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Central Excise - Case Laws
Showing 241 to 260 of 80359 Records
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2024 (2) TMI 1016
Correctness of erasure of credit already availed by prospective invalidation of eligibility for retention of credit that would subject those services already procured and used in manufacture/rendering of services to the test of eligibility once again - deletion of rule 6(5) of CENVAT Credit Rules, 2004 with effect from 31st March 2011 - whether credit availed legally and validly up to 31st March 2011 is entitled to be carried forward in the books for subsequent utilization even if the enabling provision was erased from the Rules on that day?
HELD THAT:- The operation of law by erasure of rule 6(5) of CENVAT Credit Rules, 2004 could not impact the credit taken under rule 3 of CENVAT Credit Rules, 2004, at the time of procurement of the impugned services; nor is that entitlement thereof under challenge in the proceedings initiated by the notice issued to the appellant. Proceeding onward, the operation of erasure of rule 6(5) of CENVAT Credit Rules, 2004 would not impact credit relating to ‘inputs’ or ‘input services’, already consumed and not determined as attributable exclusively to production of exempted goods or exempted services as on date of erasure. The amendment was effected only for withdrawal of the privilege of exclusion from the general provisions of the rule 6 of CENVAT Credit Rules, 2004 that permitted retention of credit even after the factum of utilization in or deployment in exempted goods and exempted services become apparent. Consequently, the operation of rule 6(5) of CENVAT Credit Rules, 2004 did not, or does not, impact taking of credit but is only pertinent to the retention of credit and, being exclusion by special provision, would have to operate only with effect from the date on which such exclusion came into effect.
It is in this context that the decision of the Hon’ble Supreme Court in EICHER MOTORS LTD. VERSUS UNION OF INDIA [1999 (1) TMI 34 - SUPREME COURT] in SAMTEL INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR [2003 (3) TMI 121 - SUPREME COURT] and in COLLECTOR OF CENTRAL EXCISE, PUNE VERSUS DAI ICHI KARKARIA LTD. [1999 (8) TMI 920 - SUPREME COURT] must be seen i.e., non-operation of rule 3 of CENVAT Credit Rules, 2004 both at the threshold and at the time of utilization of the impugned goods/services. It is clear that the ‘vested right’ affirmed by the Hon’ble Supreme Court in re Eicher Motors Ltd clearly applies to the case of the appellant as there is no evidence that the impugned services had been utilized only after 31st March 2011.
The continued eligibility for credit cannot be curtailed or impacted - the impugned order does not sustain - appeal is allowed.
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2024 (2) TMI 1015
Levy of Automobile Cess - manufacture of Electrically Operated Vehicles named Yo–Bikes by assembling various Parts, components and Assemblies - exempt under N/N. 25/2008-CE - time limitation - suppression of facts or not - HELD THAT:- The appellant is assembling various parts and components in order to produce Yo-Bikes falling under the chapter heading 87 which qualifies for exemption vide Notification No. 25/2008-CE. Further it is observed that the Appellant has paid automobile cess upon being pointed out by auditors for the period February, 2010 to February, 2011 under protest only because the Appellant was under bona fide belief that their product does not qualify under the category of automobiles and thus they were not liable to pay cess for which they received no clarity from the department with respect to their liability. It is pertinent to note here that the department has taken no effort to establish any tests/ingredients as to why the product of the appellant will be classifiable as “automobile” for the levy of automobile cess and has simply taken the support of Notification 67/88 dated 09/01/1989 to levy automobile cess on the Appellant.
The entire demand for automobile cess has been raised from the Audit Objection and records maintained by the Appellant which goes on to show that the department never raised any objection regarding non–deposit of automobile cess even when the cess was paid by the Appellant under protest. Therefore it cannot be denied that the Department had enough time to investigate for the purpose of levy of cess.
Time limitation - HELD THAT:- The entire demand in this case is time barred as for the period 2008 – 09 to 2011 - 12 show cause was issued on 03.04.2013 which is not only beyond the period of normal limitation but also that the Department has incorrectly invoked extended period of limitation without sufficiently establishing ingredients to give effect to the same.
The demand is barred by limitation. The issue on merit is left open. Thus the impugned order is set aside - Appeal allowed.
