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 Law/2013-14/1685

Whether credit is admissible on paint which is not used as input for fabrication of parts of towers?

Case:-VIJ ENGINEERS & CONSULTANTS PVT. LTD. VERSUS COMMR. OF C. EX., ROHTAK
 
Citation:- 2013(29)S.T.R. 623(Tri.-Del.)

Brief Facts:-The appellant-manufacture parts of transmission tower from the structural steel items. They also received duty paid paints. The parts of tower are cleared on payment of duty along with paints. Since they have contract for erection and installation of those towers, after clearance of parts of towers, the same are installed at the site and thereafter paints cleared along with parts of towers used for painting the same. The appellant’s head office is also registered as taxable service provider and is paying service tax on the erection and installation charges. The department being of the view that the appellant’s unit is not eligible for Cenvat credit in respect of paints, as the same is not an input for manufacture of parts of towers, issued show cause notice for denying Cenvat credit amounting to Rs. 33,01,171/- availed by them on paints during the period from 1-4-2006 to 31-12-2009. This show cause notice was adjudicated by the additional Commissioner vide order-in-original dated 3-2-2011 by which Cenvat credit demand was confirmed against the appellant alongwith interest and penalty of equal amount was imposed under Rule 15(2) of Cenvat Credit Rules, 2004. On appeal to the Commissioner (Appeals), the order of the Additional Commissioner was upheld vide order-in-appeal dated 30-12-2011 against which this appeal along with stay application has been filed by the appellant.
 
Appellant contentions:-The appellant has submitted that though the paint is not used as input for fabrication of parts of towers, duty on parts of towers had been paid on value which included the value of paints, which is clear from the invoices regarding the sale of tower parts issued by the appellant, that in any case, the paint can be treated as an input for the service of erection and installation being provided by the appellant and since the appellant’s head office is registered for payment of service tax and they are paying service tax on erection and installation charges, they would be eligible for Cenvat credit in respect of paints which could be utilized for payment of service tax and that in view of this, the impugned order is not correct. He, therefore, pleaded that the appellant have a strong prima facie case in their favour and, hence the requirement of pre-deposit of Cenvat credit demand, interest and penalty may be waived for hearing of the appeal and recovery thereof may be stayed till the disposal of the appeal. 
 
Respondent contentions:-  The respondent opposed the stay application and reiterating the findings in the impugned order, emphasized that the paint not being an input for the manufacture of parts of towers, the appellant would not be eligible for cenvat credit in respect of the same and that the fact that the appellant’s head office is registered as service provider is of no relevance, as the service tax registration is of different location than the location of the manufacturing unit. He accordingly pleaded that this is not the case for waiver from the requirement of the pre-deposit.
 
Reasoning of Judgment:-We have considered the submissions from both sides and perused the records. We find that the appellant’s head office is registered as provider of taxable service and they are paying service tax on the charges for erection and installation of towers which also involving painting of the same. Hence, paint received by them can be treated as inputs for providing taxable service, and the appellant would be eligible for Cenvat credit in respect of the same which could be utilized for payment of service tax. Thus, even if cenvat credit in respect of paint is denied to the appellant’s manufacturing unit, the same would be available to the head office registered as service provider for payment of service tax as erection and installation service. Prima facie, we also find substance in the plea of the appellant that the duty on parts of tower had been paid on the value which included the value of paints. In view of this, we are of the view that the appellant have a strong prima facie case in their favour and hence requirement of pre-deposit of demand of Cenvat credit demand and interest thereon and penalty is waived for hearing of the appeal and recovery thereof is stayed till disposal of the appeal.
 
Decision:-Stay application is allowed.
 
Comment:-The essence of this case is that paint is not used as input for fabrication of parts of towers but duty on parts of towers had been paid on value which included the value of paints, which is clear from the invoices regarding the sale of tower parts issued by the appellant. They are also paying service tax on the charges for erection and installation of towers which also involving painting of the same. Hence, paint received by them can be treated as inputs for providing taxable service, and the appellant would be eligible for Cenvat credit in respect of the same which could be utilized for payment of service tax. Therefore, prima facie applicant is eligible for availing credit on paints.

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