manupatra round-up Legislative and Regulatory Update   You now have the option of customizing your manupatra round-up .This means that you get updates on the areas of interest that you select .You may change your preferences at any time you wish to. If you do not customize your round up you will continue to get the updates on all areas   To customize your round-up now click here. _____________________________________________________________________ India Centric Online Legal & Business Database Bringing forth new efficiency and unparalleled results to research efforts. In This Issue [No.41]                                                                        Feb 20, 2003 SEBI CBDT CBEC Excise Tariff CBEC Excise Non Tariff CBEC Customs Tariff RBI DGFT Department of Commerce Department of Industrial Policy Ministry of Chemicals and Fertilisers Ministry of Consumer Affairs Ministry of Environment and Forests Department of Health Ministry of Labour Supreme Court Securities Appellate Tribunal Site Links Roundup Archives Free Trial Contact us   To keep you informed about the latest Legislative and Regulatory information manupatra.com publishes this e-roundup highlighting the recent changes brought about by the Notifications/Acts/Bills /Ordinances etc. About manupatra.com ../ provides comprehensive and easy to use legal and related information over the Internet .Our database covers Central Laws , Judgments of Supreme Court and High Court (full text of the judgments from 1950 onwards ), Orders of Tribunals , Bills , Notifications, Circulars and more Key features of manupatra are Content is derived from reliable primary and secondary sources Database is updated on a daily basis Electronic Ready Reckoner to view the judgments under a particular section of an Act / Subject Powerful search engine with user friendly interfaces Search in any one court/year or multiple courts/year Hyper-linking of documents Updated modules on WTO, Anti Dumping, Arbitration, Investment Destinations Abroad, Capital Markets, Taxation, Environment, Cyber & IT Laws, IPR, Corporate Laws, Industrial Policies, Foreign Trade, Forex & Banking and more For subscription to manupatra.com or for more details please log onto ../ or call us at 0120 4531811 or send an email to : contact@manupatra.com If at any stage you wish to stop receiving the e-roundup please click here to unsubscribe. SEBI Primary Market Division Clarification regarding SEBI (Portfolio Managers) Amendment Regulations, 2002 Circular No. RPM Circular No 3 (2002-2003) Dated 05.02.2003 : It has been clarified that  1. In terms of amendment to Reg 16(1)(b), the lock in period of one year has been removed. In this regard, it may be noted that the amended regulations are applicable to  a. New Investors (Investors entering into agreement after passing of the amendment )and b. Existing Investors (Investors who had entered into portfolio management agreement prior to above amendment) provided that the Agreement is suitably modified to provide for the same.  2. The Portfolio Managers are permitted to invest in derivatives, including transactions for the purpose of hedging and portfolio rebalancing, through a recognised stock exchange. Secondary Market Division Non-compliance of provisions of listing agreement Circular No. SMD/Policy/Listing/Cir-5/03 Dated 12.02.2003 : All Stock Exchanges have been advised to take suitable action against companies under Sec 23(2) of SC(R ) Act, 1956, for violation of section 21 of SC(R ) Act, 1956, for non-compliance of the provisions of listing agreement.  Restructuring of the Subsidiary Management Circular No. SMD/POLICY/Cir - 4 /03 Dated 11.02.2003 : It has been decided that the subsidiary companies shall be required to comply with minimum requirements in order to ensure that the transactions in subsidiaries are conducted in a manner which are not detrimental to the interest of the investors and also to enable the subsidiaries to provide a safe and transparent mechanism for transactions in securities.  Regulations Securities and Exchange Board of India (Central Listing Authority) Regulations, 2003 Notification No. SO171(E) Dated 13.02.2003 : SEBI has made the Securities and Exchange Board of India (Central Listing Authority) Regulations, 2003 to be effective from 13.02.2003 Extension of time for appointment of common agency for share registry work  Circular No. D&CC/FITTC/CIR-18/2003 Dated 12.02.2003 : Issuer Companies have been directed to appoint a common agency for share registry work by February 01, 2003 vide circular No. D&CC/FITTC/CIR-15/2002 dated December 27, 2002. Since then a large number of representations have been received from Chambers of Commerce, professional bodies, issuer companies and other market participants requesting an extension of time to comply with the above requirement