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Central Excise - Case Laws
Showing 1 to 20 of 80434 Records
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2024 (5) TMI 1057 - CESTAT KOLKATA
Clandestine removal - shortage of stock found during joint stock taking conducted by the officers in the presence of the Director of the company - demand of duty and disallowance of credit - demand of duty confirmed on the alleged clandestine removal of goods, on the basis of the data recovered from the CPU - Penalties imposed on the Managing Director and Director.
Demand of Central Excise duty and the disallowance of CENVAT credit on the basis of the shortages noticed during the joint stock verification done - HELD THAT:- The verification of stock was done in the presence of the Director. The weighment sheet is prepared on the basis of weight of each article as provided by the Director multiplied by number of such articles. Counting numbers of the articles was noted down in the rough sheets at the time of stock taking which has been authenticated by the Director on the spot and he has confirmed the shortage in his statement dated 23.08.2008. Subsequent retraction of the statement and alleging that the stock taking was not done properly, seems to be an afterthought - the stock verification has been done properly and there is no reason to suspect the findings arrived at during the course of the stock verification by the officers - there are no infirmity in the findings of the Ld. Commissioner insofar as the demand based on the shortage of stock is concerned.
Demand on the alleged clandestine clearances - HELD THAT:- The demand has been confirmed for the financial years 2004-2005 and 2005-2006 whereas the search was conducted on 23.08.2008. The demand is confirmed based on the print out retrieved from the computer CPUs that was admittedly in the official use of the appellant-assessee - The pen drives recovered from the office premises of the appellant-assessee are floating devices. Many staff from the office would have used the pen drive to store data. Thus, it is required to identify the person who entered the data in the computer. It is also observed that the author of the computer printout recovered from the Appellant's office has not been established in this case. Without identifying the author who entered the data, the information available in the pen drive cannot be relied upon to demand duty - the investigation has not brought in any corroborative evidence to substantiate the allegation of clandestine removal - the charges of clandestine removal against the appellant assessee M/s. Mittal Iron Foundry Pvt. Ltd. in the impugned order is not sustainable.
Penalties imposed on the Managing Director Shri Ramjilal Agarwal and the Director Shri Vijay Kumar Agarwal, under Rule 26 of the Central Excise Rules,2002 read with Rule 15 of the CENVAT Credit Rules, 2004 - HELD THAT:- It is observed that they were in charge of the day-to-day affairs of the company. They admitted the shortage noticed during the joint stock verification. Thus, they are liable for penalty for the shortages noticed during joint stock verification. However, the demand raised on clandestine removal is not substantiated. Accordingly, we hold that they are liable for penalty, but the penalty can be reduced commensurating with the offence. Since the demand is confirmed only relating to the shortages found, it is observed that the penalty of Rs. 10,00,000/- imposed on each can be reduced to Rs. 1,00,000/- each, to meet the ends of justice.
Appeal disposed off.
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2024 (5) TMI 1056 - CESTAT NEW DELHI
Recovery of the refund of service tax paid - vice of judicial discipline - services rendered to Electro Motive Diesel, Inc (EMD) - export of services or not - Whether the refund granted to the appellant pursuant to the Tribunal's order can be challenged by way of a show cause notice u/s 11A of the Central Excise Act. - HELD THAT:- There is no doubt that the issue has been considered in the earlier decisions passed in the case of the appellant themselves, where the Tribunal in NATIONAL ENGG. INDUSTRIES LTD. VERSUS COMMR. OF C. EX., JAIPUR [2007 (12) TMI 170 - CESTAT, NEW DELHI] dealt with the similar issue while allowing the appeal observed 'In the present case, it is revealed from contract that the appellant would be paid USD equipment (sic) (equivalent) to non-convertible Indian Rupee at the Rate of Exchange prevailing on the date of supply order. It is noted that the equivalent amount of foreign exchange payable to the appellant was not released to the Indian Railways, and therefore, the appellant complied with the provision of Rule 3(1)(b) of the Rules.'.
Similarly, in the final order in the case of the appellant in NATIONAL ENGINEERING INDUSTRIES LTD. VERSUS COMMR. OF C. EX., JAIPUR [2011 (9) TMI 759 - CESTAT, NEW DELHI], the issue decided in favour of the appellant was whether the service provider – appellant in India getting rupee value equivalent to commission amount of 5% US $ shall be liable to service tax on the allegation of nonfulfilment of condition of Rule 3(1)(3) of Export Service Rules, 2005.
Admittedly, neither the final order nor the consequential order of refund was challenged by the Revenue and had thereby attained finality. If the Revenue was agreed by the grant of the refund amount, the proper remedy was to approach the proper forum by way of appeal and not by issuing the show cause notice as they have done in the present case. May be, the matter was subjudiced before the Supreme Court, however, there was no stay of the impugned order and, therefore, the Revenue was bound to implement the order of the Tribunal as confirmed by the High Court of Rajasthan.