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2024 (2) TMI 1014
Levy of penalty u/r 26 of the Central Excise Rules, 2002 - clandestine manufacture of Pan Masala - recovery of duty alongwith interest and penalty - HELD THAT:- The penalty under Rule 26 can be imposed if one is concerned in a manner indicated in the Rule with goods which were liable for confiscation or was in any way concerned such goods or any person who is connected with issue of invoices without delivering goods so as to enable the person to enable the other person to avail CENVAT credit incorrectly.
In this appeal, no penalty has been imposed with respect to the confiscation of the goods (first SCN). The second SCN was only concerned with recovery of duty. It is in this SCN, penalty of Rs. 10,00,000/- was imposed on the appellant under Rule 26. This Rule does not provide for imposing penalty on the ground that no excise duty was not paid or short paid.
In the first SCN, where there was confiscation of goods, no penalty was imposed on the appellant by the adjudicating authority and in the proceedings related to the second SCN, where duty is to be demanded, penalty was imposed under Rule 26 which is clearly beyond the scope of this Rule - Since there is no basis for imposing penalty on the appellant under Rule 26 in the second SCN (which neither involved confiscation of goods nor issue of invoices without supplying goods), the penalty cannot be sustained.
Appeal allowed.
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2024 (2) TMI 1013
Non-fulfillment of input output norms as per the allegation of the Department - defective PETs also should be considered as part of the output or not - Applicability of Note 2 of the SION - submission of the Appellant is that in the course of manufacture of PET even hypothetically speaking, no manufacture can produce 100% correct quality quantity of PET - time limitation - HELD THAT:- There are force in the Appellant’s contention that the Adjudicating Authority should have considered the defect PETs emanating in the course of their final manufactured product towards the SION fulfillment.
It is also seen from the records that Note 2 was issued by the Committee after proper verification of the technical details furnished by the Appellant. This Note 2 cannot be treated as a new norm prescribed for the future manufacture only. This simply prescribes the norms for normal production which are being carried out by the Appellant all along. Therefore, the Adjudicating Authority is in error in taking the stand that this Note 2 cannot be applied for the goods manufactured during the past period.
Time Limitation - HELD THAT:- So far as the Appellant’s submissions on limitation are concerned, there are force in the same. The Appellant was registered EOU and was filing the ER-2 and ER-5 Returns regularly and data contained in these Returns have been considered by the Department for issue of the Show Cause Notice. Therefore, allegation of suppression does not sustain. The Department has committed a grave error by issuing the second Show Cause Notice once again invoking the extended period.
It is surprising that the Adjudicating Authority has relied on the Nizam Sugar Factory Larger Bench decision, after this LB [1999 (10) TMI 123 - CEGAT, NEW DELHI] was overturned by the Hon’ble Supreme Court long ago in NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP [2006 (4) TMI 127 - SUPREME COURT]. In view of these facts, we hold that the confirmed demands cannot sustain for the extended period in respect of the both Show Cause Notices.
For the confirmed demand in respect of the normal period, (March 2009 to October 2009), the matter is remanded to the Adjudicating Authority to consider the following facts.
(i) Get the details of defective PET manufactured during this period and give the benefit of such quantities holding that they are part of the total manufactured quantity.
(ii) Consider the amendment brought in under Note 2 of the SION and give the benefit to the Appellant.
After considering these two issues, the net quantification is required to be done. If any demand is confirmed by the Adjudicating Authority after such re-quantification, the Appellant is required to pay the interest - Appeal disposed off.
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2024 (2) TMI 961
Permission to withdraw the petition - Maintainability of petition - availability of alternative remedy - HELD THAT:- Learned counsel for petitioner seeks leave to withdraw the petition, reserving the right of the petitioner to avail of appropriate remedies in law.
Petition is dismissed as withdrawn.
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2024 (2) TMI 960
Demand of unutilized carried forward Cenvat balance invoking the Rule 11(3) (ii) of the Cenvat Credit Rules, 2004 - denial of carrying forward of balance credit on the ground that the same shall stand lapsed as the appellant have opted for simultaneous benefits under notification no. 29/2004 & 30/2004-CE - HELD THAT:- As submitted the Appellant has maintained separate records, however the adjudicating authority without verifying the said fact demanded the Cenvat of unutilsed balance while opting for exemption notification No. 30/2004-CE by invoking the Rule 11(3)(ii) of Cenvat Credit Rules, 2004.
