I. CX – Charges of availing excess Cenvat credit are unsustainable, where not backed by corroborative evidence – allegations of suppression of facts do not hold where assessee’s accounts were audited periodically: CESTAT
– Demand in the absence of any corroborative evidence is nothing but based on presumptions and is not permissible under the law
– Charge of excess cenvat credit on the strength of balance sheet only is not sustainable [Beer Bros. Vs. Comm CE 2016 (333) ELT 337 (Tri-Del)]
– The allegation of suppressing the facts from the department does not hold good in the event of a periodic audit by dept [BST Infratech vs Comm of CGST & CE Excise Appeal No. 77116 of 2019 CESTAT Kolkata]
II. Cus – An exporter is not required to give a declaration of the technical specification, quality and characteristics of inputs used in the resultant product: CESTAT
– The issue involved is, whether the assessee is entitled to claim DFIA benefits for import of “Wheat Gluten” against input product description “Wheat Flour”
– There is no provision either in Policy or in Hand book to say that DFIA benefits can be claimed on the basis of ITC (HS) numbers
– Specific name of input in the present case ‘Wheat Gluten’ is not mentioned in the licence or in the export shipping bill, benefit of DFIA cannot be extended particularly when the broad description as wheat flour is specified in SION as well as in the annexure to the DFIA licence.
– The import goods “Wheat Gluten ” or “Wheat Flour” are not specified under Sensitive items under Para 4.30 of FTP- (2015-2020) of DFIA’s.
– Therefore, the exporter is not required to give a declaration of the technical specification, quality and characteristics of inputs used in the resultant product.
– Appeal is allowed and appellant is entitled for the benefit of DFIA for import clearance of Wheat Gluten
III. ST – Where Cenvat credit wrongly taken is subsequently reversed, it is tantamount to nonavailment of credit – Rule 6(3) of CCR is inapplicable in such circumstances: CESTAT
– Rule 6 of the Cenvat Credit Rules is not enacted to extract illegal amounts from the assessee.
– The main objective of Rule 6 is to ensure that the assessee should not avail the Cenvat Credit in respect of input or input services which are used in or in relation to the manufacture of the exempted goods or for exempted services.
– Amount which is to be recovered shall not be in any case more than Cenvat Credit attributed to the input or input services used in the exempted goods.
IV. Delhi CESTAT – No service-tax on liquidated damages, earnest money, deposit & penalty for contract breach…same could be applied in GST as well [TS-1120-CESTAT-2020-ST]
The Principal Bench of Hon’ble CESTAT at New Delhi, on 22.12.2020, has allowed the Appeal (ST-50567/2019) filed by us for South Eastern Coalfields Ltd. by setting aside the Service Tax demand of Rs. 32.76 Crores approx., plus equal penalty and applicable interest, on the amount of Liquidated Damages/Forfeiture of EMD/Penalty recovered from the various contractors & suppliers / Coal buyers under FSA and coal e-Auction scheme.
The said demand was raised by invoking the provisions contained in Section 66E(e) as ‘Declared Service’ which reads as “agreeing to an obligation or to refrain from an act or to tolerate an act or a situation or an act”.
V. ST – Irrespective of the person who maintains canteen in a factory, exemption as per Entry 19A of 25/2012-ST is available to such person – Benefit cannot be whittled down by restricting it to factory owner alone: CESTAT
Exemption is available to such person and the benefit cannot be restricted to the owner of the factory alone [SAI Food services vs. Com CGST ST(A) No. 87416 of 2019]
VI. GST – SCN falls short of all the known principles of natural justice and no prudent man could have given a reply to the kind of SCN which was served – Set aside
VII. Department cannot be permitted to be a voluntary litigant in the Constitutional Courts especially to challenge orders of Single Judge without any valid rhyme or reason
There is absolutely no merit in department contentions to challenge and no bona fide reasons
Mad HC raised a question that why the Department should file intra-court Appeals just for the sake of litigation – It is not at all justified
It has been a routine for the department in recent years when the directions of single bench Judge is not in their favour they challenge the same even without looking into the proposition of the Judgement
One may use the said case reference when the department challenges the rulings on unreasonable grounds.
Please revert on [email protected] in case of any clarifications.