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Central Excise - Case Laws
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2024 (5) TMI 325 - CESTAT AHMEDABAD
Entitlement to Cenvat credit on the entire credit distributed by their head office despite the fact that the appellant company having three units - period April 2008 to March 2012 - HELD THAT:- In view of strict interpretation of Rule 7 prevailing prior to 01.04.2012, the entire credit distributed by the head office of the appellant to the appellant’s unit alone is absolutely in the order and the same cannot be disputed.
This issue has been considered by the Hon’ble Bombay High Court in the case of THE COMMISSIONER, CENTRAL TAX, PUNE-I COMMISSIONERATE VERSUS M/S. OERLIKON BALZERS COATING INDIA P. LTD. [2018 (12) TMI 1300 - BOMBAY HIGH COURT] wherein it was held that 'our attention is invited to Rule 7 of the CENVAT credit Rules, 2004 as substituted w.e.f. 1.4.2016 which has made it mandatory for distribution of input services to the various units providing output services. This is evidence by the use of words “shall distribute the Cenvat Credit” in the substituted Rule 7 as Cenvat Credit Rules 2004 w.e.f. 1.4.2016. Therefore, on plain reading of Rule 7 as existing both pre and post amendment 2012 covering period involved in these proceedings, the respondent - assessee was entitled to utilize the CENVAT credit available at its Pune unit.'
Thus, the entire demand which is contrary to the Provision of Rule 7 and the various judgments given on this issue, the demand is not sustainable - the impugned order is set aside - appeal is allowed.
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2024 (5) TMI 324 - CESTAT BANGALORE
Recovery of the cenvat credit wrongly availed along with interest and penalty - input services or not - Management Consultancy or Business Services - credit availed based on the invoices issued by M/s. Biocon Ltd. for mark-up fees / milestone fees against permanent services agreed to be provided - January 2009 to November 2012 - burden to prove on manufacturer.
The adjudicating authority has held that the permanent services include ineligible services like supply of electricity, back-up power, steam, supply of water, extending canteen facilities, Effluent Treatment Plant(ETP) charges, potable water supply charges, etc.; hence not input service; accordingly the mark-up fees / milestone fees paid to the Biocon Limited in connection with ineligible permanent services are not covered under the scope of Rule 2(l) of the Cenvat Credit Rules, 2004.
HELD THAT:- The reasoning of the adjudicating authority deserves to be rejected on two grounds: on going through the individual services i.e. supply of electricity, back-up power, steam, supply of water, extending canteen facilities, Effluent Treatment Plant(ETP) charges, potable water supply charges, etc. necessary for manufacturing activities and it cannot be said to have not been used in or in relation to the manufacture of finished excisable goods from the same premises, which was taken over by the appellant from Biocon Limited. Secondly, putting all these individual services under the taxable category of ‘Management Consultancy Services’ on which service tax paid by Biocon Limited and not objected to by the Department for the relevant period from 2009 to 2012 cannot be questioned in the hands of the receiver i.e. appellant while availing cenvat credit on the said taxable services.
This principle has been upheld by the Hon’ble Supreme Court in the cases of SARVESH REFRACTORIES (P) LTD. VERSUS COMMISSIONER OF C. EX. & CUSTOMS [2007 (11) TMI 23 - SUPREME COURT] and COMMISSIONER OF CENTRAL EXCISE & CUSTOMS VERSUS MDS SWITCHGEAR LTD. [2008 (8) TMI 37 - SUPREME COURT] which has been followed subsequently by this Tribunal in a series of cases - it was held in the case of MDS SWITCHGEAR LTD. that 'A quantum of duty already determined by the jurisdictional officers of the supplier unit cannot be con tested or challenged by the officers in charge of recipient unit.'
There are no reason to deny the cenvat credit availed by the appellant on Business Support Services received against Support Services Agreement dated 18.07.2007 on which service tax paid by M/s. Biocon Limited under the Management Consultancy Services during the said period - the impugned order is set aside.
Appeal allowed.
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2024 (5) TMI 273 - CESTAT CHENNAI
Classification of goods - Sulphuric Acid, used in the manufacture of Agricultural Grade Zinc Sulphate - classified as fertiliser under Chapter 31 of CETA or classifiable under 28332990 of CETA - benefit of exemption N/N. 04/2006-CE (Sl.No. 32) dated 01.03.2006 - HELD THAT:- The appellants have relied on the decision in the case of PUNJAB MICRO NUTRIENTS LTD. VERSUS COLLECTOR OF C. EX. [1990 (4) TMI 122 - CEGAT, NEW DELHI] in support of their contention that the benefit of exemption Notification No. 04/2006-CE dated 01.03.2006 is available for procuring Sulphuric Acid without payment of duty.
