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Postal Registration No.THC/05/2014-2016Volume No.V.Issue No.VII Dated 07.07.2014

5, U.K. Industrial Est, Behind Durian, 2nd Pokhran Road, Thane

COSIA @ North East

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2 (July ‘14) cosia.org.in

(L to R) Dr. M.R. Khambete, President, TSSIA, Shri. Ram Bhogle, President ‐ MCCIA, Cdr. Dipak Naik, President ‐ MEDC and Shri. Ashish Sirsat, TSSIA EC Member at a Conference organized by Loksatta on “ MSME Challenges “ at Mumbai on 23rd June 2014

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BMOs Meeting on LBT / Alternative Tax by TSSIA, COSIA & FAM on 27th June 2014 ; Shri S. K. Shrivastava, Addl. Chief Secretary presenting Govt. views. Shri. Sandeep Parikh, Vice President ‐TSSIA, presenting Alternate Tax proposal of Government of Maharashtra ; Shri. Mohan Gurnani, President‐FAM delivering Presidents’ address; Shri. Nitin Kareer, Commissioner of Sales Tax‐Maharashtra responding to queries .

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Article Industry & Business

Manufacturing is in trouble in India. The

sector’s share of gross domestic product (GDP) reached 16% in 2006‐07, then stagnated and has declined since 2010‐11, to little more than 15%, a sliver when compared with the shares in Thailand (36%), South Korea (31%), and China (30%). Employment in absolute terms has fallen in the formal manufacturing sector from 55 million in 2004‐05 (12.2% of India’s overall workforce) to 50 million in 2010 (10.5%). The sector’s growth rate has been declining for four years, actually falling into negative territory in the first quarters of 2012 and 2013. India’s development model is largely at fault. In the absence of a well‐conceived policy response by the next government, manufacturing will soon be gripped by an even more profound crisis. The sector is marked by a deep dualism—gaps between the formal and informal economies—in virtually every sub‐sector. The dualism affects wages, productivity, technological capabilities and working conditions. This, in turn, creates capacity fragmentation, a relative absence of economies of scale and scope that renders the sector globally uncompetitive. A disturbing feature in the past decade has been the slow but steady exit of established manufacturers, a reflection of an increasingly difficult operating environment. Many have switched to importing their products from China and elsewhere. The recently passed Land Acquisition, Rehabilitation, and Resettlement (LARR) Act, which sharply raised rural land prices and mandated a time‐consuming acquisition procedure, will likely accelerate the process of de‐industrialization in India. Given that India needs to find jobs for at least one

million new workers every month for the next 15 years, the prospect of a shrinking manufacturing sector should be cause for extreme concern.

Internal challenges Because discussions about the problems facing manufacturing tend to

begin and end with a long finger pointed at the government, it might be useful to start elsewhere: with constraints that flow from industry’s self‐induced weakness and inertia.

Indian industry continues to face an acute skills shortage. It laments this problem but does not even attempt to emulate the efforts of firms in the

information‐technology and other service sectors, which have opened large‐scale in‐house training programmes. It has also been unable or unwilling to adopt effective forms of collective action to demand government accountability or to find solutions for shared problems. And it has made no attempt at self‐regulation to curb corrupt practices.

On another front, small and medium enterprises (SMEs) often do not receive payments on time from their larger buyers, a far cry from the nurturing that such companies enjoy in Japan and South Korea. Finally, because Indian industry is in large parts cartelized, there is much resistance to price competition, a short‐sighted stance works against achieving global competitiveness. All of these weaknesses should be addressed by the industry itself if it hopes to improve its competitiveness and credibility.

Government policies That said, the challenges posed, directly or indirectly, by government policies are formidable. Consider the

Revisiting manufacturing policy

Industry and the government must implement a reform agenda together to revive the manufacturing sector

Rajiv Kumar is presently a senior fellow at the Centre for Policy Research and a senior fellow with the Wadhwani Foundation, New Delhi.

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following.

• Difficult business environment: India ranked 132 out of the 185 countries in the World Bank’s Doing Business survey in 2013. According to the official data, nearly 70 clearances are required annually for businesses to operate. The greatest cost falls on SMEs, where the proprietor has to bear the entire burden. Such an environment, combined with retroactive changes in tax demands, creates much uncertainty, anathema for investment. Another challenge is the lack of adequate protection against extortion and protection rackets.

• Labour deployment rigidity: Indian manufacturing has suffered in the past from the twin constraints of militant and competitive trade unionism and a plethora of labour legislation. In recent years, unionism has ostensibly weakened. Nevertheless, it is still present in major industrial centres, and its infrequent but violent demonstration discourages foreign investors and induces others to keep employment to a minimum. India has nearly 50 laws at the central or state level that affect labour conditions. Consequently, hardly any enterprise can claim to be in total compliance.

• Infrastructure deficit: The peak power deficit in India is estimated at 7% to 8%, and industry is not insulated from the resultant power cuts that sweep the country. Most large manufacturing units have had to create full backup capacity, raising capital costs. Indian companies across the board bear a significantly higher price for infrastructure services and utilities than their global competitors.

• Regulatory delays and lack of transparency: Over time, a rather complex regulatory structure has been established to deal with land acquisition, land use and the environment. The process has become increasingly time‐consuming, opaque and unpredictable, especially during the past 10 years under

the rule of the United Progressive Alliance. According to one survey, 1,240 central and state regulations apply to the industrial sector.

• Onerous commercial bank credit: More than two‐thirds of surveyed SMEs preferred not to utilize commercial bank credit because of long processing times and stiff collateral requirements. Instead, they turned to the informal markets, paying higher rates but with less onerous conditions. This defeats the avowed aim of the government’s selective credit control policy, which requires banks to earmark 10% of their credit to SMEs.

What can industry do? Industry can implement a series of steps that are in its direct control. Private companies are just beginning to tackle the skills shortages by entering into a partnership with the government on managing about 110 industrial training institutes. They would do well to collaborate with vocational skill providers in growing capacities, designing curricula, and offering assured placements. They should also empower their chambers and associations to take collective action to demand the timely delivery of high‐quality public services. Because collective action requires credibility, they will first have to improve their record of self‐regulation. Large businesses must adopt a nurturing attitude toward their suppliers, which invariably belong to the MSME category of micro, small and medium enterprises. To become global players, they should substantially increase spending on research and development. Finally, it is time to disband the thousands of sector and sub‐sector associations whose ostensible raison d’être of negotiating fiscal concessions and securing government licenses is increasingly irrelevant in the post‐liberalization period.

New government agenda There are two schools of opinion on the government’s policy reform priorities for manufacturing. The first believes that structural conditions do not permit the

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growth of mass manufacturing in India. By putting a statutory floor under the price of both labour and land, the principal factors in production, the political process has effectively raised their cost. Moreover, the complicated resettlement and rehabilitation (R&R) provisions enshrined in the land acquisition law make land procurement highly cumbersome. This school also argues that the new generation of workers, being more educated and IT‐savvy than earlier ones, will not accept low‐productivity shopfloor jobs.

Given these conditions, this school holds that India should give up trying to enter mass manufacturing and instead support so‐called sunrise industries—sectors that use frontline technologies, require highly skilled labour, and are design‐and technology‐intensive. Government policy would focus on creating and sustaining a learning environment for businesses. India could emulate Japan and South Korea, where private firms, government science and technology agencies and technology institutes come together to produce large‐scale product and process innovations, which are then commercialized by dynamic entrepreneurs. This is a seductive model, but a number of factors make it somewhat unfeasible, including the low R&D orientation of Indian industry and the low penetration of broadband connectivity and Internet access.

The alternative approach for policy reforms—which represents the more desirable way forward—is not to accept the high cost of labour and land as a given. Instead, it assumes that the large majority of new workers will continue to be semi‐skilled and willing to accept productive jobs in the formal manufacturing sector (though not in the unorganized sector). Thus, this option requires government policy to be directed toward more conventional intervention.

• Land costs: These costs can be kept at acceptable levels by using the land already acquired by industrial development corporations in various states; increasing the ratio of floor area to space; releasing the vast stock of land owned by government and public sector entities; and amending the land acquisition law to remove the R&R requirement for the private purchase of land.

• Labour conditions: It is pointless to argue for the removal of Article 35A in

Chapter V of the Industrial Disputes Act and give employers permission to hire and fire at will and without due process. This is a non‐starter in the present Indian context. Instead, other ways have to be found for the desired level of flexibility in labour deployment. The proposal in the new manufacturing policy, for example, for the creation of a resource pool to retrain retrenched workers and to give them unemployment security for a minimum period while they are re‐trained is well worth considering. Another change would reduce the welter of labour laws to four or five comprehensive statutes.

• Business environment: Among the measures that could improve the environment almost immediately include introducing a combined application form for obtaining clearances, cutting the time needed for starting and exiting a business, licensing some private‐sector banks to cater to the needs of the MSMEs.

To revive manufacturing, industry and the government (central and states) must implement a reform agenda together—to increase competition, reduce dualism, make the regulatory process more transparent and cut the compliance burden.

The two approaches described above are not necessarily in conflict. Expanding islands of innovation can coexist with a manufacturing sector that is reining in its informal side. But reforms must be urgently implemented. If India is to achieve its strategic and development objectives, its manufacturing base can’t be shrinking.

This is adapted from a chapter in the upcoming book Getting India Back on Track edited by Bibek Debroy, Ashley J. Tellis and Reece Trevor. It will be published in June by the Carnegie Endowment for International Peace and Random House India. Comments are welcome at [email protected] Follow Mint Opinion on Twitter at https://twitter.com/Mint_Opinion

[Source : Mint 23 April 2014]

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The Pump industry in India is worth Rs 2,500 crore. There are 500 manufactures in the market and together they produce 1.2 million pumps every year. Also the industry meets 95 per cent of the domestic demand. They cater to a range of sectors from agriculture to industries including nuclear power generation. The global market for pump sales is estimated to be around $32 billion. A deterrent in the export growth could be the high cost of inputs that could stand in the way of economies of scale of production. The statistics can be overwhelming. The pump industry in India is worth Rs 2,500 crore and yet when it compares it to the US market it is merely 7 per cent of its size. There are 500 manufacturers in the market and together they produce 1.2 million pumps every year. Also the industry meets 95 per cent of the domestic demand. They cater to a range of sectors from agriculture to industries including nuclear power generation. The global market for pump sales is estimated to be around $32 billion. The size of the market in the US and America is slated to be around $7 billion, while Germany and the other major countries command a market size of another $ 7.5 billion. Japan and other countries in the Asia also have a market size of $ 7.5 billion. The top three companies in the world enjoy a market share of 19 to 20 per cent, while the next 25 companies in the league command25 per cent of the market share. The next 800 companies in the tier enjoy 90 per cent of the market share.

