Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  The GSTN has issued an Advisory dated 21.04.2026 about the introduction of an Offline Tool for the Invoice Management System (IMS)  *  CBIC extends due dates for filing of FORM GSTR 3B  for the month of April 2026 *  Interest cannot be imposed in adjudication order, if not demanded/quantified in show cause notice : Allahabad HC *  Wheelchairs with toileting facility eligible for exemption: CESTAT affirms customs duty exemption to importer *  Industries urge GST council to allow inverted duty refunds on input services *  Tamil Nadu GST dept introduced virtual hearing facility for GST appeals under under section 107 of the TNGST act: detailed guidelines  *  CIC urges authorities to implement GST evasion complaint tracking system *  Even if the assessee opts "NO" for personal hearing in form DRC-06 ,The mandatory requirement under section 75(4) to grant opportunity of hearing cannot be waived:Gujarat High Court  *  Glufosinate imports curbs imposed by govt *  Government extends Re-import period for exported cut & polished diamonds *  CIC flags lack of tracking system for tax evasion complaints,urges GST authorities to improve transparency *  No Custodial Interrogation needed in GST fraud case based on documentary evidence already in Department's Possession : Chattisgarh HC *  Orders under section cannot be sustained if passed without considering the taxpayer's objections and without granting a personal hearing:Gujarat High Court *  Mere cancellation of supplier's registration cannot,by itself,justify denial of ITC or cancellation of the recipient's registration:Bombay High Court *  High Court sets aside GST notice citing factual errors and natural justice violations *  Provisional Bank Attachment under Section. 110 of Customs Act Unsustainable Beyond Statutory period without Extension order: Bombay HC orders to defreeze accounts *  Post Clearance MRP Alteration by Distributor Does not attract Differential Customs Duty: CESTAT *  DGFT Expands scope of 'Screws' classification under RoDTEP Scheme  *  E-way bills surze to all time high of 140.6 million in March *  GST Exemption Allowed on Pure Labour Services for Standalone Houses: AAR  *  GST Payable Only on Margin in Second-Hand Car Sales, Subject to Strict Conditions and No ITC Claim: AAR *  DGFT rolls out procedure for allocation of calcined coke *  GST portal update : Pre-deposit amount now editable in Appeals *  J&K HC declared TMT scrap a 'Specified Good' eligibile for GST refunds under Support Scheme  *  Pigmy agents are employees of banks; no GST can be levied on commission  paid to them : Karnataka HC *  DGFT Revises HS Code Description for Screws Under RoDTEP *  GST Registration Cancellation Invalid Without Proper Service of Notice: Allahabad High Court. *  Bengaluru CGST | GST Backlog Appeals Deadline Fixed at June 30, 2026 *  No Time Bar on Refund of Service Tax for Services Not Rendered: CESTAT  Remands Indiabulls Case for Unjust Enrichment Check. *  Supreme Court Holds Renewable Energy Incentive Must Benefit Generators, Not Be Adjusted in Tariff
Subject News *   Delhi HC Quashes Order, Says Reminder Cannot Validate Improperly Served GST SCN *  KARNATAKA HIGH COURT REMANDS GST SHORTFALL MATTER DUE TO ABSENCE OF PERSONAL HEARING   *  CESTAT cancels confiscation and penalties on imported computer cabinet cases: Custom duty restricted to 111 surplus units *  Deposit of tax during search or investigation cannot be treated as 'Voluntary Payment' : Bombay High Court *  Section 76 of the CGST cannot be invoked where the tax has already been duly deposited, even if through another registration of the same entity: Madras High Court *  Sec 74 allows use of material regardless of source; illegality or flaws in section 67 search do not vitiate valid adjudication: HC *  Inter-State transfer of ITC on Amalgamation permissible as given under section 18(3) read with rule 41 of the CGST rules, 2017: Gujarat High Court *  HC: No GST on commisson paid to Pigmy Agents *  IGST refund denial on illegible bill of lading invalid absent chance to furnish docs; merit reconsideration in appeals directed: HC *  ITC is not admissible on GST paid on leasehold rights of land used fpr setting up an air seperation plant: AAAR,Tamil Nadu *  GST: No penalty under Section 74 after voluntary ITC reversal due to non-existent supplier : High Court *  TN AAAR denies GST ITC on Land Lease under Sec. 17(5)(d) for setting up plant and machinery *  GST proceedings quashed as notices sent to old address, despite updated address in registration *  Importer Can’t Be Penalised for Alleged IGCR Procedural Lapses Without Evidence of Departmental Error: CESTAT *  Structured Healthcare Training Not ‘Charitable Activity’, 18% GST Payable: AAR  *  CESTAT As The Appellate Authority For Central Sales Tax Disputes: A Paradigm Shift Under Finance Act, 2023 *   Rs. 25K Cost Imposed On SGST Joint Commissioner for Attaching Bank  Accounts Without Forming Mandatory “Opinion”: Bombay HC *   Ex-Parte GST Order Without Hearing Violates Natural Justice: Karnataka  High Court Quashes Adjudication and Bank Attachment.  *   Retrospective GST Cancellation Can’t Invalidate Genuine Transactions:  Jaipur Commissioner (Appeals) Quashes Rs. 95,670 ITC Demand. *   GST Pre-Deposit Non-Compliance: Allahabad High Court Allows Appeal  Subject to Rs. 30 Lakh Balance Deposit, Recognises Offline Filing. *  Documentary Nature of Evidence: Allahabad High Court Grants Bail in Rs. 32.66 Crore Fake ITC Fraud Case *  Supreme Court Flags Systemic Bias in Army’s Permanent Commission Process for Women Officers *  Re-Determination of Land Compensation Can Be Based on Appellate Court Awards, Clarifies Scope of S. 28-A: Supreme Court. *  Supreme Court Imposes Rs. 5 Lakh Costs On Rent Authority Officer For Acting Beyond Jurisdiction. *  DGGI Meerut | Court Denies Bail to Accused in Claiming Fake ITC And Export Refunds *  Denial of GST Rate Revision Benefit to Contractor Violates Article 14: Rajasthan HC *  GST Registration Cancellation for Non-Filing of Returns: Gauhati High Court Directs Restoration on Compliance. *   Supreme Court Quashes FEMA Adjudication Orders, Revives Proceedings at  Show Cause Stage. *   Higher Rank, Harsher Punishment Justified: Supreme Court Restores Dismissal  of Bank Manager in Misappropriation Case. *   Limitation for Export Refund to Be Counted from Foreign Exchange Realisation,  Not From Export Invoices Issuance: CESTAT  

