Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Dept. Can’t Classify Product as Zarda Scented Tobacco After Repeatedly Approving It As Chewing Tobacco: CESTAT *  Mere Uploading Of GST Order On Portal Is Not “Valid” Service: Tripura HC *  CGST Can Proceed Even If SGST Closed Similar Case Earlier: Delhi HC *  SC upholds 28% GST on online gaming with retrospective effect. *  West Bengal Govt cuts E-way Bill Threshold limit to Rs. 50,000 for intra-state goods movement. *  Criminal Prosecution Under Central Excise Act Can’t Continue After CESTAT Sets Aside Duty Demand on Merits: Punjab & Haryana High Court. *  Madras High Court Quashes GST Assessment Orders for Denial of Personal Hearing; Remands Matter Subject to 10% Deposit *  Ex Parte GST Order: Madras High Court Directs Immediate Removal of Bank/ITC Attachment Upon 25% Deposit *  J.K. Cement Receives GST Demand Order of Rs 8,02,113/- from Ahmedabad Tax Authority *  Delhi Police EOW Busts Alleged Rs. 128 Crore GST Fake Invoice Network. *  REPLY TO SCN CAN’T BE TREATED AS “EMPTY FORMALITY”: ORISSA HIGH COURT QUASHES GST DEMAND OF RS. 57.30 LAKH *  Challenge to CGST Provisions restricting ITC to Bonafide Purchasers : Allahabad HC issues notice *  CBIC Notifies Revised Customs Tariff Values for Edible Oils, Gold, Silver, Brass Scrap and Areca Nuts *  Delhi HC Orders Removal of GST Attachment After Statutory 1 Year Period Expired *  GSTAT Extends Relaxed Appeal Filing Guidelines till December 31, 2026 *  AO fails to Provide Import - Export Data from DGFT to Taxpayer for Reconciliation *  Gold, Silver Imports To Get Costlier As Govt Raises Customs Duty To 10%  *  GSTAT Enables Pre-Payment Access to Document Upload and Checklist for GST Appeal Filing *  GST Portal Restrictions Can’t Override Statute: Gujarat HC Allows Cross-State Transfer Of CGST ITC After Amalgamation *  Centre Revises HS Codes for Large Diameter Steel Pipes Used in Oil & Gas Pipelines *  Customs Duty Liability Arises On Warehouse Clearance Date: Supreme Court *  Government lifts export ban on de-oiled rice bran *  CESTAT Grants 12% Interest on Pre-Deposit for Investigation from Date of Deposit till Refund and Denies Interest on Interest. *  Government Overhauls GST Classification Framework for Non-Alcoholic Beverages; Fruit Juice Drinks, Milk-Based Beverages and Caffeinated Drinks to Attract Revised 5% and 40% GST Rates from May 1, 2026 *  India’s gross GST collections hit a record Rs 2.42 lakh crore in April, up 8.7% *  Customs clearance stalled, revenue hit over MRP dispute *  Shipping Corporation explores Middle East routes as Hormuz tensions disrupt cargo movement *  India, Kenya signs MoU for exchange of pre-arrival customs information *  No demand of Taxes under Reverse Charge if Tax Already Discharged by Service Provider under forward charge *  The India-New Zealand Free Trade Agreement, signed "once-in-a-generation" deal that eliminates tariffs on 100% of Indian exports to New Zealand
