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/2014-15/2384

Interest on differential duty to be computed after adjusting excess duty paid.

Case:-CCE, BANGALORE-LTU VERSUS TOYOTA KIRLOSKAR AUTO PARTS PVT LTD

Citation:-2014-TIOL-1875-CESTAT-BANG

Brief Facts:-Appeal  No. 291/2008 is filed by Revenue and the period covered is 2006-07. Appeal No. 782/2008 is filed by the assessee and the period covered is 2005-06. In both the appeals issue involved is common and therefore both the appeals are taken together and a common order is being passed.

Appellant opted for provisional assessment in respect of their manufactured goods since the customer to whom the goods were cleared namely Toyota Kirloskar Motor Pvt. Ltd. was related person and therefore transaction value under Section 4(1)(a) of Central Excise Act 1944 (Act) was not applicable. The provisional assessment was permitted. The provisional assessment was finalized after getting the necessary details from the assessee and in both the cases it was found that there was short payment of duty in respect of certain items cleared by the appellant and in respect of certain items there was excess payment of duty. As far as the year 2005-06 is concerned, there was a short payment of duty was of Rs.1,30,65,161/- which was remitted by the appellant even before finalization of provisional assessment on 30.10.2006 itself. Assessment was finalized on 22.12.2006. The excess payment amounted to Rs. 47,51,060/- in respect of which no refund was claimed by the appellant. As regards the year 2006-07, the excess payment was Rs. 1,10,84,180/- and short payment of duty was Rs. 35,29,558/-.

Respondent Contentions:-The learned counsel submits that the Hon'ble High Court of Karnataka in the case of the same appellant in their order reported in [2012 (276) E.L.T. 332 (Kar)] = 2012-TIOL-10-HC-KAR­] have held that for the purpose of calculation of interest for short-fall in payment of duty on finalization of provisional assessment, when the assessee is manufacturing more than one item, each item is not to be treated separately and the total duty payable for all the goods has to be calculated. Therefore in respect of the year 2006-07, where excess payment of duty was more than the short-fall, no liability arises on the payment as a result of finalization of assessment. As regards the year 2005-06 he submits that the issue as to whether interest has to be paid and if so from what date interest has to be paid had come up for consideration before the Tribunal in the case of Ispat Industries Ltd. Vs. CCE, Nagpur [2007 (209) E.L.T. 280 (Tri.-Mum.)] = 2006-TIOL-1994-CESTAT-MUM and Tribunal took the view that if differential duty is paid prior to final assessment, no interest is liable to be paid.He submitted that this decision was upheld by the Hon'ble High Court of Bombay as reported in [2010 (259) E.L.T. 662 (Bom.)]. He also submits that the matter was carried to the Supreme Court and the Hon'ble Supreme Court passed the following order on the appeal.

"Delay condoned.

The special leave petition is dismissed. However, the question of law is kept open."

In view of the decision of the Hon'ble High Court of Mumbai which is against the Revenue and SLP filed has been dismissed he submits that the decision of the Bombay High Court has to be followed in the appellant's case also. He submits that in view of the decision of the High Court, the Larger Bench decision in the case of Cadbury India Ltd. Vs. CCE, Pune-I [2008 (232) E.L.T. 224 (Tri.-LB)] = 2008-TIOL-1986-CESTAT-MUM-LB relied upon by the learned AR has no relevance.

Reasoning of Judgment:-We have considered the submissions. As regards the differential duty, in view of the decision of the Hon'ble High Court of Karnataka, the duty has to be calculated after considering the duty payable on all the goods together and therefore excess payment if any will have to be adjusted towards short payment to calculate the differential duty payable.

Coming to the date from which interest is to be calculated, it was considered that the submission of the learned counsel that Bombay High Court decision has to be followed is not correct. This is because Hon'ble Supreme Court where the matter was challenged, while rejecting the SLP, kept the issue of law open. This means that clearly Hon'ble Supreme Court did not consider the law to have attained finality and therefore the dismissal of SLP was only a decision in personam. The legal issue remains open and it cannot be said that decision of Hon'ble High Court of Bombay has laid down the law. Under these circumstances, it was considered that the decision of the Larger Bench of the Tribunal relied upon by the AR is required to be followed.

In view of the above observations, it was held that interest is liable to be paid by the appellant from 1st  day of the next month on the differential duty payable for each month as finalized. Needless to say the interest has to be calculated only if there is a differential duty payable after setting off the excess payment towards short payment. Appeals are decided in above terms.

Decision:- Appeal accordingly decided

Comment:-The essence of this case is that interest on differential duty is to be calculated after adjusting the excess tax if paid. Moreover, another ratio of this case is that when an appeal filed against the order of High Court is dismissed by Supreme Court without considering the question of law, then it cannot be concluded that the issue has attained finality.

Prepared by: Hushen Ganodwala

 

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