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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.  

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PJ/Case Laws/2012-13/1099

Extended period of Limitation - whether invokable when Non-payment of service tax is due to interpretation of legal provisions

Case:M/S CHANSAMA TALUKA SARVODAY MAZOOR KAMDAR SAHAKARI MANDLI LTD V/S COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD
 
Citation:2012-TIOL-41-CESTAT-AHM
 
Issue:- Non-payment of service tax due to interpretation of legal provisions – extended period of limitation cannot be invoked.
 
Simultaneous penalty under Section 78 and 76 cannot be imposed even before specific provision w.e.f. 10.5.2008.
 
Brief Facts:- Appellants were registered with the department for providing services under “manpower recruitment and supply agency services” for which they had submitted ST-3 returns. During audit, it was noticed that service tax liability was not discharged on the cleaning service provided by them to M/s ONGC under contract.
 
Demand of service tax was raised by invoking extended period of limitation. The Demand was confirmed with interest and penalty was also imposed.
 
In appeal, the Commissioner (Appeals) held that non payment of service tax during the impugned period came to light only as a result of audit checks conducted by the departmental officer. That the appellant have failed to intimate that the activities amounting to the cleaning services, which was based on a contract they had entered into with the M/s ONGC, the entire service tax liability for providing ‘cleaning services’ was not paid by the appellant till it was detected in the audit checks and therefore extended period invoked and imposition of penalty under Section 78 and 76 of Finance Act, 1994 on the ground of suppression of the fact, is valid and proper. An option for payment of 25% of penalty confirmed under Section 78 was given if the entire amount including the penalty and interest is paid within 30 days was also given to appellant. The Commissioner has extended the benefit of cum-tax price to the appellants.
 
Appellant have filed appeal before the Tribunal.
 
Appellant’s Contention:- Appellant contended that since the issue pertains to interpretation of relevant clauses of the Finance Act, 1994 neither could penalty under Section 76, 77 and 78 of the act be imposed nor the extended period of limitation, for the purpose of confirming demand can be invoked.
 
It was submitted that the fact was found during audit however, the Audit officers themselves were not sure whether the activities under taken by appellants were covered under “manpower recruitment and supply agency services” or under “cleaning service”. It was submitted that it was alleged that appellant had provided “manpower recruitment and supply agency services” but in show cause notice is was alleged that they had provided Cleaning service. Thus, when there was confusion, wilful suppression could not be alleged against the appellant.
 
It was alternatively contended that penalties under Section 78 and 76 could not be imposed simultaneously and the penalty was wrongly imposed. In this regard, reliance was placed on following judgments:
 
- CCE Chandigarh v/s Krishna Automobile [2011-TIOL-877-CESTAT-DEL
- CCE, Ludhiana v/s Pannu Property Dealer [2008-TIOL-1750-CESTAT-DEL
-CCE Chandigarh v/s City Motors [2010 (19) STR 486 (P&H)
- The Financers v/s CCE, Jaipur [2007-TIOL-1778-CESTAT-DEL
- CCE Madurai v/s Ayya Communications [2011-TIOL-551-CESTAT-MAD  
 
Reasoning of Judgment:- The Tribunal held that it is well settled law that even before specific amendment in the law on 10-5-2008 was made providing that penalty under Section 76 and 78 of the finance act, 1994 cannot be imposed simultaneously, the same shall be also applicable in those cases where the period of dispute is prior to the said date i.e. 10.5.2008.
 
Thus, it was held that as the period in dispute is before 10.5.2008, penalty cannot be simultaneously imposed under Section 76 and 78.
 
The Tribunal noted that the Commissioner (Appeal) has relied upon the judgment given in CCE v/s Krishna Poduval in imposing simultaneous penalties under Section 76 and 78. It was noted that in this regard, the appellant has relied on judgment in CCE, Lucknow v/s K. S. Engineers (India) [2009-TIOL-2217-CESTAT-DEL.
 
On facts, it was held that simultaneous penalties under Section 76 and 78 could not be imposed.
 
With regard to invocation of extended period of limitation, it was held that the matter involved was interpretation of relevant clauses of the Finance Act, 1994 to find out under which category of service the activity undertaken by appellant was classifiable. Relying on judgment in Laxness ABS Limited v/s CCE, Vadodara [2011-TIOL-145-CESTAT-AHM and observed that since the issues is of interpretation, appellant cannot be held responsible for interpreting the said provisions in a manner beneficial to them. No penalty imposable under Section 78 as extended period of limitation was not invokable.  
 
Decision:- Appeal allowed.

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