|
Advanced Search Options
Central Excise - Case Laws
Showing 1 to 20 of 82127 Records
-
2025 (7) TMI 145
Denial of interest on the pre-deposit amount - Section 35FF of CEA - HELD THAT:- The amended provision came into operation on 06.08.2014 whereas appeal was filed subsequently on 01.07.2016 and pre-deposit was made in compliance of Section 35F as stood on 01.07.2016. The said proviso comes into play in respect of appeals, which were decided subsequent to 06.08.2014, but the same were filed before 06.08.2014 and accordingly in such appeals pre-deposit was also made in terms of Section 35F as stood prior to commencement of Finance (No.2) Act, 2014. However, in case where appeal is filed subsequent to 06.08.2014, the pre-deposit is also made under the new Section 35F and accordingly the proviso to Section 35FF will not come into picture.
In the present appeal, as the appeal has been filed subsequent to 06.08.2014, therefore, it cannot be said that the pre-deposit was made under Section 35F prior to the commencement of Finance (No.2) Act, 2014. Unless an Order, against which an appeal is filed, is passed, the question of making pre-deposit under Section 35F prior to commencement of Finance (No.2) Act, 2014 does not arise. Thus, in such cases, where stage of pre-deposit came into effect after 06.08.2014, the deposit is made under new Section 35F only and thus the proviso will not operate. The interest on refund of pre-deposit is to be made from the date of deposit of such amount under the Section 35FF as effective from 06.08.2014.
In any case the decision in the matter of Jeevan Diesels and Electricals Ltd. Vs. C., GST & C. EX., Pondicherry [2019 (4) TMI 1554 - CESTAT CHENNAI], relied upon in the impugned order has no applicability in the present matter because in that case pre-deposit was in old Section 35F (effective before 06.08.2014) as the appeal was filed in 2006 whereas in the present case the appeal has been filed after 06.08.2014 therefore, it will be deemed that the pre-deposit was made and considered under the new Section 35F. This is also evident from the fact that no stay application could have been filed seeking waiver of pre-deposit further, all the Appellant was required to comply to make mandatory pre deposit under the provision of new Section 35F after 06.08.2014. In such a view, the pre-deposit was made only under the new Section 35F and accordingly the proviso to Section 35FF has no application, thus, interest is payable from the date of deposit only in terms of Section 35FF.
Appeal allowed.
-
2025 (7) TMI 144
Inter-connected units - coomn directors - related persons - applicability of Section 4(3)(b)(i) or Rule 9 of the Valuation Rules, 2000 - mutuality of interest - revenue neutrality - extended period of limitation - HELD THAT:- The Commissioner(Appeals) has treated the Units as Inter Connected Undertaking only and no efforts have been made to find out the mutuality of interest. In case of Inter Connected Undertaking it is not covered under Rule 9 of the Valuation Rules, 2000. Therefore, the confirmed demand is set aside.
It is clear that when the allegation is to the effect that the goods are cleared by the Appellant to only their inter-connected units, the demand should have been quantified by finding out the value at which the alleged inter-connected units were selling the goods to the independent third parties. From that value, the value adopted by the Appellant should be deducted and the duty quantified should be on the differential value. But in this case the Department has failed to do so. They have demanded the duty at 100% of the cost of manufacture + 10% profit margin in terms of Rule 8 which is applicable where the goods are sold to the related/inter-connected units are consumed by them. Therefore, even on this ground, the demand is not legally sustainable. On this ground, the confirmed demand set aside on merits.
Extended period of limitation - HELD THAT:- There are force in the Appellant’s submission that no case of suppression has been brought out by the Revenue in the proceedings. They are registered with the Department and have been filing their Returns wherein the value adopted by them would have been shown. The Department has not undertaken any scrutiny of the Returns, nor have they queried the value adopted by them all these years. Therefore, no case of suppression has been made out by Revenue. Hence, the confirmed demand is not sustainable on account of time bar also.
Appeal stands allowed both on merits as well as on limitation.
-
2025 (7) TMI 67
CENVAT credit taken on duties paid towards procurement of capital goods - alleged utilisation of the capital goods in the manufacture and clearance of exempted goods which, according to lower authorities, is not permissible and should have been reversed in accordance with rule 6(4) of CENVAT Credit Rules, 2004 - HELD THAT:- Rule 6(4) of CENVAT Credit Rules, 2004 is not a bar to taking credit which flows from the authority of rule 3(1) therein. The impugned order has erred in concluding that the appellant was not entitled to take the credit and contradicts application of rule 6(4) inasmuch as rule 6 is for extinguishment of credit by deployment of ‘input’ or ‘input service’ in manufacture of exempted goods or in rendering of exempted service. Unlike these, insofar as capital goods is concerned, retention of credit is barred if used exclusively in manufacture of exempted goods.
The returns leave no room for doubt that goods have been exported and, consequently, rule 6(4) of CENVAT Credit Rules, 2004 is inapplicable. Furthermore, rule 6 is no authority for recovery and rule 14 of CENVAT Credit Rules, 2004 is authority to do so when credit is retained contrary to the mandate therein. It falls to the central excise authorities to establish that the capital goods were used exclusively in the manufacture of exempted goods and mere allegation without substance cannot operate to shift the onus on to the appellant to disprove. That obligation has not been discharged in the proceedings leading to the impugned order.
