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2020 (3) TMI 1299 - Commissioner - GSTTransitional Input tax credit - inputs lying in their stock as on 30-6-2017 without having proper documents or not - HELD THAT - The appellant has submitted copy of 58 VAT-invoices of M/s. TEXMO Industries in respect of ITC of Rs. 90, 639/- availed by the appellant along with a certificate dated 17-1-2019 of excise duty paid by the principal manufacturer i.e. M/s. TEXMO Industries Coimbatore. Whereas Section 140(3)(iii) of the Act stipulates that the supplier should have in possession of prescribed documents evidencing payment of duty under the existing law (Central Excise Law) in respect of such inputs. I observe that the VAT invoices submitted by the appellant do not fulfil the conditions for being a valid document under Rule 9 of the Cenvat Credit Rules 2004 or Rule 11 of the Central Excise Rules 2002 (i.e. the existing law). The appellant has also paid reliance upon the decision of Hon ble Gujarat High Court in the case of DOWNTOWN AUTO PVT. LTD. VERSUS UNION OF INDIA 2019 (2) TMI 542 - GUJARAT HIGH COURT - It is found that the above decision is an interim judgment not a final decision. Hence it will not be justified to use the same as in favor/against of any party. The appellant was not in possession of prescribed documents evidencing payment of duty under the existing law for availing input tax credit of Rs. 90, 639/- as required under Section 140(3)(iii) of the Act - Appeal dismissed - decided against appellant.
Issues:
1. Disallowance of input tax credit of Rs. 90,639 by the department. 2. Validity of documents submitted by the appellant for availing input tax credit. 3. Interpretation of Section 140(3)(iii) of the CGST Act, 2017. 4. Reliance on the decision of Hon'ble Gujarat High Court in a similar case. 5. Imposition of penalty under Section 73(9) read with Section 122(2)(a) of the Act. Analysis: 1. The department disallowed input tax credit of Rs. 90,639 availed by the appellant, alleging non-possession of invoices or prescribed documents as required under Section 140(3)(iii) of the CGST Act, 2017. The appellant contested this disallowance, claiming possession of excise duty paid invoices and certificates from the principal manufacturer as evidence of duty payment. The appellant argued that the disallowance was unjustified and illegal, emphasizing the sufficiency of the evidence provided. 2. The appellant submitted 58 VAT invoices of the manufacturer along with a certificate of excise duty payment. However, the Commissioner noted that the submitted documents did not meet the criteria of valid documents under the existing law, specifically Rule 9 of the Cenvat Credit Rules, 2004 or Rule 11 of the Central Excise Rules, 2002. Despite the appellant's arguments, the Commissioner found the documents insufficient to support the claim for input tax credit. 3. Section 140(3)(iii) of the CGST Act, 2017 mandates that a registered person must possess prescribed documents evidencing duty payment under the existing law to avail input tax credit. The Commissioner emphasized the importance of complying with this provision and held that the appellant's failure to meet this requirement justified the disallowance of the input tax credit. 4. The appellant relied on an interim judgment of the Hon'ble Gujarat High Court in a similar case. However, the Commissioner clarified that interim judgments do not hold the same weight as final decisions and cannot be used definitively in favor or against any party. Therefore, the reliance on the Gujarat High Court decision was deemed inconclusive in the present appeal. 5. The Commissioner upheld the impugned order disallowing the input tax credit and imposing a penalty of Rs. 10,000 under Section 73(9) read with Section 122(2)(a) of the Act. Despite the appellant's arguments and submissions, the Commissioner found no grounds to overturn the decision, ultimately rejecting the appeal filed by the appellant. This detailed analysis highlights the key issues addressed in the judgment, focusing on the disallowance of input tax credit, the validity of supporting documents, the interpretation of relevant legal provisions, the reliance on external judgments, and the imposition of penalties.
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