The ratio of the above decision has been followed in the case of Himgiri Metal Pvt. Ltd. Vs. Commissioner of Central Excise, Meerut-I [2014 (12) TMI 1030 - CESTAT NEW DELHI] where it was held that 'The only requirement in the present Notification which was also introduced in the previous Notification by way of including Explanation is to explain the meaning of fertilizer. It stands mentioned in the Explanation that fertilizer shall have the meaning assigned to it under Fertilizer (Control) Order, 1985.'
In Jyothi Chemicals & Fertilisers [2023 (8) TMI 1141 - SC ORDER], the plea raised by appellant that Zinc Sulphate (agricultural grade) is known as fertiliser in common parlance was not considered as the said plea was not raised by appellant therein before earlier forums.
Appreciating the ratio of the above decisions as applicable to the facts obtaining in these appeals, the impugned Order cannot sustain and ordered to be set aside - appeal allowed.
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2024 (5) TMI 272 - CESTAT NEW DELHI
Re-quantification of interest (on the refund of the pre-deposit) payment to the appellant - relevant time - interest to be paid from the date of deposit of the amount or from three months from the date of communication of the order? - HELD THAT:- The pre-deposit has been made by the appellant during February/March 2006 and May 2013. During the relevant period, Section 35(FF) of CEA, 1944, as reproduced above, laid down for payment of interest on delayed refund of pre-deposit only after the expiry of three months from the date of communication of the order of the appellate authority, till the date of refund of such amount. There is no dispute that the said impugned order was passed after the amendment in Section 35FF ibid, but it has to be borne in mind that in terms of proviso below amended Section 35(FF) of CEA, 1944, the payment of interest on pre-deposit made prior to 06.08.2014 has to be governed by pre-amended Section 35(FF) of CEA, 1944 only.
It is also that CESTAT, being a creature of the statute, cannot traverse beyond the provisions of the Statute. This view has been held in a catena of decisions viz., M/S. KALI AERATED WATER WORKS REPRESENTED BY ITS PROPRIETOR K.P.D. RAJENDRAN VERSUS THE CUSTOMS EXCISE AND SERVICE TAX, THE COMMISSIONER OF CENTRAL EXCISE NGO 'A' COLONY, TIRUNELVELI [2022 (11) TMI 795 - MADRAS HIGH COURT]. This view is resonated in similar other decisions viz., M/S VEER OVERSEAS LTD. VERSUS CCE, PANCHKULA [2018 (4) TMI 910 - CESTAT CHANDIGARH], AJAY EXPORTS VERSUS COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI [2015 (12) TMI 996 - CESTAT MUMBAI] and MAA MAHAMAYA INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX VISAKHAPATNAM-I, COMMISSIONERATE [2014 (11) TMI 747 - ANDHRA PRADESH HIGH COURT]. Accordingly, the provisions regarding payment of interest as provided in the Central Excise Act, 1944 shall prevail, and the Tribunal cannot intervene in this regard.
There are no infirmity in the impugned order - appeal dismissed.
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2024 (5) TMI 271 - CESTAT ALLAHABAD
Principles of Res-judicata - suo-moto re-credit taken instead of filing refund application - Refund of amount of duty deposited by the Appellant under the unamended Section 35F of CEA - eligibility for exemption under Notification No. 6/2006-CE dated 01.03.2006 - HELD THAT:- Both the parties agreed that in earlier round of litigation, this Tribunal in SARASWATI ENGINEERING LIMITED VERSUS COMMISSIONER OF CGST & CENTRAL EXCISE, KANPUR [2021 (8) TMI 1144 - CESTAT ALLAHABAD] decided the Appellant’s entitlement to interest for the period starting from the date of deposit till its realization. Both the parties are also ad-idem to the fact that the said order dated 04.08.2021 was not challenged further. Once this is so, the said order dated 04.08.2021 attained finality between the parties and the Assistant Commissioner was bound by the said order. The impugned order of the Commissioner (Appeals) taking a contra view on the issue of entitlement and period of interest, is therefore contrary to the principle of judicial discipline as enunciated by the Hon'ble Supreme Court in UNION OF INDIA VERSUS KAMLAKSHI FINANCE CORPORATION LTD. [1991 (9) TMI 72 - SUPREME COURT], wherein the Hon’ble Supreme Court was pleased to hold 'the mere fact that the order of the appellate authority is not “acceptable” to the department — in itself an objectionable phrase — and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws.'
