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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.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

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PJ/Case Laws/2010-11/1089

Refund of Service Tax under Notification No. 41/2007-ST when Duty Drawback claimed

Case: CCE, Jaipur-II v/s M/s Rajasthan Synthetics Ltd
 
Citation: 2011-TIOL-243-CESTAT-DEL
 
Issue:- The exemption under Notification 41/2007-ST is available even if the drawback is availed even for the period prior to exemption.
 
Brief Facts:- Respondent-assessee is an exporter who had filed refund claim of service tax paid on services utilized for export of their goods under the provisions of Notification No. 41/2007-ST dated 06.10.2007. The refund claim was rejected on the ground that the appellant had availed drawback of duty and as per Condition I(e) of the Notification refund under said Notification was not admissible if duty drawback was claimed.
 
Respondent-assessee filed revision application. Revisional Authority held that all the services specified under Notification No. 41/07-ST as amended on which refund has been allowed are availed after clearance of goods from the factory, therefore, these services cannot come under the purview of taxable services used as input services in the manufacturing or processing or for containing or packing of export goods. Thus, while fixing the rates of drawback the incidence of service tax paid on such specified service of Notification No. 41/07-ST used for export of goods is not taken into consideration. It was also noted that Condition I(e) of the Notification was withdrawn vide Notification No. 33/2008-ST dated 07.12.2008 to remove ambiguity. It was held that since the goods in question have been exported without availing drawback of service tax under the Customs, Central Excise Duties and Service Tax drawback Rules, 1995 therefore refund was admissible to the respondent.
 
Revenue has come in appeal against Revisional Order.
 
Appellant’s Contention:- Appellant finds fault with the Revisional Order on the ground that the Notification No.41/07-ST does not grant any benefit to the service tax prayers because no credit shall be available in respect of the movement of the goods till the export point.
 
Respondent’s Contention:- It is the preliminary submission of the respondent that the Tribunal in the case of Commissioner of Central Excise, Meerut vs. Anand Track & Field Equip. Pvt. Ltd [2010 (19) S.T.R. 379 (Tri.-Del.)] has already considered the issue and Revenue's appeal on the similar footing was dismissed.
 
Reasoning of the Judgment:- The Tribunal held that no doubt, at the first instance, the case of the respondent is covered by the Single Bench decision aforesaid cited by the respondent. But the reasoning given in the order passed by Revisional Authority almost concurring with the original authority also grants relief to the respondents. When the adjudication was reviewed, Revisional authority found that original order also the authorities also get sanction from the citation made by the ld. Counsel. Consequently, Revenues appeal is dismissed.
 
It was also stated that there is no information with Revenue to suggest whether the Single Member Bench decision cited as aforesaid is carried by Revenue in appeal to any higher Court and whether that order has been stayed by such Court. Accordingly, Revenue appears to have no grievance further against the Single Member decision for which appeal is also liable to be dismissed.
 
Decision:- Appeal dismissed.
 
Comments:- We are normally bringing you the decisions which are effecting the trade and industry. This is also example of the same. The number of cases were rejected by the department for handicraft industry on this issue that the manufacturer is availing the drawback. We have pleaded before them the Drawback Rules says that the Government fixes the rates of drawback after seeing the service tax incidence on “input services” under Cenvat credit Rules. The Government has introduced this new scheme for those services only on which Cenvat credit is not admissible.  But the department did not agree. We further pleaded that the deletion from the definition clearly leads to conclusion that the Government did not intend to incorporate this condition. But the department said that the amendment notification clearly states that it is effective from the date of its publication. Even we wrote a series of article titles “Johnny and service tax refund” to bring about the problems of exporters. It does not have retrospective effect. But the contention of exporters has ultimately been accepted by the department.  The truth ultimately prevail. 

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