The authorities below have seriously erred in upholding the recovery of the refunded amount from the appellant. Once the issue has been decided by the Tribunal that the appellant is entitle to the refund, the authorities below have no jurisdiction to order for recovery of the said refunded amount unless the order of the Tribunal granting refund is stayed or set aside by a higher forum, which is not in the present case. Infact the lower authorities further exceeded the brief by commenting critics on the decision rendered by the Tribunal which is much superior in hierarchy. The impugned order is, therefore, set aside.
Appeal allowed.
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2024 (5) TMI 1055 - CESTAT KOLKATA
Clandestine manufacture and surreptitious removal - demand based on statements of the buyers and the appellants recorded during the course of investigation - retraction of statements - HELD THAT:- The statements of the appellants have been retracted, but statements have not been tested in terms of section 9D of the Central Excise Act, 1944 to know the veracity of the statements by examination in chief and after examination in chief of all third party statements, cross-examination of the said statements is required to be done. All these aspects are missing in this case - From the investigation and facts, it is not coming out anywhere that the payment received in the bank account of M/s. Bharat Suppliers was sent to appellant No.1, 2 or 3 by any means and there is no admission to that extent by the appellants.
Admittedly, in the case in hand this Tribunal in the case of M/S ARYA FIBRES PVT. LTD., M/S NOVA PETROCHEMICALS LTD. AND OTHERS VERSUS CCE AHMEDABAD-II [2013 (11) TMI 626 - CESTAT AHMEDABAD] has laid down the certain parameters to establish clandestine removal of goods, the show cause notice is not in conformity with the criteria in the case of Arya Fibres Pvt.Ltd. The allegation of clandestine removal of goods is not sustainable.
Moreover, the statements which has been relied by the adjudicating authority in the impugned order, are not tested as per procedure prescribed under section 9D of the Central Excise Act, 1944 to find out the genuineness of the statements recorded during the course of investigation - the allegatoin of clandestine removal of goods by appellant No.1 is not sustainable against the appellants, the same has been alleged on assumption and presumption without corroborative evidences, therefore, no demand of duty is sustainable against the appellants alleging clandestine removal of goods, consequently, no penalty can be imposed on the appellants.
It is further noted that the Ld.Counsel for the appellant has taken the ground that they have paid the entire amount of duty along with interest and 25% penalty under protest, the same is required to be refunded to the appellant as the said amount has been paid by the appellant after adjudication of the case. Therefore, bar of unjust enrichment is not applicable to the facts of this case.
The amount of duty, interest and penalty paid by the appellant after adjudication and under protest for entertaining the appeals filed by the appellant is refundable to the appellant - Appeal disposed off.
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2024 (5) TMI 1054 - CESTAT KOLKATA
Valuation - balance amount collected subsequent to installation of the bearings in the project - Amount received towards supply of goods or services? - Required to be added in the assessable value or not - Non-following of CAS- 4 valuation - extended period of limitation - HELD THAT:- In the present case, without any dispute, the Appellant has divided the contract into two parts and paid any Excise Duty on 70% of the value treating the same as the value of goods supplied. For the balance 30% value of the contract, they have not paid any Excise Duty. For the second portion of this contract value amounting to 30% realization by the Appellant would in fact should be termed as service and the Department should have demanded Service Tax on the same. Considering the fact that the main contractor HCC was awarded the contract under “Works Contract” and both materials and services are involved even in respect of the goods to be cleared by the Appellant, it is clear that designing, installation etc. form part of the services rendered by the Appellant. Therefore, the Revenue is in error in treating this as a valuation case by enhancing the value of manufactured goods to arrive at the quantified/confirmed demand.
Non-following of CAS- 4 valuation - HELD THAT:- Since this is not a case where the Appellant is supplying to their own unit and the goods are not cleared on stock transfer basis, they are not required to follow CAS-4 value. Even otherwise, irrespective of the value declared for the manufactured goods cleared, in the normal course on the balance 30% portion the appellant would have been liable to pay the Service Tax. However, the Department has failed to issue the Show Cause Notice demanding the Service Tax.
The confirmed demands are not sustainable on merits - the confirmed demand and penalty on the Appellant company is set aside.
Time Limitation - HELD THAT:- The SCN has been issued within one year from the date of Audit getting the reply from the appellant. But it is noted that the appellants are registered manufacturer. As such they have been filing their Monthly Returns showing the value adopted by them. Even under the self assessment regime, scrutiny of the ER-1 Returns are still to be taken up by the Range officials. There is nothing to indicate that the self-assessed ER-1 were taken up for scrutiny and any query was raised towards the assessable value adopted by the appellant for their clearances. Therefore, the confirmed demand for the extended period is set aside.