It is also found that the direction in the impugned order directing the adjudicating authority to decide the issue of entitlement to interest afresh, is also barred by principle of res judicata, as the said issue was conclusively decided in order dated 04.08.2021 and therefore the parties cannot be allowed to re-agitate the said issue again.
Further, it is a settled law that once an order has not been challenged before the appropriate authority, it cannot be reopened and challenged in collateral proceedings subsequently by the same authority - the impugned order violates principle of judicial discipline and is liable to be set-aside on this ground alone.
The impugned order is set aside and the appeal is allowed.
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2024 (5) TMI 206 - CESTAT ALLAHABAD
Territorial jurisdiction to Grant Refund - Authorities at Noida or the Assistant Commissioner, Ghaziabad, had the jurisdiction to grant refund of the duty paid - Refund of excess duty in cash - price variation clause - HELD THAT:- The present litigation attained finality with the order of this Tribunal being Final Order No.A/70802/2016-EX[DB] dated 10.06.2016 [2016 (11) TMI 1203 - CESTAT ALLAHABAD]. Subsequently, an appeal was filed by the Commissioner, GST Noida before this Tribunal against the Order-In-Original No.R-373/D-III/GZB/2016-17 dated 19.01.2017 and the same was dismissed by the Tribunal in COMMR., CENTRAL TAX (CENTRAL GOODS & SERVICE TAX) , NOIDA VERSUS M/S. TTL LTD. [2019 (7) TMI 2018 - CESTAT ALLAHABAD]. Thus, cash refund of the entire amount already paid to the Appellant has attained finality as no further appeal before any of the superior courts has been filed by the Revenue.
The factory of M/s TTI Ltd. was located in Ghaziabad. Hence the territorial jurisdiction over the factory was of the Assistant Commissioner, Ghaziabad Division and not the Assistant Commissioner, Noida. Clearances of electric meters took place in Ghaziabad Division and the Central Excise duty was also paid in that Division. Hence, refund of the excess duty paid in Ghaziabad Division was to be sanctioned by the jurisdictional Assistant Commissioner, Ghaziabad. Initially refund claims were rejected by the Assistant Commissioner, Ghaziabad - While jurisdiction of the Commissioners is specified by the Government / Board by issue of a notification., no such notification is issued in case of the Assistant Commissioners of the Division, whose jurisdiction is determined with respect to the location of the factory. M/s TTL Ltd., Ghaziabad surrendered their Registration Certificate to the Assistant Commissioner, Ghaziabad on 09.03.2009 on merger with M/s QRG Enterprises Ltd. Order-in-Original dated 19.01.2017 was passed by the Assistant Commissioner, Ghaziabad after surrender of the certificate.
The refund was rightly sanctioned by the Jurisdictional Commissioner, Ghaziabad who was having jurisdiction over the factory premises located in Ghaziabad at the appropriate time in which disputed duty was paid which was to be refunded.
The impugned order cannot be sustained and the same is set aside - Appeal allowed.
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2024 (5) TMI 195 - CESTAT KOLKATA
CENVAT Credit - services utilized for setting up plant for manufacturing of finished products which started with effect from September 2015 - amendment in Rule 2 (l) of CCR, 2004 with effect from 01/04/2011 and the word “setting up” was removed because of which Cenvat Credit cannot be taken for the services used towards setting up of the factories - suppression of facts or not - extended period of limitation - HELD THAT:- There is no dispute that the Appellant is manufacturing goods which were exigible to Excise Duty payment when they are cleared from their factory. They have taken the Cenvat Credit on various input services which have been used before they commenced the manufacturing activities.
The issue is no more res-integra. This Bench in the case of Texmaco UGL Rail (P) Ltd, [2019 (7) TMI 1651 - CESTAT KOLKATA] has held 'the amendments have been made in the definition of input services effective from 1 stApril, 2011 to specifically exclude input services in forms of works contract or construction services used in relation to building or civil structure or part thereof. It also excludes similar services used for laying of foundation or making of structure for support of capital goods. Thus, the intention of legislature was to restrict input tax credits on above services, which are used during factory set up and hence the term “setting up” was removed from the earlier definition having specific exclusion clause in the new definition.'
There are substantial force in the Appellant’s submission that when they were taking the Cenvat Credit and reflecting the same in the ER-1 Returns during the period 2012 to 2015, the Department was very much aware that they were taking the Cenvat Credit for various input services. The Department was aware that till September 2015, they were not manufacturing the goods, nor clearing the same. Therefore, the Appellant cannot be fastened with the liability of suppression.
The confirmed demand for the extended period is also hit by time bar. Therefore, the Appeal stands allowed even on account of limitation.
