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Central Excise - Case Laws
Showing 1 to 20 of 80480 Records
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2024 (6) TMI 41 - CESTAT BANGALORE
CENVAT Credit - eligible services in terms of Rule 2(l) of Cenvat Credit Rules, 2004 - invocation of extended period of limitation - HELD THAT:- Revenue has already issued a show-cause notice dated 06.12.2010, covering the period November 2005 to March 2010, disputing the eligibility of certain services to credit and invoking extended period. The said show-cause notice has been dropped by the Commissioner; the appeal filed by the Department against that order was rejected by this Bench in [2021 (12) TMI 381 - CESTAT BANGALORE], while deciding the issue in favour of the appellants.
It is found that in the instant case also extended period has been invoked while relying on the data which was already available with the Department. It is found that where there are no changes in the material facts of the case and the information available with the Department extended period cannot be invoked again in the subsequent period as held by the Hon’ble Supreme Court in the case of NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP [2006 (4) TMI 127 - SUPREME COURT].
Invocation of extended period requires the evidence regarding the satisfaction of the conditions prescribed therein like suppression of facts etc. with an intent to evade payment of duty. Leaving alone such proof, it is found that learned Commissioner does not even discuss as to why extended period can be invoked. We are of the considered opinion that such a show-cause notice and the impugned order cannot be sustained. The invocation of extended period is a weapon in the hands of the Department to demand duty where the belligerent assessee evades payment of duty and not in cases wherein all the material facts of the case were available with the Department and show-cause notices are being issued regularly on the same issue. Therefore, the appellants have a strong case in their favour on limitation.
CENVAT Credit - HELD THAT:- The appellants are agreed upon that the services on which credit was availed are integral to the business of manufacture carried out by the appellants. In fact this Bench in [2021 (12) TMI 381 - CESTAT BANGALORE] has analyzed various services on which the appellants have availed credit and have decided the issue in favour of the appellants. The appellants therein has relied upon various cases to justify the credit taken in respect of 67 services on which credit was taken.
The appellants have a strong case in their favour. The impugned order cannot be sustained and is liable to be set aside - Appeal allowed.
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2024 (6) TMI 40 - CESTAT KOLKATA
Refund arising on account of finalization of provisional assessment - hit by the clause of unjust enrichment - rejection on the sole ground that the appellant had failed to prove that the duty element claimed to have been returned through credit notes to the immediate buyer, had ultimately reached the consumer - scope of SCN crossed.
Refund claim - HELD THAT:- In the present case, upon finalization of provisional assessment vide Order dated 29.09.2008, it was notice that there was short payment as well as excess payment of duty. The proper officer ought to have allowed adjustment of the short paid and excess duty paid as per Rule 7 of the Central Excise Rules, 2002. However, it was not allowed and the appellant was asked to file refund claim for the excess paid amount of Rs.4,55,260/-.
Scope of SCN - HELD THAT:- It is observed that the Show Cause Notice was issued for denial of the refund on the ground of time-bar. However, both the authorities below have denied the refund claim on the ground of unjust enrichment. Thus, the submission of the appellant is agreed upon that the impugned order has travelled beyond the Show Cause Notice and therefore, the same is liable to be set aside on this ground alone.
Unjust enrichment - HELD THAT:- From the sample certificate issued by the dealers, we observe that all the dealers were not registered under the Central Excise Law for the purpose of availing or passing on the credit. Therefore, the question of any dutiable component in the form of refund of excise duty on the component of discounts as well as CENVAT Credit on the component does not arise - the appellant has produced sufficient evidence to establish that unjust enrichment is not applicable to this case.
The evidence available on record which clearly indicates that the appellant has not passed on the duty element to the ultimate customers, it is held that the impugned order denying the refund claim filed by the appellant on the ground of unjust enrichment is not sustainable.
The impugned order is set aside - appeal allowed.
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2024 (6) TMI 13 - CESTAT CHENNAI
Cenvat credit - 1%/2% CVD paid on imported Steam Coal vide N/N.12/2012- Cus dated 17.03.2012 - HELD THAT:- The issue has been decided by the Tribunal in the case of M/s. Chettinad Cements Corporation Pvt Limited (supra) by final order dated 26.10.2020. The Tribunal had followed the decision in the case of M/S. TAMIL NADU NEWSPRINT & PAPERS LIMITED VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, TIRUCHIRAPPALLI [2021 (10) TMI 13 - CESTAT CHENNAI]. The demand raised and confirmed denying the Cenvat credit availed on CVD paid on imported Steam Coal was set aside.
The demand cannot sustain and requires to be set aside. The impugned orders are set aside - Appeal allowed.
