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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 law/2013-14/1869

Penalty under section 11AC is not imposable when issue involves interpretation of law.
Case:- PRIJAI HEAT EXCHANGERS PVT LTD Vs CCE, MUMBAI-III
 
Citation: - 2013-TIOL-1269-CESTAT-MAD-CX

Brief Facts: - The brief facts of this case are that Appellant is engaged in the manufacture of excisable goods and availed Cenvat Credit in Respect of Capital goods. The same was cleared after use on 05.09.2009 and 16.02.2010 on payment of duty as per Notification No. 39/2007-CE (NT) dated 13.11.2007 by calculating the duty based on Quarter and part thereof from the date of Receipt of capital goods in the factory. The officer of the Revenue pointed out that the appellant had short paid duty on the capital goods and on pointing out the same, the appellant immediately paid the duty along with interest on 09.03.2010. Thereafter the appellant received the show cause notice dated 03.02.2012 for appropriation of duty amount already paid and for imposition of penalty under Rule 11 AC of the Central Excise Act. The adjudicating authority confirmed the duty along with interest and imposed penalty under Rule 11AC of the Central Excise Act. The appellant filed appeal and the same is dismissed by commissioner (Appeal). Hence, the appellant is before the Tribunal.
Appellant contentions: - The contention of the appellant is that the issue is in respect of interpretation of provision of Notification 39/2007 CE (NT).The appellants calculated and paid the duty by taking into consideration the quarter in which the capital goods were received and cleared from the factory whereas the Revenue is calculating duty on the basis of the days from the day thecapital goods were received in the factory. In these circumstances, there is no intention on the part of the appellants to evade payment of duty.
 
Respondent contentions: - The Revenue relied upon the findings of the lower authority and submitted that as the appellants had short paid the duty at the time of clearance of the capital goods, therefore, differential duty has been paid subsequently in view of the objection raised by the Revenue, therefore, it is clear case where the appellants evaded payment of duty hence the penalty is rightly imposed.
 
Reasoning of Judgment: -It was found that the provisions of Notification no. 39/2007-CE (NT) provide that if the capital goods on which credit has been taken are removed after being used, the manufacturer shall pay an amount equal to CENVAT credit taken on the capital goods reduced by 2.5% on each quarter of the year or part thereof from the date of taking of the CENVAT credit. The appellants while clearing the capital goods calculated duty on quarterly basis whereas the Revenue wants to calculate on actual number of days. In these circumstances, Tribunal finds merit in the contention of the appellants that it is not a case of intention to evade payment of duty, therefore, the penalty imposed under section 11AC of the Central Excise Act is set aside and the appeal is allowed.
 
Decision:-Appeal Allowed.

Comment:-The analogy drawn from this case is that whenever the matter requires interpretation of law, it cannot be said that the assessee has willfully evaded payment of duty and so the penalty under section 11AC is not imposable.
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