Penalty u/s 74 Was Inappropriate Since Fraud or Misstatement Wasn’t Proven by Revenue | HC
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Case Details: Greenstar Fertilizers Ltd. v. Joint Commissioner (Appeals) - [2024] 163 taxmann.com 509 (Madras)
Judiciary and Counsel Details
- C. Saravanan, J.
- S. Ganesh for the Petitioner.
- N. Dilipkumar, Standing Counsel for the Respondent.
Facts of the Case
The petitioner was a Central Excise Assessee under the provisions of the Central Excise Act, 1944 r/w. Central Excise Rules, 2002. It had wrongly availed the credit under Section 142 of the CGST Act, 2017. The department issued show cause notice and penalties were imposed for wrongful availment of ITC. It filed appeal but the order was rejected. Thereafter, it filed writ petition to challenge the order.
High Court Held
The Honorable High Court noted that the penalties under section 74 deals with situation where credit is availed or utilized by reason of fraud or any wilful misstatement or suppression of facts. In the instant case, the fraud or misstatement wasn’t proven by department and credit was also reversed post-notice. Therefore, the Court held that penalties under Section 74 were inappropriate and a token penalty of Rs.10,000 was to be imposed.
List of Cases Reviewed
- M/s.Gujarat Travancore Agency, Cochin v. Commissioner of Income Tax, Kerala, Ernakulam [1989 (3) SCC 52]
- Punjab Tractors Ltd. v. Commissioner of Central Excise, Chandigarh [2005 (11) SCC 210] (Para 18)
- Aathi Hotel, Rep. by its Proprietor S.Vaithiyanathan v. Assistant Commissioner (ST) (FAC), 2021 SCC OnLine Mad 16170 (Para 15)
- Kumaran Filaments (P) Ltd. v. Commissioner of Central GST and Central Excise, Madurai and others, 2021 SCC OnLine Mad 12062 (Para 16)
- Commercial Steel Engineering Corporation v. State of Bihar and others, (2020) 74 GSTR 51: 2019 SCC OnLine Pat 3363 (Para 17) followed.
List of Cases Referred to
- Aathi Hotel, Rep. by its Proprietor S.Vaithiyanathan v. Asstt. Commissioner (ST) (FAC), 2021 SCC OnLine Mad 16170 (para 15).
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