and also to complete the process of transfer of records. SEBI has considered these requests and has decided to extend the time upto March 31, 2003 for compliance with the circular No.D&CC/FITTC/CIR-15/2002 dated December 27, 2002. SEBI (Delisting of Securities) Guidelines - 2003 SEBI has issued SEBI (Delisting of Securities) Guidelines, 2003 under section 11(1) of SEBI Act, 1992, read with sub-section (2) of Section 11A of SEBI Act, with the objective to protect the interest of investors in the securities market. Foreign Institutional Investors Applicability of investment limit in Exchange traded derivative contracts Circular No. FIITC/FII/7/2003 Dated 11.02.2003 : SEBI has been receiving various queries about applicability of investment limits for FII transactions in derivatives. In this regard, it is clarified that Trading by FIIs and their sub-accounts in derivatives contracts till these are not resulting into settlement by physical delivery of underlying stocks shall not attract the investment limit of 10% or 5% of the total issued capital of the company as prescribed in Regulations 15(5) and (6) of the SEBI(FII) Regulations, 1995 .  CBDT Notification under section 10(23C)(iv)  Notification No. 28/2003 Dated 30.01.2003, No. 32/2003 to No. 34/2003 Dated 07.02.2003 and 14.02.2003 : India Brand Equity Fund (IBEF) Trust, New Delhi, Yusuf Meherally Centre, Mumbai, Bhartiya Vidya Bhawan, Mumbai and Vivekananda Rock Memorial and Vivekananda Kendra have been Notified under Section 10(23C)(iv)  Income-tax (Amendment) Rules, 2002 Notification No. 31/2003 Dated 06.02.2003 : Part IX C specifying Mutual Assessment Procedure has been inserted wherunder rule 44G relating to Application for giving effect to the terms of any agreement under clause (h) of sub-section (2) of Section 295 and rule 44H relating to Action by the Competent Authority of India and procedure for giving effect to the decision under the agreement, have been inserted. Form No. 34F has also been inserted. Clarification regarding residential status under Indo-Mauritius Double Taxation Avoidance Convention (DTAC) Circular No. 1/2003 Dated 10.02.2003 : It has been clarified that where an assessee is a resident of both the contracting States, in accordance with para 1 of Article 4 of Indo-Mauritius DTAC, then, his residence is to be determined in accordance with para 3 of the said article. Where an Assessing Officer finds and is satisfied that a company or an entity is resident of both India and Mauritius, he would be free to proceed to determine the residential status under para 3 of Article 4 of DTAC. Where it is found as a fact that the company has its place of effective management in India, then notwithstanding its being incorporated in Mauritius, it would be taxed under the DTAC in India. CBEC Excise Tariff Audit of EOUs situated in port cities and other areas Circular No. 9/693/2003 Dated 13.02.2003 : Board has desired that the EA-2000 audit of EOUs should be conducted by the jurisdictional Central Excise Commissionerates. However, for the frequency of audit, the criteria of selection and the number of days for conduct of EA-2000 audit of EOUs, the jurisdictional Commissioners may draw a parallel from the criteria fixed for non-EOUs given in the Audit Manual.  Valuation of goods captively consumed Circular No. 8/692/2003 Dated 13.02.2003 : Board has desired that the EA-2000 audit of EOUs should be conducted by the jurisdictional Central Excise Commissionerates. However, for the frequency of audit, the criteria of selection and the number of days for conduct of EA-2000 audit of EOUs, the jurisdictional Commissioners may draw a parallel from the criteria fixed for non-EOUs given in the Audit Manual.  Removal of Budget Day restrictions for Budget 2003-04 Circular No. 7/691/2003 Dated 11.02.2003 : Budget Day restrictions were aimed at preventing duty evasion as the duty was required to be paid before the removal of the excisable goods and the duty rates were normally enhanced. It has been decided to do away with Budget Day restrictions with immediate effect and this decision has been implemented vide issue of Notification 6/2003 –CE (NT) dated 11th February, 2003 . To reiterate, there shall be no Budget Day restrictions this year. The net effect shall be that as on any other day, on the Budget Day i.e. 28th February, 2003 also, the assessees shall be free to carry out their activities without seeking special permission from the Department. CBEC Excise Non Tariff Central Excise (First Amendment) Rules, 2003 Notification No. 6/2003 NT Dated 11.02.2003 : Rule 32 has been omitted.  