The key players As mentioned earlier, there are 500 players in the market and most of them are medium and small manufactures. Thirty of them have already invaded foreign markets like Egypt, US, West Asia, Greece and Italy. Some of the big names are Kirloskar Copeland, Tecumesh Products (India) Ltd., BHEL, Ingersoll‐Rand,

Elgi Equipment, CRI Pumps, Sharp Pumps, Aqua Sub Pumps, Suguna Motors & Pumps, Texmo Pumps, Mahendra Pumps et al. There are also others like Grundfos Pumps, ITT Corporation India, Heidelberg ProMinent Fluid Controls, Nanfang Pumps India, Kirloskar Pumps, Peco Valves, Audco Inida Limited (AIL) and Cenlub Systems. Kirloskar Copeland, which is at 51:49 joint ventures between Kirloskar Brothers and the US‐based Copeland Corporation, has already positioned itself as a leader in the segment. Next in the rank is Ingersoll‐Rand which is a major solutions provider for industries as diverse as manufacturing, transportation, construction and agriculture since

1871. Elgi Equipment is the market leader in the manufacture of air compressors. The products are used in a wide range of applications in areas ranging from mining , defence , transport, pharmaceuticals , power, oil, railways, chemicals, textiles, printing to ship building , paper , electronics telecommunications, medical, food and

beverages and plastics. Sharp Pumps is also a leading player in the segment. Based in Coimbatore, Sharp Pumps has emerged as a leading manufacturer of domestic water pumps and agricultural water pumps. The company exports its products to countries like Bangladesh, Burma, Australia and New Zealand. Mahendra Pumps, too, has carved out a niche in the market. Established in the year 1960 in Coimbatore, today Mahendra Pumps is a well known name abroad. The company manufactures about 650 varieties of pumps for domestic, industrial and agricultural needs.

The global pie The manufacturers, who have already created a dent in the global market, are all set to capture a greater share of the pie. In fact, the Indian market is growing at a high rate of six to 7 per cent which is higher than the global average of 4 per cent. The world market is now estimated to be Euro 10 billion. It may be pointed out

New Opportunities ‐Pumps and Valves Industry Seizing

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that amongst the machinery pumps are produced and used the most, second only to electric motors. According to industry estimates, India currently produces around one million pumps of various kinds and uses pumps worth around Rs 35 billion. The exports have also touched a high. India has been exporting to as many as 60 to 65 countries around the world, including developed countries. The total export figure is to the tune of Rs. 600 crore. By 2015, the exports are expected to grow by $ 1.25 billion. There have also been buy back contracts with MNCs which is a proof of the technological and economic competence of the Indian pump industry.

Future bright The low availability of water and the increasing demand for delivery and treatment of water will give a boost to the water‐ treatment industry and in turn the demand for pumps. The rising consumption and decreasing supply of uncontaminated water is pushing up the market of desalination plants for treating seawater, in which pumps play a major role. The urbanization of the country has witnessed over a billion migrations from villages to major cities thus creating a pressure on existing infrastructures including delivery of utility water after removal and treatment of wastewater. Also the government likely to increase its spending on infrastructure projects like irrigation and drinking water schemes. This would give a boost to the pump industry and the demand for specialized and efficient pumps will increase. With global warming a great concern, the central and state governments are laying emphasis on optimum utilization of power. Thus, several measures for energy conservation are being adopted. Company’s manufacturing energy efficient submersible pumps are in for great profit as it helps save about 40 percent energy, compared to conventional water pumps. With the country set to add new capacity at more than 10000 mega watt per year for the next decade, the pumps industry would see good opportunities. As Avinash

Purandare of KBL Pumps points out, the industry is expected to grow in size in the next few years. The key sectors that will give a major push to the industry are water handling/ sewage treatment, oil and refineries, and power with a market size of 35 percent, 45 percent and 20 per cent respectively. The valve industry: on the growth track the rough patch between 1998 and 2003 is at a face pace. Growth opportunities are good what with new projects slated to come up in the power, chemicals, pulp beverage industries. The Indian valve industry is categorized into two sectors: one is the domestic application valves and the other is the industrial valves and the other is the industrial valves. There is stiff competition in the domestic valves segment as a majority of the players are in the unorganized sector. These companies are able to

manufacture small range of valves that are of decent quality with ease. Also, valves from China and other countries are easily available in the market. The quality requirement in the industrial valves segment is quite stringent. Hence, there are few major valve manufactures who are actively playing a role in the sector. The sector again faces stiff competition

from companies in the unorganized sector who are using substandard products and selling them at a lower price. Under the spotlight it is estimated that the Indian valve industry in the organized sector is worth more than Rs 900 crore, while the unorganized sector accounts for Rs 500 crore. The growth rate of the industry is approximately 15 per cent of the market. The unorganized sector is fragmented with more than 1,000 companies manufacturing valves is expected to post a healthy growth as investments are expected to flow into the infrastructure, iron and steel and petrochemicals industries.

The global valves market is estimated at about $46 billion. All core sectors require valves for expansion of capacities, maintenance and repair of plants. The demand for valves is growing at a fast pace abroad. In addition, the industry in the developed countries is in a

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consolidation phase with large companies purchasing family owned business and at the same time establishing manufacturing plants in the low cost countries like china and Korea. Therefore, the Indian valve manufacturing companies will face increasing competition from China. As a result, three will be a pressure to reduce costs that would affect the bottom line.

The key players A few key players are Audco India Limited (AIL), Precision Valve India Limited, Viba Fluid Control et al. a premier valve manufacturing company, is jointly owned by Larsen & Toubro Limited (L &T) in India and Flowserve Corporation, USA. AILs manufacturing operations commented in 1962 and over last four decades the company is catering to the needs of the domestic and international markets. Expert Engineering Enterprises is also a leading player in the valves industry. Founded in 1981, the company is a rapidly growing concern and has established markets in Europe, US, South Africa and West Asia. Next is A Sealmech valve which is one of the leading manufacturers of all types of industrial valves.

Looking east Large multinationals are now looking at India as a manufacturing hub because of a large pool of technically qualified people and low manufacturing costs. The companies are also confident of India’s capability of manufacturing quality products. Several companies including Crane, Audco Flowserve, Durco, AK, KSB, Spriex Sarco and Xomox have established manufacturing plants in India. Mazda has a tie‐up with its former collaborator Croll‐ Reynolds, USA. Croll uses the manufacturing base of its Indian partner and focuses on marketing its products in the global market. Mazda has also tied up with Kauer Engineering, Germany, for manufacturing specialty valves for power plants. The US‐ based fluid system components manufacturer, Swagelok, is considering setting up a manufacturing base in India. The company manufactures tube fittings, valves quick connects and

welding systems. Mather & Platt (M&P) tied up with VAG of Germany to increase its presence in the industrial valves market. The export story The Indian companies are also exporting their products and have found a market abroad because of their quality. There is a growing export market in the mature economices but a large untapped market also exists in the developing economies of Africa, West Asia, South America and the undeveloped East Europe. A primary reason behind the growth story is that the developing economies are witnessing increasing globalization, privatization and urbanization. As a result, there is a spurt in the petrochemicals, power generations and distribution sectors which present a large market for valves. Threats to the industry

Increasing raw material prices like those of steel are a cause of concern. That has put pressure on the export margins of valve manufacturing companies. Additionally duties and taxes levied on the products are making Indian valves uncompetitive in the global market. However, the introduction of VAT (value added tax) has eased the situation a bit. The valve industry being an intermediate industry is completely dependent on the growth of the core sectors in the Indian economy. Therefore with an expected growth in the oil and gas, power, pipeline, steel, infrastructure, petrochemicals and pharmaceutical industries, the demand for valves are also expected to gather steam. For example to gather steam. For example, Rs 1,74,000‐crore investment is expected in power sector in the next seven years while Rs 18,000 to 20,000 crore are expected to be invested in new refineries. On an average total 2 percent of total plant and machinery cost. Hence expected business opportunities for valves industry in power and refinery is Rs. 3,500 crore and Rs. 800 crore, respectively. Besides a huge market for replacement, parts will add significantly to the volumes. It is also expected that more technological innovations in valve automation will help the industry to become highly competitive.

[Source : Space Product Finder ‐June 2014 Annual Issue]

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Article MSMEs Role

Shri. V.S. Rathore

The MSME sector contributes significantly to the country’s manufacturing output, employment and exports and is credited with generating the highest employment growth as well as accounting for a major share of industrial production and exports. MSMEs have been globally considered as an engine of economic growth and as key instruments for promoting equitable development. The major advantage of the sector is its employment potential at low capital cost. The labour intensity of the MSME sector is much than 90% of total enterprises in most of the economists and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports. In India too, MSMEs play an essential role in the overall industrial economy of the country. In recent years, the MSME sector has consistently registered higher growth rate compared with the overall industrial sector. With its agility and dynamism, the sector has shown admirable innovativeness and adaptability to survive the recent economic downturn and recession.

Background: The Micro, Small & Medium Enterprises (MSMEs) in India have seen a vast development in the last five decades. The MSMEs have registered tremendous growth as also progress in terms of quality production, exports, innovation, product development and import substitution, beyond the expected objectives of setting up MSMEs by the planners of industrial production base in the country. Entrepreneurial efforts have made it possible to produce number of items, which hitherto were imported. In quite a few cases new variants so

produced are having additional attributes than their original versions and are more useful. The Micro, Small and Medium Enterprises (MSMEs) contribute significantly to value addition, employment generation export and overall growth and development of India’s economy. MSME units are generating maximum employment next to agriculture. The MSME sector accounts about 45 percent of the total manufacturing output and 40 per cent of the exports from the country. Realizing their importance separate Department of Micro, Small & Medium Enterprises has been created with an objective to facilitate, promote

and enhance competitiveness of MSMEs in the state. The Government has accorded top priority to the MSME Sector and has given necessary thrust for facilitating and coordinating the growth and development of the sector. The MSME sector in India is highly heterogeneous in terms of the size of the

enterprises, variety of products and services and levels of technology. The sector not only plays a critical role in providing employment opportunities at comparatively lower capital cost than large industries but also helps in industrialization of rural and backward areas, reducing regional imbalances and assuring more equitable distribution of national income and wealth. MSMEs complement large industries as ancillary units and contribute enormously to the socioeconomic development of the country.

