evidence as explained in the said

circular. However, it can be denied only where

there was fraud, misrepresentation or intent to

evade the tax which is established. Once an

assesse is under VCES, such establishment may be

a challenge for the revenue.

- Venkatanarayana GM

Availment of Cenvat credit under VCES scheme- Circular No. 176 dated 20.1.14.


The contribution of Small scale sector in the

industrial growth of the Indian economy is

significant besides the potential for employment

generation.

The Small scale sector has for itself a special

dispensation in the Central Excise law in order to

make it competitive in the domestic and global

market. Central excise duty concessions have been

extended to the units in the small scale sector

based on their turnover so as to facilitate them to

graduate by availing these concessions in a graded

manner.

Eligibility

The definition of SSI under the provisions of the

Excise Act is one whose aggregate value of

Turnover does not exceed Rs. 400 Lakhs in the

preceding financial year. Concession from excise

duty in respect of clearances of specified excisable

goods.

Where the SSI unit does not avail the Cenvat

For first clearance effective from 1st April of

financial year upto an aggregate value of Rs. 1.50

crore, duty is exempted in respect of those SSI units

which do not intend to avail Cenvat Credit. Units

availing SSI exemption are permitted to remove

specified goods to a place outside the factory for

getting any job work done on any specified goods

without payment of duty. (notification no 83/94 &

84/94 CE date 11.04.94 as amended)

Mode of calculation of limit of Rs. 150 lakhs / Rs

400 lakhs

1. Turnover of Exports, Deemed exports,

turnover of non-excisable goods, turnover of

unconditionally exempt goods, Sales to UNO

etc, for their official use, goods manufactured

with others brand name and cleared on full

payment of duty, job work done under

notification no. 214/86-CE, 83/94-CE and

84/94-CE, processing not amounting to

manufacture and traded goods is to be

excluded.

2. Value of intermediate products (when final

product is exempt under notification other

than SSI, Exemption notification), Branded

goods manufactured in rural area and cleared

without payment of duty, export to Nepal or

Bhutan and goods cleared on payment of duty

is to be included

3. Value of turnover of goods exempted under

notification (other than SSI exemption

notification or job work exemption

notification) is to be included for purpose of

limit of Rs. 400 lakhs, but excluded for limit of

Rs. 150.

SSI exemption under Central Excise

Eligibility for SSI concession

Unit whose turnover was less that Rs. 400 lakhs in

previous year are entitled to full exemption upto

Rs. 150 lakhs in current financial year. SSI unit can

avail Cenvat credit on inputs and input services

only after it starts paying duty. However, Cenvat

credit of capital goods can be availed even if these

were received during period of exemption.


- Keshav Murty

SSI exemption under Central Excise

Articles eligible for SSI exemption

Broadly, items generally manufactured by SSI are

eligible for SSI exemption. Items like pan masala,

matches, watches, tobacco products, Power driven

pumps for water not confirming to BIS, products

covered under compounded levy scheme etc. are

specifically excluded, even when these can be

manufactured by SSI. Some items like automobiles,

primary iron and steel etc. are not eligible for SSI

exemption, but anyway, these are beyond capacity

of SSI unit to manufacture.

Procedural relaxations

SSI units eligible for SSI concession are required

to pay duty on quarterly basis and file quarterly

return even if they do not avail the SSI

exemption

SSI mfing goods with other’s brand name not

eligible

Goods manufactured by an SSI unit with brand

name of others are not eligible for SSI

concession, unless goods are manufactured in a

rural area. However, SSI exemption will be

available to packing material even if it bears

brand name of other person.

Turnover of all units of same manufacturer to be

clubbed

Turnover of all units belonging to a manufacturer

will be clubbed for calculating SSI exemption

limit.

Clubbing if units are one in reality

If two SSI units are genuinely independent, they

are eligible for SSI exemption, even if some or

even most partners/directors are common.

Financial control, flow back of profits and unity

of interest are the major tests to determine

whether turnover of two units is required to be

clubbed.

Our GMCS Experience!!!

GMCS was introduced in 2002 to equip the new entrants to the profession with interpersonal and

management skills and provide exposure to the contemporary issues in the ever-changing socio-economic

scenario. GMCS is meant to inculcate in each of us the best of management, communication and

presentation skills and builds confidence.

This course was a fun packed, vibrant and informative 15 days experience. We had Seminars, workshops,

Outdoor management, Business presentation and many more... It is a wonderful experience and also we

made many friends coming from different states, colleges, firms.

Each one of us had equal opportunity to participate which ignited team spirit, team building and self-

motivating abilities. As students we should retain and implement things learnt and practiced continuously

would lead us to become extraordinary Chartered Accountants. On the whole, 15 days of heavenly

experience if utilized to full advantage can end up being memories to cherish for lifetime.

- Vidhya R, Nandini H, Srividya S, Rajeshwari S

Case Analysis


Issue

Constitutional validity of Service Tax on Renting of

Immovable property’ .

Decision of Hon`ble High court (2009)

Delhi High Court in the case of Home Solution Retail

India Limited Vs Union of India(2009) (237) E.L.T

209 (Del.) which held that renting of Immovable

Property Per Se is not a service whereas any other

service in relation to such renting may fall under

the taxable service category under the definition

existing at that point in time.

Subsequently in the Budget 2010, the definition of

the taxable services of renting of immovable

property was retrospectively amended to neutralize

the finding of the judgment. The amended

definition of Renting of Immovable Property reads

as follows.

