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/2016-17/3135

Whether process losses during filling of gases in a cylinder require credit reversal?

Case:-M/s BOC INDIA LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI-I

Citation:- 2016-TIOL-1285-CESTAT-MUM

Brief Facts:-The appellant, M/s BOC India Ltd., were procuring various gases like, oxygen, nitrogen and organ and bottling them into smaller packs. During the process of re-bottling, there were following losses:-

(a) At the time of debulking/decanting/discharge of the bulk parcel into the storage tanks the assessee;

(b) During the storage period (while the inputs were in the storage tanks), before being drawn for filling in the unit cylinders for manufacture of their finished products; and

(c) At the time of filling of the cylinders i.e. during the process of manufacture.

Revenue demanded reversal of credit taken on the gases in respect of these losses on the ground that the said inputs were either not received or were not accounted for purposely or used in the manufacture of exempted goods under Rule 57(i) of the Central Excise Rules, 1944. Penalty was also imposed under Rule 173Q of the Central Excise Rules, 1944.
 
Appellant’s Contention:-Learned Counsel for the appellant argued that in their own case, Tribunal has allowed them relief in case of gases that escaped into the atmosphere during the filling of cylinder vide Order No. 1934-1945/2003/WZB/C-III dated 17.12.2003 reported in 2004 (164) ELT 357. He further informed that the said order has been upheld by the Hon'ble Gujarat High Court vide 2008 (223) ELT 33 (Guj.). He further informed that in their own case, Tribunal vide order reported in 2004 (166) ELT 254 (Tri-Del) has held that gases lost during manufacturing process are to be considered used in or in relation to manufacturing process and credit has been allowed. He further informed that the said decision of the tribunal has been upheld by Hon'ble High Court of Delhi vide 2007 (213) ELT 647 (Del). He further relied on the decision of Hon'ble High Court of Andhra Pradesh in the case of Andhra Paper Mills Ltd. -2011 (269) ELT 79 (AP), wherein credit of entire amount of chlorine gas supplied by the supplier has been allowed even though while returning the cylinder, a part of chlorine gas was returned, holding it to be a process loss in or in relation to manufacturing process.

Respondent’s Contention:-Learned AR relies on the decision of the Hon'ble High Court of Patna in case of I.O. L. Ltd. - 1997 (95) ELT 182 (Pat.)
 
Reasoning Of Judgement:-They have gone through the rival submissions and find that the decision cited by the appellant in their own case clearly held that the process losses during the filling of a cylinder are use of input in or in relation to manufacturing process. They further find that the decision of Hon'ble High Court of Andhra Pradesh in case of Andhra Paper Mills (supra) goes a step further and allowed the credit in respect of the actual quantity filled even though the part of quantity was returned in this case, later.

In view of the above, they find that the issue is squarely covered. The appeal is accordingly allowed.
 
 
Decision:- Appeal allowed.

Comment:-The gist of the case is that the process losses during the filling of cylinder are use of input in or in relation to manufacturing process and credit cannot be denied on it. And,therefore the demand of revenue regarding reversal of CENVAT credit on account of these losses of inputs is not sustainable. This decision was squarely covered by the case of Andhra Paper Mills Ltd.

Prepared By:- Neelam Jain
 
 

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