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2024 (5) TMI 1427 - HIMACHAL PRADESH HIGH COURT
Seeking to quash the prosecution - No Dues - Discharge Certificate issued - application of the Sabka Vishwas (Legacy Dispute Resolution) Scheme - liability of the petitioners-accused under the Central Excise Act 1944 and the Indian Penal Code - HELD THAT:- In peculiar facts of this case, mere pendency of an application dated 15.10.2022, for withdrawing the prosecution filed by Respondent-Complainant, if any, cannot be the basis for continuing the prosecution, when, the petitioner(s)-accused have remitted the liability and even the No Dues-Discharge Certificate and approval for withdrawing the prosecution from concerned Court stands accorded by the Respondent-Complainant competent authority. Further, no fruitful purpose would be achieved in continuing with the prosecution.
At the same time continuing with the prosecution despite the fact that the alleged liability has become non-existent, obsolete in view of the Sabka Vishvas [Legacy Dispute Resolution] Scheme, under which the liability stands liquidated. Further, the continuance of prosecution shall unnecessarily burden the docket of the Learned Trial Court and lead to accusation which no longer survives and continuance of prosecution shall entail unwarranted suffering and humiliation to the petitioner-accused, contrary to the purpose and object of the criminal justice system.
Accordingly, the Complaint, titled as Central Excise & Customs Department & Ors. Versus M/s Him Cylinders Ltd. & Anr. pending before Learned Chief Judicial Magistrate, Amb, District Una [H.P.], is quashed and set aside; and the petitioner(s)-accused shall stand acquitted of the accusation for all purposes, so far as it relates to the instant complaint.
Thus, the instant petition as well as the pending application(s), if any, shall stand disposed of.
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2024 (5) TMI 1389 - CESTAT MUMBAI
Reversal of proportional credit on clearance of 27923531 kgs of ‘medical grade’ oxygen - non-maintenance of separate records as prescribed in rule 6 of CENVAT Credit Rules, 2004 - HELD THAT:- In re Mercedes Benz India (P) Ltd [2015 (8) TMI 24 - CESTAT MUMBAI] pertaining to disputed credit to be reversed between April 2011 to February 2012, and intimated reversal in March 2012, the Tribunal had held that 'Rule 6 of the Cenvat Credit Rules is not enacted to extract illegal amount from the assessee. The main objective of the Rule 6 is to ensure that the assessee should not avail the Cenvat Credit in respect of input or input services which are used in or in relation to the manufacture of the exempted goods or for exempted services. If this is the objective then at the most amount which is to be recovered shall not be in any case more than Cenvat Credit attributed to the input or input services used in the exempted goods. '
There is no merit in the impugned order which is set aside - Appeal of assessee allowed.
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2024 (5) TMI 1337 - PUNJAB AND HARYANA HIGH COURT
Recovery of refund granted twice - grant of refund again by suppressing fact of suo moto availment of credit - Levy of penalty u/s 11AC - existence of mens rea or not - HELD THAT:- A bare reading of Section 11AC of the Act, 1944 shows that where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, for any reasons other than the reason of fraud or collusion or any willful mis-statement or suppression of facts or contravention of any of the provisions of the Act or of Rules made thereunder with intention to evade payment of duty, he shall be liable to pay penalty. Meaning thereby that there should be an intention to evade the payment of duty and in the present case, the mens rea of the appellant is proved from his conduct since it took the benefit of refund twice by suppressing fact of suo moto availment of credit.
There are no error much less perversity in the order impugned, warranting intervention by this Court - appeal dismissed.
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2024 (5) TMI 1336 - CESTAT ALLAHABAD
Abatement of appeal - adjournment of matter beyond three times - HELD THAT:- In case of ISHWARLAL MALI RATHOD VERSUS GOPAL AND ORS. [2021 (9) TMI 1301 - SUPREME COURT] condemning the practice of adjournments sought mechanically and allowed by the Courts/Tribunal’s Hon’ble Supreme Court has observed that 'Considering the fact that in the present case ten times adjournments were given between 2015 to 2019 and twice the orders were passed granting time for cross examination as a last chance and that too at one point of time even a cost was also imposed and even thereafter also when lastly the High Court passed an order with extending the time it was specifically mentioned that no further time shall be extended and/or granted still the petitioner – defendant never availed of the liberty and the grace shown.'
There are no justification for adjourning the matter beyond three times which is the maximum number statutorily provided - The Appeal is dismissed for non prosecution in terms of Rule 20 of CESTAT Procedure Rules, 1982.