“to any person, by any other person, by renting of

immovable property or any other service in

relation to such renting, for use in the course of or,

for furtherance of, business or commerce.

Further, amendment also changed to cover the

renting of vacant land for used in business

furtherance.

However, considering the retrospective

amendment, the Bombay Court in the case of

Retailers Association of India v. Union of India 2011

(23) S.T.R. 561 (Bom.) has upheld the constitutional

validity of the Service Tax on Renting of Immovable

Property. Further, it is held that Service tax on

renting of immovable property was held to be

outside scope of Entry 49 of List-II by relying on

the fact that service tax is different from Tax on

Land and Building. Accordingly, the Bombay High

Court held that Central has the power to levy tax

on this by virtue of Entry 97 of List – I read with

Article 248 of Constitution.

Decision of Supreme court

The Hon’ble Supreme Court has not confirmed the

applicability of Service Tax on Renting of

Immovable Property and the matter is still not

finality and pending before the Hon’ble Supreme

Court. However, the Supreme Court has held that:

No Coercive steps can be taken against the

petioners of the case for the recovery of Service

Tax for the period on or before 30th September

2011.

However, the Supreme Court has clarified that

there is no applicability of Stay for recovery with

effect from 1st October 2011 is concerned.

From the above decision, we can analyze that the

Hon’ble Supreme Court prima facie has confirmed

the liability of Supreme Court on the Renting of

Immovable Property after 1st October 2011 and

plea of limitation and bona fide belief of non

taxability of the transaction will not be sustainable

as per the above findings of the Supreme Court an

Industry is waiting for the final verdict from the

Hon’ble Supreme Court.

- CA. Roopa Nayak

Retailers Association of India v. Union of India - 2011 (272) E.L.T. A67 (S.C.)

Case Analysis


ISSUE:

Whether processing of til oil and Groundnut Oil

procured to produce Vanaspati will generate an

intermediate product called Refined Oil from the

raw oil which is liable to excise duty. Whether the

process of conversion of ground oil and til oil results

in manufacture of non-essential vegetable oil?

Decision of Hon’ble High Court:

There are three petitions from three different

companies manufacturing vegetable product

known as Vanaspati. These petitions raised a

common question regarding liability to excise duty

on similar facts. High court accepted petitioner’s

contention that oil in their hands is not liable to

excise duty. Punjab High Court ordered excise

authority to withdraw the impugned demand of

excise duty on petitioners.

Arguments of Authorized Representative for UOI:

In the process of manufacture of Vanaspati from

Groundnut oil and til oil, petitioners bring into

existence at one stage after carrying out some

processes with the aid of power, what is known in

market as ‘Refined Oil’ which will fall under

description of ‘vegetable non essential oil’ liable to

excise duty. It was further argued that refined oil is

obtained by neutralization bleaching of raw oil.

Sometimes it is subject to process of further

deodorization. Even if petitioners don’t

manufacture refined oil as is known in market, they

are manufacturing some kind of non-essential

vegetable oil by applying raw material purchased by

them.

Arguments of Authorized Representative for

Petitioner:

Oil is not regarded as refined oil unless it was also

deodorized, since failure to deodorize leaves

behind certain impurities in shape of compounds

which give off bad odors.

Observations made by the Supreme Court:

1. Specification of refined oil by Indian standard

institute – Refined Ground nut oil – Ground

nut oil which has been refined by

neutralization with alkali bleached with fuller

earth and/or activated carbon and deodorized

with steam, no other commercial agent being

used.

2. It relied upon passage quoted in Permanent

edition of Words and Phase Vol 26 from an

American judgment which states-

“Manufacture implies a change, but every

change is not manufacture and yet every

change of an article is the result of treatment,

labour and manipulation. But some more is

necessary and there must be transformation a

new and different article must emerge having

a distinctive name, character or use”.

Decision of Supreme Court:

1. Indian Standard institute furnishes very strong

support for petitioner’s view that without

deodorization oil is not refined oil as it is

known for consumer and commercial

community. Appellant could not provide

evidence of single case of marketing of

refined oil without deodorization.

UOI Vs Delhi Cloth and General Mills Co Ltd [1977(001) ELT J199 SC]

Case Analysis


Decision of Hon’ble Commissioner and CESTAT:

They were of the opinion that the respondent was

entitled to the benefit of Notification No. 80/80 and

in respect of the playing cards no excise duty would

be payable because the aggregate value of the

clearances of the playing cards was less than

Exemption limit. In the opinion of the High Court, the

clearances in respect of printed cartons could not be

taken into consideration. Hence, the appeal was filed

with Supreme Court.


1. The Supreme Court relied upon the decision of

Collector of Central Excise, Hyderabad v. Vazir

Sultan Tobacco Co. Ltd., 1996 (83) E.L.T which

state that by the virtue of exemption

notification the rate of duty was reduced to NIL,

the goods specified in Tariff act would still

regarded as excisable goods. The printed cartons

which are covered under Tariff act are excisable

even though they are charged at NIL rate of

duty.

Decision of Supreme Court

1. The fact that the rate of duty at which Printed

Carton are dutiable is NIL by the reason of

Exemption notification, would not make it non-

excisable. Therefore the value of clearance for

the purpose of SSI exemption should include

Printed carton which are dutiable at NIL rate.