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2024 (5) TMI 194 - CESTAT AHMEDABAD
Valuation - inclusion of freight and/or insurance charges is includable in the assessable value of excisable goods - sale of goods is on ex-factory basis - HELD THAT:- It is observed from the sale invoices of the appellant that the sale is ex-factory as clearly mentioned in the invoice and freight and /or insurance were charged separately. In this fact the freight and /or insurance is not includable in the assessable value as held by this Tribunal in the case of Gujarat Fluorochemicals Ltd [2024 (1) TMI 883 - CESTAT AHMEDABAD] wherein this Tribunal has held that 'freight charges are not to be included in the assessable value.'
From the above decision of this Tribunal, it can be seen that the facts in the present case and the case referred above is identical. Accordingly, the ratio of the above judgment is directly applicable in the present case. Hence, issue is no longer res-Integra.
Thus, freight and/or insurance is not includable in the assessable value. Consequently, demand of duty on this count is not sustainable - the impugned order is set aside - appeal allowed.
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2024 (5) TMI 193 - CESTAT CHENNAI
Excisability of waste product - Requirement to pay the duty at the prescribed rates on the value of exempted goods namely Bagasse and Press Mud - HELD THAT:- The issue has already been decided by us in the case of M/S. PONNI SUGARS ERODE LTD. VERSUS THE COMMISSIONER OF GST & CENTRAL EXCISE, SALEM [2024 (5) TMI 3 - CESTAT CHENNAI] where it was held that 'impugned demand cannot sustain since Press mud is no different from Bagasse, which is also a waste product, which is also a result of the manufacturing process of a different product and, consequently, the impugned demand cannot sustain.'
Thus, the present demand against the appellant cannot sustain - the impugned order set aside - appeal allowed.
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2024 (5) TMI 192 - CESTAT NEW DELHI
Refund of Cenvat credit availed on Education Cess and Higher Secondary Education Cess carried forward as on the appointed day i.e. 30.06.2017 in terms of Section 142(3) of the CGST Act 2017 - Section 11B of Central Excise Act, 1944 read with 142(3) of the Central GST Act 2017 - violation of principles of natural justice - time limitation - HELD THAT:- Cess is commonly employed to connote a tax with a purpose or a tax allocated to a particular thing suggested by the name of the cess. In the present case, it is related to education. Cess is generally for such levy which is for some special administrative expense as shall be suggested by the name of the cess. Education cess was levied by virtue of Finance Act No. 2 of 2004 in Section 92 to 94 thereof to be charged as a duty of excise with an objective to fulfill commitment of the government to provide a finance universalized quality basic education.
No doubt the Cess are the part of the excise duty - the levy of EC and SHEC was however dropped and deleted by the Finance Act, 2015.
Whether the cess are cenvitable? - HELD THAT:- The definition of 'eligible duties and taxes' as per the explanation 3 under Section 140 of the CGST Act, 2017 was amended with retrospective effect from 01.07.2017 whereby it is specified that cesses are excluded from the definition of 'eligible duties and taxes', Thus, the credit is ab initio not available for utilization for GST. In view of the above, cesses are not be transitioned through TRAN-1, as per the transitional provisions specified under CGST Act, the credit balances not transitioned to GST regime shall lapse, and, as such, the argument of the appellant the impugned credits never lapse, as there is no provision retaining the same is not sustainable. The appellant cannot circumvent the said legal provision through the route of 142 (3) of the CGST Act.
As the amount of Cenvat credit balance of E. Cess & SHE Cess of Rs.7,97,27,333/- (of which refund had been filed by the appellant) was included in the carried forward amount by the appellant as on the appointed day i.e. 01.07.2017, in terms of Section 142(3) of the CGST Act 2017, refund of the same is not admissible to the appellant. Thus, it is clear that “taking” of the input credit in respect of Education Cess and Secondary and Higher Educatiion Cess in the Electronic Ledger after 2015, after the levy of Cess itself ceased and stopped, does not even permit it to be called an input Cenvat credit and therefore, mere such accounting entry will not give any vested right to the Assessee to claim refund of the said amount - there is no error when Commissioner (Appeals) has held that there is no provision in the Cenvat Credit Rules, 2004 or in Central Excise Act, 1944 to allow cash refund of cesses lying in he balance in Cenvat credit. Once it is not allowable, question to refund the same does not arises mere transitioning it to TRAN-1 shall not create any light to what was not allowable.