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2024 (5) TMI 1335 - CESTAT BANGALORE
Levy of penalty on other co-noticee - Clandestine manufacture and clearance of the finished goods - whether after acceptance of application of the main applicant under SVLDRS, 2019 regarding the duty liability and penalty imposed, the personal penalty imposed on other notices can survive? - HELD THAT:- This issue has been dealt by the Tribunal in the case of M/S JPFL FILMS PRIVATE LIMITED, JALAN JEE POLYTEX LTD., KAVITA INTERNATIONAL AGENCY, KULDEEP SINGH, DP SINGH, R KNITFAB, PERFECT DESIGNER, VK KALRA, RELIANCE INDUSTRIES LIMITED, KANPUR WOOL INDUSTRIES, SWASTIK TRADING CO., APEX CORPORATION AND MANSA TRADERS VERSUS COMMISSIONER OF CENTRAL EXCISE, LUDHIANA [2023 (12) TMI 304 - CESTAT CHANDIGARH] has held that 'the benefit of the Scheme cannot be denied to the appellants just because they did not file the declaration under SVLDR Scheme.'
There are no reason not to follow the aforesaid precedent of this Tribunal. Consequently, the appeal filed by the appellant deserves to be allowed and accordingly the same is allowed.
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2024 (5) TMI 1334 - CESTAT ALLAHABAD
Classification of Colour Television Sets in SKD condition - classifiable under sub-heading No.8528.00 of CETA or not - confirmation of demand with interest and penalty - HELD THAT:- The issue is no more res integra and is squarely covered by the decision of the Tribunal in the case of M/S. L.G. ELECTRONICS INDIA PVT. LTD., SHRI S.N. RAI AND SHRI ATUL TANDON VERSUS COMMISSIONER OF CENTRAL EXICSE, NOIDA-II [2022 (8) TMI 873 - CESTAT ALLAHABAD]. In the above matter the Tribunal has decided that the parts and Sub-assembling cleared without all the critical components cannot be classified as CTVs. The Tribunal further held that unless all the critical parts of CTVs i.e. CTPs and PCBs also, are removed together, till then Rule 1 of the Rules of Interpretation to the Tariff is applicable and Rule 2(a) of the same Rule has no application and accordingly, the classification of such parts/Sub-assemblies will fall under 85.29 of the Tariff. The Tribunal set aside the adjudication order which applied Rule 2(a) in similar case where also CTPs were not removed by the supplier with other parts/Sub-assemblies.
The aforesaid order of the Tribunal was assailed by the Department before the Supreme Court in COMMISSIONER OF CENTRAL EXCISE, NOIDA II VERSUS M/S. LG ELECTRONICS INDIA PRIVATE LIMITED ETC. [2023 (4) TMI 1326 - SC ORDER] and the Civil Appeal was dismissed holding that 'on closer scrutiny of the unique facts of this case, it is our view, the goods of the appellant may not be said to be ‘parts’ as per Section Note 2 to Section XVI of the Tariff. The appellant not only used to assemble all parts of the Television Receivers and make complete television sets, but the said Television Receivers were also operated in the manufacturing unit of the appellant and thoroughly checked and only upon it being confirmed that the Television Receivers were complete in all respects, they were disassembled and along with relevant material and individual serial numbers, sent to the various satellite units.'
The impugned order passed by the Commissioner is set aside - Appeal allowed.
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2024 (5) TMI 1333 - CESTAT MUMBAI
Attachment of immoveable property owned by the appellant and his brothers jointly - recovery of dues, of which 80% share stands in the name of persons who have nothing to do with the government recovery - levy of interest and penalty - HELD THAT:- The order of attachment of immovable property has been done under the Rules of 1995, which were made in exercise of the powers conferred by Section 156 r/w. Section 142 of the Customs Act, 1962. Rule 2(vi) of the said Rules of 1995 defined ‘defaulter’ as any person from whom Government dues are recoverable under the Act. Chapter II of the said Rules deals with the procedure for the attachment of property. The issuance of certificate under rule 3 of chapter II is for the dues not paid by the defaulter to the government and the amounts specified as the amounts due from ‘such person’. Such person can only be the ‘defaulter’ as defined u/r. 2(vi) and no one else. Rule 10 is very relevant for the situation herein as it stipulates that “where the property to be attached consists of the share or interest of the defaulter in property belonging to him and another as coowners, the attachment shall be made by a notice to the defaulter prohibiting him from transferring the share or interest or charging it in any way”.
Whether the duty amount with interest and penalty which has become due and payable by the defaulting firm, could be recovered by attaching the entire property in which the appellants’ personal share is on 20%? - HELD THAT:- The answer to this question should be in the negative. A partnership firm under the Indian Partnership Act, 1932 is not a separate legal entity and the liability of the partners is joint and several u/s 25 ibid - Here the share of the appellant in the attached personal property is merely 20% whereas 80% of the share therein is that of his brothers who have nothing to do with the defaulting firm or their activities - In the absence of any specific provision under the Rules for recovery of the dues by attaching the personal property of some other partnership in which the majority of the shareholders have nothing to do with the recovery of the government dues, the notice of attachment of said property is bad in law.
