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Corporate News *  GST summary assessment remedy must be meaningful; application u/s 64(2) should be decided promptly: Karnataka High Court. *  Rs. 1,800 shortfall in GST appeal pre-deposit can’t defeat appellate remedy: Karnataka High Court. *  GST notice merely uploaded on common portal can’t be treated As properly served: Rajasthan High Court. *  GSTAT dismisses department’s appeal for violating Rs. 20 lakhs litigation threshold. *  GST payment without tax ascertainment and DRC-04 acknowledgment not voluntary: Karnataka High Court orders refund with interest. *  10% penalty pre-deposit not required when GST order also confirms tax demand: Madras High Court. *  Subsequent deposit of full 10% meets mandatory pre-deposit requirement: CESTAT. *  DGGI Gawahati | GST bank account attachment automatically lapses after 1 year: Gauhati High Court. *  Supreme Court stays 3 times penalty over failure to disclose order clarifying higher entry tax rate. *  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).
Subject News *  DRI | 3 years custody and slow trial alone can’t override NDPS bail bar in commercial quantity case: Delhi High Court. *  Customs refund can’t be adjusted against disputed demand that has not attained finality: CESTAT. *  Calcutta High Court quashes GST proceedings based solely on omitted rule 96(10). *  Unreliable panchnama, unproduced private ledger can’t prove clandestine removal: CESTAT.   *  Only amortised value of customer-owned tools and dies can be included in assessable value of auto parts: CESTAT. *  Mere recital of ‘fraud’ or ‘suppression’ can’t justify GST extended limitation: Chhattisgarh High Court quashes notices. *  GST Appellate Authority can’t remand case for document verification; must decide appeal itself: GSTAT. *  Supreme Court stays High Court’s ruling allowing Deputy Commissioner to issue GST penalty notice exceeding Rs. 1 crore. *  Sec. 74 GST can’t be invoked to question CENVAT credit availed under pre-gst regime: Punjab & Haryana High Court. *  Service Tax refund or adjustment can’t be decided before classifying contract as works or service contract: Kerala High Court. *  Service Tax order passed 8.5 Years after SCN quashed: Meghalaya High Court. *  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.  

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PJ/Case Laws/2012-13/1170

Grounds not taken before adjudication authority cannot be raised first time before appellate authority.
Case:M/S. Cargo Motors (Guj.) Pvt. Ltd. V/s. Commissioner of Customs Excise , Vadodara
 
Citation:2012-TIOL-270-CESTAT-AHM
 
Issue: Grounds not taken before adjudication authority cannot be raised first time before appellate authority.
 
Brief Facts:The assessee is providing various services like- providing finance from various banks, insurance of the vehicles, coating/colour, incentive/labour etc. to his clients as under the category of ‘Business Auxiliary Service’. The assessee has not contested the merit of service tax liability before the first adjudicating authority and only pleaded against imposition of penalties under section 76, 77 and 78 of the Finance Act, 1994 and therefore, taking up the issue on merits of service tax liability before the subsequent appellate authority will be incorrect position of law. Thus, demand of service tax and interest thereon is confirmed. As regards the imposition of penalties, there are various decisions of the Tribunal which clearly states that services provided by the appellant such as loan from banks, amount received from banks and insurance companies for services rendered cannot be brought within the definition of ‘Business Auxiliary Service’ and thus, this is a fit case to invoke the provisions of section 80 of the Finance Act, 1944 and penalties under section 76, 77 and 78 are set aside.
 
Appellant’s Contention: The appellant submitted that he is providing various services like- providing finance from various banks, insurance of the vehicles, coating/colour, incentive/labour etc. to his clients as under the category of ‘Business Auxiliary Service’. He submitted that the issue is squarely covered by the decision of the Tribunal in the case of Kamal Auto Ind. Vs. CCE, Jaipur, CCE, Belgaum vs. Chadha Auto Agencies -2008-TIOL-1388- CESTAT-MAD and Silicon Honda vs. CCE, Banglore- 2007 (7)-STR 475 (Tri-Bang)= (2007-TIOL-1159-CESTAT-BANG.). Thus, the appellant submitted that this appeal should be allowed in the light of above cited judgments.
 
Respondent’s Contention:The respondent reiterates the findings of the first appellate authority.
 
Reasoning of Judgment: The appellant has not disputed service tax liability before the first appellate authority. They have pleaded against the imposition of penalties under section 76, 77 and 78 of Finance Act, 1944 only and have conceded the issue on merits. On specific query from the counsel submits that the assessee is unable to justify the stand taken by the assessee before the first appellate authority or today before us as regards contest of issue of merits. The appellant has not disputed the issue on merits of service tax liability before the first adjudicating authority and later on taking up the issue on merits of service tax liability before the subsequent appellate authority will be incorrect position of law.
As regards the imposition of penalties, there are various decisions of the Tribunal which clearly states that services provided by the appellant such as loan from banks, amount received from banks and insurance companies for services rendered cannot be brought within the definition of ‘Business Auxiliary Service’ and thus, this is a fit case to invoke the provisions of section 80 of the Finance Act, 1944 and penalties imposed on the appellant under section 76, 77 and 78 are set aside on the basis of the various decisions of the Tribunal holding that the activities provided by the appellant could not have been taxed under the category ‘Business Auxiliary Service’.
 
Decision: The appeal is disposed of by way of allowing the appeals as regards the imposition of penalties are involved and confirming the demand of service tax and interest thereon.
 
Comment:- This is settled principle as well as ratio of this decision that the grounds raised before adjudication officer can be raised before the appellate authority. No new ground can be raised at that stage. Hence the drafting of show cause notice is very important and the consultants as well as assessee should be very particular in doing the same.
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