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 Laws/2012-13/1243

Interest is payable on taking of credit. There is no requirement of mesa rea for imposition of Penalty under Rule 15 of CCR,2004.



Case:- Commissioner of Central Excise, Jaipur-I versus Videocon Industries Ltd.
 
Citation:- 2012(279) E.L.T. 438 (Tri-Del)
 
Brief Facts:- The respondents are manufacturers of refrigerators chargeable to Central Excise duty. They avail Cenvat credit of duty paid on inputs used in or in relation to manufacture of their finished products. They availed Cenvat credit on the basis of certain invoices twice, which on being pointed out by the audit was reversed. Subsequently show cause notice issued to them for con­firmation of Cenvat credit demand and also for demand of interest on wrongly taken credit and imposition of penalty. The Assistant Commissioner was demanded interest on the same under Rule 14 Cenvat Credit Rules, 2004 read with Section 11AB of Central Excise Act and imposed penalty on them under Rule 15 of Cenvat Credit Rules. On appeal being filed before the Commissioner (Appeals) by the respondent, the Commission (Appeals) by the impugned order-in-appeal, while upholding the Cenvat credit demand, set aside the interest and penalty. Against this portion of the order, the Commissioner (Appeals), the pre­sent appeal has been filed by the Revenue.
 
Appellant’s Contention:- The Appellant pleaded that the question of interest for the period of wrong avail­ment of Cenvat credit is concerned, the issue stands decided in favour of the re­spondent by the judgment of Hon'ble Supreme Court in the case of Union of India v. Ind-Swift Laboratories Ltd. that since this is a case of wrong availment of Cenvat credit, penalty under Rule 15(1) would also be attracted, as from the wordings of Rule 15(1) of Cenvat Credit Rules, 2004 it is clear that the penalty is attracted for wrong availment of Cenvat credit and for this purpose, no mens rea is required to be proved. He, therefore, pleaded that the impugned order setting aside the interest and penalty is not correct. I have carefully considered the submissions of the learned DR and perused the records.
 
 
 
Reasoning of Judgement:- In this case, none representing the respondent ap­peared. There is also no letter from them seeking adjournment. There is no dispute about the wrong availment of Cenvat credit, which had been availed on the basis of the same invoices twice and on being pointed out; the excess credit taken had also reversed. The dispute is only as to whether the respondent are liable to pay interest for the period, they had availed the wrong Cenvat credit and also whether they are liable for penalty un­der Rule 15(1) of Cenvat Credit Rules, 2004. So far as the question of interest for the period of wrong availment of the Cenvat credit, the same stands decided in favour of the department by the judgment of Hon'ble Supreme Court in the case of U01 v. Ind-Swift Laboratories Ltd. (supra), and, hence, the Commissioner (Ap­peals)'s order setting aside the interest is not correct and the same is liable to be set aside. The imposition of penalty for wrong availment under Rule 15(1) of Cenvat Credit Rules, no mens rea is re­quired to be proved and penalty is attracted whenever Cenvat credit is availed wrongly. It is only for imposition of penalty equal to the wrongly availed Cenvat credit under The provisions of sub-rule (2) of Rule 15 read with Section 11AC of the Central Excise Act, 1944, that the mens rea is required to be proved. In view of this, the impugned order setting aside the penalty on the respondent is not cor­rect and is liable to be set aside. However, looking to the circumstances of this case, the imposition of penalty equal to the Cenvat credit demand would not be justified and the same has to be reduced.
In view of the above discussion, the Commissioner (Appeals)'s order setting aside the interest and penalty is set aside and in this regard, the order passed by the original Adjudicating Authority is restored. However, looking to the circumstances of this case, penalty under Rule 15(1) of Cenvat Credit Rules, 2004 is reduced to Rs. 20,000/-. Revenue's appeal stands disposed of, as above.
 
Decision:- Appeal Disposed off.
 
Comment:- Although the credit has been reversed by the appellant voluntarily yet the interest and penalty is payable. The Apex Court has decided on interest that the same is payable even on taking of credit though the same is not utilized. Although the department has amended the rule and it is now clear that the interest is payable on utilization only i.e. when the harm is caused to the department. But it does not have retrospective effect.
 
Secondly, the important point in this case, penalty under Rule 15 does not require mensa rea for imposition of penalty. This requirement is only for penalty under Section11AC. 
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