Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
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.  

Comments

Print   |    |  Comment

PJ/Case Laws/2011-12/1005

The Revenue Authorities acting as quasi-judicial bodies are bound to follow the decisions of Higher Forums to maintain judicial discipline.

Prepared By:
CA. Rajani Thanvi &
Bharat Rathore

 

 
 

Case: Allovers and Lace P. Ltd v/s Commissioner of C. Ex., Pune

Citation: 2011 (264) E.L.T. 292 (Tri-Mumbai)

Issue:- The Revenue Authorities acting as quasi-judicial bodies are bound to follow the decisions of Higher Forums to maintain judicial discipline.

Brief Facts:- Appellant was engaged in the manufacture of Embroidery, which was being made on cotton and man-made fabric supplied by their customers. Appellant received fabric from their customer and after embroidering the cloth with yarn, the embroidered cloth was returned back to the customer on payment of duty. Before 01.03.2003, appellant was covered under scheme of compound levy for the purpose of Central Excise duty @ Rs. 45/- per metre length of machine per shift. With the budgetary changes made in Finance Bill 2003, compounded levy scheme was withdrawn and the appellant was required to discharge Central Excise duty on the embroidered cloth on ad valorem basis BED @ 10% adv. and AEDTT @ 15% of BED. However, the appellant was allowed to continue working under compounded levy scheme for the period upto 31.3.2003.

Subsequently, during Budget 2004, embroidery was exempted from payment of Central Excise duty and consequently from payment of AEDTT. Thus appellant was required to discharge Central Excise duty on ad valorem basis only during the period from 01.04.2003 to 07.07.2004.

During the said period, appellant was receiving various type of cloth from their customers for the purpose of embroidery. Cenvat credit of duty paid on such cloth received was being availed by the appellant. Appellant also availed Cenvat credit of excise duty paid on the yarn purchased and received, for intended use of making embroidery. The appellant had also availed transitional Cenvat Credit of Rs. 869000/- declaring the same to be relatable to the stocks of cloth and yarn available with them, either as such or in process or contained in finished goods, in stock as on 01.04.2003.

Appellant availed credit in respect of entire yarn received during the period April, 2003 to July, 2004 including transitional credit availed in respect of yarn in stock as on 01.04.2003.. It was noticed that the appellant was utilizing the yarn for embroidery, which was cleared on payment of duty as well as embroidery performed as job work on material received from the principle manufacturer under Rule 4(5)(a) of Cenvat Credit Rules, 2002 and the appellant had never reversed the credit pertaining to yarn used for aforesaid exempted activity.

In July 2004, exemption was granted to embroidery on cloth, thus appellant’s only final product being manufactured was no more chargeable to duty was required to reverse Cenvat Credit pertaining to the stocks of cloth yarn on which credit was originally availed, lying in balance as such or contained in semi-finished goods.

Department issued show cause notice to the appellant to reverse the Cenvat credit pertaining to the stocks of cloth and yarn on which Cenvat credit was originally availed, lying in balance either as such or contained in semi-processed or finished goods alleging that the appellant has not furnished to the Department, the position of stocks as mentioned above, lying with the appellant as on the date on which their product became exempted from payment of Central Excise duty.

It was alleged in the show cause notice that the appellant has contravened the provisions of Rule 6(3) of Cenvat credit Rules, inasmuch as the appellant has not paid the amount equivalent to the Cenvat credit pertaining to the quantity of yarn used for carrying out the process of embroidering the cloth received under the provision of Rule 4(5)(a) of CCR, 2004 which was exempted from payment of Central Excise Duty.

Duty was confirmed along with interest and penalty. Against this order, appellant is before the Tribunal.

Appellants Contention:- Appellant relied on judgment in Sterlite Industries (I) Ltd v/s CCE, Pune [2005 (183) ELT 353 (Tri-LB)] where in it was held that the Cenvat credit of duty paid on inputs used in the manufacture of final products, which were cleared without payment of duty by the job worker for further utilization in manufacture of final product, which are cleared on payment of duty by principal manufacture, not hit by provisions of Rule 57C of Central Excise Rules, 1944.
Appellant also submitted that the Appellate Authority in the impugned order had held that there is a merit in the contention of the applicant but passed the order on some irrelevant observation.

Respondents Contention:- Revenue relied upon UOI v. Kamlakshi Finance Corporation Ltd [1991 (55) ELT 433 (SC)] wherein the Apex Court had directed the department to pay utmost regard to judicial discipline and give effect to orders of higher appellate authorities, which are binding on them.

Reasoning of Judgment:- The Tribunal found that the Commissioner (Appeals) in his order himself had found merit in the arguments of the appellant that the case of the appellant is covered by the Sterlite Industries (I) Ltd’s case wherein this Tribunal has held that the Cenvat Credit on input used for carrying out job work cannot be denied on the ground that the final products were exempted from payment of duty under job work Notification. The same has been confirmed by the Bombay High Court reported in 2009 (244) ELT A89 (Bom) but the Commissioner (Appeals) has not paid any respect to the decision of this Tribunal and has gone beyond the scope of the show cause notice which is not permissible to him.

It was further held that in Kamlakshi Finance Corporation Ltd’s case it was rightly pointed out that in disposing of quasi-judicial issues before the Revenue Officers, they are bound by the decisions of the appellate authorities. The order of the Appellate Collector is binding of the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and Appellate Collectors, who function under the jurisdiction of the Tribunal the principles of judicial discipline require that the orders of the higher appellant authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not “acceptable” to the department, in itself an objectionable phrase and is the subject-matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent Court. If this healthy rule is not followed, the result will only be undue harassment ot assessee and chaos in administration of tax laws.

It was held that in the present case also, when the Commissioner (Appeals) had found force in the argument of the appellant that the decision of the Larger Bench in the case of M/s Sterlite Industries is applicable to this case but they did not pay any respect to the decision of this Tribunal. The act of the Commissioner (Appeals) is not appreciable at all, which caused the appellant to approach before this Tribunal. As the case of the appellant is squarely covered by the decision of Tribunal in M/s Sterlite Industries’s case, which was upheld by the High Court of Bombay, impugned order is set aside as having no merit.

Decision:- Accordingly, appeal allowed.

************

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com