Violation of principles of natural justice - HELD THAT:- The appellant had filed the written submissions dated 02.01.2020 before original adjudicating authority. Personal hearing was also attended. There is no denial that notices of hearing were issued by Commissioner (Appeals) as well. Though appellant could not appear before him, without going into the plea by receipt of those notices, it is observed that Commissioner (Appeals) has duly considered the appellant’s reply dated 03.12.2017 and all the grounds of appeal taken by appellant. Hence it is not agreed that principles of natural justice have been violated.
Time limitation - HELD THAT:- There are no reason to differ from the findings arrived at in the impugned order.
Appeal dismissed.
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2024 (5) TMI 191 - CESTAT KOLKATA
Refund claim - Can refund be claimed without opting of provisional assessment? - Reduction in price subsequently resulting in payment of duty in excess - time limitation - Section 11B of the CEA, 1944 - HELD THAT:- The word “may” is used interchangeably with “shall” and does not necessarily mean that the word “may” used cannot be read as “shall”. If the Learned Advocate‟s contention is taken as correct, that would mean that the refund claim can be made even after many years since no specific mention has been made that the refund claim should be made within one year. This would make the time specified under Section 11B (1) otiose.
On going through the orders of the lower authorities, it is found that they have passed a detailed and considered Order wherein they have rejected the refund claim solely on the ground of time bar. There are no reason to interfere with the same.
Accordingly, the present Appeal is dismissed.
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2024 (5) TMI 190 - CESTAT AHMEDABAD
Refund of CVD/SAD paid - unable to avail and utilize the credit of CVD/SAD paid by them as payment was made on 30.09.2020 when no provision exist in GST regime to avail such credit - rejection of refund on the ground that at the time of payment of CVD and SAD, Cenvat Credit Rules were not exist, therefore neither the appellant can take the Cenvat credit nor the same is eligible for the refund - Section 11B of the Central Excise Act, 1944 - HELD THAT:- In the present case, the refund was made under the existing law i.e. section 11B of Central Excise Act, 1944 accordingly, the refund of SAD/CVD paid by the appellant which was cenvatable at the time when the said duty was payable, It is clearly eligible for refund under Section 11B read with Section 142(3) of CGST Act, 2017. Therefore, the appellant are legally entitled for the refund of CVD/ SAD.
The Revenue has filed the appeal on the sole ground that the adjudicating authority has rejected the claim relying on the Single Member Bench decision in the case of this Tribunal decision in the case of Sarvo Packaging Ltd. There are number of judgments by this Tribunal itself which are contrary to the decision of M/S. SERVO PACKAGING LIMITED VERSUS COMMISSIONER OF G.S.T. AND CENTRAL EXCISE, PUDUCHERRY [2020 (2) TMI 353 - CESTAT CHENNAI]. Moreover, even after considering the Sarvo Packaging Limited decision, the Tribunal’s Single Member Bench in the case of SRI CHAKRA POLY PLAST INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL TAX MEDCHAL – GST [2024 (1) TMI 927 - CESTAT HYDERABAD] after relying upon many other decision came to the conclusion that the appellant are entitled for the refund under Section 142(3) of CGST Act, therefore, the decision of Sarvo Packaging Limited stand departed.
The impugned order is upheld. Revenue’s appeal is dismissed.
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2024 (5) TMI 189 - CESTAT BANGALORE
CENVAT Credit - requirement to pay 10% of the value of the excisable goods cleared to a SEZ developer in terms of Rule 6(3)(i) of CENVAT Credit Rules, 2004 - non-maintenance of separate records - HELD THAT:- There is no dispute about the fact that during the disputed period, the appellant had cleared furnitures against ARE-1 and raised proper invoices to SEZ developers without payment of duty.
It is found that applicability of Rule 6(2) of the CENVAT Credit Rules, 2004 for clearances to SEZ developers is no more res integra being covered by the judgment of the Hon’ble Karnataka High Court in the case of THE COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX AND THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S FOSROC CHEMICALS (INDIA) PVT LTD AND OTHERS [2014 (9) TMI 633 - KARNATAKA HIGH COURT]. Interpreting Rule 6 of the CENVAT Credit Rules, 2004 in the context of Notification No.50/2008-CE(NT) dt. 31.12.2008 whereby the earlier Rule 6(6)(i) has been amended as “cleared to a unit in a special economic zone or to a developer of a special economic zone for their authorised operations” w.e.f. 31.12.2008 held that the same is retrospective operation.
