| 1. | (a) | Fill in the blanks in the following sentences by using appropriate words/phrases given in the brackets: | 1x15=15 | |
| | | (i) | EOU can obtain indigenous goods without payment of excise duty by submitting _________ (B–17 Bond/CT–3 Certificate). | | (0) |
| | | (ii) | Vaibhav Cargo Ltd. raised a bill for cargo handling services on 2.2.2012. The payment was received on 2.3.2012. The due date for payment of service tax is _____ (5th March, 2012, 31st March, 2012). | | (1) |
| | | (iii) | Service tax paid on mobile phone bills ______ (is/is not) eligible for CENVAT credit. | | (1) |
| | | (iv) | For units paying duty of more than Rs. 3 crore EA2000 excise audit is applicable _______ (every year, once in 2 years, once in 5 years). | | (0) |
| | | (v) | Bonafide baggage including ________ personal effects are exempt from customs duty. (used, unused, damaged). | | (0) |
| | | (vi) | Assessee who is paying 1 % excise duty and not manufacturing any other goods is required to file quarterly return within 10 days after close of the quarter in form of return ________ (ER–8IER–I). | | (0) |
| | | (vii) | Any person providing taxable service of commercial or industrial construction of residential complex can opt to pay service tax @ ________ (25%/33%) of gross amount charged if gross amount includes value of land. | | (0) |
| | | (viii) | Cost of Designing & Engineering incurred for the purpose of manufacture of excisable goods has ________ (to be included/not to be included) in assessable value under Central Excise Act. | | (0) |
| | | (ix) | While determining the assessable value under central excise laws, equalized freight is allowable as deduction if there is ________ (sale/removal) of excisable goods at factory gate. | | (1) |
| | | (x) | Under Rule 4(5) of the CENVAT Credit Rules, Jigs, fixture, modules & dies can be sent to a vendor for production of goods according to specification of the Principal manufacturer ________ (with/without) reversal of credit. | | (0) |
| | | (xi) | Under Rule 12 (1) of Central Excise Rule, SSI Unit eligible for SSI concession (even it it does not avail such concession), has to file a quarterly return in Form ______________ (ER-3/ER-2) by 10th of the following month of the quarter. | | (0) |
| | | (xii) | Every exporter should obtain BIN (Business Identification Number) from ________ (DGFT/CBEC). | | (1) |
| | | (xiii) | Packing or repacking and labelling is ________ (not manufacture/deemed manufacture) in case of goods are covered under section 4A of the Central Excise Act. | | (0) |
| | | (xiv) | E–payment of excise duty/service tax is mandatory in case of assessee who had paid either in cash or by utilizing cenvat credit or both for an amount of rupees ________ (ten/fifty) lakhs or more in the preceding financial year. | | (1) |
| | | (xv) | As per section 3(1) of Central Excise Act, value of excisable goods cleared by EOU to DTA shall be determined in accordance with provisions of ________ (central excise/customs) valuation. | | (0) |
| | (b) | State whether the following statements are true or false. If false give the correct statement. If true give the reason in brief. | 2x5=5 | |
| | | (i) | Wealth–tax payable by company is treated as a charge on book profits. | | (0) |
| | | (ii) | In computing the net wealth of an individual, the value of assets held by a minor child will be included. | | (0) |
| | | (iii) | The sale of assets by bank for realization of loans is liable to tax under CST Act. | | (0) |
| | | (iv) | Service sector SEZs should have an area of 1000 hectares or more in order to be eligible for exemption. | | (0) |
| | | (v) | Different systems of accounting e.g. Mixed or Hybrid cannot be adopted for receipts and payments. | | (0) |
| 2. | (a) | Please specify the relevant date with reference to Customs Act 1962 in following cases of goods warehoused under bond. | (i) | Rate of exchange when goods are removed for home consumption. |
| (ii) | Rate of duty where goods are removed for home consumption. |
| (iii) | Rate of duty if the goods are not moved from warehouse within the permissible period. |
