AI Drafter 
TaxTMI 
TaxTMI 
2024 (5) TMI 119
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....it was wrongly availed by reason of fraud, willful misstatement or suppression. None of the above ingredients are present in this case so as to invoke section 74 of the CGST Act, 2017. The Appellant has not suppressed any fact from the department. He has filed Tran-1 fully disclosing the import duty carried over as transitional credit. The department after considering all the facts on record has granted the refund. It is clear that there was no misstatement or fraud on the part of the Appellant. Hence, I am of the view that the Issue of SCN under Section 74 of the CGST Act, 2017 is not legal and proper. Now we address the issue whether penalty is imposable under Section 74 of the CGST Act 2017. As invocation of demand under Section 74 itself is not legal the demand for penalty is not sustainable. Hence, I set aside the Penalty of Rs. 21,44,097/- imposed in the order. The summary of Order in Form GST DRC-07 does not demand interest but the manual order dated 19.03.2020 has demanded interest under section 50 @18%. Section 50(1) reads as below: Section 50- Interest on delayed payment of tax (GST) (1) Every person who is li....
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....under:- On perusal of the documents during Tran-1 Verification and upon verification of bill of entry submitted by you and duty paid challan to the central tax authority, the availed credit of import duty on the import of split Coriander for industrial processing and the total value was shown as Rs. 1,34,600/- instead of US Dollars and the credit availed in Tran-1 filed on 27.12.2017 to the tune of Rs. 42,88,194/-. It was also noticed that you have paid only the basic customs duty and cess on customs duty but there was no CVD As per Rule 3(1) of the Cenvat credit rules, 2004, listing the eligible duties which are allowed to take credit wherein the basic customs duty does not fall under category of eligible credit, you have been informed already by the Perambalur range officer vide the letter dated:28 10.2019 Since as much as the ineligible amount of Rs. 42,88,194/- was refunded, you are hereby given an opportunity to pay the erroneous refund amount along with interest u/s.50. failing which action initiated will be taken under sec. 74 of TNGST Act-2017. 6. The petitioner suffered an adverse order in the hands of the first respondent on 19.03.2020 in his....
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....hat only such a person shall pay, on his own, interest at such rate, not exceeding 18%, as may be notified by the Government on the recommendations of the Council. 12. It is submitted that in the case, the petitioner was not liable to pay the tax or therefore was no fault on the part of the petitioner to pay tax and therefore, the question of levying interest under Section 50 of the CGST Act, 2017 does not arise. It is further submitted that the question of invoking Section 50(3) of the CGST Act, 2017 also will not arise since the petitioner has although wrongly availed the input tax credit, he has not utilised the same. 13. It is submitted that the amount that was wrongly availed as input tax credit by the petitioner was refunded back to the petitioner on 17.07.2018 was later repaid back by the petitioner on 23.07.2020 and 17.11.2020. Therefore, it is submitted that in absence of statutory mechanism under Section 50 read with Section 74 of the Act to recover the interest on such erroneous refund made to the petitioner, the impugned orders passed by the respondents imposing interest are liable to be interfered with. The learned counsel for the petitioner prays for quashing th....
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....tax credit lying un-utilised under the CENVAT Credit Rules, 2004 and TNVAT Act, 2006 in Tamil Nadu could be transitioned. 21. Sub- Section (2) to Section 140 of the CGST Act, 2017 also makes it clear that the registered person shall not be allowed to take credit unless the said credit was admissible as CENVAT credit under the existing law i.e., CENVAT Credit Rules, 2004 and is also admissible as input tax credit under the CGST Act, 2017. 22. Therefore, the question of the petitioner transitioning the amount that was wrongly claimed as input tax credit under the CENVAT Credit Rules, 2004 did not arise. The Department however committed a mistake by sanctioning the refund to the petitioner on 17.07.2018 pursuant to refund claim filed by the petitioner. 23. Thereafter, releasing the mistake, the Department has issued Notice dated 01.02.2020 under Section 74 of the CGST Act, 2017. The petitioner has also not disputed that the petitioner was not entitled to avail input tax credit under the CENVAT Credit Rules, 2004. 24. The petitioner has also paid the amount to the Department post facto on 23.07.2020 and on 17.11.2020. There is a delay in the payment of the amount after the ....
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....r excess reduction, as the case may be, at such rate not exceeding twenty four per cent., as may be notified by the Government on the recommendations of the Council. 27. Sub-Section 10 to Section 42 and Section 43 of the CGST Act, 2017 reads as under:- Section 42(10) of the Act Section 43(10) of the Act Section 42 - Matching, reversal and reclaim of input tax credit (1) ..... ........ (10) The amount reduced from the output tax liability in contravention of the provisions of sub-section (7) shall be added to the output tax liability of the recipient in his return for the month in which such contravention takes place and such recipient shall be liable to pay interest on the amount so added at the rate specified in sub-section (3) of Section 50. Section 43 - Matching, reversal and reclaim of reduction in output tax liability (1) ..... ......... (10) The amount reduced from output tax liability in contravention of the provisions of sub-section (7) shall be added to the output tax liability of the supplier in his return for the month in which such contravention takes place and such supplier shall be liable to pay interest on the amount so added at the rate sp....
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....74- Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful-misstatement or suppression of facts. (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice. 31. Under Section 73(5) of the respective GST Enactments, the person chargeable with tax may, before service of notice under Sub- Section (1) or, as the case may be, the statement under Sub-Section (3), pay the amount of tax along with interest payable thereon under Section 50 of the Act on the basis of his ow....