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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.  

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PJ/CASE LAW/2014-15/2413

Whether notification issued under custom act has prospective effect or retrospective effect?

Case:-VIRANDER BEHL, AMBICA FIBRES, G R FIBRES, RAMESH ARORA Vs COMMISSIONER OF CUSTOMS (EXPORT), NHAVA SHEVA
 
Citation:-2014-TIOL-1954-CESTAT-MUM

Brief facts:-There are four appeals and stay petitions filed against of order-in-original No.25/2012 dated 31/08/2012 passed by the Commissioner of Customs (Export), Nhava Sheva. Vide the impugned order, the learned adjudicating authority has confirmed a duty demand of Rs.2,98,49,448/- against M/s. Ambika Fibres under Section 28 (2) of the Customs Act, 1962 along with interest thereon and also imposing an equivalent amount of penalty under Section 114A of the Customs Act. He has also imposed penalties of Rs. 75,00,000/- each on Shri Ramesh Arora and G.R. Fibres under Section 112 (a) of the Customs Act, 1962 and a penalty of Rs.50,00,000/- on Shri Virander Behl of M/s. Alfa Exports & M/s. Alfa Exim under Section 112 (a) of the Customs Act, 1962 for aiding and abetting alleged evasion of Customs duty by M/s. Ambica Fibres. Aggrieved of the same, the appellants are before Tribunal.
 
Appellant’s contention:-The learned Counsel for the appellant took a preliminary objection with regard to the jurisdiction of Directorate General of Central Excise Intelligence (DGCEI), Ahmedabad in issuing the show-cause notice dated 19/05/2005 and consequent adjudication proceedings leading to the impugned order. It is his submission that prior to issue of Notification No. 44/2011-Customs (NT) dated 06/07/2011 the DGCEI, Ahmedabad had no jurisdiction to issue show-cause notice in respect of imports which had taken place through various ports situated in Mumbai. He also relies on the decision of this Tribunal in the case of C.K. Geever – 2009(235) ELT 304 (Tri-Chennai) = 2009-TIOL-74-CESTAT-MAD, Swami Fashions (P) Ltd. Vs. CC, Tuticorin - 2009 (239) ELT 149 (Tri-Chennai) = 2008-TIOL-2371-CESTAT-MAD and Copier Force India Ltd. Vs. CC (Imports), Chennai - 2009 (235) ELT 282 (Tri-Chennai) = 2009-TIOL-75-CESTATMAD wherein similar situation, the question of jurisdiction of DGCEI officers exercising powers of Commissioner of Customs was considered by this Tribunal and in the absence of specific powers conferred on these officers, the show-cause notices and the follow up proceedings were set aside and the appeals allowed.
 
The learned Counsel submits that the ratio of these decision squarely applies in the facts of the present case and therefore, stay be granted. The Counsel for the other appellants also reiterates the above submissions.
 
Respondent’s contention:-The learned Additional Commissioner (AR) appearing for the Revenue reiterates the findings of the authority. However, he fairly submits that Notification No. 44/2011-Customs (NT) dated 06/07/2011 has not been given any retrospective effect. However, it is his submission that vitiating of show-cause notice by itself could not lead to quashing of the impugned order and therefore, he pleads for putting the appellants to term.
 
Reasoning of judgment:-Prima facie it appears that when the show-cause notice was issued on 19/05/2005 in respect of some transactions that took much before that, the DGCEI, Ahmedabad Zonal Unit and its officers did not have all India jurisdiction to issue show-cause notices under Section 17 & 28 of the Customs Act. These powers have been conferred on these officers by Notification No. 44/2011-Customs (NT) dated 06/07/2011. It is a settled position of law that every notification issued under the Customs Act has only prospective application unless retrospectively is specifically granted by an act of the parliament. Therefore, Notification No. 44/2011-Customs (NT) dated 06/07/2011 is only prospective and cannot be said to have any retrospective application. In these circumstances, the appellants have made out a prima facie case for grant of stay. Accordingly, they grant unconditional waiver from pre-deposit of dues adjudged against the appellants and stay recovery thereof during the pendency of the appeals.
 
Decision:-Stay granted.

Comment:- The analogy of the case is that the show cause notice was issued on 19.05.2005 and power of issue show cause notice have been confirmed on DGCEI, Ahmedabad Zonal Unit and its officers by notification no. 44/2011-Cus(NT) dated 06/07/2011. It is a settled position of law that every notification issued under customs act has prospective application unless it is specified that the notification has retrospective application. In view of prospective application of the notification, it was concluded that prima facie the order is not sustainable.

Prepared by: Monika Tak 

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