Key highlights of MSME Sector: •MSMEs account for about 45% of India manufacturing output.

•MSMEs account for about 40% of India total exports.

•The sector is projected to employ about 73 mn people in more than 31 mn units spread across the country.]

•MSMEs manufacture more than 6,000 products ranging from traditional to high tech items.

•For FY11, total production coming from the MSMS sector was projected at Ts. 10,957.6 bn, an increase of more than 11 % over the previous year.

The Micro, Small and Medium Enterprises (MSMEs) play a pivotal role in the economic and social development of the country, often acting as a nursery of entrepreneurship. They also play a key role in the development of the economy with their effective, efficient, flexible and innovative entrepreneurial

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MSMEs outperform GDP and IIP growth rates: MSMEs have outperformed IIP and GDP growth rates in the past five years. The total production of MSMEs for FY’11 was Rs.10, 957.6 bn (at 2001‐02 prices). Between FY’07 and FY’11, the sector’s total production grew at a CAGR of 11.5% ‐ a clear indication of the substantial contribution of MSMEs to the Indian economy. During FY12, total production of MSMEs has grown at 11.48 %, compared to industrial and GDB growth of 8.2% and 8.4% respectively.

Fixed investment and employment in MSME segment Productivity of the MSME sector has been improving tremendously with fixed investment and employment growing consistently in the past couple of years. This is a direct indication of the efforts in the sector to integrate the workforce with technological enhancements to increase production. Fixed investment in the MSME sector between production and FY’11 has grown at a CAGR of 11.48% and employment grew more than 5%( y‐o‐y). PSBs remain the largest lenders to MSMEs: The MSME sector has been accorded high priority in the industrial policy owing to its vital role in the economy. During FY11, the total outstanding credit by banks to MSMEs in India stood at Rs. 4,859.53 bn, growing at a CAGR of 39.8% during FY’07‐FY11. Among bank categories, public and private sector banks have registered impressive growth of 35.28% and 36.28% in Micro and Small Enterprises {MSE} lending in FY’11. However, Public Sectors Banks ( PSBs) account for a major share compared to private and foreign banks. During FY11, total priority sector advances by PSBs grew by 19.1% y‐o‐y to Rs.10,286.15 bn, as against Rs. 8,637.77 bn in FY’10. Total advances provided by the public sector banks to the MSE sector for FY’11 grew by 35.3% y‐o‐y to Rs.3,766.25 bn. Advances to MSE formed around 37% of the total priority sector advances of PSBs, versus the 32% share during FY’10. Moreover, the share of MSE credit to net bank credit stood at 9.9% in 2011 against 13.4% in 2010. Major initiatives undertaken by the government in FY’12 to revitalize the MSME sector: •The BSE and NSE got the approval for SME platforms from the SEBI and have been operationalised. This will

serve as an opportunity for Indian SMEs to raise funds from capital market.

•To achieve the overall target set by the Prime Minister’s National Council on Skill Development. Ministry of MSME and the agencies conducted the skill development programmes for 4,78,000 people during FY12. During FY13, the Ministry aims to provide training to 572,000 people through its various programmes for development of self employment opportunities as well as wage employment opportunities in the country.

•To improve the productivity, competitiveness and capacity building of MSMEs, the Government of India has adopted a cluster based approach. During Apr‐Jan 2012, the government has taken 8 new clusters for diagnostic study, 5 for soft interventions, and 4 for setting up of common facility centres. Till Jan 2012, the government has taken a total of 477 clusters for diagnostic study, soft interventions and hard interventions and 134 infrastructure development projects.

Despite the various challengers it has been facing, the MSME sector has shown admirable innovativeness, adaptability and resilience to survive the recent economic downturn and recession.

Outlook: A dynamic global economic scenario has thrown up various opportunities and challenges to the MSME sector in India. On the one hand, numerous opportunities have opened up for this sector to enhance productivity and look at new national and international markets. On the other hand, these opportunities compel the MSMEs to upgrade their competencies to face the competition since obsolescence is rapid with new products being launched at an incredible pace and are available worldwide in a short time. The Indian MSMEs with the visionary spirit of entrepreneurs of MSMEs and overall Government and Institutional support are poised to make the best of these opportunities and continue to be backbone of the Indian economy.

The author is Secretary General, COSIDICI (An Apex Body of State level Financial Institutions‐SLFls) and a Former Executive Director, SIDBI [Source: Jagriti (A Monthly Journal of KVIC on Rural Industrialization) June 2014 Vol. 58 No.7]

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While operating your business, you think about margins, ROI, cost of capital/ borrowings, payables and receivables, “cost” in multiple terms but how often do you think of productivity? Maybe not as often as you should! Productivity lies at the core of any business; it can be a driver or an impediment, a source of curtailing waste or increasing it thus hitting your costs and margins. Productivity is simply a measure of output based on utilization of per unit input. It is the calculation of how quickly and efficiently can a system generate outputs.

This can be based on man hours utilized or per kg of material used or even the capacity utilization of a machine. For example: Tailor A is able to make a standard pre‐defined design and size of school shirt in 60 minutes using a machine X. Tailor B is able to do the same in 55 minutes. The productivity of the second tailor is higher. Thus, for every 12 shirts, Tailor B can make one more.

This is no doubt a very simplified example. Businesses are more complex and there are too many variables but as long as our finger is on the “productivity” pulse, we can achieve some serious benefits, something that we seldom calculate in quantifiable terms

What affects our productivity?

There are a large number of factors involved in enhancing or diminishing productivity. The following diagram is a list of few such factors.

Productivity is not standardized

As shown in the list above, there are many factors at play. Every individual is different. Thus, a fixed productivity formula may not work for all. There are people who can perform better at different parts of the day due to their biological composition. Professions requiring fixed set of activities in a time frame can be easily quantified but creative jobs are more about the final value addition. For example: a worker in a manufacturing company, his job role and salary can be used to come up with a reasonable benchmark to ascertain productivity. Work method study

Think about Productivity Article

Dr. Ipshita Basu Guha Email. [email protected],

Blog. http ://sublimesense.blogspot.in,

Management

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M/s India Industries is manufacturer of automobile parts. They manufacture and supply components like bar stock, machining cold forged/ hot forged parts ,fasteners, fulcrum pins, pull rod, clevis and other parts using state of the art CNC turning centres, single pindle automats, centreless grinders, thread rolling machines, milling machines, surface grinders and materials are used with main focus on steel grades. The core processes are CNC turning, milling, drilling grinding and thread rolling. The unit was established in the year 1985 and the number of employees is 112. Current turnover of the unit is approx. Rs. 10 crores. The major customers are Greaves Cotton India Ltd and Brakes India Ltd.

Lean Journey During the diagnostic study, it was found that setup

changes were done frequently as the number of components produced was high but the production bath sixe was small. The time taken for setup changes considerably reduced the time available for production while also increasing the cost of the cutting tools.

Lean Tools Used: SMED, Kaizen To address the above mentioned issues the unit selected two projects: • Set – up time reduction • Cutting Tool cost reduction A separate Lean team was formed to work on each of the projects.

is a concept that many business owners can put in place to measure efficiency. However, a lawyer or an author/ script writer, sales person, or even a doctor’s productivity cannot be measured in a linear fashion. But there are some factors which are generic and applicable to all human beings,

For an individual, quality of sleep, diet and nourishment and daily exercise regimen plays a fundamental role in affecting productivity. The time to recharge and restart activities is important too. It is a misconception that prevails about how many hours are put into a job – rather we should be concerned about how much is the output. Just by sitting on a desk for ten hours a day – your accountant or logistics person is not achieving more. Is the job done perfectly? Have the material been dispatched on time as per the customer’s requirement? Is the quality intact? Did it require any rework? Did it help in the next process as an input? How much cost was saved?

Loss of productivity is money out of your pocket straight and simple! And it definitely hits your bottom‐line. Sometimes it is easy to quantify and in other cases not. It is upto your ingenuity to make estimations and calculate productivity in terms of time or money thus identifying impact – positive or negative. Think about it!!!!

Article

Lean Management

Cost reduction is resulted due to the Lean Management. Here are two Case Studies for the readers .

Case Study –I (Automobile Parts)

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The set up time data of all machines for period of one month was collected. The machines were categorized into 3 different categories based on setup time and number of setups in a month. The total setup time per month for all the 3 categories of machines was found to be 6800 minutes. It was observed that various activities were done after the set‐up time was high. Root causes were identified and action plans were developed to address the concerns. The team then observed and studied the above action plans for a period of 1 month and analyzed the results. A reduction in setup time was observed as the setup time reduced to 5440 minutes, saving 1360 minutes in a month. For the second project on reducing cutting tools’ cost, several kaizens were evolved. The cutting tools cost data for a period of 7 months was collected which was approx. Rs. 72,707/‐ per month. Cost details and the quality used for each tool which contributed to a major portion of the total cost was identified. It was observed that the inserts’ types of tools had the maximum contribution towards the cost of tools. The cost of all tools of inserts type was collected and tabulated. Tools which were identified with highest cost were TNMG160408 VM NC3120 and TNMG160404 VM3120. Analysis was carried out to identify the concerns of

these tools. Brainstorming was done among the team members to find out the probable causes for high tool consumption. Action plan was worked out to address various concerns. Tool life monitoring charts was designed to keep track of tool usage. The savings per Year had been estimated to be around Rs. 50, 469/‐ 5S implementation was taken up to bring in a culture of cleanliness and good housekeeping which improved visual appearance of the shop floor.

Type of Unit: Medium The unit M/s Madhav Agro Food Pvt. Ltd. was established in 1993 in the green belt of Padra District near Vadodara in Gujarat, where fresh fruits and vegetables are available in abundance. The unit is a manufacturer and Supplier of Pickles, Paste & Chutney. The company is among the first in India to implement ISO and HACCP (Hazard Analysis and Critical Control Point) in 2001 and was internationally recognized for Quality and Food Safety Systems. Currently the unit is accredited with ISO 22000:2005. The sales turnover of the company is about Rs.5 Crores and it employs around 80 people. The unit supplies over 300 recipes to North America, Europe, Australia, Middle East and Africa under various private labels.

