Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  GST registration cancellation without reasons amounts to ‘Economic Death’ of business: Supreme Court. *  No GST refund if appeal before GSTAT is filed late: Gujarat High Court. *  Mere upload of GST notice on portal not valid service, appeal limitation won’t start: Punjab & Haryana High Court. *  Taxpayer can’t be penalised for missing notices hidden under ‘Additional Notices/Orders’: Calcutta High Court allows fresh adjudication. *  State tax officer can’t issue GST SCN beyond CBIC-assigned jurisdiction: Bombay High Court stays recovery proceedings. *  Earlier 7.5% Pre-Deposit must count towards mandatory 10% for Appeal: Uttarakhand high court quashes CESTAT Order. *  Third Parties can’t challenge GST Advance Rulings merely due to financial impact: Karnataka HC *  GST SCN generated using AI tool quashed: Punjab & Haryana High Court *  Bank Attachment Quashed as Madras HC Quashes GST Order Issued Against Deceased Person *  ITC Blocking Order for Failure to Record ‘Reason to Believe’ U/R 86A Quashed: Allahabad High Court *  Govt Extends GSTAT Appeal Filing Deadline From 30 June to July 31, 2026 *  GST Demand on RWA Stayed: Allahabad High Court Questions Taxability of Electricity Distribution to Flat Owners *  CBIC Clarifies Jurisdiction After GST Registration Transfer: Earlier Proceedings Remain Valid, New Officer to Continue Action *  GST authorities’ certification not mandatory for reimbursement, but tax payment must be proven: Karnataka HC *  Contractor can’t seek gst reimbursement through writ when contract has arbitration clause: Karnataka HC *  Unsigned Order Is No Order in Law: AP HC Quashes GST Assessment Order for Want of Officer’s Signature *  Customs Can’t Levy Rs. 1.36 Crore Cost Recovery Charges Without Proof of Full-Day Officer Deployment: CESTAT  *  12% IGST Payable On Imported Dialysis Machine Parts: CESTAT *  Bombay High Court Admits Challenge to GST Limitation Extension Notifications; Grants Protection Against Coercive Recovery *  Criminal Case Can’t Run Parallel to GST Proceedings on Same Facts: Allahabad High Court *  Allahabad High Court Stays GST Detention Order; Directs Release of Vehicle and Goods on Deposit of Rs. 1.44 Lakh *  Service Tax Can’t Be Levied on Loss-Making Contracts: Gujarat High Court *  GSTN Mandates Ship-to GSTIN in e-Invoice and e-Way Bill APIs; Introduces Voluntary e-Way Bill Closure Facility from August 1, 2026 *  GST Appeal Can’t Be Rejected as Time-Barred When Taxpayer Was Pursuing Rectification Remedy: Telangana High Court *  Absence of E-Way Bill and Transport Documents Justifies Customs Seizure U/s 110: Gauhati HC *  Madras High Court Upholds GST Late Fee and Penalty for Non-Filing of Annual Return, Dismisses Challenge  *  GST Records, Purchase Documents Sufficient to Discharge Burden Under Customs Act: CESTAT Orders Release of 3.65 Kg Gold  *  No Sugar Cess Payable on Sugar Exported Out of India: CESTAT *  Road Construction Services Exempt and SCN Time-Barred: CESTAT Quashes Service Tax Demand Based Solely on Form 26AS  *  ITC Freeze Upheld After GST Dept Find Suppliers Were Allegedly Fake Bill-Trading Entities: Madras HC 
Subject News *  Input service benefits can’t be denied: CESTAT allows export refund despite MMTC acting as Canalising agency. *  No service tax demand without proof of service of SCN: CESTAT. *  Service tax demand quashed as dept. fails to prove service of SCN: CESTAT *  GST : Mere allegation of inadequate consideration of reply not enough to invoke writ jurisdiction: Delhi High Court *  Onerous conditions imposed for provisional release of seized imported goods shouldn’t amount to virtual denial of relief: CESTAT. *  GST SCN without alleging fraud cannot invoke sec. 74: Karnataka High Court quashes adjudication order. *  Extended Limitation Can’t Be Invoked Merely on Form 26AS Data: CESTAT *  Revenue-Sharing with Restaurants Not Taxable as Business Support Service: CESTAT *  R. 6(3) Option Can’t Be Forced on Taxpayer; CESTAT Quashes Rs. 12.36 Crore CENVAT Credit Demand *  Excise Duty | Power Consumption Alone Can’t Prove Clandestine Manufacture: Karnataka High Court *  Madras High Court Examines DGGI’s Authority to Issue GST Penalty Orders Under Section 122, Adds DGGI as Party *  Proceedings under omitted r. 96(10) can’t survive without saving clause: andhra pradesh high court quashes gst refund recovery *  Excise duty power consumption alone can’t prove clandestine manufacture: karnataka high court *  Madras high court rules GST show cause notices must disclose grounds for invoking extended limitation *  Court Can’t Direct Extension GST Return Deadlines or Waive Interest and Penalties: Karnataka High Court *  GST Notifications Can’t Go Beyond GST Council Recommendations: Madras High Court Quashes SCN on Branded Pulses *  Appeal Can’t Be Dismissed for Delay When Dept’s Own Order Mis-states Limitation Period: CESTAT *  No Evidence of KYC or Due Diligence Breach By Customs Broker: CESTAT Quashes Licence Revocation in Export Overvaluation Case *  Glucometers Are Chemical Analysis Instruments Classifiable Under Tariff Heading 9027: CESTAT *  Validity of Post-GST Service Tax Proceedings Upheld: Gujarat High Court Dismisses Challenge to S. 73 SCN *  Rectified GST Refund Applications Can’t Be Rejected as Time-Barred If Original Refund Claim Was Filed Within Limitation: Gujarat HC *  Service Tax Refund Can’t Be Denied as Time-Barred When Levy Itself Is Unconstitutional: Gujarat High Court *  Same Officer Can’t Act As Auditor & Adjudicator: Karnataka High Court *  Karnataka High Court Condones 324-Day Delay, Revives Customs Appeal in Jewellery Pilferage Case  *  Madras High Court Quashes GST Assessment Order Passed Ex Parte Despite Prior ITC Reversal; Lifts Bank Attachment *  Tobacco Process Doesn’t Amount to Manufacturing: Madras High Court Quashes Rs. 1.32 Crore Compensation Cess Demand  *  Recovery Notice Unsustainable After Voluntary Reversal of Unutilised Credit: CESTAT  *  GST | ‘System Generated’ SCN Without Officer Details Invalid: Allahabad HC  *  Electronic Records Without Statutory Certification Requirements Can’t Justify Undervaluation Allegations: CESTAT *  Madras High Court Stays GST Order, Finds Prima Facie Merit in Plea Against S. 74 Proceedings Based on S. 73 Intimation  