The confirmed demand is not sustainable against the Appellant company, the question of imposing penalty on the Director would not arise. Accordingly, the penalty imposed on him is also set aside.
Appeal allowed.
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2024 (5) TMI 1053 - CESTAT MUMBAI
Penalty u/r 26 of the Central Excise Rules, 2002 imposed on the appellants as company - appellant failed to verify the payment of excise duty in the invoice - HELD THAT:- From plain reading of the legal provisions contained in Rule 26, it transpires that the penalty under this rule can be imposed in specified situations given therein. One such situation is, that a person who does any act in acquiring possession or who in any manner deals with, the excisable goods which he knows that these are liable to confiscation can be imposed with penalty. The second situation is in respect of person, who is liable to pay duty upon issue of excise invoices, but issues such invoice without delivery of goods or issues it wrongly to enable the recipient to claim undue benefit. Thus, these provisions make it essential that a person should have the knowledge of the fact that the subject goods are being liable to confiscation. As the acquisition of such knowledge is related to individual persons, it is apparent that such penalty under Rule 26 ibid is applicable on individual persons and not on legal person.
Further, in the present case, the appellants are not the person, who are issuing excisable invoices for the CDs/DVDs. The only allegation on the appellants is that they did not verify the payment of excise duty in the invoice. It is seen from the contract entered with M/s M/s KRCD (India) Pvt. Ltd., that the price is inclusive of all excise duty and other taxes. Inasmuch as the appellants have specifically indicated in contract that the price is inclusive of excise duty, there does not appear to be any ground for the appellants to believe that the DVDs or CDs have been supplied without payment of excise duty. Thus, on the above basis also, the imposition of penalty under Rule 26 is not sustainable.
The issue is no more in dispute as in a number of orders, the Tribunal has held that penalty under Rule 26 can be imposed only on individuals and not on company - in the case of Kakateeya Fabs (P) Ltd. [2017 (9) TMI 13 - CESTAT NEW DELHI], the Tribunal has held that that penalty under Rule 26 cannot be imposed on company firm or organization.
The impugned order to the extent it has imposed penalty under Rule 26 of Central Excise Rules, 2002, on the appellants is not legally sustainable - the impugned order set aside - appeal allowed.
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2024 (5) TMI 1052 - CESTAT AHMEDABAD
Calculation of education cess and higher secondary education cess on the excise duty chargeable on the goods cleared by 100% export oriented unit into DTA - HELD THAT:- It is found that even though in the matter the issue in hand is pending before Hon’ble Supreme Court in case of SARLA PERFORMANCE FIBERS LTD. VERSUS COMMISSIONER OF C. EX., VAPI [2010 (2) TMI 335 - CESTAT, AHMEDABAD], there is no stay granted to the Revenue. Moreover, in the appellant’s own case MEGHMANI DYES & INTERMEDIATES LTD. VERSUS COMMR. OF C. EX., AHMEDABAD [2010 (4) TMI 1026 - CESTAT AHMEDABAD] following the decision of Sarla Performance Fibres Limited, this Tribunal has passed the order in their favour and the same was upheld by the Hon’ble Supreme Court in COMMISSIONER VERSUS MEGHMANI DYES & INTERMEDIATES LTD. [2014 (11) TMI 615 - SC ORDER].
The Tribunal in the case of M/s. Sarala Performance Pvt. Ltd. held that once the measure of Customs duty equivalent to Central Excise duty had been calculated, there was no need to levy Education Cess separately for clearances by 100% EOU to DTA.
In view of the above decision of the Tribunal which was upheld by the Hon’ble Supreme Court in the appellant’s own case, the present appeal does not survive - appeal of Revenue dismissed.
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2024 (5) TMI 1051 - CESTAT AHMEDABAD
Clandestine removal - demand based on the finding that weight of physical stock of grey fabrics ( finished goods) less than the weight recorded - clandestinely removal of duty free raw material by manufacturing and clearing grey fabric (finish goods) showing the excess weight than the actual weight of grey fabrics - invocation of extended period of limitation - confiscation - levy of redemption fine and penalty - Cross-examination of witnesses - admissible evidences or not - violation of principles of natural justice.
Principles of natural justice - HELD THAT:- It is found that in this matter earlier the matter was remanded by this Tribunal vide order dated 26.11.2014 with a direction to comply with the principles of Natural Justice. In the remand proceedings the appellant have specifically requested for cross-examination of the witnesses who have given the statements including the 3 buyers of the alleged clandestinely purchased goods. However, Learned Adjudicating Authority has not granted the cross examination.
Cross-examination of witnesses - admissible evidences or not - HELD THAT:- From the statutory provision of Section 9D, it is settled that the statements which have not passed the test of examination-in-chief and/ or cross-examination of witnesses, are not admissible in evidence. Therefore, the case based on the statements will not stand. As regard other evidence that there is a difference in weight since, it is also based on statement, the allegation majority stand diluted on this account also.
