Liquor Licensee Can't Avoid Licence Fee By Citing Business Losses, Natural Calamities: Himachal Pradesh HC

The Himachal Pradesh High Court has held that a liquor licence holder cannot back out of its obligation to pay the licence fee after voluntarily participating in an auction and accepting the licence terms, merely because the business later became commercially unviable. The court ruled that business losses, natural calamities or lower liquor prices in a neighbouring State do not dilute the contractual obligations arising from the licence A Division Bench of Justices Vivek Singh Thakur and...

Gujarat HC Holds PLA Payment Cannot Result In Double Recovery, Directs ₹3.74 Cr. Credit Restoration

The Gujarat High Court on 24 June held that the Central Excise Department cannot require a taxpayer to claim a cash refund after the taxpayer has already deposited the disputed duty amount through the Personal Ledger Account (PLA), as the corresponding CENVAT credit must be restored to prevent double recovery. A Division Bench of Justices A.S. Supehia and Vaibhavi D. Nanavati allowed the writ petition filed by Inductotherm India Pvt. Ltd. and directed the Department to re-credit Rs. 3,74,33,462...

Gujarat High Court Restricts Excise Rebate In Coke Exports, Rejects Moisture Loss Claim

The Gujarat High Court on 19 June held that Rule 18 of the Central Excise Rules, 2002 allows rebate only on the quantity of goods actually exported and not on the higher quantity cleared from the factory on payment of excise duty. A Division Bench of Justices A.S. Supehia and Vaibhavi D. Nanavati dismissed a batch of petitions filed by Mahashakti Coke, which challenged the denial of rebate on the differential quantity of metallurgical coke. The Court held: “The expression 'duty paid on such...

Sale Or Service Taxability Disputes Can Only Be Challenged Before Supreme Court: Telangana High Court

The Telangana High Court has held that disputes involving whether a transaction constitutes a “sale of goods” or a “service” raise questions of taxability and are not maintainable under Section 35G of the Central Excise Act, as such issues lie within the appellate jurisdiction of the Supreme Court under Section 35L. A Division Bench of Justices P. Sam Koshy and Narsing Rao Nandikonda dismissed the appeal filed by the Commissioner of Central Tax & Customs against Zoom Technologies (India)...

Delhi HC Upholds DGCEI Officers' Discharge In Custodial Torture Case, Rejects CCTV Evidence

On 22 May, the Delhi High Court upheld the discharge of officers of the Directorate General of Central Excise Intelligence (DGCEI) who were accused of illegally detaining, kidnapping and torturing a businessman during a central excise investigation. A Bench of Justice Amit Mahajan held that the CCTV footage relied upon by the complainant was not admissible because it did not have the required certificate under Section 65B of the Indian Evidence Act, 1872 and dismissed the revision petitions...

Madhya Pradesh High Court Denies Bail To Tobacco Trader Accused Of ₹3.32 Crore Excise Duty Evasion

The Madhya Pradesh High Court at Gwalior has recently refused bail to a tobacco trader accused of evading around ₹3.32 crore in central excise duty by allegedly concealing tobacco packing machines and illegally manufacturing tobacco products. Justice Rajesh Kumar Gupta observed that the trader's claim that one of the two machines found during the search was non-functional could not, at this stage, weaken the prosecution case. “Mere oral assertion during search proceedings that the machine was...

Revenue Neutrality Not Applicable To Non-Reversal Of SAD Credit In Inter-Unit Transfers: CESTAT Mumbai

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), on 5 May upheld the demand of duty, interest and penalty against Thermo Fisher Scientific India Pvt. Ltd. for failure to reverse the Special Additional Duty (SAD) component of CENVAT credit while transferring inputs “as such” between its units, holding that the plea of revenue neutrality is not applicable in such cases. A Bench comprising Judicial Member Dr. Suvendu Kumar Pati observed that the assessee's...

Telangana High Court Upholds Rejection of Excise Settlement Plea for Lack of Full and True Duty Disclosure

The Telangana High Court has dismissed a writ petition filed by Airan Comtrax Towers Pvt. Ltd., upholding the rejection of its settlement application on the ground that it failed to make a full and true disclosure of its duty liability. A Division Bench of Justice P. Sam Koshy and Justice Narsing Rao Nandikonda was dealing with a challenge to the order dated February 28, 2008 passed by the Settlement Commission. The case arose from a show cause notice dated April 4, 2005 alleging clandestine...

CESTAT Chennai Orders Refund Of Excise Duty On Revised Price Not Accepted By Buyer

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, has held that excise duty paid on a higher price claimed through supplementary invoices cannot be sustained where the buyer never accepted that price. “The contemporaneous letter dated 13.07.2015 issued by the buyer clearly establishes that the supplementary invoice was not accepted, the amount was not accounted in the books and no CENVAT credit was availed. Thus, the revised value never crystallized into a transaction...

Revenue Cannot Demand Interest On Delayed Duties Yet Deny It On Refund: Telangana High Court

The Telangana High Court recently held that the Revenue is bound to compensate a taxpayer for amounts wrongfully collected and retained as interest on alleged central excise duty liability arising from a customs notification, even where such amounts were recovered under an amnesty scheme. The court said, “the Revenue cannot act in contradicting ways, i.e., on one hand demanding interest from the assessee for the delay in payment of duties and on other hand refusing to pay interest on the amount...

Excise Duty Recovery During Stay On Demand Treated As 'Under Protest'; Refund Not Time-Barred: Madras HC

The Madras High Court has held that where the Department appropriates amounts during the pendency of an appeal against a Excise duty demand despite a subsisting stay order, such amounts must be treated as paid under protest, and a refund cannot be denied on the ground of limitation.The bench stated that "If the revenue is permitted to adopt such novel ways to adjust the amounts by getting over an order of stay and thereby indirectly recovering the money, it cannot be construed as a duty payable...

Himachal Pradesh High Court Quashes Distillery Licence Cancellation Over Lack Of Independent Application of Mind

The Himachal Pradesh High Court set aside the cancellation of distillery licences, holding that the decision was influenced by an unauthorised recommendation and lacked independent application of mind. It permitted fresh adjudication by the competent authority. Justice Jyotsna Rewal Dua was dealing with a writ petition filed by a distillery licensee (Tiloksons Brewery & Distillery) challenging cancellation of its licences in Forms D-2 and L-11 under the Himachal Pradesh Excise Act, 2011.The...