2. The respondent was not entitled to the Small

Scale benefit under Notification 80/80 and

hence he cannot claim exemption under SSI

notification.

2. Supreme Court is of the opinion that view of

Indian Standard institute as regards what is

refined oil as known to trade in India must be

preferred. The affidavits filed by petitioners

are clear and categorical.

3. Further In regarding process resulting in

manufacture, Manufacture means “Bringing

into existence a new substance” and doesn’t

mean merely “to produce some change in

substance”.

4. Thus Supreme court is of the opinion that

High court is right in its conclusion that there

was no legal basis for demands of excise duty

made on petitioners and direct them to

withdraw these demands.

UOI Vs Delhi Cloth and General Mills Co Ltd

[1977(001) ELT J199 SC]

UOI Vs Nandi Printers Pvt Ltd

[2001 (127) ELT 0645 S.C]

UOI Vs Nandi Printers Pvt Ltd

[2001 (127) ELT 0645 S.C]

ISSUE:

Whether the assessee can avail SSI benefit and

whether Value of Clearance for the purpose of SSI

Exemption should include manufacture of printed

cartons which are exempted under Notification

no. 89/79 or not. The answer to that question

depends on whether the value of the printed

cartons can be taken into consideration even

though by Notification No. 89/79 levy of excise

duty on manufacture of printed cartons was

exempted.

Case Analysis


Facts

1. The Respondent is a Co-operative society

registered under the Gujarat Co-operative

Societies Act, 1961.

2. Engaged in manufacture of milk and cocoa

products.

3. This society is also a member of Federation

(which is also a society) and manufactured

products of the society would send only to the

Federation.

4. The Federation could decide the pricing policy

of the union, fix the rate of service charges for

manufacturing, processing or making & render

financial, technical , administration or other

necessary assistance to the members & enter

into corroboration agreement.

Issue

Whether Society and Federation would cover under

the definition of related person as per section

4(4)(c) of CE Act 1944. Where the price list , they

claimed a deduction of the commission charged by

Federation from the union for the purpose of

marketing the product

Decision of Hon’ble Commissioner and CESTAT:

The Commissioner rejected the price list taking the

ground that Society and Federation would cover

under the definition of related persons as per

section 4(4)(c) of CE Act, 1944.

As per the bye-law, Federation could decide the

pricing policy of the Union, fix the rate of service

charges for manufacturing, processing or marketing

and render financial, technical, administrative or

other necessary assistance to the members and

enter into corroboration agreements. From the

above, it is clear that Federation could exercise

control over the union.

Observations made by the High Court:

I. In order to attract the definition of a “related

person” in Section 4(4)(c), the assessee and

the person alleged to be related, must

have interest, direct or indirect, in the

business of each other.

II. If there is a shareholder, then the

shareholder may have an interest in the

assessee company, but merely because some

products are being sold by the assessee to

the shareholder, it cannot be said that the

assessee has any interest in the business of

the shareholder.

III. Merely because the Federation purchases

milk from the Union would not be sufficient

for the purposes of making the Federation a

related person.

High Court held that the Society and Federation

are not the related persons mentioning that the

allegation made by dept is not sufficient.


Aggrieved by the decision of the High Court, the

department filed appeal to the SC and SC agreed

the view of HC.

KAIRA DISTT.CO-OP MILK PRODUCERS UNION LTD 2002 (146) ELT 502 SC, JT 2002 (10) SC 266

Case Analysis


ISSUE:

Whether the manufacture of same products in

factory as well as by job workers is

clubbed for SSI exemption for the main

manufacturer?

Material facts giving rise to the appeal

1. The respondent, M.M Khambhatwala is

engaged in the manufacture of agarbatti,

amlapodi and dhup etc. The goods produced by

household ladies in their own premises out of

the raw material supplied by the respondent

who paid wages on the basis of number of

pieces manufactured. No supervision over the

manufacturing of the goods by the respondent.

The goods are sold from the premises of such

household ladies but sale proceeds sent to the

respondent.

2. Now the question is whether the household

ladies are treated as manufacturers or hired

labourers and the value of goods manufactured

by household ladies clubbable with the value of

the goods manufactured in respondents’

premises?

3. The turnover of the respondents for the year

1980-81 exceeded Rs. 20 Lakhs including the

value of clearances from the premises of

household ladies. According to Notification no.

80/80-C.E dated 19-06-1980, the SSI exemption

is available to the first clearances of Rs. 7.5

Lakhs if the value of clearances of the preceding

year does not exceed Rs. 20 Lakhs. The

respondent for the year 1981-82 claimed

exemption for the first clearance of Rs. 7.5 lakhs

by excluding the value of clearances from the

premises of the household ladies.

Decision of Hon’ble Collector of Central Excise:

1. The Superintendent of CE issued a Show

Cause Notice calling upon the respondents to

explain why the exemption claimed by them

under Notification No. 80/80-C.E. should not

be disallowed. After considering the

explanation, the Assistant Collector of Central

Excise, Ahmedabad withdrew the above Show

Cause Notice on the ground that the

clearances of all excisable goods did not

exceed Rs. 20 lakhs in the previous year

namely 1980-81. This view was taken on the

footing that the value of agarbatti, amlapodi

and dhup etc. manufactured on behalf of the

respondents in premises other than their

factory premises were not to be included in

the value of total clearances.

