Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Dept. Can’t Classify Product as Zarda Scented Tobacco After Repeatedly Approving It As Chewing Tobacco: CESTAT *  Mere Uploading Of GST Order On Portal Is Not “Valid” Service: Tripura HC *  CGST Can Proceed Even If SGST Closed Similar Case Earlier: Delhi HC *  SC upholds 28% GST on online gaming with retrospective effect. *  West Bengal Govt cuts E-way Bill Threshold limit to Rs. 50,000 for intra-state goods movement. *  Criminal Prosecution Under Central Excise Act Can’t Continue After CESTAT Sets Aside Duty Demand on Merits: Punjab & Haryana High Court. *  Madras High Court Quashes GST Assessment Orders for Denial of Personal Hearing; Remands Matter Subject to 10% Deposit *  Ex Parte GST Order: Madras High Court Directs Immediate Removal of Bank/ITC Attachment Upon 25% Deposit *  J.K. Cement Receives GST Demand Order of Rs 8,02,113/- from Ahmedabad Tax Authority *  Delhi Police EOW Busts Alleged Rs. 128 Crore GST Fake Invoice Network. *  REPLY TO SCN CAN’T BE TREATED AS “EMPTY FORMALITY”: ORISSA HIGH COURT QUASHES GST DEMAND OF RS. 57.30 LAKH *  Challenge to CGST Provisions restricting ITC to Bonafide Purchasers : Allahabad HC issues notice *  CBIC Notifies Revised Customs Tariff Values for Edible Oils, Gold, Silver, Brass Scrap and Areca Nuts *  Delhi HC Orders Removal of GST Attachment After Statutory 1 Year Period Expired *  GSTAT Extends Relaxed Appeal Filing Guidelines till December 31, 2026 *  AO fails to Provide Import - Export Data from DGFT to Taxpayer for Reconciliation *  Gold, Silver Imports To Get Costlier As Govt Raises Customs Duty To 10%  *  GSTAT Enables Pre-Payment Access to Document Upload and Checklist for GST Appeal Filing *  GST Portal Restrictions Can’t Override Statute: Gujarat HC Allows Cross-State Transfer Of CGST ITC After Amalgamation *  Centre Revises HS Codes for Large Diameter Steel Pipes Used in Oil & Gas Pipelines *  Customs Duty Liability Arises On Warehouse Clearance Date: Supreme Court *  Government lifts export ban on de-oiled rice bran *  CESTAT Grants 12% Interest on Pre-Deposit for Investigation from Date of Deposit till Refund and Denies Interest on Interest. *  Government Overhauls GST Classification Framework for Non-Alcoholic Beverages; Fruit Juice Drinks, Milk-Based Beverages and Caffeinated Drinks to Attract Revised 5% and 40% GST Rates from May 1, 2026 *  India’s gross GST collections hit a record Rs 2.42 lakh crore in April, up 8.7% *  Customs clearance stalled, revenue hit over MRP dispute *  Shipping Corporation explores Middle East routes as Hormuz tensions disrupt cargo movement *  India, Kenya signs MoU for exchange of pre-arrival customs information *  No demand of Taxes under Reverse Charge if Tax Already Discharged by Service Provider under forward charge *  The India-New Zealand Free Trade Agreement, signed "once-in-a-generation" deal that eliminates tariffs on 100% of Indian exports to New Zealand
Subject News *  Consignment Sales Can’t Be Reclassified as Inter-State Sales Based on Pre-Agreement Evidence: CESTAT *  Exporter Can’t Be Denied Advance Authorization Benefit Due To ICEGATE Technical Glitch: Delhi High Court *  No GST Demand For Mere Wrong Set-Off Of IGST Credit Under CGST And SGST Heads: Kerala HC. *  Cenvat Credit Can’t Be Denied on Input Services Having Nexus With Manufacturing Activities: CESTAT *  Pending Proceedings Can’t Survive Without Saving Clause: Calcutta High Court Quashes GST Demand of Rs. 6.28 Crore After Omission of Rule 96(10) *  Madras HC Quashes GST Demands on TASMAC (Tamil Nadu State Marketing Corporation) Bar Licence Fee *  GST Proceedings Cannot Survive Omitted Rule Without Saving Clause: Calcutta HC *  Provisional Release Can’t Be Denied Solely On Dept. Suspicion Of Misclassification And Undervaluation Of Imported Goods: CESTAT *  Businesses Should Not Be Kept Outside GST Regime Without Due Process: Gauhati High Court *  Punjab & Haryana HC Directs Reconsideration of Contractors’ Claim for Additional GST Payment After Tax Rate Hike From 12% to 18% *  S. 108 Statements Can’t Be Sole Basis Without Following Section 138B Procedure: CESTAT *  Bombay High Court Frames Key Questions on Mandatory Distribution of ITC U/s 20 CGST Act *  Filing of Annexure-B for Refund Applications involving Accumulated ITC using the offline utility in GST portal: GSTN *  No Service Tax on Parent Company’s Un-Invoiced Cost Allocations Without Actual Service or Consideration: CESTAT  *  Calcutta High Court Upholds GST Classification of Polypropylene Leno Bags as Plastic Products *  DRC-01 Summary Can’t Replace Mandatory SCN: Gauhati High Court *  GSTAT Issues Major Bench Allocation Framework; All Appeals to First Go Before Division Bench *  ITC Blocking Without Reasoned Order Violates Rule 86A; Punjab & Haryana HC Directs Release of Credit *  Allahabad HC Refuses Bail to CGST Superintendent In Rs. 70 Lakh Bribery Case *  S.130 Can’t Be Invoked Without Prior Tax Determination U/s 73/74: Allahabad High Court Quashes GST Confiscation Proceedings *  SC grants Bail to Rs 54cr GST case  *  Karnataka HC Sets Aside Duplicate GST Orders, Orders Fresh Hearing on GSTIN Cancellation *  DRC-01 Summary Can’t Replace Mandatory SCN: Gauhati High Court *  Transfer Of Unutilized ITC After Amalgamation - Supreme Court Issues Notice *  PUNJAB & HARYANA HC QUASHES GST CANCELLATION NOTICE FOR FAILURE TO PROVIDE CBIC ENQUIRY REPORT *  LICENSE FEE, TECHNICAL ASSISTANCE CHARGES NOT INCLUDIBLE IN CUSTOMS VALUE UNLESS THEY ARE A CONDITION OF SALE: CESTAT *  DELHI HC ORDERS REMOVAL OF GST ATTACHMENT AFTER STATUTORY 1 YEAR PERIOD EXPIRED *  CUSTOMS BROKER CAN’T BE FAULTED JUST BECAUSE EXPORTER’S GST REGISTRATION WAS PREVIOUSLY CANCELLED: CESTAT   *  Supreme Court Dismisses Review Plea Against Delhi HC Ruling Holding Real Operator Behind Fake GST Firms Liable As ‘Taxable Person  *  GST Appeal Can’t Be Rejected Merely Because DRC-07 Was Not Uploaded On Portal: Bombay High Court  

