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 Laws/2011-12/1555

Export - Underutilisation of inputs - liability to pay duty so exempted on inputs so used

Case: ARKEMA CATALYST INDIA PVT. LTD. V/S UNION OF INDIA
 
Citation: 2012 (276) E.L.T 206 (BOM.)
 
Issue:- Whether an assessee is liable to pay duty which was exempted in case of under utilisation of the Inputs in exported goods?
 
Brief Facts:- Petitioners were importing raw materials (inputs) which were to be used in the manufacture of the finished goods which were ultimately exported in order to avail the duty exemption. The issue raised was that the petitioner was even though using the raw material for the manufacturing of goods which were eligible for the duty exemption if exported but petitioner used the lesser physical quantity of the inputs in the final product in comparison to the quantity fixed by the norms.
 
Revenue demanded duty on the ground that the manufactured goods contain less quantum of input. As per the Notification dated 19-4-2002 prima facie exempts the goods imported and used as inputs for manufacturing for goods which are meant to be exported will not be subject to duty.
 
The Tribunal ordered pre-deposit of amount demanded. Petitioner is in appeal before the High Court.
 
Petitioner’s Contention:- Petitionercontended that once a notification is issued even the custom authority can’t go behind the scope of the notification issued. The notification so issued did not directly say that under utilisation of the inputs would lead to the revocation of the duty exemption. The scope of the notification was limited to the export of the goods.
 
It was contended that once the percentage is fixed by the notification, mere fact that the one manufacturer may use more inputs and another manufacturer use less inputs in terms of the norms prescribed is irrelevant as long as conditions of the notification are fulfilled. It will not be open to the Customs Authorities to charge duties on inputs legally imported as long as the manufacturing activities subsist and ven though goods were not exported, as long as the petitioners had exported the quota required for export.
 
Respondent’s Contention:- Their contention was that the Petitioner was entitled to import 200.814 m.t. of aluminium inputs without payment of duty and the exemption was available to the extent of the raw material actually consumed in the ultimate finished goods which is to be exported. The quantity actually consumed was 154.358 m.t. and according to union of India for the balance quantity 46.456 m.t. the Petitioner was not entitled to the said exemption.
 
Reasoning of Judgment:- The High Court noted that the issue raised was that once a notification is issued, setting out norms, an advance license is issued and inputs imported against an advance license, is it open to the Customs Authorities to go behind the license. It was noted that similar issued was raised in case of C.L. JAIN WOLLEN MILLS V/S UNION OF INDIA [1995 (79) ELT 197 (Del)] wherein the Delhi High Court took the decision that once the licence is valid and duly covering the goods imported, the custom authorities are not competent to go behind the jurisdiction of the licensing authority.
 
The Court held that petitioners have a strong prima facie case.
 
On hardship, reference made to Benara Valves Ltd v/s Commissioner of Central Excise [2006 (204) ELT 513 (SC)] wherein it was held that from a cursory glance, it appears that the demand raised has no leg to stand, it would be undesirable to require the assessee to pay full or substantive part of the demand. In case of B.M. MALANI V/S COMMISSIONER OF INCOME TAX [2008 (306) ITR 196 (SC)] the Supreme Court has further observed that the demand to pay any unjust dues per se would cause hard ship.
 
On the facts of the present case, it was held that petitioners have complied with legal provisions, therefore, the Tribunal was not right in insisting on pre-deposit of amount demanded. There is no violation of Notification and prima facie, the Customs Authorities cannot go behind the licence issued calling on petitioners to pre-deposit would cause undue hardship. Impugned order set aside. Matter remanded.
 
Decision:- Petitioner allowed. 

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