There is no merit in the impugned order which is set aside to allow the appeal - Appeal allowed.
-
2025 (7) TMI 66
Clandestine manufacture and removal - M.S. Round/TMT Bars - sufficient oral and documentary corroborated evidence to demonstrate that the appellants were engaged in clandestine removal of the goods or not - levy of penalty u/r 26 (1) of CER - main appellant on whom duty was conformed, is granted Form-4 on 13th February, 2020 under the Sabka Vishwas Scheme (SVLDRS) - HELD THAT:- In form SVLDRS-4, it has been mentioned that the appellant Bhagyalaxmi Steel Industries has deposited Rs. 4, 07,378.90 under SVLDRS scheme, being the amount determined by the designated committee under Section 126 of Finance (2) Act, 2019 and the declarant has filed appeal before CESTAT Ahmedabad against any order in respect of the tax imposed and whereas the said appeal is deemed to be withdrawn in accordance with the provisions of sub-Section 6 of Section 127 of the Finance (2) Act, 2019.
In these circumstances, Excise Appeal No. 12246 of 2019 Bhagyalaxmi Steel Industries vs. CCE & ST Bhavnagar is deemed to have been allowed by the CESTAT and the demand of Central Excise duty and penalty from appellant Bhagyalaxmi Steel Industries is hereby set aside.
When appeal of the main appellant – Bhagyalaxmi Steel Industries has been allowed and the order regarding demand of Central Excise Duty and penalty imposed by the lower Adjudicating Authority and the Commissioner have been set aside, it appears just and proper that penalty imposed on co-noticee Shri Rajendra P. Agrawal should also be set aside and his appeal is liable to be allowed.
The impugned order set aside - appeal allowed.
-
2025 (7) TMI 65
Clandestine removal - admissibility of evidences in terms of Section 36B of the Central Excise Act, 1944 - computerized RG-1 and other records as maintained by the appellant - requirement of certification for admissibility of the ascertained stocks - Imposition of penalty on the Directors - HELD THAT:- The appellants’ submission that there was no recovery of cash or documents showing excess labour or excess consumption cannot be held as a sustainable ground in defence, when on the basis of documents as retrieved from a surprise visit by the officers from the computers maintained and worked upon by the appellant and as recorded in Panchnama establish the fact of production and suppressed indication of clearance figures.
It is also not found that Shri Deepak Kumar Agarwal has at any point in time retracted his self-inculpating statement, admitting of the receipt of payment in cash for goods clandestinely cleared and enjoyment of the booty by all the three Directors of the appellant concern. The appellant’s argument that in response to the show cause notice, they have refuted the department’s allegations and thereby stating that the statements were not voluntary and hence to be considered as retracted, is a very vague, generalised and loose submission, unacceptable in law. There is no concept of a deeming retraction known in law, and any retraction has to be a formalized one and satisfy the ingredients of a valid retraction.
Moreover, the Calcutta High Court in the case of Commissioenr of Customs (Prev.) v. Rajendra Kumar Damani @ Raju Damani [2024 (5) TMI 730 - CALCUTTA HIGH COURT] had held that the retraction of statement in itself cannot render the statement involuntary.
It is argued that no statement of person from whose possession the said chits were recovered, has been recorded. The evidentiary value of chits/loose slips recovered cannot be lost merely because no statement was recorded of the employee from whose possession the said chits were recovered for the reason that the employee of the appellant firm’s could not be labelled as a third party witness. Moreover, it has been admitted by no less but the Director, that these slips were indicative of pending payments in respect of clandestine delivery. The employees of the firm in their initial testimony at the time of recovery have confirmed that the said loose chits indicated clandestine cleared goods for which payment was obtained in cash. The said position was also admitted by the Director at the first instance.
Further, as evident from Section 58 of the Indian Evidence Act, 1872, as it stood at the material time, a fact is not required to be proved in a proceeding, if the party or its agent admit to the same, or if it is admitted by writing under their own hands before a hearing, or if it is deemed to have been admitted by way of their pleadings – the idea being that the court is required to deliberate upon points in dispute in an issue (i.e. undisputed facts are not required to be proved). Viewed in the backdrop, and the fact that there is no formal retraction at any point of time on record, the appellant merely submitting that since they contest, the matter, the statement of the appellant Director cannot be considered voluntary and is thus deemed to be retracted is completely irrational.
Imposition of penalty on the Directors - HELD THAT:- The adjudicating authority has at length and convincingly discussed the active involvement of the noticees and brought out the role played by each of the said Directors. Further, in view of the findings and discussions, it is noted that by way of their contumacious conduct and mens rea as clearly discernible, the three directors have rendered themselves liable for imposition of penalty under Rule 26 of the Central Excise Rules, 2002 - considering the entire gamut of the case and the fact of the issue being nearly fifteen years old, ends of justice would be met by restricting the penalty amount imposed to Rupees Fifty thousand only on each of the three Directors viz. S/Shri Dilip Kumar Agarwal, Deepak Kumar Agarwal and Sajjan Kumar Kedia.
The impugned order of the lower authority is upheld, but for the modification of the penalty amount as fastened upon the Directors.
Appeal disposed off.
