Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
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.  

Comments

Print   |    |  Comment

PJ/Case Laws/2011-12/1309

Interest under Section 11Ab - date of payment reg.

Case: EXOTIC ASSOCIATES v/s COMMISSIONER OF CENTRAL EXCISE
 
Citation: 2010 (252) E.L.T. 49 (Guj.)
 
Issue:- Interest under Section 11AB - Whether interest is payable from 28.9.1996 or from 11.5.2001?
 
Brief Facts:- Assessee is engaged in manufacture of clearance of chemicals like Sodium Cynate, Cuprous Chloride, B.D.S.A., etc. falling under Chapter Head Nos. 28 & 29 of the Schedule to the Central Excise Tariff Act, 1985 and was registered under the Central Excise Act, 1944. On the basis of Special Intelligence information, the Unit of the assessee at Ahmedabad was visited and searched on 18-2-2000 by officers of Preventive Wing of Central Excise Commissionerate. After necessary inquiry and investigation, show cause notice was issued on 9-4-2002 calling upon assessee for recovering Central Excise duty on finished goods manufactured and cleared illicitly under the proviso of Section 11A(1) of the Act. Assessee was also called upon for recovery of central government duty involved on inputs. It was further proposed to impose penalty under Section 11AC of the Act and erstwhile Rule 173Q of the Central Excise Rules, 1944. And interest at the prescribed rate was also proposed to be demanded under provisions of Section 11AA of the Act.
 
The Adjudicating Authority confirmed the demand a duty on finished goods and also demanded excise duty involved on the inputs under Proviso to Section 11A (1) of the Act. Penalty was imposed under Section 11AC read with Rule 173Q of the erstwhile Central Excise Rules, 1944 and levied interest at the prescribed rate under Section 11AB of the Act.
 
Being aggrieved, assessee preferred an appeal before the Commissioner (Appeals), who upheld the demand, penalty and interest raised and/or charged by the Additional Commissioner.
 
In appeal before the Tribunal, the Tribunal observed that the assessee has not disputed the duty payment before the Tribunal and confined its challenge to the levy of penalty as well as interest.
 
As far as imposition of penalty is concerned, the Tribunal observed that the question of waiver of mandatory penalty does not arise, especially, in light of a specific provision by way of the Explanation to Section 11A(2B) of the Act. Merely because somebody has paid the evaded duty by resorting to clandestine removal, prior to issue of show-cause notice, waiver of penalty should not be justified as the same will make evasion risk-free and will treat the evader more kindly than the genuine tax payer, which is neither warranted nor envisaged. The Tribunal, however, has accepted the submission of assessee to the effect that since the entire demand relates to the period of 1997 to 2000, no interest is leviable in respect of the demand prior to 11-5-2001. Accordingly, the Tribunal has confirmed the levy of penalty and set aside the order with regard to charging of interest under Section 11AB of the Act.
 
The assessee has filed further appeal before the High court against imposition of penalty. Reveneu has also filed appeal against setting aside of interest liability.
 
Reasoning of Judgment:- The High Court held that the question of waiver of the mandatory penalty does not arise, especially, in light of a specific provision by way of the Explanation to Section 11A(2B) of the Act. Merely because somebody has paid the evaded duty by resorting to clandestine removal, prior to issue of the show-cause notice, waiver of penalty should not be justified as the same will make the evasion risk-free and will treat the evader more kindly than the genuine tax payer, which is neither warranted nor envisaged. The Tribunal, however, has accepted the submission of the assessee to the effect that since the entire demand relates to the period of 1997 to 2000, no interest is leviable in respect of the demand prior to 11-5-2001.
 
It was noted that accordingly, the Tribunal has confirmed the levy of penalty and set aside the order with regard to charging of interest under Section 11AB of the Act. Further the Tribunal has deleted the interest on the ground that the demand relates to the period of 1997 to 2000 and on that count, it was held that no interest is leviable in respect of demand prior to 11-5-2001. It is, however, contended before us that while taking the said view, the Tribunal has only considered the provisions of sub-section (2) of Section 11AB brought on the Statute Book by the Act 14 of 2001 with effect from 11-5-2001. Prior to the said provision, Section 11AB was inserted by Section 76 of Finance (No.2) Act of 1996 with effect from 28-9-1996.
 
The High Court relied on the non-applicable provisions, namely, amended Section 11AB. This amended Section 11AB would not apply to the cases where Section 11AB was inserted by Section 76 of Finance (No. 2) Act, 1996, effective from 28-9-2006 and demand related to a period subsequent thereto, i.e. between the period from 28-9-1996 and 11-5-2001. Sub-section (2) of Section 11AB specifically states that the provision of Sub-section (1) of Section 11AB shall not apply to cases where the duty had become payable on the date on which Finance Act, 2001 received the assent of the President. It was, therefore, open and permissible to levy interest under Section 11AB for the period subsequent to 28-9-1996 under the unamended provision of Section 11AB of the Act.
 
Decision:- Appeal disposed off.

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