Audit Team Demanding last 5 years record with revision_Urgently

[Guest]

Dear Experts,

I am a manufacturer and imports raw material and i am paying Custom duty with BCD, CVD, Spl CVD, EC & SHEC. And i have taken credit of CVD and Spl CVD plus proportionate EC and SHEC in proportion of CVD and Spl CVD.

At the time of FY 2012-13,2013-14 it was so confusing and i discussed with excise auditor but excise auditor said nothing is wrong you can take credit of the same and he didn't raise any query and complete audit.

BUT NOW Excise auditor is doing audit of current year and he is ready to raise demand of these points of past 5 years but my point is excise audit has been done of past period and we nothing to hide and mentioned each and every item in return and now how can deptt cover my case under fraud??

Please suggest.

Thanks in advance.

[KASTURI SETHI]

Sh.Prem Bajaj Ji,

No. Since Audit has been conducted regularly by the department, now the department cannot invoke the extended period of five years on the ground of suppression of fact etc. There are judgements of High Court on this issue in favour of the assessee. However, If SCN is issued, that would not sustain but doors for facing the rigours of litigation would be opened. You are late now. Not too late.

[Ganeshan Kalyani]

Sir, I have seen that even if an audit has happened, the department issues a Notice if they are of firm view that tax has been escaped. Thanks.

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

I agree with you Sir. Sometimes lame SCNs are issued. If audit has been conducted regularly and SCN invoking extended period is issued, that would be quashed on the first stage of appeal. Now there are so many judgements on this issue. The Department has also started initiating action against the officer who issues un-sustainable SCN.

[Guest]

Dear Kasturi Sir, Thank you so much for resolving my query please suggest for one more thing that Legally EC & SHEC is not allowed But i have taken EC & SHEC on CVD Portion only which is logically allowed i think, please correct me if i am wrong.

Is there any remedy available for this.

[Guest]

Also can you please share high court judgement, if possible.

Thanks a lot sir.

[KASTURI SETHI]

Sh.Prem Bajaj Ji,

HE and SHE Cess paid prior to 1.3.15 and goods may be received in the factory of manufacturer on or after 1.3.15 can be utilised towards BED. (Notification No.12/15-CE(NT) dated 30.4.15)

[KASTURI SETHI]

Sir,

Logic has no room in front of law. Law will prevail over logic.

AI Summary

Extended limitation cannot be invoked where prior audit occurred; SCNs invoking extended period risk quashing. The department proposes reopening five prior years to deny credit of CVD, Special CVD and proportionate EC and SHEC despite earlier audits that accepted returns; where audits were regularly conducted the extended period of limitation is constrained and SCNs invoking extended period are vulnerable to quashing. HE and SHE cess paid before 1.3.2015 may be utilised towards basic excise duty for goods received on or after 1.3.2015 per Notification No.12/15-CE(NT) dated 30.4.15.