Demand based on the finding that weight of physical stock of grey fabrics ( finished goods) less by 7156.720 Kgs since the recorded stock was 13257 Kgs admeasuring 66426 linear meters - HELD THAT:- It is admitted fact that there is no difference in the length of the fabrics. Moreover, the officer also found that even length in linear meter matching there is different recorded weight of 6100 Kgs. In this position, the allegation is clearly based on assumption that 7156.720 Kgs of raw material (PFY) used in these finished goods ( grey fabrics) was removed clandestinely - the weight of the finished goods (grey fabric) cannot be assumed or counted to be the same as the imported raw material PFY to allege such illicit removal of PFY. Admittedly the raw material used in manufacturing process would be much less than weight of finished goods. Hence mererly by taking statements which are not admissible, the clandestine removal is not established - there is no evidence that due to difference in weight as stated by these buyers whose statements have already been discarded, there is no financial flow on this account. This further reinforced that the buyer’s statements are not correct.
It is found that the department could not establish clandestinely removal of goods. Therefore, the entire demands including penalties are not sustainable - appeal allowed.
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2024 (5) TMI 1050 - CESTAT NEW DELHI
Valuation - inclusion of investment subsidy received by the appellant from the Government of Rajasthan under the Rajasthan Investment Promotion Policy, 2010 in the assessable value - Recovery of central excise duty with interest and penalty - HELD THAT:- The issue was examined by the Tribunal in M/S HARIT POLYTECH PVT. LTD. VERSUS COMMISSIONER, CENTRAL EXCISE & CGST- JAIPUR I, GANPATI PLASTFAB LTD., M/S APEX ALUMINIUM EXTRUSION PVT. LTD., M/S MAHA MAYAY STEELS, M/S. TIRUPATI BALAJI FURNACES PVT. LTD., M/S. TRANS ACNR SOLUTIONS PVT. LTD., M/S. FRYSTAL PET PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & CGST- ALWAR [2023 (3) TMI 1120 - CESTAT NEW DELHI] and it was observed that 'The subsidy amount, therefore, cannot be included in the transaction value for the purpose of levy of central excise duty under section 4 of the Excise Act.'
The order dated 10.05.2019 passed by the Commissioner cannot be sustained and is set aside - Appeal allowed.
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2024 (5) TMI 1049 - CESTAT MUMBAI
Valuation - trade discount offered by the appellants to BEST, being a bulk buyer - additional consideration for sale of CNG - due to technical necessity of the product, the compressors or dispensers are to be installed at the premises of BEST for supply of CNG to their buses and outside vehicles or not - HELD THAT:- The valuation provisions contained in section 4 of the Central Excise Act, 1944 was substituted by Finance Act, 2000, w.e.f. 01.07.2000. The said amended provisions have considered different transaction values for the price charged to different customers for assessment purpose, subject to the condition that such transactions are purely based on commercial consideration, buyer and seller are not related to each other and the price charged is the sole consideration for such sale at the time and place of delivery - no evidence is forthcoming that the discount offered by the appellants to BEST was in lieu of the infrastructural facilities extended to them. Hence, the transaction value should be considered as the price at which the CNG were supplied by the appellants to BEST and such price should be considered as the value for the purpose of assessment and discharge of central excise duty liability.
The issue arising out of present dispute is no more open for any debate, in view of various orders passed by the Tribunal in the case of the appellants themselves for earlier period, holding that deduction of trade discount from assessable value is admissible on sale transactions - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE, MUMBAI-V VERSUS M/S MAHANAGAR GAS LTD. [2019 (9) TMI 746 - CESTAT MUMBAI] where it was held that 'No investigation has been conducted by the revenue to establish the allegation that the discount offered by the respondent to BEST was in lieu of all infrastructural facilities extended by BEST to the respondent.'
There are no merits in the impugned order, insofar as it has upheld confirmation of the adjudged demands on the appellants - appeal allowed.
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2024 (5) TMI 1048 - CESTAT BANGALORE
Levy of National Calamity Contingent Duty (NCCD) - chassis emerges at the intermediary stage and is captively consumed in the manufacture of Dumpers - captively consumed chassis or are they exempted vide N/N. 67/95.