2. The order of the Assistant Collector was taken

up for review by the Collector of CE, Baroda

proposing to set aside the Assistant Collector

Order holding inter alia that the total

clearances of goods including those

manufactured from outside the factory

exceeded Rs. 20 lakhs and consequently the

respondents were not entitled to exemption

from duty in respect of first clearance of Rs.

7.5 lakhs of the goods for the year 1981-82.

Aggrieved by that, the respondents preferred

an appeal to the CESTAT.

COLLECTOR OF CENTRAL EXCISE, BARODA Vs M.M. KHAMBHATWALA

1996 (84) E.L.T 161 (S.C)

Case Analysis


Order of CESTAT

CESTAT after considering the submissions placed

before it by the Departmental Representative and

the counsel for the assessee and after verifying the

records came to the conclusion that the decision

reached by the Collector while reviewing the order

of the Assistant Collector was not correct and,

therefore, set aside the Collector’s order and

restored the order of the Assistant Collector.

Aggrieved by that the appeal to Supreme Court has

been filed by the revenue.

Representation by the learned counsel of the

Appellant/Revenue:

The learned counsel appearing for the appellant

placing heavy reliance on the fact of the

respondents having paid ‘wages’ to the house-hold

ladies for manufacturing agarbatti, amlapodi and

dhup etc. contended that the goods manufactured

by such house-hold ladies though in their own

premises must be taken as manufactured in the

factory of the respondents. Here, it is not in dispute

that levy of excise duty is attracted on the incident

of manufacture. Therefore, counsel on both sides

paid much attention to this aspect to substantiate

their respective contentions.

Representation by the learned counsel of the

respondent/assessee:

1. The learned counsel appearing for the

respondents, however, submitted that though

respondents paid `wages’ to the house-hold

ladies, it was on the basis of number of pieces

manufactured, that no power was used by

those ladies for manufacturing those goods

and there was no supervision over the

manufacture of those goods and that the

goods so manufactured were sold from the

premises of the cottage manufacturers. It is

further emphasized that those goods did not

go to the factory premises of the respondents.

It is contended by the learned counsel that

the manufacturers in this case are

undoubtedly the house-hold ladies,

notwithstanding the fact that raw-materials

for manufacture of those goods were supplied

by the respondents.

2. He also contended that the error committed

by the Collector of Customs was that he

proceeded on the assumption that the house-

hold ladies manufactured the goods as ‘hired

labourers’ which assumption is contrary to the

undisputed facts available in this case.

3. In support of his submission, he placed

reliance on two judgments of this Court in

Ujagar Prints etc. v. Union of India and Others

[1988 (38) E.L.T. 535] and Empire Industries

Ltd. and Others v. Union of India and Others

[1985 (20) E.L.T. 179].

4. In Empire Industries (supra) this Court held

:“The taxable event for Central Excise is the

manufacture of excisable goods and the

moment there is a transformation into a new

commodity commercially known as a distinct

and separate commodity having its own

character, use and name, whether be it the

result of one process or several processes

”manufacture" takes place and liability to duty

COLLECTOR OF CENTRAL EXCISE, BARODA Vs M.M. KHAMBHATWALA 1996 (84) E.L.T 161 (S.C)

Case Analysis


is attracted. The sale or the ownership of the

end-product is absolutely irrelevant for the

purpose of taxable event under the Central

Excise."

5. In Ujagar Prints (supra) the Constitution Bench

had held that the view taken in Empire

Industries (supra) case is an eminently plausible

view and does not suffer from any fallacy.


1. The Supreme Court considered the submissions

advanced before it by the learned counsel on

both the sides. The undisputed facts are that

the respondents supplied raw materials for

rolling incense sticks etc. to outside

manufacturers and paid wages to them on the

basis of number of pieces manufactured. Such

manufacture was without the aid of power.

There was no supervision over the

manufacture. Incense sticks were put in packets

and such packets were sold from the premises

of the house-hold ladies and they did not go to

the factory premises of the respondents. No

doubt the sale proceeds went to the

respondents but that will not change the

character of manufacture. If the conclusion is

that the house-hold ladies were the real

manufacturers then the decision of the Tribunal

cannot be faulted.

2. On the facts narrated above, the court do not

think that the assumption of the Collector that

the respondents got the goods in question

manufactured by `hired labourers’ can be

sustained. On the other hand, the court found

from the facts that the house-hold ladies are

the manufacturers of the goods in question

and the liability to excise duty will be

attracted on their manufacture of the goods

and therefore, it cannot be clubbed with the

goods manufactured in the factory premises

of the respondents to deny the exemption

claimed.


On the facts of this case and in the light of the

pronouncements of this Court on the question of

liability to excise duty, the court do not think that

there is any case for interference with the order

of the CESTAT. The court answers the point

against the appellant.

- Venkatanaraya GM

- Vetted by – CA. Sriharsha

COLLECTOR OF CENTRAL EXCISE, BARODA Vs M.M. KHAMBHATWALA 1996 (84) E.L.T 161 (S.C)

Circulars


In the recent circular issued by CBEC is providing

“Clarification on Levy of service tax on services

provided by a Resident Welfare Association (RWA)

to its own members”. It may be remembered that

circular not in line with the law are invalid in law as

per the supreme court/s decision in Ratan Melting

& Wire Industries 2008 (231) ELT 22 (SC).