| 1+1+1=3 | (0) |
| | (b) | Discuss whether remission of duty will be granted under the Central Excise Rules in the following cases: | (i) | Loss of molasses due to auto combustion in sugar factory. |
| (ii) | There was natural calamity in the factory, but the department was not intimated in time. |
| 1+1=2 | (0) |
| | (c) | M/s. Shneha & Co. has imported goods weighing 1200 Kg with CIF value US $ 48,000. The bill of entry was presented on 12th Jan., 2012. The exchange rate on the said date was 1$ = Rs. 45. Basic Custom Duty is chargeable @ 10% plus education cess as applicable. No Excise duty is payable on above goods if manufactured in India. As per notification issued by Govt. of India anti dumping duty has been imposed on above goods. The anti dumping duty will be equal to difference between amount calculated @ US $ 60 per Kg. and landed value of goods. you are required to compute— | (ii) | Customs duty payable |
| (iii) | Anti–dumping duty payable. |
| 1+3+1 | (0) |
| | (d) | Explain in brief | | |
| | | (i) | What are the purposes for which Advance Authorization can be issued? | 2 | (0) |
| | | (ii) | What is the maximum limit of duty free import of mandatory spares under Advance Authorization? | 1 | (0) |
| | | (iii) | What is the basis of determination of Annual Advance Authorization for annual requirements of any exporter? What is the maximum value of Annual Advance Authorization can be issued? | 1+1 | (0) |
| 3. | (a) | Discuss whether assembly of machinery at customer’s site will amount to manufacture under excise law, if such machinery is bolted and can be shifted? Will your answer be different if such machinery cannot be sold without dis–assembling? | 4 | (0) |
| | (b) | Briefly explain the manner in which a Cost Accountant can help a client in the handling of VAT audit called for by the Department and in conducting external audit of VAT records. | 3 | (0) |
| | (c) | As per the Foreign Trade Policy, can warranty spares of plant, machinery etc. be exported without authorization? | 4 | (0) |
| | (d) | M/s. XYZ Ltd. shifted its factory from Sitapur to Rampur and transferred all the available inputs and capital goods to the new site. The inputs, capital goods and the balance of unutilised CENVAT credit were duly received and accounted for in the registers of the new unit. The said balance of unutilised CENVAT credit transferred was Rs. 8,00,000. However, the quantum of CENVAT credit attributable to the inputs and capital goods so transferred to the new site was Rs. 6,00,000 only. The Department raised the plea that the assessee was entitled to transfer only Rs. 6,00,000 of CENVAT credit and not the entire balance of unutilised credit of Rs. 8,00,000. Explain, with the help of a decided case law, if any, whether department's plea is justified in law. | 4 | (0) |
| 4. | (a) | Briefly outline the procedure for fixing anti–dumping duty. | 3 | (0) |
| | (b) | Is it correct to say that the cenvat credit of input services used for repair or renovation of factory is available? | 2 | (0) |
| | (c) | Rithika & Co., a partnership firm, has its registered office in Jammu & Kashmir. The firm has been rendering taxable services and paying service tax, for the past three years. The following details are furnished to you relating to services rendered and bills raised during the quarter ended 30.06.2011:
(i)
(ii) |
Taxable services rendered in Srinagar, Kashmir
Services rendered in Mumbai:
To RBI
To United Nations Organization
To Customer L
To Customer M
To Customer N, as a sub-contractor (Services rendered by N are not taxable) | Amount (Rs.)
9,00,000
4,00,000
3,00,000
8,00,000
4,00,000
9,00,000 |
Assume that all services rendered in Mumbai are taxable, excepting where any service is outside the service tax net. The assessee has raised bills for above amounts plus service tax at applicable rates wherever required. All amounts billed have been received in the same quarter, excepting from Customer M, who refused to pay the service tax component of the bill raised to him.