-
2025 (7) TMI 1
Admissibility of input credit - security services deployed at the residential colony situated outside/adjacent to the factory under Rule 2(l) of the CENVAT Credit Rules, 2004 - HELD THAT:- The dispute in the present appeal is no more res integra and is covered by the various decisions of the Tribunal. In the case of Northern Coal Fields Ltd. V/s Commissioner of GST, Customs & Central Excise [2020 (2) TMI 1004 - CESTAT NEW DELHI] where it was held that services crucial for maintaining staff colonies are considered "input services" under Rule 2(l) of the Cenvat Rules, 2004.
It is found that the facts of the present case are squarely covered by the abovementioned decision of the Tribunal. Further, it is an admitted fact that the residential colony/township is located at a remote place, where no municipal services are available. Further, it is an admitted fact that an industrial township is set up by the Appellant/Assessee so that trained manpower is available to run their plant for production of dutiable output. Accordingly, the security services qualify as input service under Rule 2(l) of CENVAT Credit Rules, 2004 being the service utilized by the manufacturer in relation to manufacture of dutiable final products. Accordingly, there is no impropriety in the claim of the Appellant.
Further, there is a mistake of fact in the order of the Lower Authority in observing that the colony is located away from the manufacturing area. In this view of the matter, the Appellant/Assessee requires the residential colony for workers for manufacturing dutiable goods. Security service is essential in order to maintain the residential/industrial colony of the Appellant.
The Appellant is entitled to CENVAT credit under dispute - the impugned order is set aside - appeal allowed.
-
2025 (6) TMI 1961
Clandestine removal - Levy of penalty on Director u/r 26 of the Central Excise Rules, 2002 - non-compliance of the provisions of section 36B of the Central Excise Act - burden of proving the allegations made in the show cause notice.
HELD THAT:- The Commissioner (Appeals), in the impugned order, has held that the finding recorded by the Joint Commissioner that the panchanama dated 30.12.2013 prepared for retrieval of data from computer and pendrive in the presence of two independent witnesses and Shri Rakshit Bhansali, Director of Paradise Steels, is itself a certificate under section 36B of the Central Excise Act. This finding is contrary to the provisions of section 36B of the Central Excise Act. It was obligatory on the part of the department to follow the procedure contemplated under section 36B of the Central Excise Act.
The Commissioner (Appeals) observed that the data was not stored in the computer and only a print out from the USB drive was taken by connecting it to the computer. It was, therefore, obligatory on the part of the department to have followed the procedure set out in section 36B of the Central Excise Act and obtain a certificate. There is, therefore, no error in finding recorded by the Commissioner (Appeals).
In view of the aforesaid decision of the Tribunal in Surya Wires [2025 (4) TMI 441 - CESTAT NEW DELHI], the statement of the Director of Paradise Steels made under section 14 of the Central Excise could not have been taken into consideration as the procedure contemplated under section 9D of the Central Excise Act was not followed.
The Commissioner (Appeals) is also justified in holding that to substantiate the allegation of clandestine removal, it was obligatory on the part of the department to seek confirmation from the buyers to prove the type of product that was sold by the appellant as this was most crucial evidence, but the investigating authority did not take the statement of any of the buyers.
Thus, penalty could not have been imposed upon the Director of Paradise Steels - appeal of Revenue dismissed.
-
2025 (6) TMI 1960
Reversal of CENVAT Credit - exempt service - trading activity undertaken by the appellant - clearances of Polypropylene Co- Polymer (PPCP) - common input services - used in providing the exempted services as well as dutiable goods - delibrate suppression of facts or not - invocation of extended period of limitation - HELD THAT:- It is found discombobulating that adjudicating authority has, despite holding that PPCP received by the appellant and cleared to the moulders are used in the manufacture of containers and lids which in turn are used by the appellant in the manufacture of batteries and thus an input falling under the definition of Rule 2(k) of Cenvat Credit Rules 2004, and further finding that its clearance to the moulders on sale after reversal of cenvat credit has been made by the appellant after rightly paying the amount in terms of Rule 3(5) of CCR on removal of inputs as such from the factory; yet gone on to treat the very same transaction of removal of inputs as such as trading and thus an exempted service!. Moreover, it is also pertinent that the adjudicating authority has not controverted the appellant’s contention that the entire quantity of PPCP supplied by the appellant is only to make the parts meant for the appellant and thus no quantity of the PPCP is used by the moulders for any other use and the entire PPCP gets converted and supplied back in the form of battery parts and which was evidenced by the certificate of the moulders produced. The adjudicating authority also has failed to controvert the contention of the appellant that the price at which PPCP is sold to the moulders will ultimately become a cost to the Appellant and the Appellant does not stand to gain any profit, as the price at which PPCP is sold to moulders is built into the price of the containers and lids sold back by the moulders to the Appellant.
The show cause notice itself is woefully lacking in any evidence to show that the appellant is known in the market as a trader of PPCP or that the appellant sells PPCP to any other customers with a profit motive. The adjudicating authority has thus failed to appreciate that the Department has not let in any evidence that shows that the appellant is in the business of trading in PPCP. In fact, the concatenation of transactions as a whole clearly reveal that it is nothing but removal of inputs on payment of duty by reversal of credit taken, and is in the course of the appellant’s activity of manufacture of batteries. It is a settled principle in law that a party cannot approbate and reprobate on the same transaction. Therefore, having found the transaction of sale of PPCP to the moulders by the appellant to be removal of inputs as such from the factory, thereafter, treating the very same transaction of removal of inputs as such, as trading activity cannot be countenanced.