Whether chassis emerges at the intermediary stage and is captively consumed in the manufacture of Dumpers? - HELD THAT:- There is no whisper of Chapter Note 3 in any of these notices and no new facts have been brought out to show that in view of these changes, the chassis comes into existence even though it is not culminated into a drive away chassis - the change in the Chapter Note, whether or not fitted with a cab will not make any change in the decision rendered earlier because the criteria based on HSN was whether it is a drive away chassis. From the Chapter Heading and the HSN Notes reproduced below, it is clear Chassis fitted with engines and with their transmission and steering gear and axles fall under Chapter 8706. The Commissioner at para 88/88.1 states “this heading covers the Chassis frames or the combined to Chassis body frame work for the motor vehicles of headings 8701 to 8705 fitted with their engines and with their transmission and steering gear and axis (with or without wheels). That is to say goods of this heading are motor vehicles without bodies. The above explanation to emphasise the necessity of steering mechanism for qualifying to be called Chassis.
There is nothing new in the present show-cause notices nor in the impugned order to be decided afresh since all these factors have been already considered and the decision has been rendered in favour of the appellant. As seen from the Chapter Headings and the HSN Notes, nothing has changed and therefore, the orders discussed above in the appellant’s own case has attained finality. Accordingly, the ‘Chassis’ does not come into existence at the intermediary stage and therefore, the question of dutiability does not arise.
Whether NCCD is leviable on these captively consumed chassis or are they exempted vide N/N. 67/95? - HELD THAT:- Since it is held that the Chassis does not come into existence at the intermediary stage and therefore, the question of captive consumption does not arise, consequently, the question whether exemption is available to NCCD under N/N. 67/95 becomes only academic and not delved into.
The impugned order is set aside - Appeal allowed.
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2024 (5) TMI 1047 - CESTAT BANGALORE
Process amounting to manufacture or not - assembling of various parts and components of furniture imported in CKD condition and also procured indigenously, at the premises of the appellant or at the site of the customers - Furniture classifiable under CSH 9403 of CETA,1985, within the meaning of Section 2(f) of Central Excise Act, 1944 or not - extended period of limitation - imposition of penalties on the Appellant and the Director - Cum-tax value & Cenvat credit is admissible if the process of assembly of furnitures is held to be excisable or not.
Excisability - HELD THAT:- On the facts whether the workstations installed at the site of the customers become immovable, hence not excisable, the Ld. Commissioner analysing the statements furnished by the Manager and the Supervisor of the appellant and the cross examination of the said witnesses and other evidence has categorically held that with minor damages and scratches, the workstations installed in the premises of the customer from the imported and indigenously procured parts and components could easily be shifted to other premises, hence, these furniture(work stations) are movable and accordingly excisable - the statements/depositions given by the witnesses before the Department have not been retracted, hence are reliable evidences. The witnesses also cross examined before the adjudicating authority. No contrary evidence has been placed by the Appellant to support their argument that after assembling and then fixing the workstations to the ground / floor at the customers’ premises, it becomes immovable; hence not excisable.
This Tribunal also in the case of Leo Circuit Boards Pvt. Ltd. [2015 (5) TMI 659 - CESTAT MUMBAI] more or less confronted with more or less a similar issue of excisability of assembly of Lottery Terminal out of CKD kit supplied by M/s. Pan India Network Infravest P. Ltd. By referring to the list of parts that have been assembled at the site of the customers, even though fully manufactured and cleared in CKD condition by the supplier and later assembled at the site, this Tribunal came to the conclusion that such assembly of different parts brought in CKD condition to bring into existence of Lottery Terminal, would result into ‘manufacture’.
Classification of goods - HELD THAT:- In the present case, undisputedly the entire parts and components of the furniture, workstations are not imported but certain indigenous parts and components are procured are also used in assembling the parts/ components of furnitures imported in CKD condition - assembly of parts and components of the furniture i.e. workstations in the premises of the customers would result into manufacture of excisable goods viz. ‘furniture’ classifiable under CTH 9403 and attracts duty.
Invocation of extended period of limitation - HELD THAT:- There is merit in the argument of the appellant that on a bona fide belief that excise duty on assembly of furnitures at the site of the customers will not be payable as customs duty has already been paid at the time of its import in CKD condition albeit certain parts used were procured indigenously, excise duty was not discharged on assembly of the same - The judgment of the Hon’ble Supreme Court in Craft Interiors Pvt. Ltd.’s case [2006 (10) TMI 2 - SUPREME COURT] was delivered in the year 2006 and the present demand is confirmed invoking suppression of facts for the period 2004 to 2006-07. In these circumstances, confirmation of duty invoking extended period of limitation cannot be sustained. Thus, the demand, by issuing show-cause notices from time to time, should be limited to the normal period of limitation.
Penalty - HELD THAT:- There are no substances in imposing penalty on the appellant for failure to discharge service tax on the assembled furniture during the relevant period.
Penalty on Director - HELD THAT:- There are no justification for imposition of penalty on the Director. Consequently, the appeals filed by the Director are allowed.