The said judgment has been followed by the jurisdictional High Court in subsequent judgments COMMISSIONER OF C. EX., BANGALORE-III VERSUS ELINS SWITCH BOARDS PVT. LTD. [2014 (10) TMI 1066 - KARNATAKA HIGH COURT] and COMMISSIONER OF CENTRAL EXCISE BANGALORE-III, VERSUS M/S. LOTUS POWER GEARS (P) LTD. [2016 (6) TMI 998 - KARNATAKA HIGH COURT]. In Lotus Power Gears’s case, the Hon’ble High Court further observed that the judgment of the jurisdictional High Court is to be followed even a SLP has been filed before the Hon’ble Supreme Court against the earlier judgment as there is no stay granted by the Hon’ble Supreme Court.
The impugned order is set aside - Appeal allowed.
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2024 (5) TMI 126 - CESTAT AHMEDABAD
Benefit of nil rate of duty in terms of Notification No. 23/1998-CE dated 01.08.1998 as amended - clearance of newsprint - Non-compliance with the conditions of Notification No. 23/1998-CE dated 01.08.1998 - clearance of goods to the unregistered depots which cannot be defined as “place of removal” - finished goods have not been cleared against purchase order as required under the Notification - HELD THAT:- The first requirement is that the subject goods must be intended for newspapers. It is not the case of the department in the show cause notice that the goods are not intended for printing of newspapers - all the conditions of chapter heading 4801 of note 4 to chapter 48 and notification issued thereunder i.e. 23/1998-CE dated 01.08.1998 stands complied with. Therefore, merely because first the goods were cleared from factory to godown and then to newspaper, the conditions of the notification does not stand contravened.
Similar issue has been considered by this Tribunal in the case of SRI VENKATESA PAPER & BOARDS LTD. VERSUS COMMISSIONER OF C. EX., MADURAI [2008 (7) TMI 169 - CESTAT, CHENNAI] where it was held that 'The expression “supplied against a purchase order placed upon such manufacturer by a newspaper” does not necessarily mean that the manufacturer should supply newsprint directly to a newspaper. What was intended by the amendment was that the supply of newsprint to a newspaper must be against a purchase order placed by the latter. It could either be direct or through a depot.'
It is also observed that the factory is the place of removal as per Section 4 of Central Excise Act, 1944, however, at the same time any other place from where the goods is sold after removal from the factory, the said place is also a place of removal. Therefore, whether the goods are sold from the factory or from any other place from where the goods were sold, both are statutorily considered as place of removal. Therefore, the goods sold from godown to newspaper after clearance from the factory will not take a different colour as far as the classification of goods under 4801 read with Notification No. 23/1998-CE.
Thus, nil rate of duty is rightly and legally available to the appellant - the impugned order is set aside - appeal allowed.
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2024 (5) TMI 125 - CESTAT NEW DELHI
Short payment of Central Excise Duty - mis-declaration of value of the goods cleared to BSE - clearance of some used capital goods on commercial invoices without paying the central excise duty - confirmation of demand on the wrong presumption that central excise duty is to be levied on the amounts received - HELD THAT:- The constitutional mandate of the Union to levy excise duty and also the charging section under the Central Excise Act clearly provide for levy of excise duty only on goods manufactured or produced in India. The measure of tax could be based on the quantity or value and in most cases, it is based on the value.
Duties of excise become payable on removal of goods (Rule 2 of the Central Excise Rules, 2002) and have to be paid by the sixth day of the following month (Rule 8). This payment is not contingent on the receipts for the goods removed and sold. The amounts may be paid in that month, in advance or much later. Regardless of when the payment is received or not received, duty becomes payable on removal and has to be paid by the sixth day of the following month - Form 26AS is system generated by the Income tax portal as a compilation of all the amounts paid by various persons and the TDS deducted from the assessee during the financial year.
There is no contrary overriding provision in the Central Excise Act. Therefore, section 102 of the Evidence Act applies and in case of Show Cause Notices issued under Central Excise Act, the burden of proof lies on the Revenue because if no evidence is provided by either side, the SCN fails. Therefore, it was not for the appellant to reconcile the documents and produce evidence but it was for the Revenue to establish that some excise duty escaped assessment and has to be paid.
This demand of central excise duty on the capital goods sold by the appellant (which were not manufactured by it at all) is beyond the scope of the charging section 3 of the Central Excise Act and also beyond the legislative powers of the Union as per entry 83 of List 1 of the Seventh Schedule of the Constitution - the SCN, the OIO and the impugned order were issued under the incorrect understanding of law that central excise duty could be levied on payments received (whether or not they were related to the excisable goods manufactured or produced and sold) and on goods sold through commercial invoices (even if they were not manufactured or produced).
The impugned order, therefore, cannot be sustained and needs to be set aside - Appeal allowed.