From the careful reading of the Rule 11(3), it makes clear that the sub Rule (3)(i) covers the goods that are exempt conditionally whereas sub Rule (3)(ii) would apply to those goods to which exemption under Section 5A of the Central Excise Act, 1944 is granted absolutely. The said rule provides that in any case, the Cenvat credit on stock of input lying in stock, in process and contained in finished goods needs to be reversed however, as regard the balance Cenvat credit after such reversal shall lapse only in a case where the exemption notification is absolute. In the present case, notification no. 30/2004-CE is not an absolute notification - Since the above condition contained in the notification No.30/04-CE, in such case in terms of clause (ii) of Rule 11(3) of Cenvat Credit Rules, 2004, the provision of lapsing of balance Cenvat credit will not be applicable. This issue has been considered in a catena of judgments which are cited by the appellant.
However it is observed that the lower authority confirmed the demand of unutilized carried forward Cenvat balance only invoking the Rule 11(3) (ii) of the Cenvat Credit Rules, 2004 but not properly verified the factual aspects such as whether appellant have reversed the credit in respect of stocks as provided under Rule 11(3)(i) of the Rules, 2004, the claim of the appellant maintaining separate records and not availing the Cenvat credit on the input used in the goods cleared under Notification No. 30/2004-CE, etc. therefore we are of the view that the matter needs to be reconsidered.
The impugned order is set aside. Appeals are allowed by way of remand to the adjudicating authority.
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2024 (2) TMI 959
Interest on refund of Education Cess - interest denied on the ground that the refund claimed was on account of pre-deposit whereas the principal amount was reversed by the appellant - HELD THAT: This Bench has considered the impugned issue in the case of M/S CADILA PHARMACEUTICALS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, JAMMU [2024 (2) TMI 668 - CESTAT CHANDIGARH] where the Bench observed If the Department is barred from raising demands for the refunds already granted, the appellants also cannot seek interest on the refunds already granted.
Hon’ble Apex Court in the case of COMMISSIONER OF CGST AND CENTRAL EXCISE (J AND K) VERSUS M/S. SARASWATI AGRO CHEMICALS PVT. LTD. [2023 (7) TMI 542 - SC ORDER] observed that the subsequent decision of this Court overruling M/S. SRD NUTRIENTS PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE GUWAHATI [2017 (11) TMI 655 - SUPREME COURT] in the case of M/S. UNICORN INDUSTRIES VERSUS UNION OF INDIA & OTHERS [2019 (12) TMI 286 - SUPREME COURT] cannot have a bearing on past decisions which had attained finality although they had followed SRD Nutrients (P) Limited, which was subsequently overruled in M/s Unicorn Industries. Otherwise, a pandora’s box would be opened and there would be no end to litigation, which is against public policy.
The appellants have not made out any case for grant of refund - Appeal dismissed.
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2024 (2) TMI 958
Recovery of of erroneously availed refund under Section 11A of the Central Excise Act, 1944 along with interest under Section 11AB of the Act and also imposed equivalent penalty under Section 11AC of the Act - failure to comply with the substantive condition of N/N. 56/2002-CE dated 14.11.2002 requiring utilization of available credit before payment of duty from the PLA - appellant have received certain inputs by virtue of which Cenvat Credit was available to them, was never disclosed to the department till its detection by the department - suppression of facts with intent to avail exemption by way of irregular refund - time limitation.
Whether the ground on which the refund has been denied is legally sustainable or not? - HELD THAT:- The appellant have in fact complied with the conditions of the Notification No. 56/2002-CE dated 14.11.2002 and in terms of conditions of the Notification, the appellant had utilized the entire amount of Cenvat Credit lying in their Cenvat Credit account and thereafter, balance amount was paid through PLA and accordingly, claimed the refund of such amount of the duty. Further, it is seen that the appellant have not availed the Cenvat Credit on furnace oil under bonafide belief that the same is not available, but the learned Commissioner has drawn the conclusion that the Cenvat Credit was not availed with intention to claim excess refund.