The Residential Welfare Association (RWA) were

attempting to be kept out of service tax levy, citing

mutuality concept. Based on the doctrine of

mutuality, stand was taken that the services are

provided by members for themselves and since

consumed by the members alone, the applicability

of service tax is in great question as there is no

distinct service provider and service receiver. Since,

in the instant case both service provider and service

receiver are the members themselves, the

transaction may not be subject to service tax.

This view was also supported in recent decisionsof

Ranchi Club Ltd Vs CC of CE&ST, Ranchi and

Others(2012)51 VST 369(Jharkhand) and Sports

Club of Gujarat Ltd (2013-TIOL - 528 - HC-AHM-ST)

– In these two decisions it was held that there are

no two persons or two legal entities in activities of

a members club. Thus, if any services are provided

by a club to its members, then it is not a service by

one to another but to self and therefore it is not

liable to tax

In this background we examine in brief the other

legal issues raised and clarification given in the

circular now.

Issue 1: In respect of commonly used services or

goods, is service tax leviable?

Clarification as per Circular: Exemption is

provided specifically in Notification No. 25/2012

ST dated 20.06.2012 as amended, under SL no.

28(c), however a monetary ceiling has been

prescribed for this exemption i.e., Rs. 5,000/- per

month per member contributing to RWA for

sourcing of goods or services from third person

for the common use of its members.

Comments: The deduction in regard to goods such

as water + electricity may not be includible in the

value of service. Further the reimbursements are

also excludable [ more in point 5 below] Exempt

services if any provided could also be excluded. If

these were excluded the balance would be the

taxable service. However if one takes this

argument then the exemption cannot be claimed.

Issue 2: If the contribution of a member/s of a

RWA exceeds five thousand rupees per month,

Service Tax on Resident Welfare Assn – Post Circular No. 175/1/2014

Circulars


how should the service tax liability to be calculated?

Clarification as per Circular: If per month per

member contribution of any or some members of a

RWA exceeds five thousand rupees, the entire

contribution of such members whose per month

contribution exceeds five thousand rupees would

be ineligible for the exemption under the said

notification. Service tax would then be leviable on

the aggregate amount of monthly contribution of

such members. This seems to be an incorrect

interpretation. In our view it is only after Rs.5000/-

that the levy can apply.

Comment for issue 1 & 2: Alternative view is

possible that this exemption is available up to

Rs.5,000/- per month per member and only taxed

beyond such amount as per notification. But the

clarification given by the CBEC differs from the

notification. Circular is expanding the law and

imposing a levy!!

Issue 3: Is threshold exemption under notification

No. 33/2012-ST available to RWA?

Clarification as per Circular: Threshold exemption

available under Notification No. 33/2012-ST is

applicable to a RWA, subject to conditions

prescribed in the notification. Under this

notification, taxable services of aggregate value not

exceeding ten lakh rupees in any financial year is

exempted from service tax.

Comment: Yes, it needs to be noted that while

arriving at Rs.10,00,000/- value of fully exempted

services and services excluded from service tax levy

may not be included.

Issue 4: Does ‘aggregate value’ for the purpose of

threshold exemption, include the value of exempt

service?

Clarification as per Circular: As per the definition of

‘aggregate value’ provided in Notification No.

33/2012, aggregate value does not include the value

of services which are exempt.

Comment: No, further assessee who is claiming

exemption up to Rs.5000 pm per member may not

include such amounts in arriving at the monetary

limit of Rs.10 Lakhs.

Issue 5: If a RWA provides certain services such as

payment of electricity or water bill issued by third

person, in the name of its members, acting as a ‘pure

agent’ of its members, is exclusion from value of

taxable service available for the purposes of

exemptions provided in Notification 33/2012-ST or

25/2012-ST?

Clarification as per Circular: In Rule 5(2) of the

Service Tax (Determination of Value) Rules, 2006, it

is provided that expenditure or costs incurred by a

service provider as a pure agent of the recipient of

service shall be excluded from the value of taxable

service, subject to the conditions specified in the

Rule.

Comment: The Rule 5(1) of Service Tax

(Determination of Value) Rules, 2006 as been

quashed in the decision of Intercontinental

Consultants And Technocrats Pvt Ltd vs. UOI &Anr

2012-TIOL-966- HC-Del-ST. At the same time the

RWA can exclude expenses incurred as pure agent

i.e. Water & electricity etc., and reimbursed at

actuals subject to proper documentary evidence of

third party invoices.

Service Tax on Resident Welfare Assn – Post Circular No. 175/1/2014


Issue 6:Is CENVAT credit available to RWA for

payment of service tax?

Clarification as per Circular: RWA may avail Cenvat

Credit and use the same for payment of service tax,

in accordance with the Cenvat Credit Rules.

Comment: It can be availed subject to eligibility of

Cenvat Credit as per Cenvat Credit Rules, 2004.

The issue of the circular on 10th January means that

across India the associations in cities & towns would

have to relook at the contributions received and if

they are liable pay the tax. The possibility of

payment from October 2008 till date is a distinct

possibility.

- CA Lakshmi G. K.

For more information on Indirect Tax,

Please visit

http://www.icai.org/post.html?post_id=6624

Service Tax on Resident Welfare Assn – Post

Circular No. 175/1/2014

Proposed Board Amendments on CENVAT Credit of

Inputs/Input services used in manufacture of non –

excisable goods

As most of the issue of reversal of wrongful

availment of CENVAT Credit used in manufacture

of non-excisable goods is under litigation, board

has proposed some solution for the same.

