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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/2010-11/1062

Limitation on availing Cenvat Credit reversed earlier

Case: Commissioner of C. Ex, Kolkatta-II v/s Rahee Industries Ltd
 
Citation: 2011 (263) ELT 225 (Cal)
 
Issue:- Time limit of six months does not apply when the credit is taken which was reversed earlier.
 
Brief Facts:- Respondent-assessee had availed Modvat credit on the inputs procured for manufacturing their finished goods. In order to avail the benefit of value based Advance Licence and Duty Exemption Entitlement Schemes, they reversed the credit so taken. They could not avail the benefit of the said 2 schemes due to cancellation of advance licence. Thereafter, they again took cenvat credit on the inputs.
 
Department issued show cause notice alleging that the credit could not be taken again by the respondent in terms of provisions of Rule 57G (2) of the Central Excise Act, 1944. It was also contended that the credit was required to be taken within 6 months from the issuance of documents.
 
The Adjudicating Authority disallowed taking of credit and confirmed the demand with interest and imposed penalty.
 
In appeal, the Tribunal allowed the appeal of the respondent and set aside the impugned order and granted consequential relief.
 
Against the order of the Tribunal, Department is in appeal before the High Court. 
 
Appellant’s Contentions:- Department contended that in view of the proviso inserted in sub-rule (2) of Rule 57 G it was not proper or lawful for the assessee/respondent to credit after six months from the date of taking wrong credit under Section 11AA of the said Act. Factually the same was not done within six months being the statutory period. Hence, the Tribunal had committed error in law while allowing the credit.
 
Respondent’s Contentions:- Respondent submitted that it appears from Rule 57A that the assessee is on the facts and circumstances of case entitled to the credit of the inputs of goods as mentioned therein. The proviso so referred was inserted later. It is an admitted fact that the assessee was entitled to get credit of the inputs invoices and duly availed of the said Modvat credit and necessary entry was made and the same was produced before the appropriate officer of the revenue who had endorsed the same. After purchasing the said inputs the respondent started manufacturing goods in terms of and/or in accordance with the advice of their learned lawyer. Therefore the six month’s time mentioned in the proviso is not applicable of the facts and circumstances of the case.
 
Reasoning of Judgment:- The High Court referred to the decision of the Tribunal and noted that the Tribunal had found on fact that there was no dispute about cancellation of the advance licence and as such already reversed credit was liable to be credited back to them. The Tribunal had noted the provisions of requiring the assessee to take credit within a period of six months from the date of issuance of the invoice. It was found on fact that the respondent had already availed of the credit within the said period. Once this course of action is taken consequence of law will automatically follow. It was noted that the Tribunal had factually recorded that said credit so earned by the respondent in accordance with law was utilised by them by reversing the same at the first instance when exports were made under the said scheme. However on cancellation of advance licence the respondent again became entitled to put back the credit. The said credit was re-credited in their accounts making reverse entry earlier made by them. Therefore, the Tribunal on fact had held that it cannot be said at all that the reverse entry was made good. The credit so taken was on the basis of the invoices which were already more than six months old. On facts, the Tribunal had geld that availing of the credit on the basis of the invoices when for the first time the credit entries were made in RG 23 A Part 2 record in accordance with law. The Tribunal further held that having earned that credit it was only utilisation which was to be survived when the respondent made credit entry in their records second time, they were only reversing the debit entry of the credit already earned by them.
 
The High Court relying upon the finding of facts by the Tribunal held that the Tribunal had rightly held that provisions of Rule 57G (2) do not have any role to play in these circumstances and their contravention cannot be alleged against the appellant. It was held that the judgment of the Tribunal is not required to be interfered with. The High Court also examined the provisions of Section 57F the basic provision for allowing credit and when the Tribunal on fact found this the other portion of law has got no determinative value in this matter.
 
In the end it was held that the respondent was entitled to get relief as granted by the Tribunal. Revenue has not case at all. Reference answered in favour of the assessee and against the Revenue.
 
Decision:- Reference disposed of accordingly.
 
Comments:- Although the time limit is not applicable in current Cenvat credit rules and there are number of decisions which says that the credit can be taken even after six years. But the other ratio of this decision is also very important. If the assessee reversed the cenvat credit hoping that the benefit under other scheme will be available to him but the same is not granted to him then he can take back the cenvat already reversed by him. 

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