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/2016-17/3100

Whether difference in stock in Daily Stock Account and ER-1 sufficient to prove clandestine removal?

Case:-SALTS & CHEMICALS PVT. LTD. VERSUSCOMMISSIONER OF C. EX., KOLKATA-IV

Citation:-2016 (331) E.L.T. 449 (Tri. - Kolkata)

Brief Facts:-Briefly stated the facts of the case are that during the period from June, 2010 to September, 2010, there was mismatch between the Opening Balance (OB) and Closing Balance (CB) of the figures shown in the ER-I returns. On the basis of this difference in the figures, a show cause notice was issued demanding the duty on the differential quantity as reflected in ER-I returns alleging clandestine clearance of the same without payment of duty. The adjudicating authority confirmed the demand. Aggrieved by the said order, the appellant preferred an appeal before the ld. Commissioner (Appeals). The ld. Commissioner (Appeals), in turn, upheld the order of the adjudicating authority and dismissed the appeal filed by the appellant. Hence, the present appeal.

Appellant contentions:- The ld. advocate, appearing for the appellant, submits that on switching over from the manual system of maintenance of records/accounts to computerization, in the month of May, 2010, there was mistake in entering the data relating to opening and closing balance stock in the case of three items, namely,
(i)            Duraphos Rustokik, etc.;
(ii)           Phoschem Phosbond, etc.; and
(iii)          Phoschem Phosbond,
It is the submission of the ld. advocate that the opening and closing balance were shown correctly in the Daily Stock Account, however, inadvertently, there was error in showing the same ER-1 returns filed with the Department for the respective months. It is his submission that mere clerical mistake recording in the OB & CB of Stock in the ER-I returns cannot be construed as clearance of goods without payment of duty. In support, he has referred to the judgments of this Tribunal in the cases of CCEx., Ludhiana v. Renny Steel Castings - 2011 (274) E.L.T. 94 (Tri.-Del.), R.K. Patel & Co. v. CCEx. - 2008 (227)E.L.T.558 (Tri.-Mumbai) & Hilton Tobacco v. CCEx., Hyderabad - 2005 (183)E.L.T.378 (Tri.-Bang.).

Respondent contentions:-The ld. AR appearing for the Revenue, has reiterated the findings of the ld. Commissioner (Appeals).

Reasoning of Judgment:-Heard both sides and perused the records. Tribunal find that the ld. Commissioner (Appeals) has simply upheld the order of the lower authority without recording reasons. From the records and submissions advanced by the ld. advocate for the appellant, Tribunal find that the allegation of clandestine removal rests on the discrepancy in the figures of OB & CB of Stock mentioned in the monthly ER-1 returns relating to manufacture and production of only three items, namely,
(i)            Duraphos Rustokik, etc.;
(ii)           Phoschem Phosbond, etc.; and
(iii)          Phoschem Phosbond,
There is no difference between the OB and CB in DSA for June & July, 2010 and also for August & September, 2010. It is their claim that due to inadvertence, while filing ER-1 returns, CB & OB have not matched for the said periods. On a careful analysis of the aforesaid discrepancy, Tribunal find force in the contention of the ld. advocate for the appellant. Tribunal find that there is no discrepancy noticed by the Department in the Daily Stock Accounts in recording the OB & CB of Stock in relation to the said items. However, while recording the figures in ER-1 returns, there could be possibility of writing error in entering the data relating to OB and CB of the said items due to switching over from manual system of maintenance of records to computerized system. Tribunal find force in the contention of the ld. advocate that if there was an intention to clear the goods clandestinely, then the appellant would not have maintained different figures of the Stock in the DSA and ER-1 returns. Besides, except the said errors in recording the CB & OB in the respective ER-1 returns, the Department has not adduced any other evidence in support of clandestine removal. In the result, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law.

Decision:- Appeal allowed.

Comment:- The gist of the case is that mere difference in opening stock and closing stock mentioned in Daily Stock Account and the ER-1 returns cannot lead to charge of clandestine removal. When there is no discrepancy noticed by the department in the daily stock account in recording the OB & CB of stock in relation the said items, it could be possible that there was error in entering the data. If there was intention to clear the goods clandestinely, then the appellant would not have maintained different figures of the stock in DSA and ER-1 returns. Also department has not adduced any other evidence in support of clandestine removal. Hence, appeal was allowed as charge of clandestine removal is grave and is required to be proved with cogent and corroborative evidences.

Prepared By: Anash kachaliya
 
 
 
 

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