Manufacture process brings into existence both

excisable and non-excisable goods. In excisable

goods there may be goods which are exempted

from paying excise duty and goods which are

liable to excise duty.

Rule 6 of CCR, 2004 deals with the reversal of

credit when manufacturer manufactures both

dutiable and exempted products and service

provider provides taxable and exempted services.

It also provides provision for amount of credit to

be reversed on input/input services used in

manufacture of exempted goods or in providing

exempted services. However, there is a crucial

difference in rule 6 on reversal of credit by a

manufacturer vis-a-vis a service provider.

Exempted service means Services on which no tax

payable, Negative List of Services, Services

partially exempt subject to non-availment of

Cenvat Credit of input/inputs services. Thus the

credit on inputs and input services used in

providing non taxable/ exempted services is

required to be reversed under Rule 6 of CCR,

2004.Such provision will not be applicable to a

manufacturer under Rule 6. As definition of

In News

http://www.icai.org/post.html?post_id=6624

21

exempted goods will not cover non excisable goods,

Rule 6 will not apply to raw materials, consumables,

services used in manufacture of non excisable goods.

Thus Rule will not apply for reversal or recovery of

credit on Raw materials, consumables and input

services used for the manufacture of non excisable

goods.

Board is of the view that the assessee can argue that

there is no machinery provision in CCR,2004 to

quantify the amount of input/input services used in

manufacture of both excisable and non excisable

goods, as Rule 6 will not apply in such cases.

Board's proposed solution:

Board proposed to amend the definition of exempted

goods in CCR, 2004 such that non-excisable goods

would deemed to be exempted GOODS. In such case

Rule 6 of CCR will apply for reversal of CENVAT Credit

on raw materials, consumables and input services

used for manufacture of no excisable goods.

CBEC clarification regarding Exemption from

Excise duty to the units for another 10 years by

way of 2nd substantial expansion in the State of

Jammu & Kashmir

Department of Industrial Policy and promotion(DIPP)

announced a New Industrial Policy and other

concessions for state of Jammu & Kashmir in June

2002 vide Notification No. 56/2002-CE(Area based

exemption to all goods other than exclusion list) &

notification no 57/2002-CE(Non-area based

exemption to specified industries other than

exclusion list) dated 14.11.2002. These notifications

were issued to provide exemption from excise duty

equivalent to the duty payable on value addition

undertaken in the manufacture of the goods to the

new units and units undertaking substantial

(For private circulation to clients of Hiregange & Associates and Chartered Accountants only)

In News

expansion, for a period of ten years from the date of

notification or from the date of commencement of

commercial production. For this purpose the

manufacturer is required to pay excise duty and claim

refund later based on the above exemption

notification.

Later on review of exemption in the year 2010,

notification no 1/2010-CE dated 06.02.2010 was

issued to extend the exemption to all goods except

the exclusion list to units located in the state of

Jammu & Kashmir subject to the same conditions

mentioned in previous area based notification

(i.e.56/2002-CE & 57/2002-CE). Thus, notification

No.1/2010-CE was basically an extension of the

existing Concession / incentives for the State of J&K

with certain modifications.

The question now arises is whether an existing unit

which has availed of excise duty exemption under

notification No.56/2002-CE & 57/2002-CE, both

dated 14.11.2002 by way of substantial expansion can

avail of excise duty exemption under notification

No.1/2010-CE, dated 06.02.2010, again by way of

second substantial expansion.

Board clarification:

An existing unit which has availed of excise duty

exemption under notification No.56/2002-CE &

57/2002-CE, both dated 14.11.2002 by way of

substantial expansion can avail of excise duty

exemption under notification No.1/2010-CE, dated

06.02.2010 again by way of second substantial

expansion so long as it satisfies the conditions

stipulated under notification No.1/2010-CE, dated

06.02.2010.

- Vinayaka Adiga, Articled Assistant

- Vetted by – CA. Sriharsha

22

With the objective of holistic learning, we have come

up with the training modules.

Training Program for Chartered Accountants Firms:

This program would be conducted to enlighten and

empower the Practicing Chartered Accountants in

conducting the statutory, internal & tax audits wherein

value additive suggestions to clients may get

appreciation. This will be conducted at the respective

offices of Chartered Accountants by qualified and

skilled staff of Hiregange & Associates.

Program Highlights

• Focus on impact of indirect taxes during statutory

audit, internal audit and other areas of practice

• To enlighten and empower the Practicing CAs in the

field of Indirect Taxation

• Program will be conducted at your respective offices

• Topics for the program will be of your selection

from the proposed modules

• Programs will be conducted by qualified and

experienced staff of Hiregange & Associates

Who are eligible for the program

• Chartered Accountant company/firms at Bangalore

who do not currently practice in the field of Indirect

Taxation

• Chartered Accountant company/firms at Bangalore

who wish to enter the field but with sound

fundamental knowledge of the subject or add this

competency

Proposed Modules are:-

• Major aspects to be checked in the Statutory

Audit, Internal Audit, Tax Audit having

implications under indirect tax (IDT). How to

provide Value Addition to the auditee in

Statutory/Internal Audit with respect to IDT

• Impact of Joint and Reverse Charge

• How to fill Central Excise Returns & ST returns

• Reconciliation between Excise/Service Tax returns

to financials and other statutory returns.