Cum-duty benefit - CENVAT Credit - HELD THAT:- In the event, the appellant had issued proper invoices indicating sale price of the goods and genuineness of which has not been disputed, the appellants are eligible for the benefit of cum-duty price in view of the amendment to Section 4 of the Central Excise Act, 1944 w.e.f. 14.05.2003 - Also, the appellants are entitled to avail cenvat credit on the inputs on production of evidences of payment of duty on the said inputs to the satisfaction of the adjudicating authority.
The impugned orders are modified and the cases are remanded to the adjudicating authority to compute the demands with interest for the normal period of limitation only; also the benefit of cum-duty price and cenvat credit be allowed subject to production of necessary documents. As observed above, no penalty is imposable.
Appeal disposed off.
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2024 (5) TMI 992 - CESTAT NEW DELHI
Wrongful availment of CENVAT Credit - appellant did not produce the input tax invoices for verification at the time of audit - HELD THAT:- It is found from the orders passed by the lower authorities that the cenvat credit has been denied to the appellant on the sole reason that the input service invoices were not produced by the appellant for verification during the audit and when these invoices were produced by the appellant before the Adjudicating Authority, instead of considering the same, he sent the invoices to the jurisdictional Division Office for verification and disallowed the credit relying on the verification report of the Divisional Office.
The Commissioner (Appeals) ought to have remanded the matter in entirety and should not have bifurcated the amount when according to the appellant it is on the same footing. Learned counsel for the appellant has prayed that the dispute in the present appeal relating to the amount of Rs.10,02,461/-should also be remanded to the Adjudicating Authority to be considered de novo in the light of the documents specially the invoices to be placed on the record.
The proper course would be to remand the matter in respect of the present issue to the Adjudicating Authority to be considered on merits.
Appeal allowed by way of remand.
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2024 (5) TMI 991 - CESTAT CHANDIGARH
CENVAT credit - process amounting to manufacture or not - process of drawing from bars and rods - HELD THAT:- There is no provision in the CENVAT Credit Rules to deny credit at the end of the manufacturer who uses the inputs on which duty has been paid though under mistaken notion of law. The appellants having procured the inputs on payment of duty are entitled to avail CENVAT credit on the same.
Credit allowed - The appeal is allowed.
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2024 (5) TMI 990 - CESTAT CHANDIGARH
Wrongful availment of benefit of SSI exemption - clubbing of clearances - commonality of the directors and financial dealings between them - HELD THAT:- The very same issue has been decided in favour of the appellant by this Bench of the Tribunal in NOBLE CHLOROCHEM PVT. LTD., NOBLE ALCHEM PVT. LTD., SHRI KAILASH CHAND GUPTA, DIRECTOR, SHRI SURESH CHAND GUPTA, DIRECTOR VERSUS CCE & ST, ROHTAK [2020 (7) TMI 291 - CESTAT CHANDIGARH] on the show cause notice issued for the period 2006 to 2012, wherein the Tribunal has held 'As per the CBEC Circular No.6/92 dated 29.5.1992, the Board has clarified that private limited companies are treated as separate, therefore, we have no hesitation to hold that both the units are separate units.'
The impugned order is not sustainable and requires to be set aside - Appeal allowed.
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2024 (5) TMI 989 - CESTAT CHANDIGARH (LB)
Rejection of refund claim - refund of duty paid on outward freight charges - no requirement to pay duty on the transportation charges, as the appellant was clearing goods from their factory gate - goods are sold on FOR basis - difference of opinion - majority order - HELD THAT:- Following the ratios of the law laid down by the Larger Bench of the Tribunal in the case of M/s The Ramco Cements Limited [2020 (6) TMI 794 - CESTAT CHENNAI] and the decision of Hon’ble High Court of Himachal Pradesh in the case of M/s Inox Air Products Pvt Ltd [2024 (4) TMI 32 - HIMACHAL PRADESH HIGH COURT], it is opined that the impugned orders denying the refund of the excise duty paid by the appellant on transportation of the goods up to the buyer’s premises are not sustainable in law and hence, the same is set aside by allowing all the appeals of the appellant with consequential relief, if any, as per law.
When the sale is on a FOR basis and the outward freight charges are included in the assessable value, the appellant is entitled to claim a refund of the central excise duty paid on the freight.
Appeal allowed.
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2024 (5) TMI 988 - CESTAT CHENNAI
Exemption /effective rate for goods falling under Chapter Heading Nos.84 to 98 of of the Central Excise Tariff Act, 1985 under N/N. 6/2006-CE dated 01.03.2006 - Clearance of goods without payment of duty to M/s.Nagarjuna Thermal Power Project, Udipi, Karnataka for setting up of a Mega Power Project - demand on quantity of M.S.Rebars, cleared in excess of the quantity allotted to them by the Project Authority - Extended period of limitation.
The department was of the view that the supply of M.S.Rebars is not against the International Competitive Bidding, as the appellant is only a sub-contractor and thus the exemption has been wrongly availed by them.