Lean Journey Keeping in mind the nature of the industry, the unit was requiring a Lean system to avoid losses due to waiting, contamination, transportation etc. The raw material and WIP, being perishable commodities, could not afford any delay in processing. Though the unit was certified with well recognized QMS and it maintained quality assurance practices, yet need was felt to have a system to check quality issues and the losses at source

Overall Benefits 20% Reduced setup time Over all tool cost reduced by 5. 5% per month

110 Kaizens were evolved, estimated savings was Rs. 40000. Annual Saving of Rs. 1.50 Lacks

Article

No Activity Concern Action Plan 1 Bringing tool

from store Tool Searched & Brought from store after starting setup change

Tool to be brought from store before starting setup change

2 Bringing Drawing from QC area

Drawing brought from QC area after producing first piece

Drawing to be brought from QC area before starting set up change

3 Bringing raw material from store

Raw material brought from store after starting set up change

Raw material to be brought from store before starting set up change

4 Bringing measuring instrument from QC area

Vernier brought after producing first piece

Measuring instrument be brought before starting setup change

Case Study –II (Food Processing)

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of generation. There was waiting time loss due to lower efficiency of filler machine. Also, the Shrink tunnel and filling Machines were having breakdowns resulting in lower efficiency. Since the WIP and packing material inventory was high and ITR was low (4.33), it required better production planning. Traditional practices were largely followed all over the unit. There was no schedule followed for cleanliness and housekeeping was done in unplanned manner Delivery compliance was very low. There was no system of “Suggestions Scheme” or “Shop Floor Meeting” to solicit suggestion or feedback for continuous improvement.

Lean Tool Used: VSM, 5S, Visual Management, Inventory Turnover During diagnostic study it was assessed that the plant had a large opportunity to reduce or eliminate many wastes through 5S. Therefore, Packing and filling section were selected as the pilot areas. Lean awareness training was conducted to the core management group along with training sessions on 5S, Kaizen and Visual control for the Packing and filling sections followed by implementation of 1 S (red tagging)‐2S (PEEP)‐3S(Cleaning). Subsequent audits reflected remarkable improvement in visual management, reduction in loss of production time, reduction in inventory etc. It was found that the unit frequently fell short on delivery compliance. Also, the inventory levels were high for most of the items. The probable reasons identified were as follows. • Inadequate raw material received from vendors • No min‐ max defined for most of the items • Economic lot quantity not followed • Space constraints for stocking RM And FG • Packing material were being procured more than the lot‐size

A Value Stream Map was made showing the top level value chain processes for key products. Also, the PPC (Production Planning & Control) process was studied in detail including the dispatch data, supplier lead times, shipment size and production batch size. The min – max levels at RM – WIP – FG level were established. The change overtime for the bottleneck processes was reduced. PPC was planned and followed scientifically The above activities resulted in remarkable reduction in WIP and total inventory while increasing the delivery performance and sales turnover

The OEE of pickle filling machine was 27% and it required a deployment of 14 persons instead of 9 persons due to the bottleneck operation of filling process. No CLIT (Clean – Lubricate‐ Inspect‐ Tighten) standards were in practice. Therefore, data was collected and analyzed through Why‐ Why analysis of abnormalities / Breakdown, Fault tree analysis, Cause and Effect Diagram etc. and the ‘corrective and preventive actions’ ( CAPA) were incorporated into CLIT sheet. A comprehensive CLIT sheet was prepared and implemented. Through all these measures the OEE increased from 27% to 47% resulting in an estimated benefit of Rs. 6.6 lacs per annum.

[Source : Productivity News, May‐ 2014 Vol.51 No.3 ]

Article

Inventory & Sales

ITR for the year 09-10 and 10-11 showed that the ITR had increased

Overall Benefits 55% Score – 90% on 100% sale Increase in Labour Productivity – 27% Improvement in inventory Turnover – 103% Overall Equipment Efficiency (OEE) Improvement – 85% Annual savings estimated – Rs 42,00,000/‐ per year.

Inventory turnover

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Article

Education & MSME

In India, we have to see that the cost of basic raw material is same everywhere so that the industries can compete at par. We must include not only basic raw material, cost of raw material, cost of power, cost of fuel, various government levy various taxes and it is all anomaly say for example, it petrol and diesel is having a price of x in Delhi which is lowest, then why in Mumbai it is the highest and hence all these prices should be uniform. Same should be for electricity. Then only the regional imbalance will end and there will be a level playing field. Rules of the game should be equal for all. Minimum wages should also be the same throughout India.

The power given to LT consumer & HT consumer also differs. The government should re‐structure the tax structure of CENVAT, excise, customer duty etc. in such a way that basic raw material is available at the same price. The transportation cost say for example, steel and coal the price should be amortized, as it was done earlier by Steel Authority of India when the steel was nationalized.

There should be industrial estate in every district which can be managed by Khadi Gramodyog and they should manufacture the items with power or without power and Rs. 5

crore excise exemption should be provided to all small, medium and cottage industries which is at present Rs. 1.5 crore. The exemption of up to Rs. 1 crore should be given to the small traders who do not want to come under VAT scheme.

There are various rules and regulat ions l i ke Essent ia l Commodities Act and there are various restrictions on easy transportation from one State to another, the import and export between the State is restricted, how can we have one global village, When we are not ready to make India as a one common India village and why free movement of material is restricted.

If we apply for car registration in Mumbai, there is one set of tax rules, in Thane another set of tax, in Silvasa, it is different. Such disparity of tax for same work should be avoided as it leads to corruption and create black money.

Indian economy is being harmed by pilferages, theft of vehicle by organized gangs, and they pilferage the vehicle, and they change the name plate, then sell it to Nepal, Bangladesh etc. There are garages of these people where they remove all the spare parts and sell it as spares, the people are harassed, insurance companies have to bear the losses, they make the people go to court before paying it, and a cycle of misfortune starts for the owner of the vehicle. If pilferage of vehicle is taking place, no increment should be given to police station nearest to the spot, new police personnel should be recruited and existing people should be given voluntary

retirement. The insurance premium will automatically reduce if we do all these things. To help for the purpose, CCTV cameras should be installed. Police personnel be given more mobile vans, police should have limited working hours, at present they have to work for 24 hours, more police personnel should be employed and police which are deployed at VIPs, their safety and security should be removed.

Let their party provide for the safety of their people and not the exchequer. When we do not hear these kind of thefts in America or Europe, Why only in India on every street, every corner, cars are stolen, because there is no punishment on the part of negligence of policy department.

Every country exports expertise either manufacturing goods, knowledge, service. India has got a lot of knowledge on the spiritual field, yoga, ayurveda, and estate management, increase productivity, and knowledge of managing entrepreneurs, making them profitable. For all these services, the government should give them incentives at par with the incentives given to industrial products. They should also be allowed to get benefit of participation. They should be allowed to set up their ashrams abroad, and if they send some money to India that should be tax‐free and to allow their disciples to come to India, they should be given easy term loan to establish ashrams for foreign travelers and land should be given on easy terms, as it is being given to industries. In this way, we can earn lot of foreign exchange.

There are so many voluntary organizations doing charitable work

Dr. Vinod Tibrewala

Chancellor, J.J.T University Rajasthan

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Article like Narayani Sansthan at Udaipur for handicapped people, putting of Jaipur foot and doing various operations. They collect a lot of money from the common people by way of donation, from Corporators, NGOs, whatever money they get from the donation, equal amount should be given by the government and free land should be given without any condition, so that services can be increased and they can be given funds from MPs, MLAs, Corporators and the corpus fund which is not used. This will involve the more public participation in the social upliftment of the society.

It has become very important for treating the old parents in a good hospital, because old people require more treatment of illness like hearing impaired, cancer and terminally ill diseases. There is no law in this country for mercy death. In such a situation, government as a rule should make payment to recognize hospitals of such people who are below the poverty line, SC/STs, Backward and all those people who are economically backward whose annual income is Rs. 5 lakhs. This money should be spent from the fund which is not spent by MPs, Corporators, MLAs who are supposed to spend for the welfare of the people.

All government employees who are supposed to receive medical reimbursement of hospitalization for their treatment, since years have not been paid. There should be cashless system for the employees and their payment be made directly to the hospital by the department concerned.

Recently, a Consumer Court has given the judgement for compensation to 6 people for getting trapped in the lift for four

hours for the agony they suffered and a petty amount have been granted to each person.

What is the use of this compensation which is delayed for so long, for example before 18 years the gold price was Rs. 1,000 for 10 grams and now it is Rs. 32,000, some of the victims might have died also. It is very essential that the government fix the compensation of various deficiencies of services and some payment should be given immediately within a month by the court, once court finds prima facie evidence that they have suffered and they are liable to get compensation.

This compensation should be considered as part compensation and balance should be given within a time bound judgement, but not more than a year. No adjournment should be provided for the service provider and if they ask for adjournment, they should compensate for every adjournment. All MPs, MLAs, Corporators should compulsorily have the website, everyday they should update, how money is available, how much money is spent for which project. Public can also approach them and give suggestion for the utilization of their fund.

There should be a website on which performance of a minister of that area should also be highlighted. There should be telephone number; e‐mail of the entire department where public can lodge their complaint through sms and e‐mail. For that, there should be a separate website to be monitored by some department of the government.

There should be a video conferencing system with fixed date and time, so that people can

telephone them their grievances and get on‐the‐spot decision, if possible or within a reasonable time.

In any area, more than 1,000 cottages or small and medium industries are working without or with the help of power, government must encourage an industries association and they must make the industries association some regular payment –all the inspection agencies should co‐ordinate with them just like an IT department is raiding the office, they call two people from local people for panchnama, similarly, representative should be called by the department. This will avoid corruption, govt. will help the association, there will be no disputes, and dispute if any can be arbitrated by department and association.