The learned Commissioner failed to appreciate that had there been the balance in their Cenvat Credit account, the appellant could not have paid the duty through PLA. The learned Commissioner has also wrongly interpreted the meaning of the expression ‘Cenvat Credit available to the appellant on the last day of month’ used in the Notification No. 56/2002-CE. In this regard, it is to be noted that when the manufacturer receive the inputs/capital goods, subject to fulfillment of other conditions, the Cenvat Credit pertain to the said inputs/capital goods would accrue to them but would not automatically be available in the Cenvat Register, but when the manufacturer took the Cenvat Credit in the Cenvat Register, at that time it can be said that the credit is available to the appellant.
It is pertinent to mention that para 1A of the said Notification provides the utilization of Cenvat Credit which comes into existence only after making entry in the Cenvat Credit account and till that time, it is not a Cenvat Credit. Further, the refund sanctioning authority also examined the Cenvat Credit account before sanctioning the refund and the refund will only be sanctioned of the duty paid in cash/through PLA after utilization of Cenvat Credit for the relevant month as per the condition of the Notification. It is the common practice that self credit /refund claimed on duty paid in cash/through PLA, is allowed after considering the balance of Cenvat Credit available/lying in the Cenvat Register on the last day of the month.
It is further found that in the present case, it is not the stand of the Department that it has sanctioned/approved, refund of duty which was not paid by the appellant, but this is the case, in which the Department has sanctioned refund equal to the amount which was paid by the appellant in cash or through PLA, therefore, it cannot be said that this is a case of excess availment of refund by not complying with the condition of the said Notification.
Time Limitation - Suppression of facts or not - HELD THAT:- It cannot be understood that how in the facts of the present case, suppression can be alleged. If the appellant could have availed Cenvat Credit on inputs i.e. furnace oil, then, they would not have paid more duty in cash and would have claimed refund of lesser amount, whereas, in fact in this case, the appellant have paid the duty in cash/through PLA and thereafter claimed refund and hence, entire transaction is revenue neutral and therefore, extended period is not invokable in the present case. Accordingly, the demand is barred by limitation.
The impugned order is not sustainable in law and same is set aside - appeal allowed.
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2024 (2) TMI 957
CENVAT Credit - manufacturer of dutiable goods and conditionally/partially exempted goods - failure to properly bifurcate the input services, they have taken the Cenvat Credit towards the entire input services received - reversal of proportionate Cenvat Credit in respect of the input service used in the manufacture of partially exempted goods - demand of differential duty in respect of the partially exempted goods, i.e. normal rate of duty less 1% or 2% Excise Duty already paid by the Appellant - HELD THAT:- The issue is squarely covered by the case law of HELLO MINERALS WATER (P) LTD. VERSUS UNION OF INDIA [2004 (7) TMI 98 - ALLAHABAD HIGH COURT], wherein it has been held reversal of Modvat credit amounts to non-taking of credit on the inputs. Hence the benefit has to be given of the notification granting exemption/rate of duty on the final product since the reversal of the credit on the input was done at the Tribunal’s stage.
Prior to this, the Hon’ble Supreme Court in the case of CHANDRAPUR MAGNET WIRES (P) LTD. VERSUS COLLECTOR OF C. EXCISE, NAGPUR [1995 (12) TMI 72 - SUPREME COURT] has held we see no reason why the assessee cannot make a debit entry in the credit account before removal of the exempted final product. If this debit entry is permissible to be made, credit entry for the duties paid on the inputs utilised in manufacture of the final exempted product will stand deleted in the accounts of the assessee. In such a situation, it cannot be said that the assessee has taken credit for the duty paid on the inputs utilised in the manufacture of the final exempted product under Rule 57A.
Thus, the demand on the above is set aside.
Cenvat Credit taken towards GTA Services backed up by proper documents - HELD THAT:- Matter remanded to the Adjudicating Authority. The Appellant is directed to submit all the documentary evidence.
The Adjudicating Authority should follow the principle of natural justice and decide the issue within four months from the date of communication of this order - All the penalties on the Appellants and on the co-noticee, Mr. Satish Agarwal are set aside - Appellant is required to pay the confirmed demand, if any, on account of Cenvat taken on GTA Services, along with interest. However, the penalty on the same is set aside - appeal allowed in part and part matter on remand.
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2024 (2) TMI 956
Clandestine manufacture and removal - allegation proceeds on the assumption that the differential consumption between ER-4 and ER-6 Returns has resulted in manufacturer of 1,48,942 MT of consumable steel, which has not been accounted for by the Appellant - time limitation - HELD THAT:- No corroborative evidence whatsoever has been produced by the Revenue to fortify the allegation.