The demand made on the appellant consequent to the finding that the appellant’s clearances of Polypropylene Co- Polymer (PPCP) made tantamount to trading, along with applicable interest as well as consequent imposition of equivalent penalty on the appellant are wholly untenable and cannot sustain.
Invocation of extended period of limitation - HELD THAT:- From the appeal records it is evident that the appellant has clearly indicated the clearance of PPCP as such in the relevant columns in the ER-1 returns including the credit utilized when input goods are removed as such. In such circumstances it was for the Department to take up the scrutiny of the returns as per extent departmental instructions and raise demand if any - the extended period of limitation cannot be invoked.
The impugned order is set aside - appeal allowed.
-
2025 (6) TMI 1959
CENVAT Credit of service tax paid - input services - place of remaoval - sales commission paid to domestic marketing agents for the sale of finished goods during the period from 01.04.2011 to 31.12.2014 - Extended period of limitation - HELD THAT:- From the terms of the agreement it is evident that the activities undertaken by the marketing agent involves the entire gamut of services of sale, advertisement and sales promotion.
Having ascertained the facts as to the activities of the marketing agent, in order to appreciate the issue, it is necessary to examine the definition of input service as it existed in the Cenvat Credit Rules, 2004 (CCR) during the relevant period that is April 2011 to December 2014. The definition of “input service” in Rule 2(l) of the CCR came to be substituted by the Cenvat Credit First Amendment Rules, 2011 notified vide notification No.3/2011 C.E.(NT) dated 01.03.2011 with effect from 01.04.2011 and stood further amended vide Notification No.28/2012 C.E.(NT) dated 20-6-2012 with effect from 01-07-2012.
On a plain reading of the definition, it is evident that advertisement or sales promotion service has been specifically included in the scope of input service as defined in Rule 2(l) of the CCR. That apart, it is also noticed that the Central Board of Excise and Customs, vide Circular No.943/4/2011-CX dated 29-04-2011, on the subject of clarification on issues relating to Cenvat Credit Rules, 2004, has at sl.no.5 of the clarifications presented in tabular format, in response to the issue stated as “Is the credit of Business Auxiliary Service (BAS) on account of sales commission now disallowed after the deletion of expression “activities related to business”?”, given the clarification that “The definition of input services allows all credit on services used for clearance of final products upto the place of removal. Moreover activity of sale promotion is specifically allowed and on many occasions the remuneration for same is linked to actual sale. Reading the provisions harmoniously it is clarified that credit is admissible on the services of sale of dutiable goods on commission basis.” - Thus, it is evident that the contemporaneous exposition of the Department, through its circular, has clearly clarified that credit is admissible on the services of sale of dutiable goods on commission basis. It is a settled principle in law that the Department cannot argue against its own circular.
Extended period of limitation - HELD THAT:- There is a specific finding that the details of the transactions are recorded in the specified records - also it is held that the issue involved herein is interpretational in nature and thus the reliance placed by the appellant on the decision in International Merchandising Company, LLC(Earlier known as International Merchandising Corporation) vs Commissioner, Service Tax, New Delhi [2022 (12) TMI 556 - SUPREME COURT], to contend that extended period cannot be invoked, is tenable in this context.
The impugned order is set aside - appeal allowed.
-
2025 (6) TMI 1958
CENVAT Credit - activity amounting to manufacture or not - processed/finished goods made out of Cenvated inputs are cleared on payment of duty or not - HELD THAT:- Undoubtedly in the present case the Appellant was paying the duty on the processed goods arising out of the cenvated inputs, at the time of the clearance of the same. Revenue has sought to deny the Cenvat Credit by alleging that the activities/processes undertaken by the Appellant do not amount to manufacture as per Section 2 (f) of the Central Excise Act, 1944. As the processes undertaken do not amount to manufacture credit is not admissible. However, it is found that undisputedly for determining the admissibility of Cenvat Credit the issue that needs to be examined is whether the processed/finished goods made out of Cenvated inputs are cleared on payment of duty or not.
In terms of the Section 5B of the Central Excise Act, 1944, Central Government has been empowered to issue notification allowing the Cenvat Credit on inputs in cases where finished goods have been cleared by the Assessee on payment of Central Excise duty even though the process undertaken did not amount to manufacture. The principle contained in this Section 5B is that principle laid down by the Hon’ble High Court in the case of Ajinkya Enterprises [2013 (6) TMI 610 - CESTAT MUMBAI].
Undisputedly it is found that not all the imported goods against which the appellant had availed the CENVAT credit were processed and cleared on payment of the central excise duty. A part of the said goods were traded as such. The CENVAT credit in respect of such traded goods would not be admissible.
A detailed calculation needs to be made by the lower authorities to determine how much of the credit amounting to Rs.3,08,58,313/- pertained to the inputs which were used by the Appellants for manufacture and clearance of the dutiable goods. To that extent, the amount reversed needs to be restored to the Appellants. For the purpose of this computation, the matter needs to be remanded back to the original authority.
