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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.
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PJ/CASE LAW/2015-16/2844

Lenient approach for penalty if credit wrongly availed reversed along with interest.

Case:-TATA ADVANCED MATERIALS LTD. VERSUSC.C.E., C. & S.T., BANGALORE-I

Citation:-2015 (322) E.L.T. 540 (Tri. - Bang.)

Brief Facts:-Cenvat credit of Rs. 4,47,829/- (Rupees Four Lakhs Forty-Seven Thousand Eight Hundred and Twenty-Nine only) has been denied and demanded with interest on the ground that the credit was not admissible. Penalty also has been imposed.

Appellants Contentions:-Learned CA on behalf of the appellant submits that the first item of demand is against the credit taken twice on the same documents. He submits that even though the appellant has separate sections for handling Cenvat credit account and accounting matters, there was omission on the part of the section which was handling Cenvat credit availment. By mistake, on the same copy, credit was taken twice. This has happened because appellant received two copies of bills of entry and on both, credit was taken separately. The second item is a small amount of Rs. 8,000/- (Rupees Eight Thousand only) which happened because of clerical error. On the same document this amount was taken in excess. The third item of demand is for Rs. 1,55,426/- (Rupees One Lakh Fifty-Five Thousand Four Hundred and Twenty-Six only) which has arisen because credit was taken on the warehousing bill of entry instead of bill of entry for home consumption. The fourth demand has arisen because the appellant took credit of service tax paid on services attributable to 100% EOU which was located in the same compound by mistake. The last demand has arisen because the appellant had imported some goods which were resent without using the same at all. They had reversed this credit at the time of re-export. Department has demanded the amount on the ground that the input/capital goods have not been used for the purpose for which they were received in the factory. It was submitted by the learned CA that the last demand should not have been confirmed since the appellant had reversed the entire amount of credit at the time of re-export. Nevertheless at this stage he does not want to dispute the same. He submits that the appellant has not disputed the demand for Cenvat credit and the same has been discharged with interest even though certain portion of the demand was beyond the normal period. Further he submits that appellant is having crores worth Cenvat credit in their account and dealing with voluminous documents. All the work was handled by employees who did not derive any benefit by taking wrong Cenvat credit. Therefore intention to evade duty by mis-declaration cannot be sustained in this case. Suppression of facts also would not arise since as per the statute such details are not required to be given to the department. That being the position, in fact even though the appellant could have claimed limitation, they had paid the entire amount of Cenvat credit with interest. He submits that having regard to these facts and circumstances, penalty may be waived.

Respondents Contention:-Learned AR would submit that the details would show that the appellants have not created systems which will ensure that Cenvat credit is not wrongly utilized. He submits that this should not be taken with a lenient view.

Reasoning of Judgement:- The tribunal have considered the submissions. Tribunal find that when voluminous documents are handled, some mistakes do happen and since appellants have chosen to pay the entire amount of Cenvat credit including the last item the correctness of which is debatable, they consider that appellant deserves a lenient treatment as regards penalty. In view of the above, they consider since the appellant is not contesting the demand and have paid the entire amount with interest, penalty can be waived. In the normal course the demand could have been limited to the normal period in the absence of any intention to evade duty. Cenvat credit with interest voluntarily paid by the appellant stands upheld as not contested. Penalty imposed is, set aside. Appeal is disposed of in the above terms.
 
Decision:-Appeal disposed of.
 
Comment:- The crux of the case is that if the assessee has wrongly availed the Cenvat credit by mistake because of handling voluminous documents but the said wrongly availed credit is reversed with interest, then he deserves leniency in imposition of penalty.
 
Prepared By:- Neelam Jain
 
 

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