Case Law Details
Vinayak Industries Vs Commissioner of Central Excise & Customs (CESTAT Chandigarh)
The recent case of Vinayak Industries Vs Commissioner of Central Excise & Customs, adjudicated by CESTAT Chandigarh, sheds light on the limitations surrounding penalty imposition in tax matters. This article delves into the details of the case, examining the implications of the tribunal’s ruling.
The case revolves around the imposition of penalties on Vinayak Industries for the non-filing of returns pertaining to the period from February 2012 to March 2016. The Department had issued a show cause notice proposing penalties amounting to Rs. 96,000 under various provisions of the Central Excise Rules. However, the tribunal found that the penalties were imposed beyond the period of limitation.
The tribunal’s analysis focused on the provisions of Section 174(2)(e) of the CGST Act, 2017, which governs the continuation of proceedings under the new regime. It was observed that proceedings can only be continued under the GST regime if they arise out of certain specified activities, such as investigation, inquiry, verification, assessment proceedings, or adjudication. The violation of non-filing of returns under the previous law was not saved under the GST regime.
Furthermore, the tribunal noted that the show cause notice was issued beyond the period of limitation, without adequate grounds for invoking the extended period. It emphasized that without evidence of intent to evade tax, the extended period of limitation cannot be invoked.
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