The appeal filed by the Appellant 1 is partly allowed and the matter remanded back to the original authority.
-
2025 (6) TMI 1957
Contravention of provision of Rule 8(1) and Rule 8(3)A of the Central Excise Rules - failure to make payment of duty for the month of May, 2013 by due date - Levy of penalty - HELD THAT:- The issue involved in this matter has been decided by the Hon’ble Gujrat High Court in the case of Indsur Global Limited Vrs. Union of India [2014 (12) TMI 585 - GUJARAT HIGH COURT] and Sandley Industries Ltd. Vrs.Union of India [2015 (10) TMI 2455 - PUNJAB & HARYANA HIGH COURT] wherein provision of Rule 8(3) A of Central Excise Rule, 2002 was held ultra virus therefore, no demand can be raised against the appellant and the decision of the Hon’ble Gujrat High Court in the case of Indsur Global Limited was taken up by the Revenue by the Hon’ble Apex Court and the Hon’ble Apex Court vide [2024 (7) TMI 1559 - SC ORDER (LB)], Supreme Court Larger Bench disposed of the SLP filed by the Revenue as not pressed.
Thus, no penalty is imposable.
The impugned order is set aside - appeal allowed.
-
2025 (6) TMI 1956
Rejection of appeal - time limitation - rejection of appeals on the ground that Section 83 of the Finance Act, 1994 does not cover appeals filed under Section 35E of the Central Excise Act, 1944 - HELD THAT:- A plain reading of the subclause (c) of Clause 2, makes it clear that manufacturer/exporter can claim exemption by filing the refund of service tax paid on specified services with the Assistant Commissioner within the jurisdiction of the factory.
In the present cases, the respondents are engaged in the manufacture of iron ore lumps and iron ore fines, are not registered with the Central Excise but required to file refund claim in Form A-2 as per subclause (c) Clause (2). Thus, the appeal is required to be filed under Section 35E(ii) in view of specific mention of the procedure under the said N/N. 17/2009-ST dated 07.07.2009.
On the issue of time limit in filing the appeals, it is found from the records that the impugned order was communicated to the appellant-department on 09.11.2010 and the appeals were filed on 08.02.2011; hence, these Appeals were filed within time.
The matters are remanded to the extent of rejecting the appeals of the Revenue to consider the same on merit and pass an appropriate order - appeal allowed by way of remand.
-
2025 (6) TMI 1877
Requirement of pre-deposit for preferring appeal - Prayer for acceptance of appeal filed by the petitioner under Section 35B of the Central Excise Act, 1944 without payment of pre deposit - HELD THAT:- Having regard to the clear mandate provided for in Section 35F of the said Act, and also having regard to the judgment delivered by the Hon’ble Division Bench of this Court presided over by the Honb’le the Chief Justice in Somnath Ray, proprietor of M/s Makloyed Electrical Enterprises vs- Additional Commissioner of Central Tax, CGST & CX Commissionerate, Howrah & Ors. [2024 (4) TMI 1282 - CALCUTTA HIGH COURT] there is no scope for this Court to entertain this writ petition, it is held that the Tribunal cannot be directed to hear out the appeal in contravention of the statutory provision.
Although, by referring to the judgment in the case of Mohammed Akman Uddin Ahmed [2023 (5) TMI 23 - DELHI HIGH COURT], petitioner has attempted to make out a case that the High Court is competent in a fit case to waive the pre condition or grant a right to prefer an appeal, it is however found that the issue that fell for consideration in the said judgment was the Constitutional validity of Section 129E of the Customs Act 1962 and for a direction upon the respondents in the said case to admit the appeal filed by the petitioner without the pre deposit of mandatory duty as stipulated under Section 129E of the Customs Act 1962.
It is amply clear that the direction to admit the appeal under Section 129E of the Customs Act 1962 was sought for as and by way of a consequential relief. The High Court in the said case did not hold that the provisions of Section 129E of the Customs Act 1962 to be ultra vires the Constitution of India and having regard thereto, the grant of consequential relief in a case where the principal relief is disallowed cannot be construed as a right conferred on the petitioner to seek similar benefit. In view thereof, the aforesaid judgment does not assist the petitioner.
Conclusion - i) The writ petition seeking waiver of the mandatory pre-deposit under Section 35F is dismissed. ii) The Tribunal cannot be directed to admit or hear the appeal without compliance with the statutory pre-deposit requirement.
Petition dismissed.
-
2025 (6) TMI 1876
Clandestine removal - craft paper - removal under fake and parallel invoices - existence of corroborative evidences or not - reliability of evidences in the form of statements - entire case of the department against the appellant is based on the certain documents recovered during the course of search of factory and office premises of the appellant 1 and residential premises of the appellant 2 - Denial of CENVAT Credit in respect of the GTA services received by the appellant 1 - Demand made by referring to Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - time limitation.
