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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.  

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PJ/CASE LAW/2015-16/2892

Whether credit deniable to job worker on the ground that clearance was without payment of duty?

Case:-AURANGABAD AUTO ENGG. PVT. LTD. VERSUS COMMR. OF C. EX., AURANGABAD

Citation:- 2015 (40) S.T.R. 776 (Tri. - Mumbai)

Brief Facts:-The appellants are in appeal against the order of denial of input service credit on the ground that such credit was taken on input services which were used for manufacturing of exempted as well as dutiable goods during the period of dispute. The facts of the case are that the appellants are manufacturer of vehicle parts. During the impugned period, they manufactured some of these parts on job work basis. Some motor vehicle parts they manufactured independently also. The motor parts manufactured on job work basis were cleared without payment of duty and the motor parts independently manufactured by them were cleared on payment of duty.

Appellants Contention:-The learned Advocate for the appellants submits that these job worked goods were supplied to the principal manufacturer, who further used this goods in manufacturing of final product, which was cleared on payment of duty, which is not in dispute. Therefore the matter is squarely covered by the decision of Larger Bench of this Tribunal in the case of Sterlite Industries (I) Ltd. v. Commissioner of Central Excise, Pune reported in 2005 (183) E.L.T. 353 (Tri.-LB) therefore the issue is no more res integra, the appeal is allowed by setting aside the impugned order.

Respondents Contention:-Department was of the view that input services which were used in relation to manufacture of goods on job work basis, the input service credit was not admissible to the extent the services used in relation to manufacture of the job worked goods. Therefore, the credit to that extent was denied. Therefore, the show cause notice was issued for demand of inadmissible input service credit along with interest and imposing the penalty under Section 11AC of the Central Excise Act, 1944. The demands in show cause notice were resulted into adjudication order. On appeal before the first appellate authority, the adjudication order was upheld. Against that order, the appellants are in appeal before this Tribunal.

Reasoning of Judgement:-On careful examination of the facts and submission made by the learned Advocate, tribunal find that in this case it is not disputed that the goods manufactured by the appellants on job work basis have been cleared without payment of duty to their principal manufacturer, who further used these goods in manufacturing of final product which were cleared on payment of duty. Therefore the decision of Larger Bench of this Tribunal in the case of Sterlite Industries (I) Ltd. (supra) is squarely applicable to the facts of this case. In view of the decision of the Larger Bench of this Tribunal (supra), the appellants are entitled to take the Cenvat credit as availed by them. Therefore, they set aside the impugned order and allow the appeal.

Decision:-Appeal allowed.

Comment:- The gist of the case is that the goods manufactured on job work basis are although cleared without payment of duty to the principal manufacturer but are further used in manufacturing of final product which are cleared on payment of duty and so the cenvat credit cannot be denied to the job worker. This is based on the landmark decision given in the case of Sterlite Industries (I) Ltd.

Prepared By:- Neelam Jain
 

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