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Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

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Publish Date: 05 Jun, 2007
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PAYMENT OF DUTY ON NEW COLD ROLLING MACHINES FOR PATTA-PATTI MANUFACTURERS

PAYMENT OF DUTY ON NEW COLD ROLLING MACHINES FOR PATTA-PATTI MANUFACTURERS
 
            The manufacturers of stainless steel patta-patti are covered under special procedure contained in Rule 96 ZA to Rule 96 ZGG of Central Excise Rules. They are currently paying duty at the rate of Rs. 15000/- per cold rolling machine per month. This article ponders over the payment of duty on new machine installed in the factory premises of such manufacture.
 
            As per provisions of Rule 96ZC(3),any manufacturer has to intimate as well as obtain permission before making any change in number of machines installed in the factory premises. The duty is payable as per provisions of Rule 96ZC(2) which is only charging provisions. This Rule reads as follows: -
 
            “The sum payable as under sub-rule (1) shall be calculated by application of such rate to the maximum number of cold rolling machines installed by or on behalf of such manufacturer in one or more premises at any time during three calendar months immediately preceding the calendar month in which the application under Rule 96 ZC is made.”
 
            Also, the manufacturer has to deposit duty and apply to Central Excise Department for the permission for clearance of patta-patti from his factory for ensuing month as per provisions of Rule 96 ZC (1) ibid. The Rule is enumerated below: -
 
            “Such manufacturer shall, at any time during the calendar month immediately preceding any month of part thereof, as the case may be, in respect of which he has been permitted to avail himself of the provisions of this section, make an application to the proper officer in the proper Form for leave to remove [stainless steel/pattas, or aluminium circles] from his premises during he ensuing month, declaring therein the maximum number of cold rolling machines installed by him or on his behalf, in one or more premises at any time during three calendar months immediately preceding the calendar month in which application is made.
 
            Now, we look at a practical example. Suppose, a manufacturer is operating with two machines seeks permission from the department in the month of July- 2000 for starting third new machine from August-2000 as per provisions of Rule 96 ZC (3). He will file application AR-8AA (prescribed under Rule 96 ZC (1)) with the department at the end of calendar month of July-2000 along with calculation of number of machines. The three proceeding months immediately preceding the calendar month of July-2000 will be June-2000, May-2000 and April-2000. The maximum number of machines will be two only. As such, he has to pay duty for two machines only.
 
            Similarly, during the next month he will deposit duty for September-2000 at the end of August-2000. The immediate preceding three calendar months to said calendar month (August-2000) will be July-2000, June-2000 and May-2000. The maximum number of cold rolling machines in these months will be two only as the new machine gas started in August-2000.
 
            Thereafter, he will deposit duty at the end of September-2000 for the month of October-2000. The three preceding calendar month will be August-2000, July-2000 and June-2000 and number of machines will be as under: -
 
Month
No. of Machines
August-2000
Three
July-2000
Two
June-2000
Two
 
            So, he has to deposit the duty for three machines being the maximum number of machines. So, it is ample clear that he need not to pay duty for continuous two months even if the machine is started by him. In this case, the machine is started in August-2000 but he is paying duty for the month of October-2000.
 
            Furthermore, the argument advanced that the existing set of Rules does not contain any provision for new machine is baseless because the calculation of maximum number of machine implies the change in number of machines. Otherwise, it does not have any meaning. So, the manufacturer need not to pay duty from the starting of machine itself. But the department has deployed its old weapon of seeking clarification from Board and asking the assessee to pay duty till the clarification is received. Let us wait for clarification and pray to God so that it might be received in years to come.
 
 
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