Clandestine removal - craft paper - removal under fake and parallel invoices - existence of corroborative evidences or not - reliability of evidences in the form of statements - entire case of the department against the appellant is based on the certain documents recovered during the course of search of factory and office premises of the appellant 1 and residential premises of the appellant 2 - HELD THAT:- During the course of investigation self incriminating and admission statements of the appellant 2 were recorded in respect of the these documents to proceed against the appellants. However from the facts as recorded in the show cause notice and the orders of lower authorities it appears that no independent corroboration was made even on sample basis in respect of the these documents recovered/ resumed/ provided by the Appellant 1 and Appellant during the search of their premises and during the investigation. Undisputedly premises of certainsuppliers of waste paper, consignment agents, traders of the appellant and also their customers were searched simultaneously. However no corroborative evidences have been brought on record on the basis of such searches made. Neither any of such person have been made co-noticee in these proceedings.
It is settled position in law that charges of clandestine clearance etc., need to be established on the basis of sufficient and independent corroboration of the evidences recovered during the search and investigation.
There are no merits in impugned order to the extent of making demand in respect of clandestine removal of finished goods and packing material as the fact of clandestine removal cannot be substantiated.
Denial of CENVAT Credit in respect of the GTA services received by the appellant 1 - HELD THAT:- From the Circular No 1065/4/2018 dated08.06.2018 issued by the CBIC, it is clear that in case of the for destination sales effected by the manufacturer the CENVAT Credit of GTA on outward transportation is admissible to the point of the delivery of the goods. However for determining taking note of the decision of the Hon’ble Apex Court on the issue Board had directed that this fact whether the sales were effected on FOR basis needs to be verified in each case. Impugned order do not record any finding in respect of the nature of the sale made, as to whether they were made on FOR basis or at factory gate. The Board has specifically clarified against invocation of extended period of limitation in all such cases.
In view of the above clarification issued by the Board the matter needs to be remanded back to the original authority for determination of nature of sale for the normal period of limitation and thereafter rendering a finding in respect of the admissibility of CENVAT credit only that is within normal period of limitation from the date of Show cause notice.
Demand made by referring to Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - time limitation - HELD THAT:- The demand has been made in respect of the clearances reflected in the ER-1 returns of the Appellant 1. Annexure 5 (a) to 5 (g) have been made determining the short payment by application of the said rule in respect of the clearances which were reflected in the ER-1 filed by the appellant. In view of the fact that all these clearances were duly reflected in the ER-1 returns filed by the Appellant 1, there are no merits in the invocation of extended period of limitation for making this demand. Thus the demand made in this head by invoking extended period of limitation set aside. The matter is remanded back to the original authority for redetermination of the demand if any within normal period of limitation.
Also demand of Rs 2432.69 has been made by alleging suppression of invoice value in ER-1 for the month of June 2013, is barred by limitation and needs to be set aside.
Conclusion - i) Demand of Rs 23,03,781/- made in respect of alleged clandestine clearance of Kraft Paper is set aside. ii) Demand of Rs 74,827/-made is respect of alleged clandestine clearance of packing material is set aside. iii) Demand Rs 10,71,211/- made in alleging undervaluation oin terms of Rule 7 of the Central Excise Valuation Rules, 2000, by invoking extended period of limitation is set aside and the matter remanded to the original authority for determination of the amount demandable within normal period of limitation. iv) Demand of Rs 3,19,176/- made by denying the CENVAT Credit availed in respect of GTA services for the outward transportation of the finished goods is set aside and the matter remanded to original authority for redetermination of the issue in accordance with Circular No 1065/4/2018 dated 10.06.2018 for the normal period of limitation. v) Demand of Rs 2432.69/- made for the period June 2013 is set aside.
Appeal allowed in part.
-
2025 (6) TMI 1875
Classification of manufactured goods - Perk, ULTA Perk, Perk Poppers and Wafer Uncoated Reject - classifiable under Excise Tariff Item 1905 32 11 of the Central Excise Tariff Act, 1985 as claimed by department, or under ETI 1905 32 90 as claimed by the appellant - Nature of Products and Definition of words “communion”, "Wafer" and "Wafer Biscuit" - Benefit of exemption Notification - Interpretation of General Explanatory Notes, HSN Explanatory Notes for Chapter 19 and amendment by the Finance Act 2023 - sub-classification of the (--) heading - Interpretation of dash markings in tariff entries - HELD THAT:- For a product to qualify as “coated with chocolate or containing chocolate” under ETI 1905 32 11, the product should conform to the description of “communion wafers”. The Products of the appellant neither have the characteristics of “communion wafers” nor they are used in the Church for Eucharist purpose.
The order passed by the Principal Commissioner holds that there is no indication of the HSN that “communion wafers” can be “coated with chocolate or containing chocolate”. This issue, as noticed above, has been decided by the Tribunal in Pepsico Holdings [2019 (10) TMI 762 - CESTAT ALLAHABAD (LB)] wherein the Tribunal held that possibility of existence of chocolate coated “communion wafers” cannot be discounted.
When the Products are “wafer biscuits” and it has been found that the classification of the Products would be under ETI 1905 32 90, the Products of the appellant would clearly be entitled to the benefit of the Exemption Notification.
What is important to notice is that the show cause notice did not call upon the appellant to submit any reply on this aspect now sought to be contended by the learned special counsel for the department. The order passed by the Principal Commissioner also does not deal with this aspect. A new ground cannot be taken up by the department to defend the order in this appeal, particularly when the department has not filed Cross Appeal. In any view of the matter, the entries of the present Exemption Notification have to be examined to ascertain whether the Products of the appellant would fall under ETI 1905 32 90 and would be entitled to reduced rate of duty under the Exemption Notification.