Interest imposed u/s 11AB of Central Excise Act, 1944 is applicable when the duty became payable before the enactment of the said section - HELD THAT:- The interest has been imposed under section 11AB of Central Excise Act, 1944. Here it is interesting to note that duty demand has been made and confirmed for the goods cleared during the year 1993 and the show-cause notice was issued on 04.03.1994. Admittedly during the period Section 11AB ibid was not brought into force by the legislature as the same has been introduced w.e.f. 28.09.1996 - there is no whisper about charging of interest u/s 11AB ibid in the show-cause notice. Not only that, sub-section (2) of interest under Section 11AB stipulates that the provisions of sub-section (1), which provides for charging of interest on excise duty, shall not apply to cases where the duty became payable before the date on which the Finance (no.2) Bill, 1996 receives the assent of the President.
As the duty and penalty on M/s Turbo Micro System has been satisfied by the appellant along with personal penalty, the attachment of the immovable property in issue herein is set aside. Accordingly, the impugned order is also set aside - Appeal allowed.
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2024 (5) TMI 1332 - CESTAT ALLAHABAD
Recovery of CENVAT Credit with interest and penalty - reversal of cenvat credit of the service tax availed on any services in relation to inputs received in the factory and part quantity of which was cleared to another factory - no provision in the Credit Rules or any other statute, which provides for reversal of such cenvat credit - HELD THAT:- The issue is no more res integra and has been decided by the Tribunal in the appellant’s own case for the subsequent period i.e. from July 2015 to February 2016 and September 2014 to June 2015.
The Tribunal vide Final Order No. 71087-71088 of 2018 dated 03.05.2018 passed in Excise Appeal No.70301 and 70302 of 2018 allowed the appeals filed by the appellant by holding that 'I observe that no specific provision of Cenvat Credit Rules requiring reversal of proportionate input Service Tax credit involved in the inputs cleared as such has been invoked. In fact, there is no such provision in the law. The requirement under Cenvat Credit Rules 2004 is that when the inputs are cleared as such the Central Excise duty involved in the inputs which is availed as Cenvat credit needs to be reversed.'
It has been the interpretation and understanding that such credit is already consumed till the inputs received and further there is no legal provision exists requiring the reversal of such credit, thus, the demand is not to be raised. The following allegation in the show cause notices based on which the demand was proposed has not legal backing.
This court finds that the view as expressed by the Tribunal is strictly in conformity with the Rules. Rule 2(k) of the Rules defines ‘input’, whereas Rule 2(l) defines ‘input service’, meaning thereby both the terms have been defined independently. Rule 3 defines the term ‘Cenvat credit’, which includes duty paid under various enactments and also the service tax leviable under Section 66 of the Finance Act, 1994. Rule 3(5) of the Rules only talks about the Cenvat credit taken on inputs or capital goods - Once the rule-making authority has defined the terms specifically and used the same in different provisions consciously, the argument of learned counsel for the Revenue that merely by analogy even if in one provision both the terms have been used, the same should be read in the other provision as well, where it has not been specifically mentioned, has no legs to stand, as the tax cannot be levied merely by inference or presumption. It is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language.
The impugned order cannot be sustained and is accordingly set aside - Appeal allowed.
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2024 (5) TMI 1331 - CESTAT ALLAHABAD
CENVAT Credit - inputs used for fabrication of support structures - Explanation 2 to Rule 2(k) of the CENVAT Credit Rules, 2004 - period 2005-06 to August 2008 - extended period of limitation.
Denial of credit on the grounds that the credit on inputs utilized for construction of support structures for plant and machinery is not admissible in terms of exclusion clause in Explanation 2 to Rule 2(k) of Cenvat Credit Rules.
HELD THAT:- From the perusal of the circulars dated 2-4-2012 and 18-5-2012, it comes out that these circulars have been issued in the changed context of the definition of [Rule] 2(k) of Cenvat Credit Rules, 2004 and both circulars have no concern for the period in issue. Thus, the reliance placed by the Revenue in this regard has no substance.
The Madras High Court in M/S. INDIA CEMENTS LTD. VERSUS THE CUSTOM, EXCISE AND SERVICE TAX & THE COMMISSIONER OF CENTRAL EXCISE, [2015 (3) TMI 661 - MADRAS HIGH COURT] noticed VANDANA GLOBAL LTD. VERSUS CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] but relied upon the Apex Court judgment in COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS LTD. [2010 (7) TMI 12 - SUPREME COURT], wherein the Apex Court has considered an issue of steel plates and MS channels used in the fabrication of chimney for diesel generating set and after considering it, the Apex Court allowed the Cenvat credit on MS Rod, sheets, MS Channel, MS Plate, etc., used for fabrication of structures to support various machines/capital goods.
