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 /2016-17/3319

Whether suo motto credit taken by assessee due to delay in sanction of refund proper?

Case:-M/s JAYASWAL NECO INDUSTRIES LTD Vs COMMISSIONER OF CENTRAL EXCISE, NAGPUR
 
Citation:-2016-TIOL-341-CESTAT MUM
 
 
Brief facts:-The fact of the case is that there was proceedings on the classification dispute and denial of Exemption Notification of the goods manufactured by the appellant. The said dispute came to be settled by this Tribunal order No. E/1148/97B1 dated 8/7/1997. This Tribunal's order was challenged by the department before Hon'ble Supreme Court by way of appeal which was dismissed by the Hon'ble Supreme Court vide order dated 20/2/1999. During the proceedings appellant had deposited entire excise duty demand and subsequently after adjudication they paid penalty amount also. The appellant filed refund claim for the said amount vide refund application dated 20/2/1997. The refund was sanctioned but credited into Consumer's Welfare fund vide order in original dated 27/1/2000. Aggrieved by the said order, Revenue as well as appellant filed appeals before the Commissioner (Appeals) who vide order dated 31/8/2001 dismissed the Revenue's as well as appellant's appeal. The appellant challenging the Commissioner (Appeals) order dated 31/8/2001 filed appeal before this Tribunal which was allowed by order dated 24/1/2008. Thereafter appellant by letter dated 20/2/2008 intimated to the department regarding suo moto credit of the amount for which refund was sought for. The department issued show cause notice, on the ground that the appellant was not supposed to take suo moto credit and proposed to disallow the recredit. The show cause notice culminated into order in original wherein adjudicating authority vide order in original dated 18/11/2009 dropped the proceedings. Aggrieved by the said order, Revenue filed appeal before the Commissioner (Appeals) which was allowed vide order in appeal dated 9/7/2010 and the Ld. Commissioner (Appeals) demanded interest as well as imposed equivalent penalty, therefore appellant is before Tribunal.
 
 
Appellant’s contention:-Shri P.V. Sadavarte, Ld. Counsel for the appellant submits that against the order in original, Revenue filed appeal before the Ld. Commissioner (Appeals) only on the ground that the appellant has not followed the procedure laid down under Section 11B for grant of refund and suo moto credit taken by the appellant was not ground in the Revenue's appeal therefore order of the Ld. Commissioner (Appeals) is not correct and beyond the ground taken by the Revenue in their appeal. He further submits that their refund application was already filed under Section 11B therefore proceedings of the very same application reached up to this Tribunal and this Tribunal has allowed the appeal of the appellant, department was supposed to implement the order of this Tribunal.
 
 
Respondent’s contention:-Shri Ashutosh Nath, Ld. Asstt. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that there is no provision in law to take suo moto recredit of any amount paid by the assessee therefore Ld. Commissioner (Appeals) has rightly denied the recredit taken by the appellant. In support of his submission, he placed reliance on following judgments:
 
(a)  Parvati Agro Plast Vs. Commissioner of Central Excise, Kolhapur 2013-TIOL-1563-CESTAT-MUM
(b)  M/s. Matrix Laboratories Vs. Commissioner of Central Excise, Hyderabad 2012- TIOL-1297-CESTAT-BANG
(c)   New Allenberry Works Vs. Commissioner of Central Excise, Kolkata 2012-TIOL-1239-CESTAT-KOL
(d)  Titawi Sugar Complex Vs. Commissioner of C. Ex. MeerutI [2009 (247) ELT 519 (Tri. Del.]
 
Reasoning of judgement:-The Tribunal  carefully considered the submissions made by both sides.
As regard the refund application, the applicant has filed refund claim immediately after settling the dispute of classification vide their application dated 20/2/1997, which was disputed and matter of the refund was finally decided by this Tribunal vide Order dated 20/8/2008 thereafter it is the department who was supposed to grant the refund by implementing this Tribunal's order. However, the appellant had taken suo moto credit. In the Tribunal’s view there is no provision in Law to take suo moto credit of any amount paid during the litigation of the matter, the only course of action is to seek refund under Section 11B. However, refund application was already filed with the department and it was not processed. In view of this Tribunal order dated 24/1/2008 there is no dispute that appellant is entitle for refund along with consequential relief. In view of this fact, The Tribunal directed the appellant to reverse the Cenvat credit taken suo moto by them and the Adjudicating authority is directed to sanction the refund claim in accordance with law. Taking into consideration the facts and the circumstances of the case, since the appellant was entitled to refund after Tribunal order dated 24/1/2008 it is a case of Revenue neutral therefore interest and penalties are dropped. Due to peculiar facts involved in the case, since appellant had taken credit and enjoyed credit, they are not entitle for the interest only for the period i.e. from the date of taking suo moto credit till the sanction of refund claim. Appeals are disposed of in above terms.
 
Decision:-Appeal disposed of.

Comment:-The gist of the case is that assessee is not entitled for suo motto credit for the amount claimed as refund but not sanctioned to him. The Department was supposed to grant refund by implementing the order of the Tribunal. However, appellant took suo motu credit for which there is no provision and the proper course of action was to seek refund u/s 11B of CEA, 1944. However, in the present case, the refund claim was already filed with department and it was not processed. Hence, the appellant was directed to reverse the CENVAT credit taken suo motu and adjudicating authority was directed to sanction the refund claim in accordance with law. Since the assessee had taken and enjoyed the credit, he was not entitled for interest for the period.
 
 
Prepared by:- Praniti Lalwani
 
 
 
 

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