You are required to compute the value of taxable services rendered by the assessee during the above quarter. | 6 | (0) |
| | (d) | From the data given below relating to import of a machinery, you are required to compute the assessable value for customs duty purpose: | (in US Dollars) | FOB value of machinery
AirFreight
Expenses incurred by seller for improving the design, at buyer–importer’s request
Transit insurance
Exchange rate 1 USD = Rs. 51 | 1,10,000
24,000
5,000
1,500
|
| 4 | (0) |
|
| 5. | (a) | What is Works Contract Tax? Can a works contractor opt for composition in respect of selected works contract? Is it essential to opt for composition scheme in respect of all the works contracts? | 3 | (0) |
| | (b) | M/s. Alfa Construction Co. Ltd. expects a gross turnover of Rs. 2,500 crores during the coming year 2012–13 from various commercial/industrial constructions (inclusive of charges towards various material and services).
It furnishes following additional information: | (i) | Total value of materials and input services to be used Rs. 1000 crores & Rs. 300 crores respectively (Excise Duty @ 10.30%, and Service Tax @ 12.36%); Capital Goods received last year Rs. 200 crores (Duty @ 12.36%), but no credit was availed on them. | | (ii) | Gross turnover includes completion and finishing services of Rs. 100 crores. |
The company is in a dilemma whether to opt for abatement or go for full value and avail CENVAT credit. It engages you as a consultant to advice on minimization of it’s service tax liability. It is given that the above charges do not include the cost of land, as the said cost runs into thousands of crores on which the company does not want to pay service tax in any form. Service tax rate should be taken as 12.36% as the proposal is related to 2012–13. | 7 | (0) |
| | (c) | A bill of entry was presented on 4th August, 2011. The vessel carrying goods arrived on 11th August, 2011. Entry inwards was granted on 13th August, 2011, and the bill of entry was assessed on that date and was also returned to the importer for payment of duty on that date. The duty amounting to Rs. 5,00,000 was paid by the importer on 22nd August, 2011. Calculate the amount of interest payable under section 47(2) of the Customs Act, 1962, given that there were four holidays during the period from 14th August to 22nd August, 2011. | 3 | (0) |
| | (d) | Can an application made under Customs Act, 1962 be withdrawn in the following cases? If yes, state the time limit for withdrawal of such applications. | (i) | Application for advance ruling; | | (ii) | Application for settlement. |
| 2 | (0) |
| 6. | Dr. Basu is running a Nursing Home with his wife Dr. (Mrs.) Basu as a partnership firm Dr. Basu Nursing Home. On the basis of the following particulars, compute the total income of the firm (Dr. Basu Nursing Home), Dr. Basu and Dr. (Mrs.) Basu for the assessment year 2011–12. | (a) | | Particulars of Income of Dr. (Mrs.) Basu: | Rs. | (i)
(ii)
(iii) | Income as per Income and Expenditure Account
Finn’s tax not provided in the account
Donation to Public Charitable Trust
exempt u/s. 80G debited in the Alc. | 3,20,000
48,000
35,000
|
| | (b) | Particulars of Income of Dr. Basu: | (i) | 40% of profit from Nursing Home as per books Rs. 1,28,000 | | (ii) | Dr. Basu purchased 500 shares of Saha (P) Ltd. at Rs. 110 each in May, 1990. On 14.5.2010 Dr. Basu sold 400 shares at Rs. 300 per share. He invested Rs. 40,000 out of the net sale proceeds in Bonds of RECL in June, 2010. The balance of 200 shares were sold in December, 2010 at Rs. 380 per share. | | (iii) | Dr. Basu is a substantial shareholder and Director in Saha (P) Ltd. from which he received director’s fees amounting to Rs. 4,000. | | (iv) | Dr. Basu has obtained a loan of Rs. 50,000 from the said company for renovating the Nursing Home. The balance sheet of Saha (P) Ltd. for the Accounting year, inter alia, disclosed the following particulars: | (a) | General Reserve | 40,000 | | (b) | Profit & Loss Account (Cr. Balance) | 20,000 | | | 60,000 |
|
| | (c) | | Particulars of Income of Dr. (Mrs.) Basu: | Rs. | (i)
(ii)
(iii) | 60% share of profit from Nursing Home as per books
Income from dividend from UTI
Income from house property
(as computed under Income–tax Act) | 1,92,000
18,000
48,000 |
| | (d) | Particulars of Income of Master Piyush:
Piyush minor son of Dr. Basu and Dr. (Mrs.) Basu has been admitted to the benefits of partnership in M/s. Basu Chemists which is carrying on business as Chemists and Druggists. The said firm has two other partners Soham (brother of Dr. Basu) and Priya [brother of Dr. (Mrs.) Basu]. Piyush’s share of profits is determined at Rs.20,000.