In M/S. THIRU AROORAN SUGARS, M/S. DALMIA CEMENTS (BHARAT) LTD. VERSUS CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, THE COMMISSIONER OF CENTRAL EXCISE [2017 (7) TMI 524 - MADRAS HIGH COURT], a Division Bench of the Madras High Court held that irrespective of whether ‘user test’ is applied, or the test that they are an integral part of the capital goods is applied, all such items fell within the scope and ambit of both Rule 2(a)(A) and 2(k) and, therefore, Cenvat credit was to be allowed on such goods.
The impugned order cannot be sustained and is accordingly set aside. The appeal filed by the Appellant is allowed.
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2024 (5) TMI 1330 - CESTAT ALLAHABAD
Determination of duty liability of the manufacturer with penalty - new retail sale price - manufacture of Pan Masala and Pan Masala containing Tobacco called ‘Gutkha’ - Rule 17 of Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Rules, 2008 - Applicability of retrospective amendments to Rule 8 of the PMPM Rules.
HELD THAT:- As per the observations made by the Revenue in the said appeal to the effect that 1st proviso to Rule 8 of the Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Rules, 2008 is applicable only w.e.f. 13.04.2010 whereas the show cause notice adjudicated and disposed by the Adjudicating authority relates to the period prior to 13.04.2010 is contrary to this - there are no merits in this contention made in this appeal.
In the case of COMMISSIONER OF CENTRAL EXCISE KANPUR VERSUS M/S. TRIMURTY FRAGRANCES (P) LTD. [2015 (11) TMI 320 - ALLAHABAD HIGH COURT] it is held that 'in terms of this retrospective amendment effective from 13th April, 2010 made by Section 101 of the Finance Act, 2014, when a manufacturer in a particular month manufacturers Gutkha of different RSPs on the same machines, his duty liability in respect of that machine would be at the rate applicable to the highest RSP. In our view, this retrospective amendment is in accordance with the 6th proviso to Rule 9 and is also in accordance with the provisions of Rule 5 and this retrospective amendment to Rule 8 of PMPM Rules, shows that it was not the intention of the Government that in a case where in a month a particular machine is used to produce Gutkha pouches of more than one RSP, each RSP is to be treated as separate machine for the purpose of charging duty, but the intention was to charge duty in such a situation at the rate applicable to the highest RSP. '
Learned Commissioner has referred to the decision of the Tribunal in the case of M/S. KAY PAN SUNGANDH (P) LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIPUR [2017 (4) TMI 982 - CESTAT NEW DELHI] wherein the Tribunal relied on the decision in case of Trimurti Fragrances holding that the said amendment though made from 13.04.2010 but the same is applicable for the period prior to that, i.e. from the date of enforcement of the Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Rules, 2008. Tribunal in this case observed 'In the case in hand, it is not disputed that in mid of September 2008, under intimation to the department, the appellant had manufactured gutkha pouches with RSP Rs. 1.00 on the 12 machines which they were using for manufacture of gutkha with RSP Rs. 1.50. It is also not in dispute that they have discharged the duty liability on the production capacity of these 12 machines based on the calculation that they are going to manufacture gutkha with RSP Rs. 1.50.'
There are no reasons to interfere with the impugned order and the same is sustained. The appeal filed by the Revenue is dismissed.
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2024 (5) TMI 1329 - CESTAT ALLAHABAD
CENVAT Credit - sale of scrap generated from working capital goods, without paying an amount equal to the duty leviable on the said transaction value - non-maintenance of any record/ inventory in respect of production generation and clearance/ sale of waste & scrap arisen out of Capital goods separately nor paid due duty thereon - contravention of the provisions of Rule 3 (5A) of the Cenvat Credit Rules, 2004 - suppression of facts or not - HELD THAT:- Revenue has not produce an iota of evidence to prove the contrary. Both the lower authorities have stated that the burden to prove is on the appellant. The said contention of the authorities is contrary to the law of evidence. The burden to prove the fact lies on the person who asserts the fact. Revenue asserts that the these waste and scrap has arisen from the Cenvated Capital Goods, then the burden is on revenue to establish the same. Only once it is established by the revenue then the burden to prove the contrary will shift on the appellant. Appellant has vide letter dated 11.01.2010 taken the stand that the waste and scrap sold by them has arisen out of the Capital Goods on which no Cenvat Credit was taken.
Revenue authorities should have investigated the matter to establish to the contrary. Instead of doing so the show cause notice has been issued stating that it is immaterial whether the CENVAT Credit on the capital goods has been taken or not. Once Commissioner (Appeal) concluded that Rule 3 (5A) is applicable only to the Cenvated Capital goods, he should have dropped the proceedings initiated by this show cause notice.
