Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

Comments

Print   |    |  Comment

PJ/Case Law /2016-17/3275

Denial of credit for non-receipt of goods.

Case:- ANJ METAL RECYCLING PVT. LTD. VERSUS COMMISSIONER OF C.E., CHANDIGARH
 
Citation:-2016 (337) E.L.T. 453 (Tri.-Chan.)       
 
Brief Facts:-The facts of the case are that the investigation was conducted on one M/s. Jai Kara Steel Rolling Mills, Mandi Gobindgarh on 28-2-2005 and the gate-keeper of the said factory submitted that the factory is closed from last one year and factory started working about 4-5 months back and 9-10 workers are working in the factory, only 2-4 machines are in working conditions and there is no stock of finished goods as well as raw material and he has never seen any direct loading and unloading of material in the factory. As M/s. Jai Kara Steel Rolling Mills was dealing through registered dealers namely M/s. Jyoti Steels, the premises of M/s. Jyoti Steels was visited which was found locked. Thereafter, conducting more investigation a show cause notice was issued to the appellant on the basis that invoices issued by M/s. Jyoti Steels are only paper transactions and no goods have been received by the appellant. As well as M/s. Jyoti Steels which was adjudicated and availment of Cenvat credit on the invoices issued by M/s. Jyoti Steels was denied. Consequently, duty demand along with interest and penalty is also imposed on the appellant.
 
 
Appellant’s Contention:-Shri Gaurav Aggarwal, ld. advocate for the appellant appeared and submits that appellant is a manufacturer buyer of the impugned goods and they have received goods from M/s. Jyoti Steels against two invoices wherein the manufacturers have shown as M/s. R.S. Enterprises/M/s. Mittal Steel Industries & Rolling Mills. Therefore, on the basis of investigation conducted at the end of M/s. Jai Kara Steel Rolling Mills and concluding that as dealer is non-existent, the demand is not sustainable. As they have received the goods in their factory under the cover of duty paid invoices which shows the manufacturer and supplier of the goods and they have paid the amount against this invoice through cheque, therefore, without conducting investigation at the end of transporter and manufacturer supplier or physical verification of the stock, the demand is not sustainable.
 
Respondent Contention:-ld. AR opposes the contention of the ld. counsel and submits that in this case the first stage dealer who issued the invoice is non-existent. Therefore, question of receipt of goods by the appellant does not arise. He further submits that enquiries were revealed which shows that first stage dealer was not having any godown to store the goods. Moreover, he remained non-co-operative with the departmental officer during the course of the investigation itself. Therefore, burden casts on the appellant to prove that they have received goods physically in their factory which they failed to do so with any tangible evidence. He also relied on the statement of the authorized representative of the appellant. To support his contention he relied on the decision in the case of Neelkanth Steel Agro Industries- Final Order No. A/54432/2014-SM(BR), dated 29-10-2014 [2015 (317)E.L.T.322 (Tribunal)] and Sidh Industriesv. CCE, Chandigarh - 2010 (257)E.L.T.454 (Tri.-Del.).
 
 
Reasoning of Judgment:-On perusal of records it is found that the investigation started at the end of M/s. Jai Kara Steel Rolling Mills where they came out with the information that they are selling goods through M/s. Jyoti Steels. Thereafter, investigation was conducted at the premises of M/s. Jyoti Steels which was found non-existent and having no godown. In these set of facts, it is concluded against the appellant on the basis of the statement of proprietor of M/s. Jyoti Steels and authorized representative of appellant that appellant has procured invoice not physically received any goods. Therefore, Cenvat credit was denied. In this case, it was found that the manufacturer supplier of the goods is not M/s. Jai Kara Steel Rolling Mills at all. No investigation has been conducted by the Revenue at the end of manufacturer supplier who has issued the invoices on which the appellant has taken Cenvat credit. No investigation was conducted from the transporters to ascertain the fact whether goods have been transported to the appellant’s factory or not. Merely on the ground that M/s. Jyoti Steels is non-existent and having no godown, denial of Cenvat credit is proposed. It is not disputed by the Revenue that during the relevant period, M/s. Jyoti Steels was the registered dealer and registration was granted to M/s. Jyoti Steels by Central Excise Registration Department. If a supplier of goods is the registered dealer of the department itself, the department cannot allege that dealer is non-existent unless and until registration is cancelled.
 
Therefore, in absence of sufficient and cogent evidences to prove that the cenvat credit was taken without receipt of goods, the credit cannot be denied.
 
Decision:-Appeal allowed.
 
Comment:-The crux of the case is that credit cannot be denied to the receiver of goods without establishing that the credit was availed without receipt of goods. In the present case, the appellant has produced invoice on the strength on which they have availed Cenvat credit and the goods have been entered in their RG-23 register and same has been supported by the slips which were produced by the appellant. However, on the contrary, no investigation was conducted at manufacturer’s/transporter’s place to substantiate that there was no delivery of goods. Hence, credit cannot be denied on assumptions and investigation conducted at the end of dealer.
 
Prepared by:- Bharat Chouhan

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