(Note: Capital Gains Index of 1990–91 = 182, and 2010–11 = 711) |
| 15 | (0) |
| 7. | (a) | What is a defective return under Income Tax Act, 1961? What are remedies available for the same? | 4 | (0) |
| | (b) | In the case of Ms Radha, you are required to compute the interest u/s 234A, 234B & 234C from the following details:
Tax on total income for A.Y. 2011–12 Rs. 2,00,000; Due date for filing the return 30.09.2011; Actual date of filing the return 1.10.2011 and tax paid on 30.09.2011 Rs. 2,00,000. | 6 | (0) |
| | (c) | Manmohan is aged 35 years. His father settled a property in trust giving whole life interest therein to Manmohan. The income from the property for the years 2006–07 to 2009–10 was Rs. 70,000, Rs. 84,000, Rs. 90,000, Rs. 1,08,000 respectively. The expenses incurred each year were Rs. 2,000, Rs. 4,000, Rs. 5,000 and Rs. 6,000 respectively. Calculate the value of life interest of Mr. Manmohan in the property so settled on the valuation date 31.03.2011, with the help of the Life Interest factor of 9.267 for the purpose of Wealth Tax Act. | 5 | (0) |
| 8. | (a) | During the financial year 2011–12, a dealer purchased 11,000 Kgs. of inputs on which VAT paid @ 4% was Rs. 4,000. He manufactured 10,000 Kgs. of finished products from the inputs. 1000 Kgs. was the process loss. The final product was sold at uniform price of Rs. 10 per Kg as follows
Sold within the State – 4,000 Kgs.
Finished goods sold in inter–State sale against C form 2,500 Kgs.
Goods sent on stock transfer to consignments agents outside the State – 2,000 Kgs.
Goods sold to Government department outside the State – 1,500 Kgs.
There was no opening or closing stock of inputs, WIP or Finished product.
The State VAT rate on the finished product of dealer is 12.5%. | (i) | Calculate liability of CST and VAT. |
| (ii) | Find VAT credit available to dealer and tax required to the paid in cash. |
| 3+3 | (0) |
| | (b) | Y & Co. is a small scale Unit, eligible for exemption in terms of Notification No. 8/2003–CE dated 1.3.2003 for the year 2011–l2. It provides the following particulars with regard to the clearances of goods effected during the said year.
(i) Determine the Excisable turnover and excise duty payable.
(ii) Explain in detail, the reasons in support of exclusion or inclusion in computing the turnover. | Aggregate | Rs. (in lakhs) |
|---|
| Value of domestic clearance of goods with own brand name | 120 | Value of clearance Pf goods with the brand name of others (including
Rs. 30 lakhs in respect of goods manufactured in rural area) | 100 | | Value of clearances for exports | 50 | | Value of clearances for captive consumption | 40 | Value of clearances of exempted goods
(Assume rate of excise duty as 10%) | 20 |
| (4+2)+3 | (0) |