Subject News *  Consignment Sales Can’t Be Reclassified as Inter-State Sales Based on Pre-Agreement Evidence: CESTAT *  Exporter Can’t Be Denied Advance Authorization Benefit Due To ICEGATE Technical Glitch: Delhi High Court *  No GST Demand For Mere Wrong Set-Off Of IGST Credit Under CGST And SGST Heads: Kerala HC. *  Cenvat Credit Can’t Be Denied on Input Services Having Nexus With Manufacturing Activities: CESTAT *  Pending Proceedings Can’t Survive Without Saving Clause: Calcutta High Court Quashes GST Demand of Rs. 6.28 Crore After Omission of Rule 96(10) *  Madras HC Quashes GST Demands on TASMAC (Tamil Nadu State Marketing Corporation) Bar Licence Fee *  GST Proceedings Cannot Survive Omitted Rule Without Saving Clause: Calcutta HC *  Provisional Release Can’t Be Denied Solely On Dept. Suspicion Of Misclassification And Undervaluation Of Imported Goods: CESTAT *  Businesses Should Not Be Kept Outside GST Regime Without Due Process: Gauhati High Court *  Punjab & Haryana HC Directs Reconsideration of Contractors’ Claim for Additional GST Payment After Tax Rate Hike From 12% to 18% *  S. 108 Statements Can’t Be Sole Basis Without Following Section 138B Procedure: CESTAT *  Bombay High Court Frames Key Questions on Mandatory Distribution of ITC U/s 20 CGST Act *  Filing of Annexure-B for Refund Applications involving Accumulated ITC using the offline utility in GST portal: GSTN *  No Service Tax on Parent Company’s Un-Invoiced Cost Allocations Without Actual Service or Consideration: CESTAT  *  Calcutta High Court Upholds GST Classification of Polypropylene Leno Bags as Plastic Products *  DRC-01 Summary Can’t Replace Mandatory SCN: Gauhati High Court *  GSTAT Issues Major Bench Allocation Framework; All Appeals to First Go Before Division Bench *  ITC Blocking Without Reasoned Order Violates Rule 86A; Punjab & Haryana HC Directs Release of Credit *  Allahabad HC Refuses Bail to CGST Superintendent In Rs. 70 Lakh Bribery Case *  S.130 Can’t Be Invoked Without Prior Tax Determination U/s 73/74: Allahabad High Court Quashes GST Confiscation Proceedings *  SC grants Bail to Rs 54cr GST case  *  Karnataka HC Sets Aside Duplicate GST Orders, Orders Fresh Hearing on GSTIN Cancellation *  DRC-01 Summary Can’t Replace Mandatory SCN: Gauhati High Court *  Transfer Of Unutilized ITC After Amalgamation - Supreme Court Issues Notice *  PUNJAB & HARYANA HC QUASHES GST CANCELLATION NOTICE FOR FAILURE TO PROVIDE CBIC ENQUIRY REPORT *  LICENSE FEE, TECHNICAL ASSISTANCE CHARGES NOT INCLUDIBLE IN CUSTOMS VALUE UNLESS THEY ARE A CONDITION OF SALE: CESTAT *  DELHI HC ORDERS REMOVAL OF GST ATTACHMENT AFTER STATUTORY 1 YEAR PERIOD EXPIRED *  CUSTOMS BROKER CAN’T BE FAULTED JUST BECAUSE EXPORTER’S GST REGISTRATION WAS PREVIOUSLY CANCELLED: CESTAT   *  Supreme Court Dismisses Review Plea Against Delhi HC Ruling Holding Real Operator Behind Fake GST Firms Liable As ‘Taxable Person  *  GST Appeal Can’t Be Rejected Merely Because DRC-07 Was Not Uploaded On Portal: Bombay High Court  

