Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
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.  

Comments

Print   |    |  Comment

PJ/Case Law/2013-14/2060

Credit available on angles, channels, MS Plates when proved that they are used in manufacture of machinery.

Case:-K.B.ROLLING MILLS (P) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, HYDERABAD-I

Citation:-2014 (299) E.L.T. 466 (Tri.-Bang.)

Brief Facts:- The appellant availed Cenvat credit of duty paid on angles, channels, MS plates etc. on the ground that the appellant has no evidence for showing that these items have been used in the manufacture of components/machinery/equipment, etc., and cannot qualify as inputs, proceedings were initiated to deny the Cenvat credit of Rs. 3,21,565/- availed on these items during June to November, 2006. The proceedings have culminated in confirmation of the demand for the Cenvat credit with interest and penalty equal to the credit availed.

Appellant Contentions:-The learned counsel submits that the appellant had produced the Chartered Engineer’s certificate to show that inputs have been used within the factory for fabrication of machines/ equipments, etc. Further extended period has been invoked in this case. Extended period could not have been invoked since during the period till the matter was finally decided in the case of Vandana Global Ltd. by the Larger Bench as reported in2010(253) E.L.T. 440 (Tri.-LB), there were contrary decisions and therefore they entertained bona fide belief that they were eligible for the credit.
 
Respondent Contentions:-Learned AR would submit that in this case the appellant had not maintained any record for issue of these materials and their utilization. It is the responsibility of the assessee to show that inputs have been used in the factory for the purpose for which they claimed the Cenvat credit. Further he also submits that Chartered Engineer’s certificate cannot be accepted since it has no date; it does not say that Chartered Engineer visited the factory; it does not say when the Chartered Engineer visited the factory. Further the Chartered Engineer also says that the details worked out by him are estimates. He also submits that the Chartered Engineer himself has stated that in many cases the inputs have been used for fabrication of structural supports. He says that the Chartered Engineer’s certificate has to be rejected under these circumstances.
 
Reasoning of Judgment:-After hearing both sides, Tribunal finds that in this case a detailed stay order was passed wherein the Tribunal had given detailed observations for requiring the appellant to make pre-deposit. Even at the final hearing stage, no new facts to support the case of the appellant have been brought out. The appellants had failed to maintain proper records for the utilization of the inputs and admittedly there are no records reflecting the issue of goods and their utilization in their factory. Further, total agreement with the submissions made by the learned AR was made by the Tribunal as regards the certificate issue by the Chartered Engineer. Under these circumstances, it was held that the appellant has failed to show that the items in dispute have been used for the purpose for which they were received. Under these circumstances, the impugned order has to be upheld. Accordingly the appeal is rejected.
 
Decision:-Appeal Rejected.

Comment:-The crux of this case is that Cenvat credit is not available on angles, channels, MS plates, etc. which is used apparently for fabrication of structural supports. In case of Vandana Global Ltd. by the Larger Bench as reported in 2010(253) E.L.T. 440 (Tri.-LB) it was confirmed that credit is not available on supporting structures. Accordingly, for availing cenvat credit on angles, channels, MS Plates, the assessee is required to prove that they are used in the manufacture of machinery or its parts and components and are not used as supporting structures. 

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