Conclusion - The Products of the appellant would fall under ETI 1905 32 90 and would be entitled to reduced rate of excise duty under the Exemption Notification, as amended from time to time. The demand of excise duty confirmed by the Principal Commissioner in respect of the 25 show cause notices, therefore, cannot be sustained. Accordingly, the recovery of interest and imposition of penalty cannot also be sustained.
The impugned order dated 12.12.2019 passed by the Principal Commissioner, therefore, deserves to be set aside and is set aside - Appeal allowed.
-
2025 (6) TMI 1846
CENVAT Credit - paper transaction - non-existent transporters - appellant did not receive the goods - HELD THAT:- It is found that in this case it is a fact on record that after Modi Alloys & Metalics Pvt. Ltd., no investigation was conducted to deny cenvat credit to the appellant. Moreover, the appellant’s contention is that they have received the said inputs which has been used in manufacturing of their final products which ultimately suffered duty. The Revenue has not come with any evidence that if they have not received such goods then from where the appellant had procured the inputs to manufacture final product on which they have paid the duty. In that circumstances, cenvat credit cannot be denied to the appellant on assumption and presumption.
The appellants are entitled to take cenvat credit which they have already taken. In that circumstances, the appeal filed by the appellants are allowed.
-
2025 (6) TMI 1807
Time limitation for filing revision application - Jurisdiction to file revision application - availing wrong forum to challenge the order of the Commissioner (Appeals) - Recovery of CENVAT Credit availed utilized on inputs and Education Cess - recovery of rebate claim with interest and penalty - HELD THAT:- It is an admitted position that the petitioner has availed the wrong forum to challenge the order of the Commissioner (Appeals) so far as the orders for recovery of rebate already sanctioned to the petitioner instead of preferring a revision application before the Revisionary Authority. It is also apparent from the record that the time limit prescribed for filing an appeal before the CESTAT is three months whereas the petitioner has preferred the appeals within two months and twenty one days and therefore as per the provision of Section 14 of the Limitation Act, the petitioner is entitled to the benefit of approaching the wrong forum and therefore the Revisional Authority was not justified in not considering the time spent by the petitioner for preferring the appeal before the CESTAT for consideration to condone the delay.
The Revisional Authority ought to have considered the time of filing of revision application from the date of passing of the order by the CESTAT and it is not in dispute that the petitioner has preferred the revision application within three months from the date of passing of the order passed by the CESTAT and as such there is no delay in preferring the revision application as held by the Revisional Authority after considering the time of preferring the appeal before the CESTAT.
On perusal of the order passed by the CESTAT, it is clear that the classification dispute raised by the lower authority was not reflected in the show cause notice. The show cause notice issued by the respondent authorities for both the purpose i.e. for rejecting the refund claim of the rebate and recovery of the rebate. Therefore, the proposal of classification has to be found in the show cause notice for both i.e. for rejection of the rebate claim as well as recovery of the rebate claim already sanctioned - in absence of any proposal to change the classification of the products of the petitioner, the CESTAT has rightly held that the petitioner was entitled to a CENVAT Credit on the basis of the classification under Chapter Heading 847490 which attracts duty accordingly and the petitioners are entitled for the same and therefore the demand pertaining to the dis-allowance of CENVAT credit was rightly set aside by the Tribunal.
Conclusion - The Revisional Authority ought to have followed the order passed by the CESTAT which is a judicial authority and the Revisionary Authority could not have taken a different view for recovery of the rebate on the same ground of change of classification which was never proposed in the show cause notice. Therefore, the discussions of the Revisional Authority contrary to what is held by the CESTAT is against the judicial propriety and the Revisioanal Authority could not have gone into merits to decide the classification of the product of the petitioner contrary to what is held by the CESTAT on the same facts of the case.
Impugned order dated 31/03/2023 passed by the Revisional Authority is quashed and set aside - Petition allowed.
-
2025 (6) TMI 1806
Rebate under Rule 18 of the Central Excise Rules, 2002 - requirement to submit the proof of export with Jurisdictional Range Office in Form Annexure-19 which was filed on 16.06.2014 by the petitioner - It is the case of the petitioner that an error was committed while filing Annexure-19 containing copy of ARE-I with all supporting documents under claim for rebate before the Jurisdictional Range Office - HELD THAT:- As per Notification No. 19 of 2004, rebate of duty on export of goods are governed by the procedure prescribed therein. Whereas, Notification No. 42 prescribes the procedure for export of excisable goods under Bond. It is not in dispute that the petitioner has submitted the Form ARE-1 for rebate claim under Rule 18 along with ARE-1 for the export under Bond of all excisable goods under Rule 19 in Annexure-19.
There is no denial by the respondents that petitioner is not entitled to claim of the rebate under Rule 18 of the Rules with regard to the exports made without payment of duty. In such circumstances, in absence of any dispute with regard to entitlement of the rebate claim by the petitioner, denial of the rebate claim made by the respondent only on the ground that the petitioner has committed a mistake by submitting ARE-1 in Annexure 19 for the purpose of making claim under Rule 18 cannot be sustained more particularly, when the petitioner has claimed that it had submitted all the requisite documents along with Annexure-19 before the Range Office and the Range Office has also stated in the letter dated 28.08.2015 that ample efforts to trace out the records have been made but no such documents could be found.