Delhi bench has in the case of KARNAL CO-OPERATIVE SUGAR MILLS LTD. VERSUS COMMR. OF C. EX., PANCHKULA [2010 (11) TMI 268 - CESTAT, NEW DELHI] held that 'Admittedly the appellants were not able to produce documents on the ground that they relate to very old period. However, the submissions of the learned Advocate that prior to the amendment dated 16-5-05 to Rule 3 of Cenvat Credit Rules introducing sub-rule 5A no amount is payable on waste and scrap arising out of capital goods even if the credit had been taken requires to be accepted.'
The decision of Hon’ble Supreme Court in the case of MYSORE METAL INDUSTRIES VERSUS COLLECTOR OF CUSTOMS, BOMBAY [1988 (5) TMI 42 - SC ORDER], relied in the impugned order is in respect of the claim to an exemption made by the party. It is settled position in law that any person who claims an exemption needs to establish that he is entitled to the said benefit. However in the present case we are not dealing with the claim of an exemption but with the contravention of provision of Rule 3 (5A) of the Cenvat Credit Rules, 2004. The burden to prove the contravention of the provisions of taxing statute is always on the revenue. This decision is distinguishable.
There are no merits in the impugned order - appeal allowed.
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2024 (5) TMI 1275 - GAUHATI HIGH COURT
Levy of interest and penalty on the late payment of Central Excise duty as envisaged in Rule 8(3) and Rule 8(3A) of the Central Excise Rules, 2002 - goods exempted for payment of duty under N/N. 20/2007-CE dated 25.04.2007 - Interpretation of taxing statutes and procedural rules.
Interest and penalty - HELD THAT:- Apparent, that once the goods cleared by an eligible industrial unit have been exempted from payment of duty subject to the limitation specified in the Notification, the question of payment of any duty by an eligible industrial unit does not arise and consequently, no interest and/or penalty can be charged for non-payment of such duty within time. The provisions for payment of duty and the time prescribed for such payment of duty in the Central Excise Act, 1944 are applicable in respect of goods which are excisable to Central Excise duty and the manufacturer is liable to pay such duty. The said provision cannot be made applicable in respect of duty which is exempted by issuance of Notifications under Section 5A of the Central Excise Act, 1944.
Since in the present case, the petitioner was entitled to exemption by virtue of Notification No. 20/2007 read with Notification 20/2008, the question of payment of any such duty and consequently, the levy of interest for the purported delay in payment of duty does not arise.
In the present case, the petitioner has no liability of payment of any duty because of Notification No. 20/2007 read with Notification No. 20/2008. Therefore, the petitioner cannot be saddled with the liability of payment of interest and penalty for delayed payment of duty which was exempted.
Interpretation of taxing statutes and procedural rules - HELD THAT:- The Assistant Commissioner failed to consider that Rules are framed to carry out the purposes of an Act. Interest is a substantive provision of the taxing statute and unless there is any provision in the Act for levy and charge of interest, no interest can be charged on the basis of any Rules framed under the Act. Since no interest is payable in respect of duty which is exempted under the Act, the liability of interest and penalty cannot be fastened on an eligible unit which is exempted from payment of duty by virtue of Notification No. 20/2007 read with Notification No. 20/2008.
Apparent that the Assistant Commissioner failed to appreciate that the refund of duty paid is also an exemption from payment of duty. Since in the present case, Notification Nos. 20/2007 read with 38/2008 provided for refund of duty paid after verification of the same by excise authority, the same will not make the duty leviable or payable under the Act so as to attract levy of interest and penalty for delay in making payment of the same - It is a well settled law that taxing statutes are to be interpreted strictly and while interpreting the taxing statue, one must have argued to the strict letter of law and not merely to the spirit of law and one cannot be taxed by inference or by analogy.
In the present case, the provision of Sections 11AA and 11AC of the Central Excise Act, 1944 are very clear and there is no ambiguity in the provisions of the Act. However, even for the sake of argument, if there is an ambiguity, the benefit of the same must be extended to the tax payer - Rule 8(3) and 8(3A) of the Central Excise Rules, 2002 cannot be made applicable in support of the levy of the interest and penalty, for delayed payment of duty which is exempted in terms of notification issued under Section 5A of the Act. As discussed above, Rules are framed to carry out the purposes of the Act. If there is no substantive provision in the Act for levy of interest and penalty, the interest and penalty cannot be levied on the basis of any provisions of Rules.
The Respondent Authorities committed a manifest error in law in levying penalty and interest relying on the provisions of Rules 8(3) and 8(3A) of the Central Excise Rules, 2002 in the absence of a substantive provisions of the Act - this Court is of the opinion that interest and penalty cannot be levied for late payment of duty on goods which is exempted from payment of duty.
The impugned orders levying interest and penalty on the late payment of exempted duty were set aside and quashed - Petition allowed.
