Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *   CBIC issues draft rules for Customs valuation *  Top Headlines: Threshold for Benami deals, green bond investors, and more *  Govt aims 1-hour clearance for goods at all ports *  Exporters Allowed To Use RoDTEP, RoSCTL Scrips To Pay Customs Duty, Transfer Them; Rules Amended *  Millions of labourers to be affected by brick producers’ strike over hike in GST, coal rates *  Inauguration of ‘kendriya GST parisar’ *  Transporter can seek Release of Conveyance alone, not Goods under GST Act: Madras HC *  GST: Quoting of DIN Mandatory for Responding to Notice, Govt Modifies Portal *  Firms can soon file claims for GST credits of ?400 cr *  CBIC issues modalities for filing transitional credit under GST. *  Mumbai: Man creates 36 fake GST firms, arrested for input tax credit fraud of Rs 23 cr *  Report to restructure Commerce Ministry under study; idea is to set up trade promotion body: Goyal *  Firms can soon file claims for GST credits of ?400 cr *  Gambling Alert! Govt May Levy Up To 28% GST; UP, Bengal Back Move *  EPFO backs raising retirement age to ease pressure on pension funds *  India Moving Up Power Scale, Set to Become Third Largest Economy By 2030 *  Airfares Get Expensive: What Changes for Flyers From Today? *  IRCTC Latest News: Passengers to Pay More For Cancelling Confirmed Rail Tickets Soon. *  IBC prevails over Customs Act, says Supreme Court. *  As GST enters sixth year, a time for evaluation and reassessment *  There’s GST on daily essentials as Centre needs money to buy MLAs: Arvind Kejriwal *  Now, GST on cancellation of confirmed train tickets, hotel bookings *  GST kitty for top States could rise 20% in FY23, says Crisil *  French customs officials seize another cargo vessel over Russia sanctions *  TradeLens builds on Asia momentum with Pakistan Customs deal *  Hike tax on tobacco, reduce affordability & increase revenue: Civil society organizations to GST council *  Bihar: ?10 crore tax evasion on tobacco products detected in raids *  Centre failed on GST, COVID; would it be anti-national? Rajan on Infosys row *  Service Tax not Chargeable on Income Tax TDS portion paid by recipient: CESTAT grants relief to TVS *  Foreign portfolio investors make net investment of Rs 7575cr in Sep so far
Subject News *  Run-up to Budget: Monetary threshold for GST offences may rise to Rs 25 cr *   GST (Tax) E-invoice Must For Businesses With Over Rs 5 Crore Annual Turnover *   Both Central GST and excise duty can be imposed on tobacco, rules Karnataka high court *   CBIC Issues Clarification On Extended Timelines For GST Compliance *   CBIC Issues Clarification On Extended Timelines For GST Compliance *  Budget 2023- 9.6 crore gas connections *  GST: Tamil Nadu Issues Instructions for Assessment and Adjudication Proceedings *  GST: CBIC Extends Last Date for filing of ITC *  GST collection in September surpasses Rs 1.4 lakh crore for straight seventh time *  Dollar smuggling case: Customs chargesheet names M Sivasankar as key conspirator. *  Hike in GST rates fuels inflation *  Assam: CBI arrests GST commissioner in Guwahati *  GST fraud worth ?824cr by 15 insurance Cos detected *  India proposes 15% customs duties on 22 items imported from UK *  Decriminalising certain offences under GST on cards *  Surge in GST collections more due to higher inflation: India Ratings *  MNRE Notifies BCD and Hike in GST Rates as ‘Change in Law’ Events But With a Condition | Mercom India *   Solar projects awarded before customs duty change allowed cost pass-through *  Rajasthan High Court Dismisses Writ Petitions Challenging Levy Of GST On Royalty *   GST revenue in September likely at Rs 1.45 lakh crore *  Govt working on decriminalising certain offences under GST, lower compounding charge *  Building an institution like GST Council takes time, trashing is easy: Sitharaman *  GST collections in Sept may touch ?1.5 lakh crore *  KTR asks Centre to withdraw GST on handlooms *  After Gameskraft, More Online Gaming Startups To Receive GST Tax Claims *  Madras HC: AAR Application Filed Under VAT Does Not Survive After GST Enactment *  Threshold for criminal offences under GST law may be raised *  Bengaluru: Gaming company faces biggest GST notice of Rs 21,000 crore *  CBIC clarifies Classification of Cranes for GST, Customs Duty *  Customs seize gold hidden in bicycle in Kerala airport  