CBEC Customs Tariff Sanction of All Industry Rate of Duty Drawback pending fixation of Brand Rate of Drawback  Circular No. 10/ 2003-Cus Dated 17.02.2003 : There have been representations from the trade that since the procedure of application and issuance of brand rate letters under Rule 7 involves one to two months, they remain out of funds and face financial difficulties. This issue has been considered by the Kelkar Committee and based on its recommendations, the Board has decided that henceforth in all those cases, where the exporters have applied for brand rate of drawback , they may be permitted the duty drawback at All Industry Rate as admissible under the relevant S.S. No. of the Duty Drawback Table. Subsequently, when the exporters are issued brand rate of drawback, the differential amount may be sanctioned to them. Duty Drawback on Composite Items Circular No. 9/ 2003-Cus Dated 17.02.2003 : The trade has been representing that on occasions it becomes difficult to resolve the composite article into its constituent components and the only alternative is to break the article. This results in wastage of the products and also the exporters are asked to go for laboratory testing to ascertain the composition of individual materials. This issue has been considered by the Kelkar Committee and based on its recommendations, the Board has decided that as a general policy, the weight of the constituent materials in a composite item as declared by the exporters should be accepted.  Acceptance of self-declaration as to the non-availment of Cenvat facility for extending the duty drawback.  Circular No. 8/ 2003-Cus Dated 17.02.2003 : The Board has decided that henceforth the manufacturer-exporters who are not registered with Central Excise or such merchant exporters whose supporting manufacturer are not registered with the Central Excise, shall not be required to furnish any certificate as to the non-availment of Cenvat facility from the jurisdictional Central Excise authorities. Anti-Dumping Duty on Non-Brass Metal Flashlights  Notification No. 25/2003 Dated 13.02.2003 : The Central Government, has imposed anti dumping duty on Non-Brass Metal Flashlights, at specified rate. RBI Exchange Earners’ Foreign Currency (EEFC) Account Scheme  Circular No. A.P. (DIR Series) Circular No.78 Dated 14.02.2003 : As a measure of relaxation to the EEFC Account Scheme, it has been decided to remove the ceiling of USD 3 million. Accordingly, it will be in order for authorised dealers to permit their exporter constituents to extend trade related loans/advances to overseas importers out of their EEFC balances without any ceiling. This relaxation shall be effective upto June 30, 2003, subject to review. Current Account Transactions –Remittance for Advertisement on Foreign Television  Circular No. A.P. (DIR Series) Circular No.77 Dated 10.02.2003 : With a view to simplifying the procedure, it has been decided as under :- (i) A Chartered Accountant’s certificate, for export earnings of more than Rs.10 lakhs, in each of the preceding two years, need not be insisted in case the export earnings prescribed (i.e. minimum Rs.10 lakhs in each of the previous two years), have been realised through the same authorised dealer, through whom the remittance is sought to be made. (ii) A Chartered Accountant’s certificate should, however, be obtained certifying that the remittance represents advertisement charges incurred by the Corporate towards telecast in foreign countries and not in India alone. This certificate will have to be obtained for each remittance. Upgradation of loan accounts classified as Non Performing Assets (NPAs)  Notification No. DBOD. No. BP. BC. 69 / 21.04.048/ 2002-2003 Dated 10.02.2003 : Banks have been advised that they should strictly adhere to RBI's instructions on asset classification to avoid inconvenience to borrowers. However, the extant instructions in respect of re-classification of loan accounts subjected to restructuring would remain unchanged.  Certificate of Registration of IndusInd Leasing Ltd cancelled Press Release No. 849/2002-03 Dated 12.02.2003 : The Reserve Bank of India, has cancelled on February 8, 2003 the certificate of registration issued to IndusInd Leasing Ltd., SCO: 44, Sector 41-D, Chandigarh, for carrying on the business of a Non-Banking Financial Institution. RBI cancels licence of Yeshwant Sahakari Bank Ltd. Press Release No. 843/2002-03 Dated 11.02.2003 : The Reserve Bank of India has cancelled the licence of the Yeshwant Sahakari Bank Ltd., Mumbai, Maharashtra to carry on banking business. DGFT Instructions for the issuance of supplementary DEPB  Public Notice No. 63/2002-07 Dated 17.02.2003 : The Director General of Foreign Trade has formulated guidelines for the issuance of supplementary DEPB on account of the factoring of special additional duty (SAD) in the computation of DEPB rates.  