On going through the OIO, it is seen that the Adjudicating Authority has held Considering the practical difficulties, in estimating the actual stock and in view of the submissions made by the appellants, we find that the demand of duty made by the adjudicating authority cannot be sustained - there are no reason to interfere with such detailed findings. Accordingly, we dismiss the Appeal filed by the Revenue on merits.
Time Limitation - HELD THAT:- Coming to the issue of limitation raised by the Respondent, it is found that neither have they filed any appeal against the impugned OIO on this specific issue nor have they filed any Cross Objection against the Appeal filed by the Revenue on the issue of time bar. Therefore, this issue need no further discussion.
The Revenue’s Appeal is dismissed on merits.
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2024 (2) TMI 955
Contravention of provisions of Rule 8(3A) of the Central Excise Rules, 2002 - liability of penalty under Rule 25 of the said Rules read with Section 11AC of the Central Excise Act, 1944 - assessee has continued to clear excisable goods availing the facility of duty payment on installment basis not resorting to consignment-wise payment of duty from Account Current - HELD THAT:- The question involved in the matter, is no more res integra and has been decided by this tribunal in the case of PRINCIPAL COMMISSIONER OF C. EX., DELHI-I VERSUS SPACE TELELINK LTD. [2017 (3) TMI 1599 - DELHI HIGH COURT], M/S. SUPERMAX PERSONAL CARE PVT. LTD. VERSUS COMMISSIONER OF CE & ST, LTU, MUMBAI [2022 (7) TMI 920 - CESTAT MUMBAI] and ANDHRA CYLINDERS PVT LTD, NALIN KHARA, MANAGING DIRECTOR VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, HYDERABAD – I [2020 (1) TMI 189 - CESTAT HYDERABAD] where it was held that Undisputedly appellants have paid the defaulted duty for the month of January 2013, by making a debit entry in the CENVAT Account on 26.03.2013. Even if this debit was to be considered as not a valid payment of duty, then also the Appellant could not have been proceeded against for the clearances made after 26.03.2013, in terms of Rule 8 (3A).
The Hon’ble Calcutta High Court in the case of M/S. GOYAL MG GASES PVT. LTD VERSUS UNION OF INDIA & OTHERS [2017 (8) TMI 1515 - CALCUTTA HIGH COURT], categorically held that when Rule 8(3A) is declared ultra vires by the different High Courts then the Revenue cannot take a different stand contrary to the said judgements. The Hon’ble Court further declared Rule 8(3A) as invalid. This order of the Hon’ble High Court has not been stayed by the Hon’ble Supreme Court.
As the Appellants have made good the shortfall in duty along with interest and there is no outstanding liability on account of shortfall in duty payments, the fact that various High Courts including the Calcutta High Court have held Rule 8(3A) of the Central Excise Rules as ultra vires, there are no merit in the Department’s plea of subjecting the appellant to any penal consequences - the impugned order imposing penalty under Rule 25 of the Central Excise Rules read with Section 11AC cannot be thus sustained and the Appeal therefore is required to be allowed.
Appeal allowed.
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2024 (2) TMI 954
Availment of cenvat credit - Ferro Manganese Slag and Silico Manganese Slag received by the appellant from the supplier upon payment of duty - whether the said goods are exempt goods or not - HELD THAT:- It is observed that the impugned issue came up before the Hon’ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE & CUSTOMS VERSUS MDS SWITCHGEAR LTD. [2008 (8) TMI 37 - SUPREME COURT], wherein the Hon’ble Apex Court has held The rules entitled the receipt manufacturer to avail of the benefit of the duty paid by the supplier manufacturer. A quantum of duty already determined by the jurisdictional officers of the supplier unit cannot be contested or challenged by the officers in charge of recipient unit - The issue is settled in favour of the appellant and is no more res-integra.
The appeal filed by the appellant is hereby allowed and the orders of the lower authorities are set aside.
