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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.  

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PJ/Case Law/2014-15/2170

If any default is made in payment of duty beyond thirty days from due date, duty for each consignment is to be paid by debit in account current or same could be paid by utilizing CENVAT?

Case:-MAULI STEEL PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, AURANGABAD
 
Citation:-2014-TIOL-689-CESTAT-MUM
 
Brief facts:-As per Rule 8(3A) of CER, 2002 if there is any default in payment of duty beyond thirty days from due date, duty for each consignment is to be paid by debit in account current but appellant paid the same by utilizing CENVAT. Vide stay order No. S/1182/13/EB/C-II dated 11/11/2013 the appellant was directed to make a pre-deposit of Rs.2.22 crore through PLA within a period of eight weeks and report compliance on 15/01/2014.
 
Appellant’s contentions:-The appellant filed a modification application vide application dated 09/01/2014 on the ground that when a similar matter had come up before the Principal Bench at Delhi, vide order reported in= (2014-TIOL-138-CESTAT-DEL)in the case of Bakewel Agro Ltd. vs. Commissioner of Central Excise & Service Tax, Meerut -I, there was a difference of opinion between two Members which was referred to Third member and therefore, in view of the difference of opinion, the stay order passed by this Bench should be recalled and the matter kept pending till the difference of opinion was sorted out.
 
Respondent’s contentions:-The learned Commissioner (AR) appearing for the Revenue, on the other hand, submitted that the Tribunal had passed a final order in Appeal No. E/1900/2012 & E/85573/2013 vide order NO. A/18-19/14/EB/C-II dated 23/01/2014 in Sharp Industries Ltd. = (2014-TIOL-344-CESTAT-MUM)case in an identical matter in favour of the Revenue and against the appellant. Therefore, the modification application now filed by the appellant was devoid of merits.
 
Reasons of judgment:-The Tribunal held that their stay order dated 11/11/2013 was based on the decision of the hon'ble High Court of Karnataka in the case of Manjunatha Industries vs. Commissioner of Central Excise, Bangalore = (2013-TIOL-285-HC-KAR).The difference of opinion pending before the Principal Bench of CESTAT, Delhi was not an order at all and it had no binding value. Further, this Tribunal had decided the mater finally in Sharp Industries Ltd., case vide order dated 23/01/2014. Therefore, they found no merit in the modification application filed by the appellant and accordingly, they dismissed the same. They also directed the appellant to comply with the stay order passed and make the pre-deposit of Rs.2.22 crore forthwith and report compliance on 24th February, 2014, failing which the appeal would be liable to be dismissed without any further notice.
 
Decision:- The application was dismissed.
 
Comment:- The analogy drawn from the case is that Rule 8(3A) specifically prohibits utilization of cenvat credit during the period in which default continues, even when the said amount is required to be paid as arrears of revenue the same have to be paid in cash without utilization of the cenvat credit. Any other interpretation will make the restriction relating to utilization of credit meaningless. It is settled law that what is not allowed directly cannot be allowed/ claimed indirectly.

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