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2024 (5) TMI 124 - CESTAT MUMBAI
Refund of unutilized input credit - inputs and/or input services used in the export of goods or services as provided under Rule 5 of CENVAT Credit Rules, 2004 read that Notification No. 5/2006-C.E. (N.T) dated 14.03.2006 - period January, 2009 to March, 2009 - HELD THAT:- In view of the detailed examination of the all five conditions of Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No. 5/2006-C.E. (N.T) dated 14.03.2006, in the context of factual matrix of the case, it is found that the appellant is eligible for refund of Cenvat credit of inputs availed during the quarter January, 2009 to March, 2009 after adjusting/deducting for the Cenvat credit utilized, thereby arriving at the correct amount of Cenvat credit on inputs which could not be utilized for payment of tax or duty as Rs.3,44,804/- (Rs.23,32,780/- minus Rs.49,87,976/-). Further, the amount of Cenvat credit of input services which could not be utilized and by restricting the same to the extent of ratio of export turnover to the total turnover as per the prescribed formula, the eligible Cenvat credit for refund is arrived at Rs.77,754/-. Thus, the total eligible amount of Cenvat credit refundable to the appellants is worked out as Rs.4,22,558/-, out of the total refund claim filed for an amount of Rs.13,37,072/-.
There are no merits in the impugned order dated 21.08.2018, insofar as the adjudged demands were confirmed on the appellant by the learned Commissioner (Appeals), upholding the order of the original authority and by rejecting the appeal filed by the appellant.
The adjudged demands confirmed on the appellants being ineligible refund of Cenvat credit and rejection of eligible refunds, in the impugned order dated 21.08.2018 is liable to be set aside. The eligible refund of Cenvat Credit in terms of Rule 5 of CENVAT Credit Rules, 2004 read with Notification No. 5/2006-C.E. (N.T) dated 14.03.2006 is re-determined as Rs.4,22,558/- - the impugned order is set aside - appeal allowed.
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2024 (5) TMI 67 - SUPREME COURT
Process amounting to manufacture - activity of labelling - Availing the cenvat credit of the duty paid by its Jammu unit - whether the labelling/re-labelling or putting additional labels on the containers in the Taloja unit amounted to manufacture in terms of Note 3 to Chapter 18 of the Central Excise Tariff Act? - suppression of facts or not - Extended period of Limitation.
While contention of the appellant is that the same does not amount to manufacture, on the other hand according to the respondent, as per Note 3 to Chapter 18 of the Central Excise Tariff Act, the above activity amounts to manufacture.
HELD THAT:- The word ‘manufacture’ includes any process which is incidental or ancillary to the completion of a manufacture product; any process which is specified in relation to any goods in the Section or Chapter notes of the First Schedule to the Central Excise Tariff Act as amounting to manufacture; or any process which in relation to the goods specified in the Third Schedule involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer.
By way of the amendment, the word ‘and’ has been replaced by the word ‘or’ between the expressions ‘labelling or re-labelling of containers’ and ‘repacking from bulk packs to retail packs’. Prior to 01.03.2008, the legislative intent was quite clear. The process to constitute manufacture should either be labelling or re-labelling of containers and repacking from bulk packs to retail packs. This process was construed to be one whole. In other words, the activity should not only include labelling or relabelling of containers but the same should relate to repacking from bulk packs to retail packs. This was one activity. The other activity was adoption of any other treatment to render the product marketable to the consumer. Therefore, the legislature was quite clear that if either of the two processes were followed, the same would amount to manufacture.
It is already noticed the definition of ‘manufacture’ in the Central Excise Act. Any one of the processes indicated in Note 3 to Chapter 18 of the Central Excise Tariff Act would come within the ambit of the definition of ‘manufacture’ under Section 2(f)(ii) of the Central Excise Act - There is no factual dispute as to the activity carried out by the respondent at its Taloja unit. Whether the goods are brought from the Jammu unit or are imported, those are relabelled on both sides of the packs containing the goods at the Taloja unit of the respondent and thereafter, introduced in the market or sent for export. In terms of Note 3 to Chapter 18, this process of re-labelling amounts to ‘manufacture’.
Appeal dismissed.
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2024 (5) TMI 66 - CESTAT CHENNAI
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - the declaration under the scheme cannot be processed as the conditions specified in Boards Instructions to manually process the declaration has not been fulfilled - HELD THAT:- SVLDRS was a ‘dispute resolution-cum-amnesty scheme’ launched with the objective of reducing litigation relating to legacy taxes so as to benefit compliant taxpayers settle their old cases. It was hence a beneficial scheme. The principle consistently held by Constitutional Courts in implementing such schemes is that when substantial justice is pitted against technical considerations, it would be always necessary to prefer the ends of justice.