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2024 (2) TMI 906
Recovery of excise duty, which got extinguished on approval of resolution plan - HELD THAT:- The NCLT, Chennai has approved Resolution Plan vide its order No.25/27-June 2019. The Hon'ble Supreme Court in the case of GHANASHYAM MISHRA AND SONS PRIVATE LIMITED THROUGH THE AUTHORIZED SIGNATORY VERSUS EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR & ORS. [2021 (4) TMI 613 - SUPREME COURT] has held that all dues including the statutory dues owed to the Central Government any State Government or any local authority including tax authorities, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the adjudicating authority grants its’ approval under Section 31 of IBC can be continued. It is also stated that the Department has not made any claim before the Corporate Insolvency Resolution Process in respect of the demands arising out of the orders impugned in these three appeals.
Since the Resolution Plan has been approved, as per para 8 of the Resolution Plan, all claims shall stand irrevocably and unconditionally settled, discharged and extinguished in perpetuity.
Appeal dismissed.
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2024 (2) TMI 905
Clearance of goods in the nature of ceramic fiber board and ceramic fiber twisted rope - goods are used for insulating the furnaces /Kilns - benefit of N/N. 33/2005-CE dated 08.09.2005 denied - HELD THAT:- It is seen that the main reason for denying the benefit of Notification is that these goods do not have any direct role in power generation - the said view cannot be endorsed upon.
The Ceramic Fiber Board and Ceramic Fiber Twisted Rope are required for making the insulation on the furnace and without such insulation the heat cannot be controlled and so also the safety around the furnace cannot be ensured. These form essential part of the boiler and therefore are eligible for the benefit of Notification.
The Tribunal in the case of CHEMPLAST SANMAR LTD. VERSUS COMMISSIONER OF C. EX., TIRUCHIRAPALLI [2006 (8) TMI 51 - CESTAT, CHENNAI] had observed that these materials are eligible for credit as capital goods as these form part of the furnace and pipeline used in the factory. Again it is to be stated that as per the exemption Notification, all items which are used for setting up of the project for generation of power using non-conventional materials is eligible for the benefit of exemption.
The demand cannot sustain. The impugned order is set aside - Appeal allowed.
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2024 (2) TMI 904
Refund/rebate claim under N/N. 41/2012-ST on the credit availed on debit notes - rejection only on the ground that credit has been availed on debit notes and that these are not valid documents for availing credit as per Rule 9 of CENVAT Credit Rules, 2004 - HELD THAT:- On perusal of Order in Original No. 84/2013 dated 4.10.2023, it is stated by the adjudicating authority that the refund claim was verified and service tax could be correlated with the export documents. So also it is seen that specified services were received by the appellant and all documents were and required certificates submitted along with the refund claim. In para 9, it is stated that the refund claim was verified thoroughly and it is arithmetically in order.
The department has conducted proper verification as to whether service tax was paid and services were availed by the appellant. The proviso to Rule 9 states that in case of any doubt with regard to the particulars mentioned in the document on which credit has been availed, the AC/DC can conduct verification and on being satisfied can allow the credit.
In the present case, there is no evidence to show that the appellant has not paid service tax or not availed the specified services. The reason for rejection of refund / rebate is that debit notes are not valid documents under Rule 9 of CCR, 2004.
The above issue as to whether debit notes can be accepted as documents for availing credit is settled by various decisions. In the case of M/S. GATES UNITTA INDIA COMPANY PVT. LTD. VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI [2021 (9) TMI 688 - CESTAT CHENNAI], the Tribunal held that the credit cannot be denied on the ground that document on which credit is availed is a debit note.
The rejection of refund claim is not justified. The appellant is eligible for refund. The impugned order is set aside - Appeal allowed.
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2024 (2) TMI 818
Compliance with the pre-deposit - Section 35-F of the Central Excise Act, 1944 - Article 14 and 19(1)(g) of the Constitution of India - petitioner desires to have an adjudication on merits without complying with this condition - it was held by High Court that If the petitioner/original appellant complies with the statutory condition of pre-deposit within four months from the date of receipt of a copy of this order and reports compliance to the Tribunal, the Tribunal shall restore the appeal of the petitioner/original appellant for adjudication on merits.
HELD THAT:- There are no reason to interfere in the matter - SLP dismissed.