Comments

Print   |    |  Comment

PJ/Case Law/2014-15/2348

Whether ordering pre deposit proper if credit was denied for reason that it was taken on improper documents?

Case:- MEDICARE SERVICES (INDIA) PVT. LTD. V/S CESTAT, KOLKATA
 
Citation:- 2014 (303) E.L.T. 490 (Cal.)
 
Brief facts:-The brief facts of the case is that by the impugned order, the CESTAT disposed of two applications namely, an application for correction and/or rectification of the mistakes as well as an application seeking waiver of the deposit of duty to maintain the appeal.
 
So far as the first order is concerned, the petitioner is not aggrieved as the CESTAT has allowed the said application permitting the petitioner to amend and/or rectify the mistakes. But so far as the second application is concerned, the CESTAT has directed the deposit of 25% of the service tax amount and 10% of Cenvat credit amount within eight weeks.
 
Though the petitioner claims that the services so provided falls under the heading “services by club or association” but the assessing authority at the time of passing the assessment order held that the said services are coming under the head “insurance auxiliary services”. Precisely, the aforesaid dispute is a subject matter of an appeal before the CESTAT which is yet to attain finality. On perusal of the impugned order this Court finds that the CESTAT had disposed of the said application seeking waiver of the deposit of duty on plea that the Cenvat credit claims by the petitioner on the basis of the document which is not prescribed. 
 