There is no denial to the facts stated by the petitioner in the letter dated 20.08.2015 that the petitioner had submitted the relevant documents along with Annexure-19 and therefore there was a mistake committed by the petitioner by submitting the documents which were required to be filed separately before the respondent No. 2 and not before the Range Superintendent.
This Court in case of Apar Industries (Polymer Division) Vs. Union of India [2015 (12) TMI 1255 - GUJARAT HIGH COURT] in such circumstances, has held that 'making of the declarations by the petitioner in format of Annexure-19 was purely oversight. In any case, neither Rule 18 nor notification of Government of India prescribe any procedure for claiming rebate and provide for any specific format for making such rebate applications. The Department, therefore, should have treated the original applications /declarations of the petitioner as rebate claims. Whatever defect, could have been asked to be cured. When the petitioner re-presented such rebate applications in correct form, backed by necessary documents, the same should have been seen as a continuous attempt on part of the petitioner to seek rebate. Thus seen, it would relate back to the original filing of the rebate applications, though in wrong format. These rebate applications were thus made within period of one year, even applying the limitation envisaged under Section 27 of the Customs Act.'
Conclusion - It cannot be said that the petitioner has not filed rebate claim though submitted ARE-1 along with requisite documents for the purpose of rebate claim under Rule 18 mistakenly in Annexure-19 on 16.06.2014 within the prescribed period of limitation for preferring such rebate claim. The petitioner is therefore, entitled to the rebate claim for the exports made by it under Rule 18 of the Rules.
Respondents are directed to process the rebate claim of the petitioner within a period of Twelve (12) weeks from the date of receipt of copy of this order - Petition allowed.
-
2025 (6) TMI 1805
Refund of Central Excise duty paid second time inadvertently in respect of the goods cleared under SFIS against Notification No.34/2006-CE dated 14.06.2006, when the applicable duty has been debited under the said Scheme - rejection of refund on the ground that the appellant had not complied with the condition of the Notification No.34/2006-CE dated 14.06.2006 while clearing the goods from the factory - HELD THAT:- A plain reading of the Condition No.III of N/N. 34/2006-CE, dated 14-6-2006 reveals that in respect of capital goods, certificate from the jurisdictional Deputy Commissioner / Assistant Commissioner of Central Excise or an independent Chartered Engineer be produced confirming installation and use of the said goods.
In the present case, initially the appellant had submitted that Chartered Engineer Certificate dated 07.06.2010 to the Department which is within the stipulated period. However, the same was not accepted and a certificate from the jurisdictional Deputy Commissioner / Assistant Commissioner was insisted by the Department. The certificate from the jurisdictional officers has been subsequently submitted resulting into delay of more than 6 months.
It is not found that the rejection of the refund claim on the ground that the submission of installation certificate was delayed is justified, when the said condition allows submission of Installation certificate from a Chartered Engineer also. Thus, the rejection of the refund claim on this ground is improper. Besides, it is not in dispute that the goods cleared by the appellant had reached the factory premises of the consignee M/s. Diamond Shipping Agencies Pvt. Ltd. and consequently re-warehousing certificate has been issued.
Conclusion - In the event of any discrepancy or non-use of the capital goods in accordance with the condition, the consignee is required to discharge duty in view of Rule 20 of the Central Excise Rules, 2001 as well as settled in the case laws referred by the appellant.
The impugned order is set aside and the appeal is allowed.
-
2025 (6) TMI 1804
Valuation of goods manufactured by the appellant - determination of value in manner specified in Rule 8 of Central Excise Valuation Rules, 2000 by adopting the value in terms of CAS-4 drawn - cost of natural rubber - suppression of fact or mis-declaration for evasion of duty - Extended period of limitation - Revenue neutrality - HELD THAT:- It is an admitted fact that during the relevant period, appellant was filing returns and also it was subjected to Audit from time to time. Further, as per the statement produced by the Special Auditor it is stated that during the period from 01.09.2004 to 31.03.2005, actual duty payable was Rs. 1,30,16,588/- and appellant had paid Rs. 1,45,73,989/- and for the period from 01.04.2005 and 31.03.2006, duty payable was Rs. 2,60,24,802/- and duty paid was Rs. 2,90,73,878/- as per the calculation of Cost Accountant. Thus during the said period appellant had paid excess duty than what was payable by the appellant.
Further as per the evidence on record, appellant had adopted prices as per CAS-4 which was effective from 20.09.2004 for clearances made till 31.08.2006 and the next CAS-4 was drawn only with effect from 01.09.2006 as such it is alleged that significant increase in prices of raw material for the intervening period was not taken into account for clearances made. However, Appellant draws our attention to the imported raw material used when cost of natural rubber has increased. As per the chart relied by Appellant, they had increased the use of imported raw material up to 126%.
Conclusion - Considering, the revenue neutrality, the unsustainable allegation of suppression of facts for invoking the extended period of limitation, it is found that there is no merit in the case to reject the value as declared by the Appellant, hence and impugned order is not sustainable.
The impugned order is not sustainable - Appeal allowed.
........
|
9911796707