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2024 (2) TMI 817
Rejection of claim of the appellant for remission of duty on the finished goods which were destroyed in fire - whether the consequential demand confirmed by the Adjudicating authority is correct or otherwise? - HELD THAT:- It is found that the Adjudicating Authority rejected the claim for remission of duty made by the appellant, on the assumption and presumption that the appellant have not taken proper steps to avoid the fire accident. From the facts which is revealed in detail from the survey report of the survey conducted by the insurance company, it was found that the fire accident has taken place due to short circuit and immediately when the fire broken out the appellant’s staff have properly taken the steps to call the fire extinguisher. Therefore, the defense of the appellant appears to be reasonable.
It is found that one of the reasons given for rejection of remission claim is that there is discrepancy in the plot number in the Central Excise Registration of the appellant. However, the appellant have submitted that there was an inadvertent mistake in their registration which was subsequently rectified - once a mistake has been rectified, the rectification should be considered retrospectively as the same is inadvertent mistake. Accordingly, the correct registration should be considered for processing the remission claim.
The learned Commissioner must reconsider the overall case and re-adjudicate both the matters of remission as well as demand of duty. Needless to say that the appellant have relied upon numerous judgments on the identical issue, same also need to be considered while passing the de-novo orders - Appeals are allowed by way of remand to the Adjudicating Authority.
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2024 (2) TMI 816
Disallowance of credit availed by the appellant on security services - security services provided for the factory premises as well as trading premises is covered under Rule 6(5) of the CENVAT Credit Rules, 2004 or not - non-maintenance of separate books of account for the common input services - HELD THAT:- The First Appellate Authority (FAA) has analysed the scope of Rule (3) of CENVAT Credit Rules vis-à-vis, the activities carried on by the appellant. The First Appellate Authority (FAA) has observed that with regard to the credit of goods, the appellant was neither a manufacturer/producer nor a provider of taxable output service, since at the material time trading was neither taxable nor exempted. Moreover, according to the First Appellate Authority (FAA) exempted goods would refer only to the goods manufactured by the appellant, on which no duty was payable, but here the appellant had only bought and sold goods instead of those which were manufactured by it. In view of the above discussions, the First Appellate Authority (FAA) has concluded that the appellant was not entitled to credit attributable to credit of goods by virtue of Rule 3 which restricts and allow credit only to the manufacturer of goods or to the provider of output services.
It is not the case of the revenue that ‘security service’ was used exclusively in the manufacturing unit or used exclusively in the trading unit of the appellant, but the appellant has all along claimed that the said service was used as a common service in both the units. The amendment to Rule 2(e) was not applicable since the period under dispute is from June 2007 to January 2009 and hence, it is difficult to construe trading activity as an exempted service and that the service in question cannot be held to have been used in the provision of exempted service alone.
The impugned order of the First Appellate Authority is unsustainable in law - appeal allowed.
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2024 (2) TMI 815
CENVAT credit - capital goods installed in the distillery plant used for manufacture of Ethyl Alcohol - period from June 2011 to June 2012 - Erection, Commissioning & Installation services as input services availed after 01.04.2011 for setting up and installation of the distellery plant - exemption under Notification No. 67/1995-CE dt.16.03.1995 on the molasses consumed captively to manufacture Ethyl Alcohol - Requirement to pay an amount equal to 6% of value of the exempted goods in terms of Rule 6(3)(i) of Cenvat Credit Rules, 2004 [CCR, 2004] under Rule 14 read with Sec 11A of the Central Excise Act, 1944 - levy of interest and penalty.
Whether the Appellant is entitled to Cenvat credit on the capital goods installed in the distillery plant used for manufacture of Ethyl Alcohol during the period from June 2011 to June 2012? - HELD THAT:- While it is true that in the process of manufacture of the excisable goods, viz, denatured Alcohol, Ethyl Alcohol, which is otherwise not chargeable to central excise duty arises at an intermediate stage, and the last step of denaturing takes place in tankers itself. The manner in which the goods have left the factory is what matters with respect to central excise duty, whether it is a question of payment of central excise duty or the admissibility of CENVAT credit on the capital goods, inputs or input services. There is no good reason as to why the Cenvat credit on capital goods used in the distillery should be denied to the Appellant - neither the factor that an exempted good, viz, Ethyl Alcohol comes into existence prior to the manufacture of denatured Alcohol nor the fact that denatured Alcohol is not produced within the distillery machines, but in the tankers within the factory, should make any difference to the entitlement of Cenvat credit. Nothing in the CCR determines the eligibility of CENVAT credit based on at what stage the final goods become liable to central excise duty, and so long as the goods which are cleared from the factory are excisable goods, CENVAT credit on the capital goods cannot be denied.
