Found the following on the AVS thread, courtesy of the always helpful JDSmoothie:
e. ARC (Audio Return Channel): This is the feature that will pass audio from the TV (eg. OTA, Netflix, Pandora) back to the AVR over the same HDMI cable that connects the AVR from the Monitor Out jack to the TV. In order for the ARC feature to work, it must be offered on both the TV and the AVR. Just because the TV and AVR are HDMI 1.4 DOES NOT mean they offer the ARC feature. Note the 1312 does NOT offer ARC and therefore ARC will not work when the 1312 is connected to a TV with ARC. On some TV's simply setting the HDMI-CEC feature to ON will also turn on the ARC feature, while on other brands, there is a seperate setting for ARC.
In order to use the TV's ARC feature you must set the TV's "HDMI-CEC" setting (LG - SimpLink; Phillips - EasyLink; Panasonic - VieraLink; Sony - BraviaSync; Samsung - Anynet+; Toshiba - CE-Link,RegzaLink) to ON as well as setting the AVR's "HDMI Control" setting to ON as the factory default is OFF. Also make sure the HDMI cable from the AVR is plugged into the ARC labeled jack on the TV (usually HDMI1 or HDMI2). Note that with the 3312CI, only one of the HDMI Monitor Out jacks will support the ARC feature at a time and must be set using the HDMI Control (Control Monitor) setting (p. 109).
Note that a side effect when using the TV's HDMI-CEC/ARC set to ON is that the AVR will always shift to the "TV" source input when first turned ON rather than going to the last input that was on prior to the AVR being put into Standby (as is the case when ARC is OFF). Note also that with some TVs (ie. Samsung) the AVR will also revert to the TV input while in Standby which will prevent you from using the HDMI pass through feature (eg. cable/sat box) without turning the HDMI-CEC setting on the TV to OFF. If this is too annoying, either turn off the HDMI-CEC/ARC setting on the TV when not using it or forgo the ARC feature (set HDMI-CEC/ARC to OFF) and use an optical cable from the TV to the AVR. The optical cable will pass the same audio (PCM 2.0 or DD 5.1) that the HDMI cable would have passed with no loss in audio quality. Another option, if not trying to pass aaudio from the TV back to the AVR is to simply delete the "TV" source using the SOURCE DELETE feature in the OPTION menu.