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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.
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PJ/Case Laws/2011-12/1486

Markability of goods - establishment of

Case: ION EXCHANGE (INDIA) LTD v/s COLLECTOR OF CENTRAL EXCISE, BARODA
 
Citation: 2002-TIOL-848-SC-CX
 
Issue:- Marketability of goods cannot be decided on mere specification given in Tariff but to be proved in the light of evidence adduced by parties.
 
Brief Facts:- The appellant manufactures Ion-Exchanges and an intermediate product called D.V.B. beads is consumed in the course of the manufacture of the Ion Exchanges. Three points arose before the CEGAT. The first was in relation to whether the said intermediate products were goods which were marketable, the second was whether they fell within the classification in the relevant Tariff Item No. 15A (1) (ii) and the third related to limitation. On the third point, all the members were agreed that the demand of duty could not exceed six months preceding the show cause notice. But on the first and second points there was difference of opinions. On of the members held that the disputed goods were distinct items as compared to the end product and that they were marketable goods in as much as the affidavits produced by the appellant to the contrary were not acceptable. He also held that unless the goods were proved by the Revenue to be plastic materials or resins, they could not be brought under Item No. 15A (1) (ii) and the matter required a remand to the collector (Appeals) on that question. The other two members observed that they had some reservations as to the evidence produced by the appellant to prove that the beads were not marketable. On the question of marketability, they held that once these beads fell in the Entry 15A (1) (ii), their marketability was to be treated as no longer in the question. As to the classification, they felt no remand was necessary. The intermediate product squarely fell within Entry 15A (1) (ii). They therefore dismissed the appeal subject however to the slight modification as to the period of limitation on which point they were in agreement.
 
Appellant’s Contention:- The appellant contended that the Tariff Item No. 15A (1) (ii) was not applicable and also the first appellate authority had not gone in to the marketability of the intermediate product as the said authority did not notice the evidence produced by him.
 
Reasoning of Judgment:- The Supreme Court held that in view of the judgments of the court in Moti Laminates Pvt. Ltd. & Others v. Collector of Central Excise, Ahmedabad [1995 (76) E.L.T. 241 (S.C which has been re-affirmed in Union of India v. Delhi Cloth & General Mills Co. Ltd. & Another [1997 (92) E.L.T. 315 (S.C.)] the reasoning of the majority Members that specification in the Tariff is proof of marketability cannot be accepted. The evidence as to marketability that the Revenue may produce is, in their opinion, to be separately gone into conjunction with other evidence that is produced by the assessee. In the present case the two members who have gone merely by the specification, have not gone into the evidences produced by the parties on the question of marketability. Hence on the question, the matter has to be remitted to the Tribunal. On the other question relating to whether the intermediate product falls within the Tariff Item 15A (1) (ii) or not, one of the members has directed a remand while the reasoning given by the other two members is rather cryptic and not elaborate. Matter remitted on this issue also.
 
Decision:- Appeal allowed.

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