Revenue relied on the decision of Division Bench of this Tribunal in RAI BAHADUR NARAIN SINGH SUGAR MILLS LTD VERSUS COMMISSIONER OF CENTRAL GST, DEHRADUN [2023 (11) TMI 1163 - CESTAT NEW DELHI] to assert that no Cenvat credit can be given on capital goods used in the manufacture of a distillery unit. We have examined the decision in Rai Bahadur Narain Singh Sugar Mills. The facts in that case were different. The Assessee in that case was entitled to an Area based exemption notification, which it availed and hence it would not have been entitled to CENVAT credit on captial goods - In this case, there is no exemption for denatured Alcohol and CO2 manufactured by the Appellant from duty and there is no dispute that duty was liable to be paid and was paid. Since the present case is different on facts, we find that the decision relied upon by the Revenue will not come to its rescue.
Whether the Appellant is entitled to Cenvat credit on the Erection, Commissioning & Installation services as input services availed after 01.04.2011 for setting up and installation of the distellery plant? - HELD THAT:- This Bench held in PEPSICO INDIA HOLDINGS (PVT.) LTD. VERSUS COMMISSIONER OF CENTRAL TAX, TIRUPATI [2021 (7) TMI 1094 - CESTAT HYDERABAD] that after 01.04.2011, although the services rendered in relation to installation and commissioning of the plant were not in the inclusive part of the definition but they were not excluded either and the main part of the definition of input service is broad enough to include the input services used in setting up and installation of the plant and machinery and hence CENVAT credit is admissible - the Appellant is entitled to Cenvat credit on the inputs used in setting up the plant and machinery.
Whether the Appellant is entitled to claim exemption under Notification No. 67/1995-CE dt.16.03.1995 on the molasses consumed captively to manufacture Ethyl Alcohol? - HELD THAT:- There are no strong force in the submission of the learned Counsel that the adverse report of the Range Superintendent obtained after the Hearing was over, cannot be relied upon unless a copy is served upon the Appellant and it is given an opportunity to defend. The only matter of fact to be determined is if the appellant had fulfilled the requirements under Rule 6 of CCR or not. In view of the above, it is found that it is a fit case to be remanded to the Commissioner on this question, with a direction to provide or send a copy of the report of the Range Superintendent to the appellant and after giving the appellant sufficient opportunity to rebut the report and explain how it had fulfilled the obligation under Rule 6 of CCR, and pass a reasoned order after following principles of natural justice.
Whether the Appellant is required to pay an amount equal to 6% of value of the exempted goods in terms of Rule 6(3)(i) of Cenvat Credit Rules, 2004 [CCR, 2004] under Rule 14 read with Sec 11A of the Central Excise Act, 1944? - HELD THAT:- In M/S TIARA ADVERTISING VERSUS UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE [2019 (10) TMI 27 - TELANGANA AND ANDHRA PRADESH HIGH COURT], it has been held by the Hon’ble High Court that the obligations under Rule 6(1) or Rule 6(2) or Rule 6(3) are various options given to the assessee and it is not for the Department to choose an option for the Assessee. If the assessee does not follow any of the options and fulfill its obligations, demand can be raised to deny the entire amount of Cenvat credit, but the assessee cannot be forced to pay an amount equal to 6% under Rule 6(3)(i) of CCR, 2004. Therefore, the demand equal to 6% of the value of exempted goods sold, under Rule 6(3) of CCR, 2004, cannot be sustained and needs to be set aside.
Appeals are partly allowed and partly remanded.
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2024 (2) TMI 814
Compounding of duty - unsealing of one pouch making machine or not - one pouch packing machine that was installed in separate room as per the ground plan and used for packing sweet supari - HELD THAT:- No evidence has been produced by the revenue to establish that this machine was being used for packing Gutkha. All the evidences produced in form of declaration, ground plan and correspondences show that this machine was installed in the separate room and was used only for the purpose of packing sweet supari. Accordingly, there are no merits in the impugned order to that extent. It demands duty contrary to the declaration filed along with the ground plan, which is required in terms of Pan Masala Packing Machines (Determination of Capacity and Collection of Duty) Rules, 2008.
Appeal allowed.
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