Eligibility for benefit of Notification No.6/2006-CE dated 01.03.2006 for the goods supplied - HELD THAT:- Admittedly, the appellant is a sub-contractor who has supplied goods to the main contractor, M/s.Lanco Infratech Ltd, who has participated in the International Competitive Bidding. The issue whether the sub-contractor, who has supplied the goods to the main contractor, who has participated in the International Competitive Bidding is eligible for exemption has been clarified by vide Board Circular dated 10.07.2014.
Also, the Tribunal in the case of KENT INTROL PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [2014 (2) TMI 633 - CESTAT MUMBAI] has held that when the supply of goods are made to the main contractor who has participated in the International Competitive Bidding and has been awarded the contract; the sub-contractor is also eligible for exemption under Notification No.6/2006-CE dated 01.03.2006.
The Tribunal in the case of M/S TOSHNIWAL INDUS. PVT. LTD. VERSUS CCE, JAIPUR-II [2017 (5) TMI 387 - CESTAT NEW DELHI] has taken a similar view, which held that the sub-contractor is also eligible for the Benefit of Notification.
Thus, the view taken by the Adjudicating Authority that the goods are not eligible for exemption for the reason that the appellant is only a sub-contractor is not justified.
The second ground on which the Benefit of Exemption has been denied is by alleging that the appellant has not satisfied Condition No.19 of the Notification No.6/2006 - HELD THAT:- The goods irrespective of their individual classification and rate of duty, if intended for use in execution of a project which is satisfied under CTH 98.01 are eligible for Benefit of Exemption from Customs duties. Thus, goods imported when intended for use in Mega Power Project are eligible for exemption from Customs duties, in terms of Sl.No.400 of Notification No.21/2002-CUS dt. 01.03.2002. The condition prescribed under Sl.No.91 of Notification No.6/2006 thus stands satisfied.
In the case of SARITA STEELS & INDUSTRIES LTD. VERSUS COMMR. OF C. EX., VISAKHAPATNAM [2010 (7) TMI 568 - CESTAT, BANGALORE] the issue considered was that whether the angles, channels, beams, etc. supplied by the assesse to M/s.Bharat Heavy Electricals Limited, was eligible for exemption under Notification No.6/2006. The goods having been intended to use for the Mega Power Project, the Tribunal held that the goods would be relatable to Chapter Heading 98.01 and would be eligible for Benefit of Exemption of under Notification No.21/2002.
The Tribunal in the case of M/S GANGES INTERNATIONAL PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIPUR [14 (8) TMI 498 - CESTAT NEW DELHI] considered the same issue and held that the case is in the nature of General Fabrication Structures, Auto Welded Beams and Boxes, cleared by appellants for use in the Mega Power Project would be eligible for benefit of notification.
From the above, it is clear that the supply of goods required to set up mega power project is covered by Chapter Heading 98.01. The Project Authority Certificate issued to the appellant clearly states that the goods have been supplied for Nagarjuna Thermal Power Project, Udupi. This being the fact, the order passed by the adjudicating authority that M S Rebars do not fall under CH 98.01 is erroneous and not supported by any basis.
Thus, the denial of exemption is without any legal or factual basis. The appellant is eligible for exemption under Notification No.6/2006-CE dated 01.03.2006.
The Impugned Order is set aside - The appeal is allowed.
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2024 (5) TMI 935 - SC ORDER
Manufacture - marketability - Jurisdiction of special judge - Transfer of case from the Magistrate to the Special Judge - it was held in 2013 (10) TMI 904 - SUPREME COURT that 'The fact that for an administrative exigency, the High Court decided to exercise its plenary administrative power does not per se lead to the conclusion that the transfer of the case from the Magistrate to the Special Judge was unlawful' - HELD THAT:- The issue decided in KEC INTERNATIONAL LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NAGPUR [2016 (12) TMI 1317 - CESTAT MUMBAI] where the demand was set aside.
The duty demand set aside - appeal allowed.
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2024 (5) TMI 934 - MEGHALAYA HIGH COURT
Jurisdiction - appropriate forum - right of appeal relating to the value of service - maintainability before High Court or not - HELD THAT:- Though there is an appellate remedy available to the appellant or to the aggrieved party in terms of Section 35G, the issue pertaining to the value of service cannot be agitated before this Court. The party has got right only before the Supreme Court in terms of Section 35L.
The appeal preferred by the appellant is rejected giving liberty to the appellant to approach the Apex Court, if so advised - appeal dismissed.
