UPDATES BY MEETESH SHIROYA 
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# IT, CBDT UPDATES #
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Dear Readers,
Recently Hon. Gujarat High Court in the case ofPrakhar Estates (P.) Ltd. ([2016] 68taxmann.com 215
(Gujarat)) has laid down two important principles with regard to
recovery proceedings from persons other than the defaulter under the
Central Excise Act, 1944 (hereinafter referred as “Act”). Sec. 11 of the
Act covers the provisions with respect to recovery of sums due to the
Government. Important principles emanating from the judgment are as
follows:
1) RECOVERY CANNOT BE MADE FROM PERSON WHO HAS VALIDLY BOUGHT THE ASSETS:
Hon. High Court in the judgment (supra) has held that
recovery cannot be made from a person other than the defaulter if that
person has only bought the assets from the defaulter. In this case, the
petitioner had bought the asset (viz. land) from an individual who was a
partner in the firm which owed dues of excise to the Government. Hon.
High Court opined that as only assets were transferred and not the
business (remember that proviso to Sec. 11 fixes the liability to the
successor of business and not the transferee of assets), the transferee
being the petitioner in this case is not liable.
2) GOVERNMENT CANNOT ASK GIDC’S TO ASK THE TRANSFEREE TO SEEK NOC BEFORE REGISTERING THE TRANSFER:
In this case excise department had ordered GIDC, where the
factory of defaulter was located, to not record the transfer unless the
transferee obtains NOC (No objection certificate) from the excise
department. When the transferee sough the NOC, same was denied by the
department on the ground that the dues of the company who was operating
on the said land were still outstanding. Hon. High Court quashed such
order’s from the excise department on the ground that under the Act, the
department has no such power to ask GIDC not to register such transfer.
Thus, the said judgment will benefit bona fidebuyers of
assets in cases where the seller might have not paid the excise dues to
the Government.
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IMPOSITION OF CENTRAL EXCISE DUTY ON JEWELLERY -
CONSTITUTION OF SUB-COMMITTEE OF HIGH LEVEL COMMITTEE TO INTERACT WITH
TRADE AND INDUSTRY THEREON - EXTENSION OF TIME LIMIT FOR TAKING CENTRAL
EXCISE REGISTRATION OF AN ESTABLISHMENT
CIRCULAR NO.1026/14/2016-CX, 2016- 04 -23
Kindly refer to the Circular No. 1021/9/2016-CX, dated 21-3-2016issued vide F. No. 354/25/2016-TRU.
2. In this regard, the time-limit for taking central excise
registration of an establishment by a jeweller is being extended up to
1-7-2016. Though, the liability for payment of central excise duty will
be with effect from 1st March, 2016, the assessee jewellers may make the
payment of excise duty for the months of March, 2016, April, 2016 and
May, 2016 along with the payment of excise duty for the month of June,
2016.
3. Wide publicity may be given to this circular.
Difficulty, if any, in implementing the circular should be brought to
the notice of the Board.
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# GENERAL UPDATES #
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NITI Aayog CEO Amitabh Kant has criticised Infosys for its
allegedly poor handling of Ministry of Corporate Affairs (MCA) portal.
Replying to a series of tweets by people, complaining of technical
glitches in the MCA portal, Kant said Infosys, which manages the
service, was letting down the country.
"I have cross-checked with secretary, corporate affairs. As
(a) service provider, Infosys has let down the country," tweeted Kant, a
Kerala-cadre IAS officer of 1980 batch who previously served as the
secretary, Department of Industrial Policy and Promotion in the Ministry
of Commerce and Industry.
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Kant's tweet was in reply to a Twitter user named C S
Rengarajan who had complained about delay in approval for INC 21,
application for declaration prior to commencement of a business.
"Visiting ROC Chennai daily from March 25, no relief for approval," said Rengarajan's tweet.
Kant is driving several initiatives of Prime Minister
Narendra Modi, including Startup India and Transform India, a programme
to improve ease of doing business for faster economic growth.
"I am not dealing with it (MCA portal), but since there
were a lot of complaints on Twitter, I checked with secretary, corporate
affairs. Infosys has just not been able to manage it, they have messed
it up," Kant said in a short interview over the phone.
K V R Murty, joint secretary at MCA, who is responsible for
the project said, after the new system went live on March 27 this year,
several issues were detected in the first two weeks as it would happen
with "any system of this magnitude". However, he said, things have
improved in the past two weeks.
"We, in the ministry, monitor the tickets raised by
stakeholders for complaints and that has also shown a definitely
downward trend," said Murty.
"So, things have certainly improved though they can be
better. There is no doubt about it. We have been assured by Mr Vishal
Sikka (CEO of Infosys) that they would do everything possible to ensure
that no further inconvenience is caused to the stakeholders. We have
seen evidence of things getting better in the last couple of weeks," he
added.
In 2012, Infosys had won the $50 million (Rs 272 crore)
contract, replacing the then service provider Tata Consultancy Services
(TCS), for a period of five years. The contract required the
Bengaluru-based company to fully automate all processes related to
enforcement and compliance under the Companies Act. At that time, during
the transition, the portal had developed several technical snags. These
were later sorted out.