• Common errors made by assessee in Central

Excise/Service Tax.

• Introduction on Central Excise viz. –Concept of

manufacture, Levy of Excise duty, Classification of

goods, Exemption, Valuation Implication, Exports.

• Introduction on Service Tax viz.-Negative List,

Levy of Service Tax, Exemption, Valuation aspects,

Point of Taxation Rules, Place of Provision of

Service Rules and Aspects related to filing of

Returns.

This training conducted at Balakrishna and Co., Guru

& Jana, Vasan & Sampath and B S Ravikumar &

Associates, as we understand, useful in their audit

compliance of IDT aspects substantially.

Training Page – Information for better performance


Training Corner

Corporate Training

This is for specific clients in specific areas such as

Basic Accounting, Tax Planning and Impact of Indirect

Taxes in their day-to-day working. This program

would be conducted to enlighten and empower the

finance team of the company in the field of Indirect

Taxation.

Our approach

We have devised two approaches to this programme.

• To conduct it at H&A premises fortnightly (on

Saturdays)

• To conduct it at your respective office (on the date

and time mutually agreed)

Program Highlights

• Focus of indirect taxes in the effective day-to-day

working.

• Use of case studies and practical aspects

• To enlighten and empower our Clients in the field

of Indirect Taxation

• Topics for the program will be of your selection

from the proposed modules

• Programs will be conducted by qualified and

experienced staff of Hiregange & Associates

Who are eligible for the program :

The Indirect Taxation Training Programs are exclusively

for the Clients of Hiregange & Associates.

Proposed modules

• Introduction on Central Excise

• Introduction on Service Tax

• Availment of credit under Central Excise/Service Tax

& VAT

• Impact of indirect tax on cost

• Means of ensuring maximum credit (CE/ST/VAT)

• Accounting entries in Indirect Tax

• Impact of Joint and Reverse charge to the entity

• Filling of Excise Returns

• Filling of New format of Service Tax returns

• Common errors under Central Excise and Service

Tax

• Preventive measures to avoid common errors

• Strengthening Internal Control with respect to

Indirect Taxation

• Reconciliation between Excise / Service Tax

return with financials and other statutory returns

• Point of Taxation Rules

• Place of Provision of Service Rules

• How to make a refund application?

For further information please contact

Mr. T.V.Gopinath - +91 9620116163

Email: [email protected]

Mr. Praveen K - +91 9900068915

Email: [email protected]

CA IPCC Nov 2013 results will be

declared on 31st January 2014.

Wishing all the candidates ALL THE

BEST!!!

mailto:[email protected]


24

Coaching classes :

Coaching classes with large number of

students and no doubt clarifications may be

avoided as individual attention is not received.

Coaching class is not necessary to pass CA

Final. However if one goes to coaching class

they should revise everyday from study

material.

Compare Study material index with your

coaching class coverage. If anything missed

out cover it from the study material.

If you are going for audits where you have an

opportunity to analyse the financial statements

see how they are relevant to your subjects,

which will enable never forgetting.

If handwriting is poor improve by practice. At

the time of revision makes short notes and

refer the same during final revision

E learning is available at ICAI portal free of

cost. Make the best use of this facility

Give more importance to the weak subjects.

For theory subjects read the bear act and for

practical subjects work out problems from

practice manual and RTP.

The first step success is optimism. So aim in

being a part of the 3%, rather the 97%.

" A diamond lies underground; dig it. Success

is behind failures; grab it.“

BEST OF LUCK FOR YOUR STUDIES!!!

I am sure this down in the percentage, though a

shock, nevertheless this will be an inspiring

factor for all the CA aspirants!!!

ALL THE BEST!!!

CA FINAL Nov 2013 - Pass

Percentage are lowest from the past

10 attempts

Wake up Alarm without snooze button!!!

Time to wake up and brush your brain !!!

Group Pass %

Both Groups 3.11%

Group – I 5.67%

Group – II 7.35%

Exam Results

What is it that a student can do???

Increase the time allocated for studies. As

well as understand the concepts and

applicability without difficulty in

implementing it in the practical field.

Value of the Chartered Accountant would

now start increasing and arrest the

downward salary trend of the past.

Going Forward:

Check for examiner comments in the ICAI

website board of studies portal

If not satisfied with the evaluation apply for

retotalling and/ copies of your paper so that

you know where you stand

Next attempt checkout the status in the

mock tests.

Find out what is the real pass percentage in

your coaching class and if it is less than

20% for final results, relook your decision

Exam Results - What is it that a student can do???


Knowledge Portal

Circular on Levy of the Education

Cess and the Secondary and

Higher Education Cess on other

cesses

http://www.cbec.gov.in/excise/cx-

circulars/cx-circ14/978-2014cx.htm

Implementation of decision of

Hon’ble Supreme Court in case of

M/s Fiat India ltd

http://www.cbec.gov.in/excise/cx-

circulars/cx-circ14/979-2014cx.htm

Upcoming Event

Student Corner

CA Result http://www.google.com/url?q=http%3A%2F

%2Fcaresults.nic.in%2F&sa=D&sntz=1&usg=A

FQjCNFLn1xOo5g_WGF6g-bcg9cyVAwndg

For taxation information http://www.google.com/url?q=http%3A%2F

%2Fwww.simpletaxindia.net%2F&sa=D&sntz

=1&usg=AFQjCNFz39yY76_JetDYUQI_CH1OE

6eSqw

Team Hiregange & Associates, Bangalore are

conducting a workshop on “How to face audit

under central excise and service tax?” on 8th

February, 2014

The sessions are:-

Introduction – Legal Background – Disputes

Major Issues in Central Excise

Common issues in Service Tax

Question and Answer for Central Excise and Service

Tax

How to prepare or conduct audits

Audit issues - Resolution

The workshop will be of special interest to:-

Entrepreneurs – SSI & Medium Scale

CEO/ CFOs

Top Management involved in Strategy or Project

Planning

Chartered Accountants in Practice

Management Consultants

For further details, please contact:-

Vidhya R : [email protected]