Comments

Print   |    |  Comment

PJ/Case Law/2014-15/2187

Whether Cenvat credit be availed on goods returned to the factory on which duty was not paid at the time of clearance?

Case:- INDO COUNT INDUSTRIES LTD Vs COMMISSIONER OF CENTRAL EXCISE, KOLHAPUR
 
Citation:- 2014-TIOL-352-CESTAT-MUM

Brief facts:- The application sought waiver of pre-deposit of cenvat credit of Rs. 68.45 lakhs and equal amount of penalty imposed under Rule 15(2) of the Central Excise Rules, 2004 read with Section 11AC(1)(a) of the Central Excise Act.
 
Appellant’s contentions:- At the outset, the learned Advocate, Mr. V.B. Gaikwad, for the applicant, submitted that during the relevant period October 2011 to November 2011, they availed Cenvat credit amounting to Rs. 68.45 lakhs on the CVD paid against re-importation of their goods, viz cotton fabrics and made-up articles exported earlier. He submitted that because of the defect in the said goods, the overseas buyer rejected the goods and sent it back to the applicant. It was his submission that the only ground on which the cenvat credit was denied to the applicant, was that initially, the goods were not duty paid and hence, when it was returned to the factory, after rejection, it could not be admissible to cenvat credit under Rule 16 of the Central Excise Rules, 2002. The learned Advocate did not plead any financial hardship
 
Respondent’s contentions:- The learned AR for the Revenue reiterated the findings of the adjudicating authority and submitted that Rule 16 of the Central Excise Rules, 2002 was very specific. Therefore, the applicant was not entitled to cenvat credit.
 
Reasons of judgment:- Heard both sides and perused the records, the Tribunal held that it was not in dispute that the applicant had, after initial export of the goods, received back the rejected goods and paid CVD at the time of its reimport and availed CENVAT Credit of the CVD paid on the rejected goods, under Rule 16 of the Central Excise rules, 2002. The said Rule 16 reads as:
"Rule 16. Credit of duty on goods brought to the factory. - (1)Where any goods on which duty had been paid at the time of removal thereof were brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of the duty paid as if such goods were received as inputs under the CENVAT Credit Rules, 2002 and utilise this credit according to the said rules.
(2) ............................................................................................"
On a preliminary analysis of Rule 16 of the Central Excise Rules, 2002, prima facie, the Tribunal was of the view that any goods on which duty had been paid at the time of removal when brought back to the factory for processes mentioned therein, would be eligible to cenvat credit. In these circumstances, they of the opinion that the applicant was not able to make out a prima facie case for total waiver of the dues adjudged. Keeping in view the interest of revenue as well as the principles of law settled by the Hon'ble Supreme Court and High Courts on the issue of disposal of stay applications, they directed the applicant to deposit 50% of the cenvat credit involved in the present case. On deposit of the same, the balance dues adjudged would stand waived and its recovery stayed during the pendency of the appeal.

Decision:- Pre deposit ordered.

Comment:- The analogy drawn from the case is that as per Rule 16 any goods on which duty had been paid at the time of removal when brought back to the factory for processes mentioned therein, would be eligible to cenvat credit. Hence since the goods in the case were cleared without payment of duty therefore, cenvat credit could not be availed on the same when imported back.
 
Prepared by:- Ranu Dhoot

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