Comments

Print   |    |  Comment

PJ/CASE LAW/2015-16/2818

Whether suo moto credit of duty mistakenly paid twice can be taken?

Case:-PUSHP ENTERPRISES VersusCOMMISSIONER OF CENTRAL EXCISE, JAIPUR-I
 
Citation:- 2015 (322) E.L.T. 728 (Tri. - Del.)
 
Brief facts:- The appellant is in appeal against the impugned order wherein Cenvat credit takensuo moto by the appellant was denied. Therefore, duty is demanded along with interest and penalty of Rs. 50,000/- was also imposed.
The facts of the case are that the appellant is manufacturer of bearing component and supplying the same to M/s. SKF Ltd. They are having an agreement as the actual selling price of the goods were not known, therefore they were issued supplementary invoice. If the cost of raw material is increased, the appellant cleared the goods on payment of duty. Later on, they realized that the cost of raw material is increased. Therefore, they raised 3 supplementary invoice on 3-11-2008 and debited the duty thereon in their Cenvat credit account. The buyer of the goods did not accept the invoice issued by the appellant on the premise that as per the agreement the buyer has already paid excess duty to the appellant. In this scenario, the appellant took suo motu credit on the duty paid on supplementary invoice on 21-3-2009. During the course of audit, it was found that appellant has taken suo moto Cenvat credit in their Cenvat credit account which they were not entitled to as per Section 11B of the Central Excise Act, 1944. A show cause notice was issued to the appellant to deny Cenvat credit taken suo moto and consequently to demand duty along with interest and for imposition of penalty. The matter was adjudicated and demand along with interest was confirmed and penalty of Rs.50,000/- was also imposed. On appeal, the order of adjudication was confirmed by the first appellate authority. Against the said order appellant is before tribunal.
 
Appellant’s contention:- Learned Counsel submits that it is admitted fact that they have paid the duty twice and the supplementary invoice issued by the appellant were not accepted by the buyers. Therefore, they had taken suo moto credit. She submits that although there is no provision to take suo moto credit under Section 11B of the Act, it is only a procedural lapse and for that Cenvat credit cannot be denied as held by this Tribunal in the case of Sopariwala Exports Pvt. Ltd. [2013 (291)E.L.T.70 (Tri- Ahmd.)] and S Subrahmanyan and Co. [2011 (268)E.L.T.497 (Tri-Ahmd)]. She also relied on the decision of Zandu Chemicals Ltd.v. Union of India[2015 (315)E.L.T.520 (Bom)] to say that for procedural requirement provisions are incapable of supplementary invoice and there is no requirement for strict compliance therewith if there is material on record which show procedural requirement is furnished, then inconsistency of compliance with procedure prescribed as per law is totally uncalled for and unjustified.

Respondent’s contention:-On the other hand, learned AR opposed the contention of the learned Counsel and submits that Larger Bench of this Tribunal in the case of BDH Industries [2008 (229)E.L.T.364 (Tri-LB)held that suo motu credit or refund is not allowed. Although the said order has been challenged before the Hon’ble High Court of Bombay, but fate of the same is not known. He further relied on the decision of Titwari Sugar Complex [2009 (247)E.L.T.519 (Tri-Del)] to deny the Cenvat credit. Learned AR also submits that once the amount is deposited with the Government of India, same cannot be taken as suo motu credit.

Reasoning of judgment:- In this case, the short issue to be decided by them is that whether the appellant have correctly taken suo moto credit of duty paid twice or not. For that, the learned AR has relied on the decision of the Larger Bench of this Tribunal in the case of BDH Industries (supra) which was followed by this Tribunal in the case of Titawi Sugar Complex (supra).
On the other hand, learned Counsel has relied on the decisions of Sopariwala Exports Pvt. Ltd. (supra) wherein on the similar facts, this Tribunal had came to the conclusion that decision of Motorola India Pvt. Ltd. [2006 (206)E.L.T.90 (Kar)]was not placed before the Larger Bench of this Tribunal in the case of BDH Industries Ltd. (supra), therefore the decision of BDH Industries Ltd.(supra) cannot be relied upon and thereafter this Tribunal following the decision of Motorola India Pvt. Ltd. (supra) came to the conclusion that suo moto credit can be taken if duty is paid twice as excess duty paid is not a duty and same is deposited. In these circumstances, as the decision of Sopariwala Exports Pvt. Ltd. (supra) has been delivered by this Tribunal based upon the decision of Hon’ble High Court of Karnataka in the case of Motorola India Pvt. Ltd., therefore, they hold that the appellant has correctly taken suo moto credit of the duty paid twice. In these circumstances, impugned order is set aside. Appeal is allowed with consequential relief, if any.
 
Decision:- Appeal allowed.
 
Comment:-The substance of the case is that relying in the case of Motorola India Pvt. Ltd, it was held that though there is no provision to take suo motu credit under Section 11B of Central Excise Act 1944, manufacturer is eligible for taking suo motu Cenvat credit on excess amount paid by him because the amount paid twice cannot be considered as duty and rather it is deposit.

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