Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

Comments

Print   |    |  Comment

PJ/Case Law/2018-2019/3481

Whether the transportation cost incurred for Goods sold form factory to customer is to be included in assessable value?
Case:JOST’S ENGINEERING CO. LTD.Versus COMMISSIONER OF C. EX., MUMBAI-II          
Citation: 2017 (7) G.S.T.L. 344 (Tri. – Mumbai)
Issue:Whether the transportation cost incurred for Goods sold form factory to customer is to be included in assessable value?
Brief facts:The brief facts of the case are that the appellants cleared their excisable goods from factory gate but did not show freight, transportation charges separately in excise invoice. They had collected freight and transportation charges either through commercial bills or debit notes.
Appellant’s contention:Shri RoshilNachani, ld. Counsel appearing on behalf of the appellants submits that the issue whether the transportation charges is includible in the assessable value in a case where the goods were sold from the factory has been settled by the Hon’ble Supreme Court in the case of Ispat Industries Ltd.2015 (324) E.L.T. 670(S.C.) at least for the period from 1-7-2000 to 31-3-2003. The present case involved the period from July, 2000 to March, 2003. He also placed reliance on the Tribunal decision in the case of KappacPharma Ltd. 2017-TIOL-305-CESTAT-MUM.
Respondent’s Contention and Reasoning of Judgement:Shri M.R. Melvin, ld. Supdt. (AR) appearing on behalf of the revenue reiterates the finding of the impugned order.
After carefully considering the submission made by both sides and perusing the records, the bench find from the impugned order that the Commissioner (Appeals) has held that transportation charges collected by the appellants is required to be included in the assessable value by giving the following finding :-
“I have gone through the case records and written submission filed by the respondents and find that lower authority has failed to appreciate the facts that respondents had collected freight and transportation charges through commercial invoices issued by them and no duty was paid on the amounts so collected. Rule 5 of Central Excise Valuation (Determination of Price of excisable goods) Rules, 2000 is very clear and it is mandatory on the part of assessee to show the cost of transportation separately in the invoice for the goods cleared to exclude the actual cost of transportation from the assessable value. In this case, since the assessee recovered the freight and transportation cost through debit notes and not by showing separately in the invoices, they violated the Rule 5 of the Central Excise Valuation (Determination of Price of excisable goods) Rules, 2000 and they are not eligible for excluding the freight and transportation cost from the assessable value.”
From the above finding, it can be seen that the ld. Commissioner did not dispute in principle that whether in the case the goods were sold from the factory in terms of Rule 5. The transportation charges are excludible from the assessable value. However, he has confirmed the duty on the transportation charges only on the ground that the appellants have not shown the transportation charges separately in the invoice accordingly, they have violated Rule 5 of the Central Excise Valuation Rules 2000 accordingly, they are not eligible for excluding the freight and transporters cost from the assessable value. They find that in principle as decided by the Supreme Court in the case of IspatInds. (supra) when the goods are sold from the factory the transportation cost is not to be included in the assessable value, therefore the transportation cost per se in the given transaction is not includible in the assessable value. As regards the ld. Commissioner (Appeals) finding that it is not excludible due to the reason that the transportation cost was not shown separately in the invoice is only a procedural lapse. Whether the transportation cost shown separately in the invoice or charged separately by way of commercial invoice or debit note, the nature of the transportation cost is not under dispute. Therefore in our considered view, merely because the transportation cost is not shown separately in the invoice cannot be the reason for denying the exclusion of the same from the assessable value. The Authority therefore set aside the impugned order and allow the appeal.
Decision:The application allowed.
Comment:The gist of the case is that the assessee had sold goods from factory to the customer as well as transported the same. The transportation cost was not shown in the invoice. The assessee had collected freight and transportation charges either through commercial bills or debit notes. The decision has been given in favor of assessee by giving reference of Ispat Industries Ltd.2015 (324) E.L.T. 670(S.C.).
 Prepared By:HimanshuBhimani
 
 
 
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