On March 27, a new portal was rolled out to comply with the
new Companies Act. However, Infosys said, some technical glitches were
noticed and soon rectified.
"Infosys has upgraded the MCA21 system to run on the SAP
platform, which went live on March 27, 2016. Post the go-live, over
1,183 Indian companies have been incorporated and 1,647 limited
liability partnerships have been registered. In addition, since March
27, 2016, there have been more than two lakh filings," the company said
in a statement. It added that the system is functioning normally now.
The company said if the week gone by was compared with the
same period in 2015, there was an increase of more than 20 per cent in
daily filings on MCA portal.
Infosys is working on several large e-governance projects
in India, including the Central Processing Centre (CPC) of the Income
Tax department and India Post modernisation initiatives. The Income Tax
project is considered as one of the most complex transformational
initiatives by the government which has helped the I-T department
improve its processes significantly.
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New Version of LLP E-Forms
New Version of following E-Forms has been updated on MCA website:
Form 3 (Information with regard to limited liability
partnership agreement and changes, if any, made therein) Form 4
(Notice of appointment, cessation, change in name/ address/designation
of a designated partner or partner. and consentto become a
partner/designated partner) Form 8 (Statement of Account &
Solvency) Form 15 (Notice for change of place of registered office)
Stakeholders are requested to check the latest version before filing.
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Finance Minister Arun Jaitley is trying to introduce a
revised Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act (SARFAESI) and Debt Recovery
Tribunal (DRT) Bill in the second half of the parliament session which
begins on Monday.
The finance ministry has already floated the cabinet note
for these bills for inter-ministerial consultation The law ministry has
begun examining the proposed amendments. The crucial change is giving
"secure creditors" the first right to auction an asset in order to
recover the dues.
This would take precedence over state laws, for example state tax commissioners trying to recover their dues over banks.
The finance ministry has also put in a mechanism for
reducing the number of adjournments, to reduce the litigation time and
expedite court hearings on recovery of bad assets.
Apart from this the government is also setting up a central
registry for lodging records of multiple loans given to same parties.
The finance minister plans to introduce the amendments to
SARFESI and DRT Acts together, while also dove tailing the effort to get
the bankruptcy code bill passed in the parliament. However, unlike
Bankruptcy Bill, SARFESI and DRT have not been positioned like a money
bill, although the speaker has every right to decide on its fate.
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Delhi High Court: Chitra Jagjit Singh, wife of ghazal
maestro late Jagjit Singh moved the application in High Court against
the organiser-defendants claiming that Indian Performing Right Society
(Defendant 1) continued to issue licence in respect of late Shri
Jagjit Singh’s works, even though it was no longer a copyright society
registered under the Copyright Act, 1957 even as per its own admission.
Defendants 2 and 3 were advertising the said concert as “Jagjit Singh
live in concert” and that Jagjit Singh “sings again for charity”.
In furtherance of the order dated March 14, 2016†, the Bench of Vipin
Sanghi, J. categorically observed that the advertisement published for
the “live-in concert” was clearly misleading and prima faie, breaches
the right to privacy and other intellectual property rights of the
plaintiff inasmuch as the picture and likeness of late Jagjit Singh is
prominently displayed and the advertisement states “Jagjit Singh live in
concert”. Apart from this, the advertisement is published on the online
booking site bookmyshow, which includes the name of the artist “Jagjit
Singh”. The endeavour of the defendants clearly appears to mislead the
unwary public into believing that late Jagjit Singh would be performing
at the show.
The Court observed that though the defendants claimed that the said
advertisement mentioned that the image and face of late Jagjit Singh
taken from his previous concert will be played live, it is not explained
as to how and from whom the defendants have obtained the copyright of
the said works.
The Court observed that considering that the defendants had already
booked the show, which was to fund charity and sold the tickets, the
defendants were directed to forthwith discontinue advertising the said
show by using the picure of late Shri Jagjit Singh, or using his name,
much less potraying the same to be “live-in concert”. Defendants 2 and 3
were directed to deposit Rs 5 lakhs to secure the rights of the
plaintiff on or before March 18, 2016. In the event of non-compliance of
the aforesaid conditions, Defendants 2 and 3 were restrained from
holding the concert*. Further it was ordered that Defendants 2 and 3
shall not hold any similar concerts in future without prior permission
of the Court. Interim order dated March 14, 2016 shall continue to
operate against Defendant 1. The matter is now posted on May 5, 2016
for further hearing of the application. [Chitra Jagjit Singh v. Indian
Performing Right Society Ltd., order dated March 16, 2016]
†Ed.: Vide order dated March 14, 2016, IPRS forthwith restrained from
granting any licence/receiving licence fee from any third party in
respect of Chitra Singh and Jagjit Singh’s works.
*Ed.: The concert was held on March 18, 2016 at Siri Fort Auditorium in New Delhi.
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Regards,
Meetesh Shiroya
