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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/2011-12/1536

Penalty under Section 11AC of CEA, 1944

Case: Commissioner of Central Excise Commissionerate V/s M/s S K Sacks (P) Ltd.
 
Citation: 2012-TIOL-90-HC-P&H-CX
 
Issue:- Shortage of finished goods – Duty and interest paid at the Adjudicating Stage – whether equal penalty can be imposed under Section 11 AC?
 
Brief Facts:- On the first visit of Revenue officer at premises of assessee-respondent, they found a shortage of 40,187 kgs inputs, namely, plastic granules on which credit has been taken. On acceptance of shortage of inputs by the assessee-respondent, the credit amounting to Rs.3 134,356 /- was paid voluntarily.
 
There are separate proceedings pending in respect of the aforesaid transaction. In another visit by the officers of the Revenue, a shortage of 32,249.4 Kgs of finished goods, namely, plastic woven fabrics was found which was valued at Rs.14,51,223/-, and 2298.3 Kgs of plastic sacks were valued at Rs. 1,10,318/-. This resulted into issuance of a show cause notice demanding a sum of Rs. 2,49,847/- as amount of duty along with interest and penalty leviable under Rule 25 of the Central Excise Rules, 2002 (for brevity 'the Rules') read with Section 11AC of the Act. The assessee-respondent deposited a sum of Rs. 1 150,000 /- on 04.11.2001 and another sum of Rs. 1,00,000/- on 05.06.2003.
 
The original authority vide order dated 28.03.2004 confirmed the demand of duty as proposed in the show cause notice and also imposed penalty equivalent to the amount of duty.
 
In appeal, the Commissioner (A) upheld the demand of duty with interest but reduced the penalty amount to Rs. 60, 000/-. Revenue and respondent-assessee both filed appeal before the Tribunal.
 
The Tribunal dismissed both the appeals by holding that before the Original Authority entire duty involved was paid and there was no link between shortage of finished goods found on 03.11.2001 with shortage of inputs found on 10.05.2001. It was was further held that it was a clear case of non-accounted shortage and penalty was warranted under Rule 25(1)(b) of the Rules and that there was no evidence relied upon by the Revenue justifying in invoking Section 11AC of the Act. Accordingly, the Tribunal held that the demand of amount of duty and interest by the original authority was wholly justified. The Tribunal also upheld the penalty upto Rs. 60,000/- as it was found to be justified.
 
Revenue is in appeal before the High Court.
 
Reasoning of Judgement:- The High Court held that the discretion exercised by the Tribunal does not suffer from any jurisdictional error nor it violates any provision of law. Appellant has not been able to point out anything from the record for taking a view different than the one taken by the Tribunal and the Commissioner (Appeals). The amount of duty has been paid along with admissible interest. It has come on record that the matter with regard to shortage of inputs is being separately proceeded. Accordingly, any question of law much less the substantive question of law warranting admission of the appeal was not found.
 
Decision:- Appeal dismissed.

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