Comments

Print   |    |  Comment

PJ/Case laws/2012-13/1064

Unjust enrichment - non-passing of incidence of duty whether proved on issue of debit notes afterwards?

Case: COMMISSIONER OF CENTRAL EXICSE, LUDHIANA V/S ORIENTAL TEXTILE PROCESSING COMPANY (P) LTD.
 
Citation: 2012 (276) E.L.T. 257 (TRI. – DELHI)
 
Issue: - Unjust enrichment- Whether issue of debit notes afterwards will discharge the burden of non passing of incidence of duty?
 
Brief Fact:- The appellant issued the invoices to their customers and buyers in which duty was included and later on the issued the debit notes to those customers. Such procedure is not permissible under law and thus department disregarded such procedure. The fact involved was that mere issuance of the credit notes or debit notes subsequent to the collection of the duty incidents in the terms of the invoices issued at the time of the sale of the goods do not amount to discharging the burden which is required to be discharged by the assessee. It amounted to unjust enrichment. A show cause notice dated 28-02-2003 was issued by deputy commissioner demanding refund of Rs 1,71,919 by cheque and deemed credit not availed at the time of clearance and Rs 44,922 by cheque of the amount of AED excess paid to the respondent.
 
The Adjudicating Authority has dropped the proceedings and ordered refund of Rs. 1, 71, 919/- by cheque and deemed credit not availed at the time of clearance and Rs. 44, 922/- by cheque of the amount of AED excess paid by respondent.
 
In appeal, the Commissioner (A) upheld the Original order and dismissed the appeal.
 
Appellant’s Contention: - Revenue contended that respondent had not established that the duty element was not passed over to the customers. Relying on judgment in Sangam Processors (Bhilwara) Ltd v/s CCE, Jaipur [1994 (71) ELT 989 (Tribunal), they submitted that records clearly disclosed that the procedure of recovering the duty from the customers by including the duty in the invoices and later on issuing debit notes to them is not a valid procedure in the eye of law. Mere issuances of debit notes to the customers would not relive the assessee from his liability to pay duty.
 
Reasoning of Judgment: -The Tribunal perused the order of the Adjudicating Authority and noted that it clearly disclosed that duty element was included in the price of the goods cleared on invoices to the buyers was never disputed by respondent. Rather it was specifically admitted and it was sought to be contended that subsequent to issuance of such invoices and payment having been received in terms of amount disclosed in invoices that the buyers issued debit notes in relation to duty elements.
 
The Tribunal perused the judgment given in Sangam Processors (Bhilwara) Ltd v/s CCE, Jaipur which was on the similar issue. It was also noted that appeal was filed against a comnnected matter and was dismissed by the Apex Court in Rajasthan Processing (India) Ltd v/s Collector [1994 (70) ELT A182 as well as in Rajasthan Spinning & Weaving Ltd v/s Collector [1999 (112) ELT A115 (SC).
 
The Tribunal held that once the law having been clearly laid down that mere issuance of credit notes or debit notes subsequent to the collection of duty incidents in terms of the invoices issued at the time of sale of goods do not amount to discharging the burden which is required to be discharged by the assessee, to come out of the principle of unjust enrichment applicable in such cases, merely because the buyers of the respondent had discharged their burden in that regard. It was held that the revenue are justified in contending that consequent failure on respondent’s part to establish the duty incident has not been passed over to the customers, the Authorities below erred in dropping the proceedings. Impugned orders not sustainable and set aside with consequential relief.
 
Decision: -Appeal allowed.
 
Comment:- When the duty has been charged in the invoice and payment is also received from customers then it clearly shows that the duty incidence has been passed on to the customer. But issue of debit note will not change this position. The concept of unjust enrichment is applicable in instant case.

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