Comments

Print   |    |  Comment

PJ/Case laws/2012-13/1065

Compounded Levy Scheme - discharge of duty liability from Credit earned legitimately

Case: Commissioner of C. Ex., Jallandhar V/s Punjab Castings (P) Ltd.
 
Citation: 2011 (274) E. L. T. 554 (Tri. – Del.)
 
Issue:- Compounded Levy Scheme – duty liability can be discharged by utilising cenvat credit earned legitimately before opting for compounded levy.
 
Brief Facts: - Respondent-assessee were functioning under Compounded levy scheme. They debited the amount of duty payable during the period from Cenvat account.
 
Show cause notice was issued and demand was confirmed asking respondent to pay duty through PLA.
 
In appeal, the Commissioner (Appeals) set aside the demand of duty to be paid through PLA and set aside of penalty and interest.
 
Revenue is aggrieved by the said order-in-appeal has filed appeal before the Tribunal.
 
Appellant’s Contention: - Revenue submitted that the respondents had debited the amount of duty payable during the period wherein compounded levy scheme was applicable to their products and it should be paid through PLA by them not through Cenvat Credit Account. That the provisions of compounded levy scheme do not allow the assessee to debit the amount through Cenvat account and amounts needs to be paid only through PLA.
 
It is submitted that the Commissioner (Appeals) has erred in setting aside the demands confirmed by the Adjudicating Authority and also that the penalty and interest needs to be charged from the assessee. That the assessee had failed to discharge the monthly duty liability as fixed by the Commissioner, in time, and consequently have failed to pay duty in the manner prescribed under the law.
 
Respondent’s Contention: - Respondents draws attention of the Bench to the fact that issue involved in these cases are discharge of duty liability on the arrears to be paid by them under compounded levy scheme through Cenvat account. It is his submission that there is no dispute that the appellants had debited the Cenvat account for the arrears on their final products but that they were eligible to avail such Cenvat credit and utilise the same.
 
Reasoning of Judgement: - The Tribunal found that the case put up against the assessee in the show cause notice clearly indicates that the demand, penalty and interest on the demand is only on the ground of discharge of duty liability on the final products covered under compounded levy scheme after 1-4-2000 through Cenvat Credit Account. It is seen that the Commissioner (Appeals) has come to conclusion that such amounts which were due from the appellants could be discharged through debit in Cenvat credit and were accordingly debited by them on their own. Such a debit through Cenvat Credit Account cannot be faulted with and there is no need for imposition of penalty and interest as Cenvat Credit Rules specifically indicate utilisation of legit credit availed for discharge of duty liability. There is no dispute that the credit availed was eligible credit.
 
The Tribunal also found that the show cause notice issued to the respondent in this case, clearly indicates that various show cause notices are issued to them, demanding the outstanding duty along with interest and also proposition of imposition of penalty as per the provisions of compounded levy scheme under Section 3A of the Central Excise Act and the same are pending adjudication. The Tribunal were of the considered view that Revenue is at liberty to adjudicate such show cause notices which are issued for the demand of duty on the goods during the period when the goods were covered under the compounded levy scheme and duty liability there under was not discharged by the respondent assessee.
 
Decision: - Appeals dismissed.
 
Comment:- There are number of issues when an assessee opts for compounded levy scheme from normal cenvat scheme. First was that manufacturer has to reverse the credit on inputs lying in stock as the assessee cannot use cenvated inputs in compounded levy. This was decided in favour assessee. Second, the cenvat credit lying on date of shifting to compounded levy will lapse but the tribunal courts decided that the credit already earned cannot lapsed. Now, in the same line, this decision clearly says that the cenvat credit already earned can be used for payment of compounded duty also. So, all the decisions are against the revenue.

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com