Appellant’s contentions:-The learned advocate appearing for the petitioner submits that the technicality should not stand in the way of dispensation of justice, if the other materials and documents availed with the authorities justify the credit to be availed by the assessee  and placed reliance upon judgments of the tribunal at Delhi in case of Cosmos Casting India Ltd. V. Commissioner of Central Excise, Raipur reported in 2011 (23) S.T.R. 44 and in case of Wichitra Auto Ltd. V. Commissioner of Central Excise, Chennai- II reported in 2012 (284) E.L.T. 231.
 
The petitioner further submits that one of the criteria for the undue hardship is a financial incapacity and the tribunal has not recorded any finding on such aspect. In support of the aforesaid contention, reliance is placed upon a Co-ordinate Bench decision of the Court in case of Amitava Saha v. CESTAT reported in 2007 (215) E.L.T. 173 (Cal.).
 
Respondent’s contentions:-The respondent authorities, however, submit that the petitioner was, in fact, providing “insurance auxiliary services” and not the “services by club or association” and therefore, the Cenvat credit which they availed was rightly reversed by the assessing authority. It is further submitted that considering the facts and documents produced before tribunal, the tribunal it self granted the waiver to the extent of 75% and 90% against the service tax amount and the Cenvat credit respectively and the said order should not be interfered with.
  
Reasoning of judgment:- After hearing the respective submissions, it appears that the CESTAT had proceeded to dispose of the aforesaid application filed by the petitioner on the plea that the petitioner was allowed the Cenvat credit on the basis of the documents which are not prescribed under 9(1) of the Cenvat Credit Rules, 2004.
 
Although the Tribunal recorded that it has considered the financial hardship but there is no finding of facts recorded therein. There is no dispute to the proposition that if there is a prescribed method for availing the Cenvat credit the same are to be adhered to and followed. But it is equally true that technicalities should not stand in the way of dispensation of the justice if the necessary ingredients required for availing of such credit under the prescribed forms are otherwise available. It cannot be decipher either from the findings recorded by the CESTAT nor from the department side that the documents on which the Cenvat credit was availed is not sufficient to grant such credit. Though the judgments rendered by the Tribunal does not bind this Court but the same may have persuasive value. The tribunal in this aspect, as it appears from the aforesaid reports, consistently held that if the particulars are contained in the documents as required to be done as proviso to sub-rule (2) of rule 9, this will not deny the Cenvat credit on hyper technicalities. This Court must record that the Tribunal must record the reasons either for allowing the waiver or refusal to waiver on the materials as well as the pleadings made before it. Mere quoting the provision does not absolve the Tribunal from its responsibility and obligation to record the reasons on each and every issue that has been raised before it. Since this Court finds that the application seeking waiver is disposed of solely on the ground that the availability of Cenvat credit on the basis of documents not prescribed under sub-rule (1) of rule 9 of the Cenvat credit rules, 2004 this Court, therefore, finds that the said order suffers from illegality and/or infirmity.
 
This Court, therefore, quash and set aside the portion of an order dated 7-10-2013 by which an application seeking waiver of deposit of duty is disposed of. The Tribunal is directed to consider the said application afresh and while doing so, shall also take into consideration the pleadings as well as the documents relied on or sought to be relied on provided the same is otherwise permissible under the procedural law, by recording the reasons thereupon in accordance with law. The entire exercise shall be completed by the Tribunal within three weeks from the date of communication of this order.
 
It is needless to mention that this Court has no occasion to go into the merits of the said application filed by the petitioner and the Tribunal shall be free to decide the same independently and without being influenced by any observation made herein in accordance with law.
 
Decision:- The petition disposed off.
 
Comment:- The analogy of the case is that when it is settled position that the benefit of Cenvat credit cannot be denied solely for procedural lapses. Hence, ordering pre-deposit for denial of credit due to the reason that the documents on the basis of which credit was taken were not prescribed under rule 9(1) of Cenvat Credit Rules, 2004 suffers from illegality, infirmity. Moreover, inspite of the fact that there was financial difficulty, the High Court opined that the Tribunal should reconsider the stay application afresh.
 
Prepared by: Monika Tak

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