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2024 (5) TMI 1274 - MADHYA PRADESH HIGH COURT
Maintainability of petition - availability of alternative remedy - requisite documents relied upon, not supplied - opportunity of hearing not provided - violation of principles of natural justice - Recovery of short paid Central Excise Duty.
Maintainability of petition - availability of alternative remedy - HELD THAT:- It hardly needs to be stated that the rule of alternate remedy is not a Thumb Rule to non-suit every litigant approaching the writ Court. It all depends upon the facts and circumstances of each case and the requirement of doing justice to the party aggrieved.
This Court finds support in its view by the judgment passed in the case of M/S GODREJ SARA LEE LTD. VERSUS THE EXCISE AND TAXATION OFFICERCUM- ASSESSING AUTHORITY & ORS. [2023 (2) TMI 64 - SUPREME COURT] wherein it has been observed that availability of alternative remedy does not operate as an absolute bar to the 'maintainability' of a writ petition and that the rule, which requires a party to pursue such remedy provided by a statute, is a rule of policy, convenience and discretion evolved by the judiciary rather than a rule of law. Therefore, in all the cases, the entities answering Article 12 of the Constitution of India cannot press into service the doctrine of alternative remedy as the China Wall against the invocation of writ jurisdiction.
Failure to supply documents reled upon - opportunity of hearing not provided - violation of principles of natural justice - Recovery of short paid duty - HELD THAT:- Undisputedly, the petitioner has not been supplied with the documents, on the basis of which show cause notice was issued and despite repeated communications from the petitioner, the said documents were not provided due to which the petitioner would not be in a position to give reply to the show cause notice which culminated into passing of final order and judgment of recovery - even on remand, the respondent no.2 without adhering to the directions of Commissioner (appeals) i.e. without providing requisite documents and in the absence of affording opportunity of hearing has again proceeded to pass a final order of recovery alongwith levying of penalty thereby again violating the principles of natural justice. Under such circumstances, the final order of recovery dated 29.03.2024 is not allowed to stand.
The matter is remanded back to the respondent no.2 for fresh adjudication - Petition allowed by way of remand.
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2024 (5) TMI 1273 - CESTAT BANGALORE
Penalty on other co-noticee u/r 8(3A) of Central Excise Rules, 2002 - whether after acceptance of application of the main applicant under SVLDRS, 2019 regarding the duty liability and penalty imposed, the personal penalty imposed on other noticees would survive? - HELD THAT:- This issue has been dealt by the Tribunal in the case of M/S JPFL FILMS PRIVATE LIMITED, JALAN JEE POLYTEX LTD., KAVITA INTERNATIONAL AGENCY, KULDEEP SINGH, DP SINGH, R KNITFAB, PERFECT DESIGNER, VK KALRA, RELIANCE INDUSTRIES LIMITED, KANPUR WOOL INDUSTRIES, SWASTIK TRADING CO., APEX CORPORATION AND MANSA TRADERS VERSUS COMMISSIONER OF CENTRAL EXCISE, LUDHIANA [2023 (12) TMI 304 - CESTAT CHANDIGARH] where it was held that 'the benefit of the Scheme cannot be denied to the appellants just because they did not file the declaration under SVLDR Scheme.'
There are no reason not to follow the aforesaid precedent of this Tribunal - appeal allowed.
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2024 (5) TMI 1272 - CESTAT BANGALORE
CENVAT Credit - inputs and capital goods which were claimed to have been destroyed in fire at the job workers premises - insurance claim restricted to the value of goods only - penalty u/s 11AC - HELD THAT:- On perusal of the records, it is seen that the insurance claim was settled at Rs.3,01,00,921/- as against the claim of Rs.4,27,32,599/-. From the insurance claim by the appellant, it is seen that the amount of Rs.4,27,32,599/- is inclusive of cenvat credit and therefore, it can be inferred that the claim was restricted to the value of the goods only. From this insurance claim reproduced below, it is clearly seen only item no.1 to 4 deals with inputs which were destroyed in the fire. Item no.5 is for finished goods and Item No.6 is for replacement cost of equipment. Therefore, the inputs which have been destroyed before putting it to use the benefit of cenvat credit cannot be extended. As per the cenvat credit rules only those inputs which are used in the manufacture of final products are eligible for cenvat credit.
With regard to capital goods also, one needs to verify whether they were put to use or destroyed before the same was used in the manufacture of the final products. If the capital goods were not used then the question of extending the benefit of cenvat credit does not arise.
In the case of COMMISSIONER OF C. EX., BANGALORE VERSUS TATA ADVANCED MATERIALS LTD. [2011 (4) TMI 1124 - KARNATAKA HIGH COURT], this was a case where the capital goods were used in the manufacture of the final products for three long years and later, these capital goods were destroyed in the fire as seen from the observations of the Hon’ble High Court of Karnataka. The facts cannot be compared with the instant case where the goods were not put to use at all, hence not applicable.