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2024 (5) TMI 933 - ORISSA HIGH COURT
Extended period of limitation - inordinate delay in adjudication of a show cause notice - dispute related to period 2004-05 - on the basis of a show cause notice issued on 10.09.2008 and after lapse of about 10 years from the date of issuance of show cause notice, notice for personal hearing was issued and the final Order-in-Original was passed on 04.09.2023, after a period of 15 years - recovery of wrongly availed CENVAT Credit with interest and penalty - HELD THAT:- The notice of show cause was issued on 10.09.2008, which came to the knowledge of the petitioner on 05.12.2017, when a personal hearing notice pursuant to the show cause notice dated 10.09.2008, was issued to the petitioner. The same was followed by another personal hearing notice dated 05.01.2018. It is only after issuance of these personal hearing notices, the petitioner became aware of the proceedings and obtained a copy of the show cause notice dated 10.09.2008 on 08.01.2018, i.e., after a lapse of more than 9 (nine) years from the date of show cause notice. The petitioner filed its reply indicating therein that the show cause notice was sought to be adjudicated after a considerable lapse of time, without any justification and without any communication to the petitioner during the intervening period and, thereby, the delay in adjudication of the show cause notice dated 10.09.2008 is fatal to the proceedings and subsequent issuance of notices for personal hearing after a lapse of about 10 years from the date of issuance of the show cause notice is contrary to the mandate of Sub-section (11) of Section 11A of the Central Excise Act, 1944.
It is made clear Section 11A (11) of the Central Excise Act, 1944 envisages that the Central Excise Officer shall determine the amount of duty of excise under Sub-section (10) within six months from the date of notice where it is possible to do so, in respect of cases falling under Sub-section (1), i.e., where no suppression of facts etc. are alleged) and within one year (substituted by two years by the Finance Act, 2016 w.e.f. 14.05.2016) from the date of notice, where it is possible to do so, in respect of cases falling under the Sub-section (4) (i.e. where suppression of facts etc. are alleged). Therefore, both the notices for personal hearing issued to the petitioner on 05.12.2017 and 05.01.2018 under Annexure-3 (Colly.) are contrary to the mandate of Section 11A of the Central Excise Act, 1944 and thus, the adjudication of the show cause notice is barred by limitation.
It is well settled in law that inordinate delay in adjudication of a show cause notice is fatal to its validity since it causes prejudice.
In Jindal Steel [2016 (5) TMI 675 - ORISSA HIGH COURT], this Court, considering the question of maintainability of writ petition, held that against any decision taken by Commissioner of Central Excise as adjudicating authority, appeal lies to appellate tribunal and accordingly dismissed the writ petition with a direction to file appeal before appellate tribunal by making pre deposit of 5% of demand.
This Court is of the considered view that the notice of show cause issued on 10.09.2008 under Annexure-2 and consequential personal hearing notices dated 05.12.2017 and 05.01.2018 under Annexure-3 (Colly.) issued after long lapse of 9 years from the issuance of show cause notice dated 10.09.2008 and the Order-in-Original dated 04.09.2023 under Annexure-9, whereby demand made in the show cause notice dated 10.09.2008 has been confirmed, cannot be sustained in the eye of law and the same are liable to be quashed and are hereby quashed.
The writ petition is accordingly allowed.
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2024 (5) TMI 932 - CESTAT ALLAHABAD
Refund of accumulated Cenvat Credit - export of goods which are exempted from payment of duty - goods not exported under bond - rejection of refund on the ground that in view of N/N.42/2001–CE, Appellant was not eligible to export goods under bond - HELD THAT:- This issue is no more res integra. It is by now the settled law that refund of accumulated Cenvat Credit is allowable on export of goods even if they are exempted from payment of Central Excise Duty. It has also been the settled law that export under bond is only a procedure. The claim for refund should not be disallowed when the fact of export is not in dispute.
In the case of JOLLY BOARD LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [2014 (3) TMI 124 - CESTAT MUMBAI], the refund claim of the party was denied by Lower Authorities on the ground that the assessee is the manufacturer of exempted goods, therefore as per Rule 6 (1) of CCR, 2004, they are not entitled to take input credit. Consequently, they are not entitled to file refund claim.
Another reason for denial of refund was that goods are not exported under bond - In the case of COMMISSIONER OF CENTRAL EXCISE VERSUS DRISH SHOES LTD. [2010 (5) TMI 334 - HIMACHAL PRADESH HIGH COURT], the Hon’ble High Court of Himachal Pradesh was also examining the similar issue. It held that input credit is allowable when exempted goods are exported under bond. Refund under Rule 5 of CCR, 2004 is allowable to the manufacturer, who exports the final products which are exempt from duty.
The Appellant is eligible for Cenvat Credit of input and input services which are used in export of goods and are exempted from payment of Central Excise Duty. In terms of Rule 5 of CCR, 2004, they are eligible for refund of accumulated Cenvat Credit attributable to export of goods. Non submission of bond is only a procedural lapse.
The impugned order cannot be sustained and is accordingly set aside - Appeal allowed.
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