Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

Comments

Print   |    |  Comment

PJ/Case Law/2013-14/2052

Whether intermediate goods supplied to projects funded by UN eligible for exemption retrospectively ?

Case:- MAHINDRA & MAHINDRA LTD. Vs COMMISSIONER OF C. EX., NASHIK
 
Citation
:- 2013 (296) E.L.T. 62 (Tri. - Mumbai)

Brief facts:- The appellants, M/s. Mahindra & Mahindra Ltd., were manufacturing motor vehicles and motor vehicle parts, etc., and supplying to their regional sales offices, who in turn sold to the dealers. By a Notification No. 108/95, dated 28-8-1995, all goods falling under the Schedule to the Central Excise Tariff Act, 1985 were exempted from the whole of the duty of excise when supplied for the official use of United Nations or International Organization or for the projects funded by United Nations or an International Organization and approved by the Govt. of India.

Rule 57C of the Central Excise Rules, 1944 prevailing during February, 1997 provided for disallowance of Modvat credit only when final product was exempted from duty. However, exemption was made in respect of supplies made in terms of Notification No. 108/95, dated 28-8-1995. The appellants were, therefore, entitled for Modvat credit of duty paid on the components used in the manufacture of motor vehicles supplied to United Nations or International Organizations; whereas Notification No. 67/95, dated 16-3-1995 did not mention about clearances of the final product to the International Organizations, whom the appellants were supplying. Later on, an amendment came by virtue of Notification No. 11/97 with effect from 1-3-1997, including these International organizations. Therefore, the dispute pertains to one month period i.e. February, 1997, during which the supplies were made to the International Organizations by the appellants, wherein the Department demanded the duty on the intermediate products utilized in the final product. The appellants claim that the subsequent amendment was to be given effect retrospectively even for the month of February, 1997 also. This position was made clear in case of CCE v. M/s. Premier Tyres Ltd. reported in 1992 (62)E.L.T.104 (Tribunal)and further contention was that the situation of Revenue neutral. The Commissioner (Appeals) had rejected the contention of the appellants and confirmed the duty demand of Rs. 1,03,707/-.
 
Appellant’s contentions:- The ld. Counsel for the appellants submitted that the Notification No. 11/97, dated 1-3-1997 was clarificatory in nature to the Notification No. 108/95, dated 28-8-1995. To support this contention, he placed reliance on the decision of the Tribunal in the case of CCE v. M/s. Premier Tyres Ltd. reported in 1992 (62)E.L.T.104 (Tribunal) which was confirmed by the Hon’ble Kerala High Court reported in 2001 (130)E.L.T.417 (Ker.).He further submitted that the similar issue came up before this Tribunal in the case of Indian Aluminium Co. Ltd. v. Collector of Central Excise, Cochin reported in 1995 (79)E.L.T.111 (Tribunal). In alternate, he submitted that it was a Revenue Neutral situation and therefore the appeal should be allowed.
 
Respondent’s contentions:- On the other hand the ld. Additional Commissioner (A.R.) appearing on behalf of the Revenue reiterated the impugned order and submitted that the Notification No. 11/97 could not have retrospective effect, therefore appeal be dismissed.
 
Reasoning of judgment:- Considering the submissions made by both sides and after examining the issue before them the Bench found that as per Rule 57C, the credit of duty was not allowed if final product were exempted.
They further found that as per Notification No. 108/95-C.E., dated 28-8-1995 the goods were exempted which were supplied to the United Nations or an International Organization for their official use. They further found that as there was an anomaly in the Rule; to plug that anomaly Notification No. 11/97-C.E., dated 1-3-1997 came into effect. The issue came before this Tribunal in the case of Indian Aluminium Co. Ltd.(supra) wherein that case the final product namely Aluminium Extrusions were dutiable and the appellant had paid duty on all such clearances, made to Export Units, as duty to such units was exempted by different notifications issued under Rule 13, which were for export obligations. No bond was executed in these cases, as they fell within the category of export units where taking of bond was not obligatory and such non-execution was only a procedural lapse and for such lapse, the benefit of the exemption could not be denied. As admittedly the final product had been utilized by export units, hence such clearance of the final products, do not attract the proviso to the Notification. In that case this Tribunal held that as Aluminium billets used in manufacture of Aluminium extrusions, which were cleared to export unit products so cleared to export units whether cleared under bond or not, not treatable as goods wholly exempt or chargeable to nil rate of duty. Benefit of exemption in respect of intermediate product was available under Notification No. 217/86-C.E., dated 2-4-1986. In the case in hand before tribunal also, the parts assembles to the motor vehicle which was the final product supplied to unit. Therefore, the intermediate product of the parts assembled, the benefit of Notification No. 67/95 read with Notification No. 108/95 was available to the appellants. Accordingly, the impugned order was set aside and the appeal was allowed with consequential relief if any.

Decision:- Impugned order was set aside and the appeal was allowed.

Comment:- The analogy drawn from the case is that the intermediate products supplied for the projects funded by International Organisations have been given exemption vide notification no. 11/97-C.E., dated 1-3-1997 and this exemption is clarificatory in nature as it removed the loophole in the Rule. Accordingly, this notification was held to be retrospectively applicable in view of the decision given in the case of Indian Aluminium Co. Ltd. 

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