The government is asking people to pay tax, when the late Prime Minister Rajiv Gandhi said that 85% of the public money collected does not reach the beneficiary and is used by around 2 crore government employees and politicians. Now the Prime Minister in waiting says it is not 85%, but 90% does not reach the beneficiary. Now in such a situation, the citizen of India should not pay any tax and rather they should spend on the welfare activity of society themselves, through NGOs etc. The money collected by tax should be spent through various other schemes but not through the government machineries. As Rahul Gandhi says “that we must change our system, there is a system failure and this system is not in a position to deliver and bring the desired result.” [Source “How to Make a New India” by Dr. Vinod Tibrewala, Vice President ‐ COSIA]

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APPEAL TO HIGH COURT UNDER CENTRAL EXCISE By

M. Govindarajan, B.Sc., M.A. BL., ACS, AMCA, MBA, PGDCA ACCOUNTS OFFICER, BSNL

Article

Appeal to High Court Section 35G of Central Excise Act, 1994 (‘Act’ for short) provides for filing appeal before the High Court. Section 35G (1) provides that an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after 1st day of July, 2003, if the High Court is satisfied that the case involves a substantial questions of law. Section 35 G (2) provides that the Commissioner of Central Excise or the other party aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court. Such appeal shall be filed within 180 days from the date on which the order appealed against is received by the Commissioner of Central Excise or the other party in the form of memorandum of appeal precisely stating therein the substantial question of law involved. It the appeal is filed by the other party he has to pay a fee of Rs.200/‐ for filing the appeal. In ‘Metal World Electrodes V. VESTAT, Chennai’ – 2014 ( 299) E.L.T. 3 ( Mad.) it was held that Section 35 G (1) has phrase ‘every order passed in appeal by the Appellate Tribunal ‘ whereas Section 35 G (2) has different phrase ‘any order in conspicuously absent in sub – section (2). Also instead of ‘every’ word ‘any’ is used

under sub‐section (2). Though appeals are maintainable under both subsections they are not intending same kind of appeal before High Court against the same kind of Tribunal. Different phrases given in the subsections cannot be given same meaning. Sub – Section (2) had widened scope of filing appeal before the High Court with specific intention that such appeal is not to be confined only against ‘every order passed in appeal’ but also against any order passed by the Appellate Tribunal’ and it is not simply procedural but suborder passed by the Appellate Tribunal’ and it si not simply procedural but substantive against stipulates against which order appeal would lie. Hence remedy of filing appeal under Section 35 G is available even against interim orders passed by the Appellate Tribunal and more so there is no specific statutory bar for filing such appeal.

Monetary limit for Department In order to reduce the litigation the Board prescribed certain monetary limits for filing appeal by the Department vide Instruction No.F.No 390/Misc./163/2010‐JC, dated 17‐8‐2011 [2011(270)E.L.T. T27.] For filing appeal before High Court the monetary limit fixed is ` 10 lakhs. No appeal shall be filed in the High Court’s if the duty involved does not exceed ` 10 lakhs with or without penalty and interest. This

monetary limit is applicable to refund cases also. However the adverse judgments relating to the following should be contested irrespective of the amount involved: • Where the constitutional

validity of the provisions of an Act or Rule in under challenge.

• Where Notification Instruction/Order or Circular has been held illegal or ultra vires.

In ‘Commissioner of Central Excise, Customs, Ahmedabad‐ I I v. Rangadhara polymers’ – 2014 (300) E.L.T. 391 (Guj.) the assessee filed an application under Rule 5 of Cenvat Credit Rules, 2004 claiming refund of ` 4, 17,531/‐ in respect of unutilized credit balance for the goods supplied. The Adjudicating Authority rejected the claim on the ground of limitation. The Commissioner (Appeals) allowed the refund partially to the extent of `1, 87,628/‐ and rejected the rest of the amount. The Tribunal allowed the appeal of the assessee whereas it rejected the appeal filed by the Department. The Department filed appeal before High Court against the order of the Tribunal. The High Court observed that the Department Circular dated 17.8.2011 provides monetary limit for filing appeal before the High Court if the duty involved exceeds `10 lakhs with or without penalty and interest. In this case the amount involved is `1, 87,628/‐

Legal

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Article only. The High Court rejected the appeal filed by the Department. Jurisdiction In ‘Suresh Desai & Associates v. Commissioner of Income Tax’ – (1998) 230 ITR 912 (Del.) it has been held that the appellate statutory jurisdiction exercised by the High Court is determined by the sites/location of the Assessing officer who had passed the Order‐in‐Original/first instance.

In ‘Commissioner of Central Excise & Service Tax, LTU, New Delhi v. Whirlpool India Limited’‐ 2014 (300) E.L.T. 182 (Del.) the respondent is operating and is situated in Pondicherry. The Department filed appeal before the High Court, Delhi. The plea taken by the Department is that a LTU has been created at Delhi and impugned order has been exam ined by t h e s a i d Commissionerate. The High Court held that this by itself will not confer jurisdiction on Delhi High Court to entertain the appeal. The original order was passed by A s s i s t a n t C omm i s s i o n e r , Pondicherry not be an offer of the said Commissionerate. The Delhi High Court lacks of jurisdiction to entertain the appeal. The High Court dismissed the appeal. Non‐maintainability of appeal As per Section 35G(1) no appeal shall lie before the High Court against an order of the Tribunal, among other things, for the determination of any question having a relation, to the rate of duty of excise or the value of goods for the purposes of assessment.

In ‘Commissioner of Central Excise,

Customs & Service Tax, Thiruvananthapuram v. Kerala Sate Beverages’ – 2014 (300) E.L.T. 217 (Ker.), the High Court held that rate of tax is a prescription of Parliament and not part of judicial function to tinker with rate of tax. The Act does not envisage that High Court would have power of such nature that they decide quantum of coverage. The High Court held that the appeal is not maintainable. In ‘Commissioner of Customs & Central Excise v Modern Transformer (P) Limited’ – 2013(293) E.L.T. 224 (All.), the record of proceedings shows that the matter relates to the value of goods. The question of law framed by the appellant is whether the respondent is entitled to exclude from the assessable value, an amount mutually agreed upon by the buyer towards the notional freight and insurance and that to without policy to cover the transportation of the goods and also this is not the actual amount of freight and transport. The High Court held that the appeal under Section 35 G does not lie on the value of the goods.

Appeal against interim orders In ‘Metal World Electrodes v. CESTAT, Chennai’‐ 2014 (299) E.L.T. 3 (Mad.) it was held that for the phrase ‘in appeal’ cannot be confined to mean that only the final orders passed in the appeal. If the final order was alone intended, then there was no necessity for the legislature to have the word ‘every’. Thus interim orders are also passed in the appeal and they are not outside the scope of the appeal or

as an independent and particle order. Substantial question of law The Tribunal is the last authority for fact finding. After that appeal shall lie only on substantial question of law. Section 35 G (3) provides that where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question.

Section 35 G (4) provides that the appeal shall be heard only on the question so formulated and the respondent shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question. Nothing in this subsection shall be deemed to take away abridge the power of Court to hear, for reasons shall be recorded, the appeal on any other substantial question of law not formulated by it; it is satisfied that the case involves such question. Section 35 G (5) provides that the High Court shall decide the question of law so formulated and deliver such judgment thereon containing the grounds on which decision is founded and may award such cost as it deems fit. In ‘Magma Fincorp Limited v. Union of India’ – 2014 (300) E.L.T. 221 (Cal.), it was held that an appeal lies to the High Court only in respect of the order which involves a substantial question of law. For an appeal to been entered the High Court has to be satisfied the a substantial question of law is involved. The High Court is required to formulate the question of law and the appeal is to be heard only on the question of law so

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Article determined. Of course the High Court might decide any other substantial question of law that may not have been formulated.

In ‘Hindustan Processors Limited v. Union of India’ – 2014 (300) E.L.T. 23 (Raj.) , the Tribunal examined the scope of clandestine removal in view of the evidence and explanation given by assessee in detail. What is involved is a pure question of fact and not any question of law much less substantial question of law. The High Court against in appeal cannot undertake the examination of factual issues nor can draw factual inferences on the basis of explanation offered by assessee. Once the explanation is acceptable by Tribunal as last Court of appeal on facts, then in such even, a finding of face recorded on such application by Appellate Court would be binding on the High Court. High Court in its appellate jurisdiction under Section 35 G of the Central Excise Act would not again de nove held that yet another factual inquiry with a view to find out as to whether explanation offered by assessee and which did not find acceptance to Tribunal in good or bad or rightly accepted or not. In ‘Metal World Electrodes v. CESTAT, Chennai’‐ 2014 (299) E.L.T. 3 (Mad.) the High Court held that while passing order waiving pre‐deposit, CESTAT goes into prima facie case and based on such factual consideration , taking note of hardship pleaded/ proved by appellant and considering interests of Revenue. Whether substantial question of law would arise in such

cases would depend upon facts/ circumstances of each case and these cannot be any uniform presumption that no substantial question of law raised and not on facts or any other aspect.

It was further held that the Appellate Tribunal is final fact finding authority except where such findings are stated to be perverse or against fact pleaded or proved. Hence appeal to the High Court against final as well as interim orders of the Tribunal has to be considered only with substantial question of law raised and not on facts or any other aspect.

In ‘Commissioner of Central Excise, Goa v. Rudra Industries’‐ 2013 (297) E.L.T> 340 (Bom.), the appeal was admitted on the two substantial questions of law which were framed at the time of admission of the appeal. The appellant did not give much emphasis on the said two substantial questions of law which were framed by the High Court but sought to argue the fact findings of the lower authorities. The High Court held that in appeal to High Court, department had no right to challenge concurrent findings of facts recorded by the appellate authorities below. Invoking extended period of limitation In ‘Commissioner of Central Excise & Service Tax v. Ratanamani Metals & Tubs Limited’ – 2014(229) E.L.T. 155 (Guj.) , RT – 12 returns were filed and goods were cleared under duty paying invoices showing that they were manufactured by job worker in premises of principal

manufacturer . The Tribunal held that manufacture at site was in knowledge of Department and extended period could not be invoked on the ground that the assessee had not filed the prescribed declaration. The High Court held that the findings of the Tribunal were based on relevant materials and were realm of appreciation. There was no perversity. Hence there was no substantial question of law.

Condonation of delay Section 35 G (2A) which was inserted vide Finance Act, 2009 with effect from 1‐7‐2003 provides that the High Court may admit an appeal after the expiry of the period of one hundred and eight days referred to in clause (a) of subsection (2), if it is satisfied that there was sufficient cause for not filing the same within that period.

In ‘Commissioner of Central Excise, Chennai – IV. V Indian inorganic Chemicals limited’ – 2013 (289) E.L.T> 328 (Guj.), the appeal filed was dismissed for not complying with the objection raised by the office to High Court regarding non supply of legible typed copies of certain annexure. On coming to know that the appeal had stood dismissed the restoration application was filed after a delay of 425 days in filing the same. The High Court considered the reasons stated in the application and satisfied that the delay in filing restoration application occasioned and satisfied that the delay in filing restoration a p p l i c a t i o n o c c a s i o n e d unintentionally and failing to remove the office objection could

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be said to be inadvertent. The High Court allowed the restoration application.

