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/2016-17/3118

Whether non submission of documents evidencing fulfillment of export obligation sufficient to impose penalty?

Case:SHREEJI INDUSTRIES LTD. VERSUS ADDL. DIR. GENERAL OF FOREIGN TRADE

Citation:2016 (332) E.L.T. 251 (GUJ.)

Brief Fact:Petitioner has challenged the Order-in-original dated 10-2-2010 passed by the Joint Director General of Foreign Trade and the appellate order dated 8th December, 2011.
Brief facts are that the petitioner had imported certain consumables without payment of duty with an export obligation of granite tiles for an FOB value of Rs. 13,13,928/-. One of the conditions of the license under which such import was allowed to be made was that the export obligation would be fulfilled within the prescribed time limit and the petitioner would submit the documents within one month from the date of expiry of the export obligation period. When the petitioner failed to produce such evidence, show cause notice was issued asking the firm to submit the documents showing export obligation fulfillment. Since the firm failed to produce any such documents, it was declared as a defaulter. Subsequently, show cause notice was issued under Section 14 of the Foreign Trade (Development and Regulations) Act why action under Section 11(2) should not be taken. Even in response to such show cause notice, no documents were produced discharging export obligation before the authorities. However, it was conveyed that the documents were lost and therefore, FIR was lodged at Abu Road Police Station for such purpose.
 
The adjudicating authority, however, by impugned order, proceeded to impose penalty of Rs. 1313400/- making following observations.

“7. It is observed from the licensing file that the firm has not submitted any of the export documents towards fulfillment of export obligation. They have not submitted any export documents towards fulfillment of export obligation such as Shipping bills, Bank realization certificate. Thus the firm has failed to fulfill the export obligation in toto. The firm has also not furnished the details of imports made by them and therefore, the adjudicating authority has no option but to believe that the notice firm has imported in full and therefore the firm has to pay the customs duty + interest @ 15% towards the imports made by them.

8. Therefore, the undersigned has reasons to believe that the noticee firm has not utilized the license for the purpose for which it was granted to them and therefore, the noticee firm and its Directors will be liable to pay the amount of customs duty together with interest @ 15% p.a. on the excess imports made by them. Moreover, the noticee firm has not submitted any evidence of exact amount of duty benefits obtained by them and therefore, the adjudicating authority is constrained to decide the penal amount on the basis of CIF value of the license. In my view, the appropriate amount of penalty in this case will be four times the CIF value of the license and therefore the noticee firm is liable to pay penalty of four times the value of the license i.e. Rs. 1313400/- (Rs. 328350/- X 4).

ORDER

I, therefore, in exercise of powers as conferred in me under Section 13 of the Foreign Trade (Development and Regulation) Act, 1992, order as under :-

9.1 To Recover/payment of penalty amount of Rs. 13,13,400/- (Rupees thirteen lakh thirteen thousand four hundred only)

9.2 Immediately after recovery/payment of the amount as indicated in paras 9.1 above, the Show Cause Notice will be treated as withdrawn and case will stands as closed/discharged/regularized.

(11) This order is issued without prejudice to any other action that may be taken under any other Act, Rule or Regulation, in force”.
Appeal against such order came to be dismissed. Hence, this petition.

 
Reasoning of Judgment:The High Court observed above fact and held that:

When the petitioner failed to produce any documents whatsoever of having discharged the export obligation, we see no infirmity in the orders passed by the authorities below. By merely stating that the FIR was lodged for lost documents, petitioner cannot substitute the requirement of production of documents demonstrating export obligation. We may recall even this reaction from the petitioner came long after the period for filing relevant documents before the authorities had lapsed. The firm, in the meantime, was already declared defaulter for being unable to fulfill export obligation. It was only in response to show cause notice issued by the authorities that for the first time, the petitioner took the stand that the documents could not be produced since they were lost. Under the circumstances, this petition is dismissed.
 
Decision:Petition dismissed

Comment:The gist of this case is that petitioner cannot substitute the requirement of production of documents demonstrating export obligation merely by the reason that the FIR was lodged for lost documents. Hence, petitioner took the stand that the document could not be produced since they were lost is not tenable. Non-submission of documents indicated failure to fulfill export obligation. Hence, penalty was upheld.

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