Placement of quantity of 8,500 MTs of Raw sugar from the freesale quota of 2002-2003  Circular No. 18/2002-2007 Dated 07.02.2003 : It has been decided to allocate a quantity of 8,500 MTs (Eight thousand five hundred MTs) of Raw Sugar out of free sale portion of 2002-2003 (October 1, 2002 to September 30, 2003) season’s production for export to USA as a Preferential Raw Cane Sugar Tariff Rate quota for the fiscal year 2003 (October 1, 2002 to September 30, 2003) and place the same at the disposal of M/s Indian Sugar Exim Corporation Ltd., New Delhi. Department of Commerce Sunset Review regarding Anti-Dumping Investigations Notification No. 14/47/2002-DGAD Dated 10.02.2003 : Sunset Review regarding Anti-Dumping Investigations Concerning Import of Polystyrene Originating in or Exported from Korea RP, Japan, Malaysia and Taiwan has been initiated. Final and Preliminary Findings regarding Anti-Dumping Investigation Notification No. 37/1/2001-DGAD Dated 04.02.2003, No. 59/1/2001-DGAD Dated 31.01.2003, No.14/11/2002-DGAD Dated 17.01.2003 and No. 14/29/2002-DGAD Dated 17.01.2003 : Final Findings regarding Anti-Dumping Investigation Concerning Import into India of Vitrified/Porcelain, Tiles Originating in or Exported from China PR and UAE, Import of Lead Acid Batteries Originating in or Exported from Taiwan, Singapore and Hong Kong and Import of Citric Acid From Indonesia and Thailand and Preliminary Findings regarding Anti-Dumping Investigation Concerning Import of Para Cresol Originating in or Exported from People's Republic of China have been published. Department of Industrial policy Exemption from Rule 31(2) of Explosives Rules, 1983 Notification No. SO124(E) to No. SO126(E) Dated 03.02.2003 : Exemption has been granted to ONGC, Assam, Niko Resources Limited, Baroda and ONGC, Mumbai from Rule 31(2) of Explosives Rules, 1983. Ministry of Chemicals and Fertilisers Fixation of Price as Maximum Sale Price of Chloroquine Phosphate Order No. SO153(E) Dated 11.02.2003 : The National Pharmaceutical Pricing Authority has fixed the maximum sale price (exclusive of excise duty and local taxes) to be Rs. 790 per Kg at which the bulk drug Chloroquine Phosphate, shall be sold. Department of Consumer Affairs Amendment Orders Notification No. GSR84(E)/Ess.Com./Sugar to No. GSR94(E)/Ess.Com./Sugar Dated 05.02.2003 : The following amendment orders have been issued. Sugar (Price Determination for 2000-2001 Production) Amendment Order, 2003  Sugar (Price Determination for 1990-91 Production) Amendment Order, 2003  Sugar (Price Determination for 1999-2000 Production) Amendment Order, 2003  Sugar (Price Determination for 1998-99 Production) Amendment Order, 2003  Sugar (Price Determination for 1997-98 Production) Amendment Order, 2003  Sugar (Price Determination for 1996-97 Production) Amendment Order, 2003 Sugar (Price Determination for 1995-96 Production) Amendment Order, 2003 Sugar (Price Determination for 1994-95 Production) Amendment Order, 2003 Sugar (Price Determination for 1993-94 Production) Amendment Order, 2003 Sugar (Price Determination for 1992-93 Production) Amendment Order, 2003  Sugar (Price Determination for 1991-92 Production) Amendment Order, 2003  Ministry of Environment and Forests Resolution regarding Constitution of National Forest Commission Notification No. SO143(E) Dated 07.02.2003 : The Indian Board of Wildlife under the Chairmanship of Hon’ble Prime Minister at its XXI meeting held on 21st January, 2002, recommended that Forest Commission should be set up to look into restructuring, reform and strengthening the entire forest set up and affiliated institutions in the country. The Government of India have, therefore, decided to appoint a National Forest Commission composed of members specified.  Matheran and surrounding region in the State of Maharashtra Notified as the, Matheran Eco-sensitive Zone  Notification No. SO133(E) Dated 04.02.2003 : Central Government has notified Matheran and surrounding region in the State of Maharashtra as the, Matheran Eco-sensitive Zone.  Department of Health Enforcement Date of Pre–Natal Diagnostic Techniques (Regulation and Prevention of Misuse) Amendment Act, 2002 (14 of 2003) Notification No. SO175(E) Dated 14.02.2003 : The Central Government has appointed the 14th day of February, 2003 as the date on which the Pre–Natal Diagnostic Techniques (Regulation and Prevention of Misuse) Amendment Act, 2002 shall come into force. Prevention of Food Adulteration (Amendment) Rules, 2002 Notification No. GSR101(E) Dated 11.02.2003 : The Draft of Prevention of Food Adulteration (Amendment) Rules, 2002 has been published whereunder the following amendments are proposed in Prevention of Food Adulteration Rules, 1955, (i) In Rule 13, in proviso to sub-rule (1), the words "above the age of eight years", shall be omitted (ii) Rule 51 relating to Duration of Licences shall be substituted. (iii) In Appendix 'A' Form IX shall be inserted. Amendment to Second Schedule of Homoeopathy Central Council Act, 1973 Notification No. SO144(E) Dated 07.02.2003 : In the Second Schedule, under the heading "KERALA", as against serial number 9A relating to UNIVERSITY OF CALICUT, KERALA, in columns 2, 3 and 4, after the entries, the entry relating to Bachelor of Homoeopathic Medicine and Surgery has been inserted.  