Forum Shopping In ‘Neeraj Jhansi v. Commissioner of Customs & Central Excise’ ‐2013 (296) E.L.T. 310 (Del.) the petitioner filed writ petition before Delhi High Court wherein interim order was passed directing petitioner to make pre‐ deposit and thereafter writ was converted into appeal on oral prayer of the petitioner. Further time was allowed to appellant to make the pre‐ deposit. The Delhi High Court allowed counsel for appellant time to look into the aspect of jurisdiction. However, thereafter, instead of contesting jurisdiction the appellant kept on taking adjournments. After enjoying stay for one year and three months the appellant sought permission to withdraw appeal with liberty to approach jurisdictional High Court and same was granted with observation that appellant had bonafidely field the appeal in Delhi High Court. On appeal being filed to Allahabad High Court which had territorial jurisdiction, the appellant does not plead that they had no knowledge that appeal had to be filed in that High Court. Appeal to Allahabad High Court was filed with a total delay of one year and 332 days. The High Court held that the appellant took chance before the Delhi High Court which appears to be practice of counsels appears to be practice of counsels appearing in such matters in that High Court and succeeded in getting interim orders. Apex Court has strongly deprecated such practice of ‘forum shopping.’ Power of High Court to determine any issue. Section 35 G (6) provides that the High Court may determine any issue which – • has not been determined by the Appellate Tribunal , or • has been wrongly determined by the Appellate Tribunal, by reason of decision of such question of law

as is referred to in sub‐section (1)In ‘Antartic Industries Limited v. Commissioner of Central Excise, Ludhiana’ – 2013 (294) E.L.T. 365 (P & H) the question of law is based on fact which was neither asserted nor discussed in the impugned order. The High Court held that such question cannot be raised for the first time before the High Court. Hence the plea of benefit of cum‐duty which is depended of bona fide payment of duty, disallowed as it was not raised before authorities below. In ‘Commissioner of Central Excise, Customs & Service Tax v. Vishwa Traders P. Limited’ ‐ 2013 (287) E.L.T. 243 (Guj.) the High Court held that the findings of the Tribunal can be inferred only of if they are perverse or same material evidence is Tribunal can be inferred only if they are perverse or same material evidence is ignored. Only in such circumstance the High Court can exercise jurisdiction on issue which may give rise to any substantial question of law.

In ‘Venus Remedies Limited v. Commissioner of Central Excise’ – 2014 (300) E.L.T. 33 ( P & H) the High Court held that the well reasoned order recorded by the Tribunal cannot be set aside merely on the ground that a co‐ordinate Bench of the Tribunal had come to a different conclusion. The High Court is not bound by the finding recorded by the other Bench and it is to adjudicate upon the correctness or legality of the order which has been challenged in this appeal.

In “Bajaj Hindustan Limited v. Union of India’‐ 2014 (299) E.L.T. 431 (All.) the issue is regarding the denial of Cenvat credit on capital goods which was fully exempt from Central Excise duty was neither raised nor decided by CESTAT. In appeal under Section 35 G of Central Excise Act, the appellant is permitted to raise only such ground which was raised before and decided by CESTAT. The appeal was rejected by the High Court.

[Source : Excise Law Times 28th April 2014]

Article

Non‐Receipt of TISA

TISA is posted on 8th of every month. This has to reach upto 15th of every month by the subscribers. It is posted on the Address communicated to us by the subscribers. The subscribers and members are requested to get‐in‐touch with the local post office for the Non‐Receipt of the TISA with a information to COSIA. COSIA may send another copy if available with it. Your cooperation is solicited.

Eknath Sonawane, Executive Secretary

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Remission of Duty‐ Basic Flaws in Legal Provisions By

Shri. K.M. Muralidharan Advocate

Article

Section 5 of the Central Excise Act, 1944 empowers the Central Government to make rules providing for ‘remission of duty on goods found deficient in quantity.’ The said section reads as follows: “Section 5. Remission of duty on goods found deficient in quantity.‐ 1. The Central Government may, by rules made under

this section, provide for remission of duty of excise leviable on any excisable goods which due to any natural cause are found o be deficient in quantity.

2. Any rules made under sub‐section 1) may having regard to the nature of the excisable goods or of processing or of curing thereof, the period of their storage or transit and other relevant considerations, fix the limit or limits of percentage beyond which no such remission shall be allowed:

Provided the different limit or limits of percentage may be fixed for different varieties of the same excisable goods or for different areas or for different seasons.” An analysis of Section 5 above reveals the following salient ingredients:‐ i) The section relates to “remission of duty on goods found deficient in quantity’’. II) The deficiency of goods in quantity contemplated

by the section has to be “due to any natural cause.” Besides the above shown two components, the section does not provide for any other basic postulate in respect of remission of duty. Another source of rule‐making power in the Central Excise Act in the matter or remission of duty is under Section 37. The said section under clause (ic) of sub‐section (2) ibid reads as follows: “Section 37. Power of Central Government to make rules.‐ (1) The Central Government may make rules to

carry into effect the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing power, such rules may‐ (ic) provide for the remission of duty of e x c i s e leviable on any excisable goods, which due to any natural cause are found to be deficient in quantity, the limit or limits of percentage beyond which no such remission shall be allowed and the different limit or limits of percentage for different varieties of the same excisable goods or for different areas or for different season.” [emphasis in italics added] It is obvious from even a plain reading of the Section 37(2) (ic) that the said clause also provides for remission of duty of excisable goods, which due to any natural cause are found to be deficient in quantity . This buttresses the position in Section 5 ibid (supra), without adding anything to the basic position in section 5 ibid. From established principle of subordinate legislation, it is clear that any rule made under section 5 or Section 37(2) (ic) ibid should confine itself to the two ingredients, namely, deficiency in goods; and any natural cause as the reason for such deficiency. Such a rule cannot go beyond the said two ingredients. It is fundamental that the delegate, on whom the power to make delegated legislation has been conferred, has to act within the limits of the authority conferred by the Act [vide: Hukamchand v. Union of India, AIR 1972 SC 2427; Additional District Magistrate v. Shri Siri Ram, (2000) 5SCC451]. In case of conflict between a substantive provision of the enabling Act and a rule made under it, the former prevails and the delegated legislation has to be read and constructed in consistent with the enabling Act [ITW Signode India Ltd. v. Collected of Central Excise, (2004) 3 SCC 48 para 56]. But Rule 21 of the Central Excise Rules, 2002 made in

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respect of remission of duty presents an entirely different picture. The said section reads as follows: “Rule 21. Remission of duty. – Where it is shown to the satisfaction of the Commissioner that goods have been lost or destroyed by natural causes or by unavoidable accident or are claimed by the manufacturer as unfit for consumption or for marketing, at any time before removal, he may remit the duty payable on such goods, subject to such conditions as may be imposed by him by order in writing.” [Provisos under the rule are omitted since not relevant in the context]. Besides ‘deficiency of goods due to any natural cause’ specified under Section 5 and Section 37(2) (ic), Rule 21 provides, saliently, for the following also: i) goods lost or destroyed by natural causes; II) goods lost or destroyed by unavoidable

accident; III) goods which are claimed by the manufacturer

as unit for consumption of for marketing ; It may be noted, in respect to point (i) immediately hereinabove, that goods lost or destroyed are not the same thing as goods found deficient in quantity. Strictly speaking, loss or destruction of goods, even by natural causes, are not contemplated by either Section 5 or by Section 37 (2) (ic). Points (ii) and (iii) above lay down entirely new provisions which are alien to Section 5 or by Section 37(2) (ic) both in letter and spirit. In addition to the above, Rule 21 also lays down a time‐frame in the matter of loss, etc. of goods , namely, “at

any time before removal”, whereas neither Section 5 nor Section 37 (2) (ic) contemplate such a time‐frame either expressly or even by implication. Rule 21, thus is at loggerhead with Section 5 and Section 37(2) (ic). As per law, (I would say, by blind law), the Sections should succeed, and the rule has to submit and fail. But alas! If Rule 21 fails and the sections remain the same, it would be a case of outrageous injustice to assesses, for then in cases of goods destroyed in accidents or goods rendered unfit for consumption/marketing no remission of duty will be available. No sensible rulers or administrators will ever permit such a situation to prevail in industry. Further, the Department has on several occasions allowed remission of duty, and rightly so, in cases of accidents by fire , etc. the Department cannot therefore turn back and deny remission in deserving cases of loss by accident, etc. We have to keep the spirit of Rule 21 and enable it to stand by amending and improving Section 5. The rational, just and equitable solution for the present legal predicament is to amend Section 5 of the Central Excise Act, 1944 so as to include cases of (i) destruction of goods by unavoidable accident and (ii) goods unfit for consumptions/marketing. It is high time that Chambers of Commerce and trade organization take up the matter with Legislators for appropriate, as indicated above, in the matter.

[Source: Excise Law Times dated 2th June 2014]

Article

Export, Import Management, Marketing, Self‐Employment, ISO 9000 and also in Personality Development, Stress Management by Omkar Therapy.

Contact: Vaishali Kulkarni.

Tel.: (R) 25825688, Fax: 25822249. Mobile: 9821245820

SAMARTH MANAGEMENT SOLUTIONS Excise & Service Tax Registration,

Cera Audits, Attending Show‐Cause‐Notice, Hearing, Filing of ST & Excise Returns, etc.

Contact Person : Priya Joshi Mob. No. 9819225870/8097841839

Email: [email protected]

Classifieds

Mr. V. Venkatraman Excise Consultant

Shop No. 3, Shree Sai Appts., Behind Dany’s Comp.,

Karvalo Nagar, Thane – 400 606 Contact : 25827722/25810419

EPABX Specialist in:

Accord, Crystal, NEC & Panasonic Systems. Access Control, Building Intercom System, CCTV & Security

System, Digital Epabox Systems Calculus Business Machines Shri. Rakesh Shirgaonkar

Mob. : 9821308924

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Duty Credit Script issued under Incremental Export Incentivisation Scheme (IEIS) – Procedure for Registration.

