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/2014-15/2443

Whether second hand capital goods freely importable as per FTP?

Case:- PERI (INDIA) P. LTD. Vs COMMISSIONER OF CUSTOMS (I), NHAVA SHEVA
 
Citation:- 2014 (308) E.L.T. 691 (Tri. –Mumbai)
 
Brief fact:- The brief facts of the case are that the appellant imported old and used pipes declared them as “old and used Prop Pep 20-300” and classified them under CTH 7308 4000. The said classification was accepted and duty was demanded accordingly. As these pipes were old and used, therefore it was held by the lower authorities that these pipes are not covered as capital goods as defined in para 9.12 of Foreign Trade Policy. Accordingly, they are not freely importable as per para 2.17 of FTP 2004-09. Therefore as appellant could not produce necessary licence for importation of the goods, the same were held liable for confiscation and allowed to be redeemed on payment of Redemption Fine and penalty. The goods were released but the appellant is challenging the imposition of Redemption Fine and penalty.
 
Appellant’s contention:- The ld. counsel for the appellant submits that these goods are equipments and they have been classified under CTH 7308 4000 which has been accepted by the department. Therefore, as per definition of the capital goods, these are equipments. Accordingly, they are freely importable as per para 2.17 of the FTP. To support this contention, he relied on Cinda Engineering & Constructions P. Ltd.- 2012 (289)E.L.T.509 (Tri.-Bang.).Therefore, he prayed that impugned order be set aside, appeal be allowed with consequential relief.
 
Respondent’s contention:- Ld. AR strongly opposed the contention on the ground that CTH 7308 deals with structures and structures cannot be the capital goods. Therefore, the appellants have imported old and used goods which are not capital goods. In these circumstances, they are required to obtain necessary licence therefore, goods have rightly been confiscated and redemption fine and penalty been rightly levied on them. Therefore, impugned order is to be upheld.
 
Reasoning of judgment:- The Hon’ble Tribunal find that the appellant has imported Propping pipes and classified the same under CTH 7308 4000. The CTH 7308 40 deals with equipment for scaffolding, shuttering, propping or pit-propping. As per the definition of ‘capital goods’ in Foreign Trade Policy in para 9.12 deals with “Capital goods means any plant, machinery, equipment or accessories required for manufacture or production either directly or indirectly, of goods for rendering services.” In this case, this propping pipes then imported by the appellant for rendering construction service. Further as per para 2.17 of the Foreign Trade Policy the second-hand capital goods are freely importable. The issue whether these propping are equipment or not came up before this Tribunal in Cinda Engineering & Constructions (supra) wherein this Tribunal observed as under :-
“It is not in dispute that the items imported by the appellant were old and used scaffoldings. I shall immediately address the question whether these scaffoldings could be considered as equipment. These goods were classified by the importer under SH 7308 40 00 of the CTA Schedule and this classification was accepted by the assessing authority for levy of duty. That duty was paid by the importer also. The assessment was final. In this scenario, the description of goods given against the tariff entry is significant and the same reads “equipments for scaffoldings...”. Once the declared classification has been accepted, there can be no dispute whether the scaffolding could be considered as equipments. They were equipments. At this stage, one has to look at the definition of “capital goods” in para 9.12 of the FTP. As per this definition, equipments used for rendering services are also capital goods.”
 
In this case also these propping pipes are imported by the appellant as equipment for rendering construction service. Therefore, same are held as capital goods. In these circumstances, impugned goods are freely importable as per para 2.17 of the Foreign Trade Policy. Therefore, as no licence is required for importation of the said goods, the confiscation of the impugned goods was not warranted. Accordingly, confiscation is set aside. As confiscation has been set aside, the question of imposing of Redemption Fine and penalty does not arise. In these circumstances, penalty and Redemption Fine is set aside. Consequently, the appeal is allowed with consequential relief.
 
Decision:- Appeal allowed.
 
Comment:- The gist of the case is that the import of old and used propping pipes that were used in rendering construction services are to be treated as capital goods. Consequently, the said goods are to be treated as second hand capital goods which are freely importable. Therefore, the confiscation is not warranted and consequently no redemption fine or penalty is payable.
 
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