It is pain to observe that the scheme which was meant for reducing litigation, appears to be driving the hapless applicants to continue to litigate even for implementing the scheme, for no fault on their part. Understandably, the scheme would apply only when a litigation is pending in appeal. To settle that dispute the tax payers would opt for the benefit of such a scheme so that they pay the tax as prescribed within the time frame provided and put an end to the litigation and buy peace of mind. But the attitude of the Department as could be seen from the present case, rather pushes the tax payer, pending one litigation, to approach High Court and obtain a direction, which is certainly not the design of any statute, not to speak of the SVLDRS.
The appellant is made to reach out to higher judicial forum incurring further expenses because of faults which are not attributable to him. The computer system not generating the required form-4 should not prove to be an expensive affair for the tax payer who opts for settlement, pays tax as demanded in time and thus discharges his burden but is denied substantive justice on technical ground and is forced into further litigation.
The respondent Department directed to manually process the request of the petitioner for issue of ‘Discharge Certificate’ within four weeks from the date of receipt of a copy of this order - appeal disposed off.
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2024 (5) TMI 65 - CESTAT HYDERABAD
Entitlement for refund of input credit in cash, which was neither transitioned in accordance with TRAN-1 (GST) procedure into the new regime nor got reflected in the ER-1 or revised ER-1 return post 01.07.2017 - whether the said refund could have been granted in accordance with the provisions of existing law or otherwise, except to the extent that the refund, if eligible, will still be admissible irrespective of any provisions contrary to this provision contained under the provisions of existing law, other than unjust enrichment?
HELD THAT:- The perusal of CCR, 2004 under the existing law clearly brings out that the refund of unutilized Cenvat credit can be made only for specific purpose covered under Rule 5, 5A and 5B, subject to certain prescribed/notified procedure, conditions and limitations etc., as may be specified or notified by notification in this regard. They have also admittedly not filed any revised ST-3 within the specified tax limit as would have been otherwise required under Section 142(9)(b).
Reliance placed by Revenue on the judgment of Hon’ble High Court of Jharkhand in the case of Rungta Mines vs CCE, Jamshedpur [2022 (2) TMI 934 - JHARKHAND HIGH COURT] is quite relevant to appreciate the scope of Section 142(3) of the Act. In this case, it was held that the provision of Section 142(3) does not entitle a person to seek refund where no such right occurs under the existing law or under new CGST regime in terms of provision of CGST Act and the rules framed and notification issued thereunder. Meaning thereby, Section 142(3) does not confer a new right, which never existed under the old regime to the manner of giving relief, if the person is not entitled under the existing law - The ratio of the aforesaid judgment is squarely applicable to the facts of the case, in so far as the interpretation of Section 142(3) of the Act is concerned. It must also be noted that a plain reading of this provision under the Act clearly supports this interpretation.
Relying on the judgment of Hon’ble High Court of Jharkhand in the case of Rungta Mines, it is found that when there was no provision for grant of refund in cash in respect of tax paid/credit taken in respect of such input in the existing law, i.e., the Central Excise Act and Cenvat Credit Rules, 2004, then the refund cannot be granted in cash in respect of such unclaimed/unutilized credit on input. The options available for getting cash refund are clearly covered within the different provisions under the Act viz., Section 140, 142(3) & 142(9)(b) - In the instant case, admittedly, neither Section 140 was followed nor Section 142(9)(b) was availed. Therefore, the cash refund, by virtue of Section 142(3) would not be admissible in the facts of the case.
There are no infirmity in the Order passed by the Commissioner (Appeals), upholding the rejection of refund in cash, amounting to Rs.14,40,627/- by the Original Authority - appeal dismissed.
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2024 (5) TMI 64 - CESTAT NEW DELHI
Levy of Personal Penalty on the Director of the company and Drivers of the trucks (transporters) - Penalties u/r 26 of CER - Abetment - Clandestine removal - gutka - evasion of duty - reasons to believe - non-application of mind - non-speaking order - HELD THAT:- It is true that the transporters and trucks drivers may or may not be very well educated. It is also a fact that every truck driver and transporter who transports commercial goods carries with him the Bill to cover the goods which he was transporting. Every driver takes this precaution because if there is a check by any authority on the way, he can show the Bills. Secondly, once the goods reach the destination he shows the Bills to the recipient and gets an acknowledgment that the goods in the Bills received. Therefore, no matter how less educated the driver might be, he will certainly know that he has to carry the goods only with the Invoice or Bill. Therefore, there are no force in the submissions of the appellant that the penalties imposed on them must be set aside.
The penalties imposed under rule 26 on the appellants upheld - Appeal allowed.
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