Export

Attention of all Importers/ Exporters/ CHA’s and all concerned is invited to the DGFT Notification No.3 (RE‐2013)/2009‐2014, dated 18‐4‐2013 and Customs Notification No. 32/2013, dated 13‐6‐2013 regarding introduction of Incremental Export Incentivisation Scheme (IEIS). Due to some technical reasons, the IEIS licence cannot be registered in the EDI system (ICES 1.5v). Till the EDI module of the IEIS scheme is operationlised, following procedure is prescribed for the Manual Registration of Duty Credit Scrips issued under Incremental Export Incetivisation Scheme (IEIS); 1. The Licence holder /Authorized representative will 2. present the Original licence /scrip to the Licence

Section along with a request letter for registration or licence / scrip.

3. On submission of licence /scrip under IEIS scheme, verification of genuineness of scrip may be obtained from concerned regional DGFT office vide fax.

4. On receipt of confirmation fax from DGFT office, Superintendent / Licence Section shall verify the details viz. Licence No &date , DGFT File No., Name of the Licence Holder, IEC No., Duty Credit Amount, Licence Validity with the Original Licence.

5. The ACAO/Licence Section shall check the Alert Register and if there is no alert, shall endorse “No Alert” with his /her signature and stamp on the

original licence/ Scrip. 6. On verification of genuineness of licence/scrip from DGFT and after obtaining “No Alert”, the licence /scrip may be registered manually. 7. The Licence Clerk shall enter the particulars of

lincence viz., Licence No. & Date , DGFT File No., Notification No., Name of the Lincence Holder , IEC No., Duty Credit amount, Licence Validity etc. In the Alphabetical Register maintained in the Licence Section.

8. Subsequent to manual registration of licence , the Licence Holder / Authorized CHA shall present the Bills of Entry filed/ Release Advices issued against the IEIS licence to the licence section. The Licence Clerk shall make relevant debit/ credit entry in the Licence Register on the basis to debit sheet of the licence. The he/she shall forward the bill of Entry with the Original licence and Licence Register to the audit clerk. The audit clerk will put the endorsement on the debit sheet attached to the Original licence against the relevant entry and also put his/her endorsement in the licence register.

Difficulties, if any, in implementation, may be brought to notice. [Commissioner of customs (Exports), JNCH, Nhava Sheva, Public Notice No. 15/2014‐15, dated 16‐52014]

[Source E.L.T. 2th June 2014]

Law update

The government extended excise duty concessions for automobiles as well as consumer and capital goods up to December 31, 2014.

[TO BE PUBLISHED IN PART II, SECTION 3, SUB‐SECTION (i) OF THE GAZETTE OF INDIA, EXTRAORDINARY]

GOVERNMENT OF INDIA MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification No. 06/2014‐Central Excise New Delhi, the 25th June, 2014

G.S.R. (E).‐ In exercise of the powers conferred by sub‐section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 12/2012‐Central Excise, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub‐section (i), vide number G.S.R. 163(E), dated the 17th March, 2012, namely:‐ In the said notification, in the opening paragraph, in the second proviso, for the figures, letters and words “30th day of June, 2014”, the figures, letters and words “31st day of December 2014” shall be substituted. [F.No. 354/85/2014‐TRU]

Excise

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Cenvat – Input services taken by appellant and used in the manufacture of job worked goods (exempt under Notification No. 214/86‐C.E.)‐ Provisions of Rule 6(1) of Cenvat Credit Rules, 2004 cannot be invoked for denying Cenvat credit of input services used by appellant factory for manufacture of job worked goods under Notification No. 214/86‐C.E. –Job work activity of appellant is amounting to manufacture and is not one of providing any service‐Appellant factory cannot be both

a manufacturer and a service provider at the same time in relation to a particular activity – A job worker is a manufacturer and hence the appellant factory cannot be treated as a service provider rendering exempted /non‐taxable service for the manufacturing activity –Revenue’s plea that appellant had rendered exempted/non‐taxable service to its sister

concern, has no force. Appeal allowed

[Source : Service Tax Review dated 1st May 2014]

Court Ruling

Co

2014 (34) S.T.R. 345 (Tri.‐ Ahmd.) IN THE CESTAT, WEST ZONAL BECNH , AHMEDABAD

S/Shri H.K. Thakur, Member (T) and M.V. Ravindran, Member (J) JBF Industries

Versus COMMISSIONER OF C. EX. & S.T., VAPI

Final Order No. A/10169/2014‐WZB/AHD, dated 11.2.2014 in Appeal No. E/1353/2011‐DB

Service Tax

2014 (34) S.T.R. 437 (Tri.‐ Del.) IN THE CESTAT, PRINCIPAL BENCH, NEW DELHI

Justice G. Raghuram, President and Shri Sahab Singh, Member (T) BECHTEL INDIA PVT. LTD.

Versus COMMISSIONER OF CENTRAL EXCISE, DELHI

Final Order Nos. ST/A/56983‐56986/2013‐CU(DB), dated 17.7.2013 in Appeal Nos. ST/45‐48/2009

Export of services –Refund of Service Tax –Relevant date –Under Section 11B of Central Excise Act, 1944 relevant date is date of export –Section 11B ibid, made applicable for refund claim under Rule 5 of Cenvat Credit Rules, 2004 as per Condition 6 of Notification No. 5/2006‐C.E. (N.T.) – In case of export of service, export is complete when foreign exchange received in India –Therefore, relevant date is date of receipt of

foreign exchange –Therefore claim filed in time not to be held time‐barred – Rule 5 of Cenvat Credit Rules, 2004 –Section 11B of Central Excise Act, 1944 as applicable to Service Tax vide Section 83 of Finance Act, 1994. Appeals allowed

[Source : Service Tax Review dated 1st May 2014]

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& Lead Collecting Industry Contact: VISION SOLUTIONS Email: [email protected], Cell: 9820605504

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Court Ruling 2014 (303) E.L.T. 589 (Tri.‐ Del.)

IN THE CESTAT, PRINCIPAL BENCH, NEW DELHI [COURT NO. III]

Ms. Archana Wadhwa, Member (J) and Shri Rakesh Kumar, Member (T) PRISMA ELECTRONICS

Versus COMMISSIONER OF CENTRAL EXCISE, NOIDA

Final Order Nos. A/58458‐58461/2013‐EX(DB), dated 28.11.2013 in Appeal Nos. E/1615‐1618/2009 –EX(DB)

Valuation (Central Excise) ‐ Sale through related person –Effect of, on assessment –HELD: Where the sale is through related person and the goods are specified goods in terms of Section 4A of Central Excise Act, 1944, it is Section 4A ibid that would be attracted for the purpose of assessment and not Section 4 ibid – On facts, denial of Section 4A ibid assessment to appellant who was clearing goods (colour TV sets) to related person by paying duty on the maximum retail price, not proper –Sections 4 and 4A ibid.[paras 5,6] Appeals allowed [Order per : Archana Wadhwa, Member (J) (for the Bench)].‐ All the appeals are being disposed of by a common order as they arise out of same impugned order of Commissioner vide which he has confirmed demands against M/s. Prisma Electronics and has imposed penalties on the other appellants.

2. After hearing both sides, we note that M/s. Prisma Electronics is engaged in the manufacture of colour Television sets. The same were being cleared by them to M/s. Dixon Technology (India) Pvt. Ltd. by paying duty on the maximum retail price of Rs. 2,740 per piece in terms of Section 4A of Central Excise Act, after availing the admissible abatements. M/s. Dixon Technology (India) Pvt. Ltd. were further selling the said colour TV sets to M/s. Elecot, Tamil Nadu Government Enterprises, which were further distributing the said Televisions free of cost to various people.

3. The dispute in the present appeal relates to the legal issue as to whether the clearance of colour TV sets by M/s. Prisma Electronics by paying duty under Section 4A of the Act was appropriate or they were required to discharge duty liability in terms of Section 4 of Central Excise Act. Revenue by entertaining a view that since M/s. Dixon Technology (India) Pvt. Ltd. were related parties to M/s. Prisma Electronics and as entire 100% sales were being made to M/s. Dixon Technology (India)

Pvt. Ltd., it is the provisions of Section 4 which would get attracted. Accordingly, demand stand raised and confirmed on the basis of Section 4 of the Central Excise Act.

4. After hearing both sides, we find that there is no dispute about the MRP affixed

on the colour TV sets which is Rs. 2740.40 per piece. The said MRP was adopted by M/s. Dixon Technology (India) Pvt. Ltd. for further sale of the Televisions to M/s. Elecot. As such, it is not a case where the MRP was subsequently enhanced in the hands of buyers.

5. The Commissioner sole reason for adhering to the provisions of Section 4 in preference to Section 4A is that M/s. Dixon Technology (India) Pvt. Ltd. is a related party to M/s. Prisma Electronics. We find that identical legal dispute was the subject matter of the Larger Bench decision in the case of Indica Laboratories Pvt. Ltd. v. CCE [2007 (213) E.L.T. 20 (Tri. –LB)] wherein after taking note of the entire legal provisions, it was held that the sale through related person is not relevant for the purpose of assessment under Section 4A inasmuch as Section 4A(2) of the Central Excise Act starts with non obstante clause –“notwithstanding anything contained in Section 4”. As such, the Larger Bench observed that even where the sale is through related person and the goods are specified goods in terms of [Section] 4A, it is Section 4A which would be attracted for the purpose of assessment.

6 In view of the above declaration of law by the Larger Bench and in view of the fact that this is sole reason adopted by the Commissioner for denial of Section 4A assessment, we set aside the impugned order and allow all the four appeals with consequential relief to the appellants.

