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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/2012-13/1155

Whether an assessee who is engaged in the activity of manufacturing has correctly reversed the duty or not.
CASE: - C.C.E., MANGALORE V/S MANGALORE REFINERY AND PETROCHEMICS LTD.
CITATION: - 2012 (280) E.L.T 383 (KARNATKA)
ISSUE:- Whether an assessee who is engaged in the activity of manufacturing has correctly reversed the duty or not.
BRIEF FACTS:- This appeal by the revenue aggrieved by the order of CESTAT, holding that proportionate reversal of Cenvat credit taken on the inputs which are utilized for manufacture of exempted product, is enough to satisfy the provisions of Rules 6(2) and 6(3) and therefore, it upheld the order passed by the appellate authority and set aside the order passed by the assessing officer which had denied benefits to the assessee.
The assessing officer in the course of assessment held that, assessee has reversed an amount of Rs. 9, 26,761/- being the credit of duty and paid on the inputs used for manufacture of DM water which is in Contravention of the Cen­vat Credit Rules, 2004. Therefore, he proceeded to pass an order holding that, a sum of Rs. 19, 44, 64,354/- would be 10% of the value of the same as issued in the show cause notice for the period from 1-3-2005 to 11-4-2005 under Rule 14 of the Cenvat Credit Rules, 2004 r/w Rule 6 of the Cenvat Credit Rules 2004 and Sec­tion 11A of the Central Excise Act, 1944 is due from the assessee. As against the said demand, a sum of Rs. 9, 26,761/- already paid by him was appropriated and a demand was also issued for interest and a penalty of Rs. 10,000/- is also de­manded. It is this order which is reversed by the both 1st appellate authority and 2nd appellate authority.
Resaoning:- Therefore, the question for consideration in this appeal is, when the assessee during the course of production of steam are using such common inputs and inputs services for manufacture of both dutiable and exempted final prod­ucts. Further, when they have not opted to maintain a separate account for receipt, con­sumption and inventory, on such inputs meant for use in the manufacture of du­tiable final products and the quantity of inputs meant for use in the manufacture of exempted product. Also when they have cleared the same which was manufac­tured with the use of Cenvat Credit from M/s HPCL on payment of duty, the assessee has an option of paying the amount equivalent to the Cenvat credit for the use in or in relation to the manufacture of final products namely, steam. Therefore, it is a clear case of ascertaining the liability of the assessee which fails within the terms of determination of rate of duty payable by the assessee.
If that is so, in view of Section 35G, that determination is outside the scope of the appeal before this court, it is a matter to be agitated in appeal under Section 35L of the Act before Apex Court.
DECISION: -   The appeal was rejected.
Comment: -When the case relates to rate and valuation of duty then the matter is to be decided by Apex Court. But Honorable High Court has held that the reversal of Cenvat credit also relates to rate of duty. Hence, the appeal lies with Apex Court.
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