Ministry of Labour Report of Court of Inquiry Bagdighi Colliery Accident Notification No SO118(E) Dated 01.02.2003 : The Central Government has published, the report submitted to it under sub-section (4) of section 24 of the said Act by the Court of Inquiry appointed to hold an inquiry into the causes and circumstances attending the accidents which occurred on the 2nd February, 2001 in the Bagdighi Colliery of M/s Bharat Coking Coal Limited in District Dhanbad, State of Jharkhand. Supreme Court Kunal Singh vs. Union of India (UOI) and Anr. The appellant was a Constable in the Special Service Bureau (for short 'the SSB'). When he was on duty, he suffered an injury in his left leg due to which his left leg was amputated on account of gangrene which had developed from the injury. He was invalidated from service by the respondents on the basis of the report of the Medical Board as per order dated 20.11.1998 passed by the Commandant, Group Centre, SSB Shamshi (Kullu). Writ petition was filed against the said order in the High Court which was dismissed. The Hon'ble Supreme Court allowed the appeal and the impugned order affirming the order of termination of services of the appellant was set aside. Securities Appellate Tribunal In Re Grasim Industries Ltd. and vs. Securities and Exchange Board of India The context is acquisition of shares of Larsen & Toubro Ltd., (the target company) by the Appellants. The 1997 Regulations prescribes time bound action by the acquirers on making public announcement. One of such time bound requirements is submission of draft letter of offer to Respondent SEBI, as provided in regulation 18(1). It is in terms of the requirement of regulation 18(1) the merchant banker submitted the draft letter of offer to Respondent SEBI. In that context Respondent SEBI, on 8.11.2002 wrote to the merchant banker stating that it had decided to conduct an investigation on the alleged violations, and advised them not to proceed further with the open offer formalities and to issue a revised public announcement. The Appellants claiming to be aggrieved by the said direction filed the appeal in the Tribunal on 18.11.2002 inter alia seeking an interim order staying the operation of the impugned order pending the hearing and final disposal of the appeal. The Tribunal declined to pass the interim order and disallowed the applications.  Swedish Match AB and Swedish Match Singapore Pvt. Ltd. vs. Securities and Exchange Board of India The SEBI in this case on noticing that the Acquirers - the Swedish Match Group has acquired 21.89% shares of the target company that is Wimco Ltd. , over and above their holding of 52.11% shares issued a show cause notice to them 28.1.2002. The Appellants answered the show cause notice. The Chairman, thereafter made the impugned order on 4.6.2002 which held that by acquiring 21.89% shares of the target company without making a public announcement the Acquirers had violated regulation 11(1) and the Acquirers were directed to make a public announcement in terms of regulation 11(1) within 45 days of the passing of the impugned order, taking 27.9.2000 as the reference date for calculation of offer price. The Acquirers were also directed to pay interest @ 15% per annum on the offer price to the shareholders from 27.1.2001 till the actual payment of consideration for the shares to be tendered in the offer. The Appellants, claiming to be aggrieved by the said order filed the appeal praying to set aside the order. The Tribunal decided to sustain the impugned order and the Appellants were directed to make public Announcement in terms of Chapter III of the 1997 Regulations within 45 days of the date of the order of the Tribunal.  Disclaimer (1) While all reasonable care has been taken to ensure that the information provided in the "round up" and on the website is fair and accurate the company and its promoters and employees shall not in any way be responsible for the consequences of any action taken on the basis of reliance upon the contents of this "round up". (2) This is not a Spam mail. You have received this mail because you have either requested for it or someone must have suggested your name under our various referral programs. Since India has no anti-spamming law, we refer to the US directive, which states that a mail cannot be considered Spam if it contains the sender's contact information, which this mail does. In case this mail doesn't concern you, please unsubscribe from mailing list. Feedback