In the case of M/S VFC INDUSTRIES PVT. LTD. VERSUS COMMISSIONER OF C. EX. & S. TAX, VADODARA [2016 (9) TMI 1020 - CESTAT AHMEDABAD], the Tribunal has categorically held that inputs lying in stock which were not put to use and which were not used in the manufacture of final products the benefit of cenvat credit cannot be extended.
There are no reason to interfere with the order of the Commissioner demanding reversal of cenvat credit on the inputs and the capital goods which were not used in the manufacture of the final products. However, for the limited purpose of verifying whether the capital goods were put to use in the manufacture of the final products, the matter is being remanded and accordingly, the penalty needs to be re-determined based on the final determination of the reversal of cenvat credit.
Appeal allowed by way of remand.
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2024 (5) TMI 1271 - CESTAT ALLAHABAD
Refund in cash - appellant's request for refund filed beyond time limit - Nature of the communication from the Assistant Commissioner - order/decision against which remedy of appellant to Commissioner (Appeals) has been provided as per Section 35 of the Central Excise Act or not - Maintainability of the appeal before the Commissioner (Appeals) - applicability of Section 142 (3) and 142 (6) of the CGST Act, 2017.
Refund in cash - appellant's request for refund filed beyond time limit - HELD THAT:- The appellant claimed they requested the refund on 20.09.2017, but records show the approach was made on 21.05.2018, approximately 9 months later. The Assistant Commissioner clarified that the refund was sanctioned on 10.08.2017, and no further action could be taken as the appellant did not utilize the remedy u/s 35 of the Central Excise Act, 1944, within the stipulated time.
Nature of the communication from the Assistant Commissioner - order/decision against which remedy of appellant to Commissioner (Appeals) has been provided as per Section 35 of the Central Excise Act or not - HELD THAT:- The view of the Commissioner (Appeals) that this is not an appealable order this is in any way not justifiable in view of the decisions referred to by the learned counsel - reliance placed in the case of Gujarat Ambuja Cement Ltd. [2005 (3) TMI 375 - CESTAT, NEW DELHI] has held that 'On hearing both the sides, we accept the contention of the appellants that the communication dated 24-2-2005 is in the nature of an order affecting the rights of the party for the reason that the claim to avail the exemption has been denied and hence the communication is an order and an appeal very much lies before the Commissioner (Appeals). '
Applicability of Section 142(3) & 142(6) of the CGST Act, 2017 - HELD THAT:- The refund claim was filed by the appellant prior to the introduction of GST in the country (From 01.07.2017) the order allowing the refund claim by way of CENVAT credit has been passed on 10.08.2017 when there was no CENVAT credit account in existence - the Order-In-Original dated 10.08.2017 should be read in conjunction with these provisions, implying the refund should be in cash.
Maintainability of the appeal before the Commissioner (Appeals) - HELD THAT:- The Commissioner (Appeals) erred in holding the appeal as non-maintainable and directed the jurisdictional authorities to implement the refund order in cash as per the provisions of Section 142(3) and 142(6) of the CGST Act, 2017.
The Jurisdictional Authorities are directed to implement the Order-In-Original in the light of the provisions contained under Section 142 (3) and 142 (6) of the CGST Act, 2017 - Appeal allowed.
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2024 (5) TMI 1270 - CESTAT ALLAHABAD
Rejection of refund claim - time limitation - Refund of deposits versus Refund of duty - Section 11B of the Central Excise Act, 1944 - refund claim has been filed by the appellant on 27.01.2016, as a consequence of the order dated 08.05.2014 of tribunal - HELD THAT:- The amounts have been deposited as per the direction of the departmental officers in respect of certain shortages detected at the time of visit. The amounts so deposited on the direction of the departmental officer cannot be said to be voluntary deposit. Further appellant have contested the demand and have finally succeeded in getting the same set aside by the tribunal. As the appellant was contesting the demand the amount paid by them were necessarily not paid voluntarily but were paid under compulsion from the officer and were paid under protest.
It is a settled law that any amount which becomes due to the appellant consequent to an Appellate order the deposits should have been refunded to the appellant.
In the case of GS. RADIATORS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, LUDHIANA [2004 (10) TMI 158 - CESTAT, NEW DELHI] it was held that 'payment made by the appellants has to be considered as payment under protest and the refund should be allowed to them if otherwise in order.'
Board has vide circular No 984/8/2014-CX dated 16.09.2014 clarified that 'in all cases where the appellate authority has decided the matter in favour of the appellant, refund with interest should be paid to the appellant within 15 days of the receipt of the letter of the appellant seeking refund, irrespective of whether order of the appellate authority is proposed to be challenged by the Department or not.'
There is no reasonable ground for rejection of the refund claim - Appeal allowed.
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