(Dictated and pronounced in the open Court)

[Source: Excise Law Times dated 26 May 2014]

Excise

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caukIcao AaiNa iGasaaDGaa[-nao Gaotlao jaaNaaro inaNa-ya¸ maM~yaaMmaQaIla AByaasaU vaR<aIcyaa ABaavaamauLo %yaaMnaa Aaplyaa talaavar naacavaNaarI naaokrSaahI AaiNa AivacaarI kayaVaMcao ADqaLo par krtanaa ]VaojakaMcaI haoNaarI dmaCak yaamauLo maharaYT/atIla laGaU AaiNa maQyama ]VaogaaMpuZo Aist%vaacaa p`Sna ]Baa zaklaa AsaUna ASaIca pirisqatI kayama raihlyaasa ]Vaoga xao~at maharaYT/ rajya rsaatLalaa jaaNyaasa vaoL laagaNaar naahI¸ ASaI BaItI ‘laGau va maQyama ]VaogaapuZIla Aavhanao’ laaoksa<aa cacaa-sa~at sahBaagaI Jaalaolyaa va@%yaaMnaI vya@t kolaI. yaa pirsaMvaadat maharaYT/ caoMbar Aa^f ka^masa-¸ [MDsT/Ija¸ A^gaÌklcarcao AQyaxa EaI.rama Baaogalao¸ maharaYT/ Aaiqa-k ivakasa mahamaMDLacao AQyaxa kmaaMDr dIpk naa[-k¸ zaNao smaa^la skola [MDsT/Ija AsaaoisaeSanacao ³iTsaa´ AQyaxa Da^. maQausaUdna KaMbaoTo AaiNa ‘iTsaa’ cao sadsya AaiSaYa iSarsaaT sahBaagaI Jaalao haoto. pirsaMvaadacao saU~saMcaalana Aisaf baagavaana yaaMnaI kolao. janata Aaplyaalaa fsavaNaarca Aaho¸ Asao gaRhIt Qa$naca kayado kolao jaatat¸ QaaorNao zrvalaI jaatat ha mau_a maaMDtanaa EaI.rama Baaogalao yaaMnaI laGau ]VaojakaMpuZIla p`mauK AavhanaaMcaI cacaa- kolaI. to mhNaalao kI¸ jagaat p`caMD vaogaanao badlaNaaáyaa tM~&anaacaa BaartIya ]VaojakaMnaIhI p`BaavaI vaapr kolaa paihjao. rsto¸ baMdr yaaMsaar#yaa sauivaQaaMkDo Aaja AapNa dula-xa krtao Aahaot. pNa %yaacaa ]VaogaaMvar gaMBaIr pirNaama haotao Aaho ho laxaat Gaotlao paihajao. [tr rajyaaMcyaa tulanaot AaplyaakDo Taola jaast Aaho¸ vaIjadr jaast Aaho. ASaa pirisqatIt Aaplao laGau ]Vaojak jaagaitk patLIvar saaoDaca¸ Aaplyaaca doSaatlyaa [tr rajyaaMtlyaa ]VaojakaMSaIhI spQaa- k$ Sakt naahIt. ASaa p`SnaaMvar AamhI saucavatao¸ to ]paya sarkar Gyaayalaa tyaar naahI¸ ASaI KMthI %yaaMnaI vya@t kolaI. ]VaojakaMpuZIla AavhanaaMbaabat EaI.dIpk naa[-k mhNaalao kI¸ ]VaogaQaMVaMsaMdBaa-tlaI QaaorNaoca ]VaojakaMpuZcao ADqaLo zrt AsaUna vaogavaogaLyaa prvaanyaaMcyaa ‘[snpo@Tr raja’ caa

rajyaat ]VaogaaMnaa AaiNa ]VaojakaMnaa fTka basalaa Aaho. gaolaI kahI vaYao- ]VaogaQaMVaMnaa KIL basat AsalyaamauLo ]VaogaQaMVacyaa patLIvar maharaYT/ doSaat pacavyaa ËmaaMkavar foklaa gaolaa Aaho. hI pirisqatI badlaayacaI Asaola tr nausa%yaa emaAayaDIsaI ]BaarNao purosao naahI tr vaIja¸ rsto rolvao yaaMcaI puroSaI trtUd vhayalaa hvaI¸ ho saaMgaUna to mhNaalao kI¸ AayaTIAayasaar#yaa saMsqaaMcaI rajyaatlyaa AaOVaoigak vasaahtIMcaI saaMgaD Gaalaayalaa hvaI. jaast vyaajadranao kja- Gao}na Aaplao ]Vaojak caIna¸ baàJaIlacyaa ]VaojakaMSaI spQaa-ca k$ SakNaar naahIt ho laxaat Gao}na %yaanausaar QaaorNao AaKayalaa hvaIt. Da^. maQausaUdna KaMbaoTo yaaMnaI ]Vaooga xao~at iSarlaolyaa Ba`YTacaaracao kahI ikssao saaMgat sanadI AiQakaáyaaMcyaa manamaanaIpuZo maM~yaaMcaIhI kSaI fsagat haoto to saaMigatlao. gaolaI daona vaYao- ]Vaoga ivaBaagaatIla ivakasa Aayau@t ho pd ir@t AsaUna ijalha ]Vaoga koMdàt vaYaa-nauvaYao- baOzkaca haot naahIt. manaalaa Aalao mhNaUna eko idvaSaI ivaSaoYa Aaiqa-k xao~acaI ³esa[-JaoD´ GaaoYaNaa krayacaI AaiNa vaYa-−daona vaYaa-MnaI p`klp fsatao tovha ‘imalaoinayama pak-’ saar#yaa p`klpaMcaI sau$vaat krayacaI. puZo ha p`klp ApyaSaI zrlaa kI AayaTI Jaaona jaahIr krayacao¸ ASaI QarsaaoD QaaorNao rabaivaNyaat sanadI AiQakarI maSgaUla AsaUna yaamauLo xao~at maharaYT/acaa p`vaasa tLacyaa idSaonao sau$ Asalyaacao KaMbaoTo yaaMnaI saaMigatlao. EaI.AaiSaYa iSarsaaT yaaMnaI sqaainak saMsqaa krasaar#yaa p`NaalaImauLo ]VaojakaMcao kMbarDo maaoDU laagalyaacaa mau_a maaMDlaa. payaaBaUt sauivaQaaMcaa maagamaUsa nasatanaa vaagaLo [sToTsaar#yaa maaozyaa AaOVaoigak xao~alaa AayaTI hba mhNaUna jaahIr krNyaacaa inaNa-ya kaoNa%yaa AaQaaro Gaotlaa jaatao¸ Asaa savaala yaavaoLI iSarsaaT yaaMnaI kolaa. jaoqao kavaLa basalaa trI vaIja jaato¸ ASaI pirisqatI Asatanaa ]VaogaaMsaazI 24 tasa vaIjaocaI GaaoYaNaa mhNajao inavvaL fsavaNaUk Asalyaacaa TaolaahI %yaaMnaI lagaaivalaa.

***************

‘[nspo@Tr raja’ mauLo ]VaojakaMcaI dmaCak

marazI ivaBaaga

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Attention Exporters The Thane Small Scale Industries Association has been authorized to issue Certificate of Origin [Non Preferential] by the Govt. of India. These Certificates are issued to the non members of Thane Small Scale Industries Association, whether large or medium or mercantile exporter. The Exporters are requested to take services from Thane Small Scale Industries Association in getting their Certificate of Origin.

For more details please contact Shri. Eknath Sonawane at TSSIA House, Thane ‐4.

Phone No. 022‐25820429 / 25822493 Email : [email protected]

COSIA Activity

Workshop on Accreditation of BMOs

With view to create an awareness amongst the BMOs, in the North– East India, a Workshop on Accreditation of Business Membership Organizations (BMOs) was organized by Chamber of Small Industry Associations jointly with NESSIA; at Brahmaputra Ashok, Guwahati with the support of Quality Council of India, NABET under MSME umbrella programme. In future, needless to mention, only accredited BMOs will be consulted and involved in various Govt. projects & programmes. Inaugural Session: While inaugurating the workshop Chief Guest, Shri Saikia, Additional Director of Industries, Govt. of Assam, & M.D of AIIDC, as a Chief Guest appealed the representatives of MSME Associations to strengthen their organizations for the robust growth of MSMEs in North‐East India. The Director Incharge of MSME Development Institute at Guwahati, Shri Shrish Asthana opined that accreditation to BMOs will definitely help for their capacity Building . He briefed the participants about S D P Training to unemployed youth .

Shri. P.S. Agwan, Hon. General Secretary of COSIA, appraised the participants about need for improvements. He appealed them to be more active for the cause of MSMEs. While opening remark, Dr. M.R. Khambete, President of COSIA , underlined the vitality of schemes for the Capacity Building of MSME Associations. Introductory Session Shri. Shankar Kumar of GIZ, a German Development

Corporation, briefed the participants about the need of Accreditation, what it denotes, purpose of the same, benefits of accreditation, scope and importants standards of it. He further explained that, “the legal status of BMO, its existence for minimum three years, independent office, minimum secretariat and financial documents” are minimum eligibility standards. He also discussed the governance aspect of a BMO. Smt. Rekha Kaul from Quality Council of India appraised the participants in details about the scheme of accreditation, the application format and procedure, record and documents essential for it, the inspection and guidance, classes of accreditation and its fees etc. At the end, Shri. P.S. Agwan, Hon. Gen. Secretary of COSIA proposed a vote of thanks.

25@ Flashback .

COSIA at National Board for MSME

To champion the cause of Micro, Small and Medium Enterprises, the Chamber of Small Industry Associations was founded in the year 1990. It was endeavour of COSIA to tackle the issues of MSMEs at the National level. With all the vigor and strength put together, COSIA was constantly advocating for a central legislation visàvis a board in order to address the major problems of MSMEs in India.

COSIA was in favour of a law to take care of vital difficulties of small entrepreneurs namely delayed payment, inadequate finance and skill development visàvis labour polices. COSIA joined the hands of Ministry of Industry to prepare the draft of such law and the first such meeting had taken place at TSSIA House, Thane.

Thereafter, the matter was constantly followed up with the Government of India and the Draft Bill was circulated in the Year 2002 and again in the Year 2004. Finally the MSMED Act, 2006 came into force from 2nd October 2006 which is mainly having the provision for issue of delayed payments as well as constitution of National Board for MSMEs.

The Government of India had nominated COSIA on the National Board of MSME twice. COSIA was also nominated as a member of Advisory Committee under MSMED Act, 2006. COSIA has raised many issues of MSMEs in the meeting of the National Board and was successful in solving the issue of collateral and the purchasing policy. As a vocal member COSIA did received appreciation from the Ministry of MSME.

National MSME Board Meeting Shri. Vir Bhadra Singh—Minister

Shri. P.S. Agwan , Hon Gen. Secretary, COSIA Late Shri. K. Parthasarthy— Committee Member, COSIA

MSME Board Meeting at Delhi Shri. Dinsha Patel—Minister

Shri. P.S. Agwan , Hon Gen. Secretary, COSIA

Postal Registration:THC/05/2014-2016

32 TISA (7th July,2014)

cosia @ north eastcosia.org.in/pdfs/tisa/2014-07-tisa.pdf · cosia @ north east . tisa ... cait ho...

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