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 LAW/2015-16/2562

Whether deemed exports considered for computing DTA sale entitlement?

Case:-  NANDANA SYNTHETICS PVT. LTD. VERSUS COMMISSIONER OF C. EX. & S.T., DAMAN

Citation:-2015(315) E.L.T. 454 (Tri.-Ahmd.)

Brief Facts:-This appeal is directed against O-I-A No. KS/350/DAMAN/2006, dated 6-10-2006.

The brief facts that arise for consideration are the appellant herein is engaged in manufacturing of polyester texturized yarn and polyester grey knitted fabrics is a 100% EOU. During the period in question (August 2003 to September 2003), appellant cleared the products manufactured by him out of indigenous raw material discharging 50% of the amount of duty payable. The lower authorities were of the view that appellant could not have done so, as per provisions of paragraph 6.8 of the EXIM Policy, issued a show cause notice which was adjudicated and recovery of differential duty was confirmed alongwith interest and penalties. Appellants appeal before the first appellate authority was also rejected. Hence, the present appeal.

Appellant Contentions:-Ld. Counsel at the outset draws our attention to the provisions of paragraph 6.8 of the EXIM Policy 2002-2007. It is his submission that during the relevant period, appellant had exported the goods and also cleared the goods to various 100% EOU’s. It is his submission that the lower authorities are holding a view that the benefit of paragraph 6.8(b) of the EXIM Policy will be applicable only to ‘physical exports’. He would submit that the issue is no more res integra inasmuch as, in the case of Gandhi Fibers - 2011 (268) E.L.T. 354 (Guj.), this Bench vide Final Order No. A/1187/WZB/AHD/2009 held in the favour of the assessee relying upon judgment of the Apex Court in the case of Virlon Textile Mills Ltd. - 2007 (211) E.L.T. 353 (S.C.). It is his submission that the said judgment of the Tribunal in the case of Gandhi Fibers has been upheld by the Hon’ble High Court of Gujarat as reported at 2011 (268) E.L.T. 354 (Guj.) and an SLP filed by the department has been dismissed by the Apex Court on 2-11-2012. He would submit that decision of the Apex Court is binding and it is also his submission that the judgment of Hon’ble High Court of Gujarat in the case of NBM Industries - 2012 (276) E.L.T. 9 (Guj.) = 2013 (29) S.T.R. (208) (Guj.) has held that refund cannot be denied only on the ground that it was the deemed export and not a physical export. He would also submit that the decision of Hon’ble High Court in the case of Amitex Silk Mills Pvt. Ltd. - 2006 (194) E.L.T. 344 and it has been upheld by the Apex Court as reported at 2010 (254) E.L.T. A98 (S.C.).

Respondent Contentions:-Ld. Departmental Representative on the other hand would submit that the appellant could have sought permission from the DGFT for clearing all these goods into DTA as provided in paragraph 6.8(b) of the EXIM Policy. He would draw our attention to the EXIM Policy and submit that the appellant having not taken permission from the DGFT authority, were precluded from clearing goods into DTA on a concessional duty. He would submit that the decision of the Tribunal in the case of Jumbo Bags Ltd. - 2011 (268) E.L.T. 81 (Tri. - Chennai) clearly states that for calculation of DTA entitlement only the value of “physical exports” needs to be taken into account and the value of the “deemed exports” should not be considered. He would also submit that the judgment of Hon’ble High Court of Madras in the case of BAPL Industries Ltd. - 2007 (211) E.L.T. 23 (Mad.) is also on the same issue.

Reasoning of Judgment:-CESTAT have considered the submissions made at length by both sides and perused the case records. Tribunal also find that the issue involved is whether the appellant is eligible to clear into DTA 50% of their FOB value of exports of deemed exports or not.

It is undisputed that appellant is a 100% EOU during the relevant period. It is also undisputed that appellant was clearing the goods to DTA on payment of duty by considering the FOB value of exports, including the deemed exports value.

CESTAT find that the issue is no more res integra.

CESTAT find that in the case of Gandhi Fibers, this Bench vide order dated 11-6-2009 relying upon the judgment of Virlon Textile Mills Ltd. had allowed the appeal of the assessee holding that assessee is eligible to clear goods to Domestic Tariff Area by taking 50% of the deemed exports value as their eligibility. It is noticed that this judgment of the Tribunal has attained finality in the hands of Apex Court. Since the issue is covered by the judgment of Hon’ble High Court of Gujarat in the case of Gandhi Fibersand as also in the case of NBM Industries and Amitex Silk Mills Pvt. Ltd., we find that the impugned order is incorrect.

Reliance placed by the ld. Departmental Representative on the judgment of the Tribunal in the case of Jumbo Bags Ltd. and the judgment of Hon’ble High Court of Madras in the case of BAPL Industries Ltd. will not carry the case any further, as the Jurisdictional High Court’s decision on the very same issue is a recent one and has been upheld by the Apex Court needs to be followed.

In view of the foregoing, we find that the impugned order is unsustainable and is liable to set aside and we do so.

The impugned order is set aside and the appeal is allowed with consequential relief.

Decision:-Appeal Allowed.

Comment:- The crux of this case is that deemed exports are also considered in calculating the DTA sale entitlement of 50% of the FOB price of the goods exported by 100% EOU. This view is confirmed by the Apex Court in the case of Virlon Textile Mills Ltd. , Amitex Silk Mills Pvt. Ltd.  and Gandhi Fibers case.

Prepared by: Hushen Ganodwala
 
 

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