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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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PJ/Case Law /2016-17/3373

Can genuineness be outrightly rejected without verifying with corroborative evidence based on irregular invoices?
 
 
 
Case -  KLJ PLASTICIZERS LTD Versus COMMISSIONER OF C. EX. & S.T., VAPI
 
 
Citation-  2016 (45) S.T.R. 327 (Tri. - Ahmd.)
Brief Facts -  The party of the case are engaged in the manufacture of plasticizers falling under Chapter 29 of CETA, 1985. They had availed Cenvat credit on various input services, mainly, on Insurance service, Banking service, etc., during the period January, 2009 to February, 2010. Alleging that the documents on which the credit availed were irregular, show cause cum-demand notice was issued for recovery of total credit of Rs. 3,34,218/-. On adjudication, the demand is confirmed and penalty of equal amount imposed. Aggrieved by the said order, they filed appeal before the learned Commissioner (Appeals), who in turn, rejected their appeal. Hence, the present appeal.
Appellant’s Contention-  The appellant submits that all the particulars necessary to avail Cenvat credit are available on the respective documents/evidences enclosed with the appeal paper book. He submits that the amount of premium paid in respect of insurance charges and applicable service tax on such premiums has been mentioned in the respective copy of premium receipts. He further submits that in the bank invoice, the service tax amounts along with other particulars are reflected. Therefore, the confirmation of demand of Cenvat credit on these documents is incorrect.
 
Respondent’s Contention- Per contra, the learned Authorized Representative for the Revenue submits that the premium paid towards insurance was scribbled on the letter head of the insurance company and not in the form of an invoice/valid document. He submits that the doubt raised by the Department is about the payment of insurance premium and service tax applicable on such premium, and since the appellant could not produce corroborative evidence to clarify the said issues, Cenvat credit was held inadmissible.
Reasoning of Judgment – The documents/evidences enclosed with the paper book on which Cenvat credit is denied, do not inspire confidence about its genuineness, in particular, the figures entered in hand. However, it also cannot be out rightly rejected that premiums have not been paid nor suffered service tax as mentioned against these documents. All these facts need to be verified with collateral/corroborative evidences. Therefore, in the circumstances, it is prudent to remand the matter to the adjudicating authority to ascertain the correctness of these documents and entries made therein with other corroborative evidences that would be produced by the appellant during the course of proceedings, while determining the eligibility of Cenvat credit on such input services. All issues are kept open. Needless to mention that a reasonable opportunity of hearing be extended to the appellant before passing the order. Appeal is allowed by way of remand to the adjudicating authority.
 
Appeal allowed.
Comment – The gist of the case is that the source/ documents/evidence required for the availing credit were irregular thus show cause cum-demand notice was issued for recovery of total credit. On adjudication, the demand is confirmed and penalty of equal amount was imposed. Thus it was to be prudent to remand the matter to the adjudicating authority to ascertain the correctness of these documents and entries made therein with other corroborative evidences that would be produced by the appellant during the course of proceedings, while determining the eligibility of Cenvat credit on such input services.
Prepared by- Alakh Bhandari
 
 
 
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