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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/2010-11/1020

The jurisdiction over 100% EOU is of territorial officers and not of custom officer where the goods are imported. Secondly, for allowing an appeal, the principle of natural justice should be followed.
Case: Noel Agritech Ltd v/s Commissioner of Customs, Bangalore
 
Citation: 2001 (128) ELT 0227 (Tri. - Chennai)
 
Issue:- The jurisdiction over 100% EOU is of territorial officers and not of custom officer where the goods are imported. Secondly, for allowing an appeal, the principle of natural justice should be followed.
 
Brief Facts:- Appellants are 100% EOU and were engaged in the export of cut fresh flowers to various destinations abroad. They sought permission to make clearances to Domestic Tariff Area (DTA) from the concerned Jurisdictional Development Commissioner, which was granted.
 
It was alleged that the appellant had made such clearances without following the prescribed procedure.
 
Appellants contended that they approached the Customs Authorities at Mangalore port where the capital goods viz. machinery was imported for installation in their 100% EOU premises at Mangalore which is away from the Mangalore port town area. Since the Customs House did not indicate to them as to what procedure and documentation was required, clearances were effected and in any case cut fresh flowers were not chargeable to any duty in the Central Excise Law and therefore there was no question of a levy of customs duty under Section 3A for the cut fresh flowers removed into the DTA.
 
The Original Authority confirmed the demand. In appeal, the Commissioner (Appeals) dismissed the stay applications & appeals. Later on in two cases without hearing and in the third case hearing was granted and appeal was dismissed for non-compliance of the pre-deposit amount. Hence, appellants are before the Tribunal. Stay applications are also filed.
 
Appellant’s Contentions:- Appellants relied on the judgment of Larger Bench in the case of Ferrous Alloys Corporation Ltd [1995 (077) ELT 31] and submitted that the jurisdiction over an Export Oriented Unit was the jurisdiction of the territorial officers where the unit was situated and not the Customs House from where the capital goods were imported and final goods were exported.
 
Respondent’s Contention:- Revenue submitted that there is a Special Officer appointed as Asst. Commissioner of Customs in charge of EOU in that area who is the competent officer having jurisdiction in this case and therefore the orders have been decided and determined by the jurisdictional officer. The Commissioner (Appeals) has the designation of Commissioner of Central Excise & Customs (Appeals), Bangalore who has jurisdiction over the entire State of Karnataka where the appellants unit fall and therefore there is no apparent conflict of jurisdiction. Respondent submitted that there was no ground for staying the pre-deposit.
 
Reasoning of Judgment:- The Tribunal held that there is no duty on removals to DTA under the Central Excise & Salt Act, 1944 which is applicable only to such goods which are permitted to be sold in the DTA. Reliance was placed on the case of Siv Industries Ltd [2000 (017) ELT 0281 (S.C.)] wherein it was held that Central Excise levy is only on goods permitted to be sold; for contravention of the procedural irregularities. Chapter VA of the Central Excise Rules prescribes the procedure to be followed and consequential action under the rules could be invoked.
 
It was held that in the present case duty, penalties & Cess have been invoked under the provisions of Customs Act under Section 28 for duty, Section 112 for penalty. Since flowers have been grown in India and removed from the premises within India to a premises in India, it is not clear as to how customs duty would be applicable.
 
Further, it was held that since principles of natural justice have been grossly violated in the decision of the Commissioner (Appeals), inasmuch as they have not determined the amounts of pre-deposit and the matter on merits in two cases and in the third case they have summarily rejected the material and the grounds on pre-deposit of duty, it is fit case for de novo consideration by the lower authorities.
 
Impugned order set aside. Matter remanded for re-determination of duty, if any, as per law.
 
Decision:- Appeal disposed off.
 
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