CA. Rajesh Maddi – [email protected]

(Brochure is attached below for further reference)

http://www.cbec.gov.in/excise/cx-circulars/cx-circ14/978-2014cx.htm





















http://toi.in/kiy34Y























http://www.google.com/url?q=http://caresults.nic.in/&sa=D&sntz=1&usg=AFQjCNFLn1xOo5g_WGF6g-bcg9cyVAwndg




































http://www.google.com/url?q=http://www.simpletaxindia.net/&sa=D&sntz=1&usg=AFQjCNFz39yY76_JetDYUQI_CH1OE6eSqw



































HOW TO FACE AUDIT UNDER

CENTRAL EXCISE AND SERVICE TAX?

WORKSHOP ON

Saturday, 8th February, 2014

From 9 am to 6 pm

@ Hotel Ramanashree #16, Raja Ram Mohan Roy Road, Bangalore – 25

(Next to Woodlands Hotel, Richmond Road)

Contact:- Hiregange & Associates

# 1010, 2nd Floor, 26th Main,

(Above Corporation Bank)

4th ‘T’ Block, Jayanagar, Bangalore–560 041

Ph No. 4121 0703 / 2653 6404

Web : www.hiregange.com

CA. Rajesh Maddi – [email protected] (9738412264)

Vidhya R– [email protected] (9743024190)











About the workshop

Snapshot of Schedule

Start Time

Duration (in min)

Topic

Speaker

9.00 20 Registration

9.20 10 Welcome address

10.00 55 + 5 Introduction – Legal Background – Disputes

Mr. K.S. Naveen Kumar, Adv.

11.00 15 Tea Break

11.15 60 Major Issues in Central Excise CA. C.R. Raghavendra

12.15 60 Common Issues in Service Tax CA. Roopa Nayak

1.15 45 Lunch

2.00 15 Question & Answer for Central Excise & Service Tax

2.15 60 + 5 How to prepare/ conduct audits CA. Madhukar N. Hiregange

3.20 15 Tea Break

3.35

60 +5

Audit Issues – Resolution Mr. M.S. Nagaraja, Adv

‘Facing an audit’ is something that has been magnanimised since

ages.! It can be simplified if a diligent and a systematic approach

is adopted.

Through this seminar, we aim to reduce the disputes, the

common issue that would arise during an audit.

‘Things Turn out the best for those who make the best of the way

things turn out’. So lets make the best of the workshop and get

ready to get “audit-ready”!!

Featured Speakers

Mr. K. S. Naveen Kumar - A graduate in Law. Visiting faculty at many prominent

institutes. Also a graduate of Landmark Education. Practices at High Court and

Supreme Court.

CA. C. R. Raghavendra: CA C.R. Raghavendra is FCA and a practicing Advocate

specializing in Indirect Taxes and FEMA. He has published various papers in the

journals of SIRC of ICAI and has co-authored a book on “Landmark cases in

Indirect Taxes” published by CCH India.

CA. Roopa Nayak - Is a Chartered Accountant by profession. Co-author of books

like Central Excise Made Simple, the Background Materials of Certificate Course

on Indirect Taxes and Two/Three Days Workshop on Enabling Service Tax

Practice. She is an active contributor of articles to Peenya Industries Association

and KSCAA

CA. Madhukar N. Hiregange: – Mentor for many CAs in the field of indirect

taxes. He is interested in making the tax law in India simple, certain and

transparent and also education of lesser privileged. He believes in “value based

practice and life”.

Mr. M. S. Nagaraja - Advocate, is a post graduate in Science, holds a Diploma in

Personnel Management and a Law Graduate. He was in government service for

over 20 years, and has been practicing in the field of indirect taxes for nearly 15

years.

Delegate Fee – Rs. 1,750/- For 3 or more delegates from the same organization fee – Rs. 1,500/- each

Includes service tax applicable @ 12.36%

The fee covers delegate kit, lunch and refreshments

Kindly issue Cheque/DD in favour of “Hiregange & Associates”, payable at Bangalore

Fee structure

(Only for CAs and clients of Hiregange & Associates)

Contact :- Hiregange & Associates # 1010, 2nd Floor, 26th Main, (Above Corporation Bank) 4th ‘T’ Block, Jayanagar, Bangalore – 560 041 Ph No. 4121 0703 / 2653 6404 Web : www.hiregange.com

CA. Rajesh Maddi – [email protected] (9738412264)

Vidhya R– [email protected] (9743024190)

http://www.hiregange.com/











Documents

H&A IDT Share January 2014 - Hiregange Academy | · PDF fileallowed for marketing and sale promotion as ... Background Article 246 governs ... As copyright is also an product of the