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Central Excise - Case Laws
Showing 61 to 80 of 80380 Records
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2024 (4) TMI 904 - ALLAHABAD HIGH COURT
Maintainability of petition - alternative appeal - waiver of pre-deposit - seeking the petitioner be relegated to appeal jurisdiction under Section 86 of the Finance Act, 1994 and direct the Tribunal to grant waiver of pre-deposit - HELD THAT:- An alternative efficacious remedy is available to the petitioner wherein, the petitioner has already filed his appeal. The very fact that the petitioner has already filed the appeal, precludes this Court from now examining this matter in writ jurisdiction. The petitioner cannot be allowed to be sitting on the fence. The filing of this petition is nothing but an after thought as the petitioner wants to escape the liability of payment of pre-deposit, which is mandated by law.
In a catena of judgements, the Supreme Court and various High Courts have categorically held that the condition of the pre-deposit cannot be waved/modified by the High Court in its extraordinary discretionary writ jurisdiction. Any discretion to be exercised by the writ Court is judicial in nature and is required to be exercised only in accordance with law. If the High Courts were to interfere/tinker with the amount of pre-deposit to be deposited, the entire provision of pre-deposit would become otiose.
A Division Bench of this Court in Shri Subhash Jain v. Commissioner of Central Goods And Service Tax [2023 (4) TMI 52 - ALLAHABAD HIGH COURT] has categorically held that in case of Central Excise Act the Courts does not have the power to waive the pre- deposit. The Division Bench of Bombay High Court in Kantilal Bhaguji Mohite v. Commr of C. Excise & Service Tax, Pune-III [2019 (2) TMI 1029 - BOMBAY HIGH COURT] has similarly laid down the ratio with regard to waiver of pre-deposit.
The judgements in Shri Subhash Jain and Kantilal Bhaguji Mohite are binding - this petition has no merit - petition dismissed.
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2024 (4) TMI 903 - CALCUTTA HIGH COURT
CENVAT Credit - inputs - respondent does not possess any furnace to use such inputs in or in relation to manufacture of final product - whether for the purpose of eligibility of Cenvat Credit, the classification of the input is irrelevant? - burden of proof upon the respondent to establish that the goods covered under Central Excise Tariff sub-heading No.72044100 procured by the respondent treating them as `inputs’ has been used in the manufacture of finished products without requiring a furnace in the factory - HELD THAT:- As a general proposition, the Tribunal may be right that the classification issue will not be a relevant issue for the purpose of claiming of Cenvat credit. However, when an issue is argued before this Court at the instance of the assessee and the revenue, the Court is bound to consider the same.
Having said so, it is now require to examine whether the Tribunal was right in allowing the assessee’s appeal - In paragraph 13 of the impugned order, the Tribunal has taken note of the factual position and found that the assessee had purchased goods from SAIL and others and they have been subjected to heating, straightening to make them suitable for rolling and sometimes cut to sizes and then rerolled to manufacture their final products and the rolling mill installed by them have the capacity to roll such items. This factual position appears to have not been shown to be wrong by the Department.
Further, the Tribunal has noted that the respondent’s rolling mill has the capacity to roll such items and the Department has not produced any evidence to counter the claim. The argument on behalf of the revenue before is by referring to the observations made by the adjudicating authority in paragraph 6.2 of the order-in-original dated 13th February, 2017. However, the said observation is not relatable to the respondent assessee since the adjudicating authority after referring to the classification under Tariff Item No.72044100 makes an observation that for manufacture of MS Flat/Bar, MS Channel, MS Round, MS Angle, MS Ribbed Bar etc. There is a requirement of ingots and billets. However, this observation made by the adjudicating authority does not relate to the factual position of the assessee’s case.
Thus, there are no question of law much less substantial questions of law arising for consideration - appeal dismissed.
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2024 (4) TMI 902 - CESTAT AHMEDABAD
CENVAT Credit - removal of capital goods as waste and scrap - waste and scrap of fire brick after use in the kiln during the period 2010-11 (upto February 2015) - Rule 3 (5A) of Cenvat Credit Rules, 2004 - HELD THAT:- Rule 3 (5A) of Cenvat Credit Rules, 2004, though provides that in case of removal of capital goods as waste and scrap, the assessee is required to pay the duty after reducing 2.5% per quarter for the period of use of capital goods. However, the appellant have taken the support of decision of BIRLA CORPORATION LTD. VERSUS COMMR. OF C. EX., RAIPUR [2002 (11) TMI 239 - CEGAT, COURT NO. IV, NEW DELHI] which deals with the provisions of 57S (2)(c) of Central Excise Rules, 1944 which provides that in case of removal of capital goods as waste and scrap, the assessee is required to pay the duty after reducing 2.5% per quarter for the period of use of capital goods.
The appellant have taken the support of decision of Birla Corporation Limited which deals with the provisions of 57S (2)(c) of Central Excise Rules, 1944 where it was held that where capital goods are sold as waste and scrap, the manufacturer shall pay the duty leviable on such waste and scrap.
It can be seen that the provisions for payment of duty on waste and scrap of capital goods in both the above rules are almost Pari-Materia, therefore, the decision of Birla Corporation is applicable.
In view of the above decision the principal bench of Tribunal held that the use of fire brick which is dismantle from the under shell of kiln is not liable to duty as waste and scrap. Since the fact of the present case is identical to the above decision and considered view taken by the Tribunal on the identical facts, the duty on waste and scrap is not liable to be paid.
In the present case also the appellant is not liable to pay the duty confirmed by the lower authority - the impugned order is set aside. Appeal is allowed.
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2024 (4) TMI 901 - CESTAT CHENNAI
Reversal of CENVAT Credit - Interest liability on Reversal - reversal of proportionate input credit relating to the exempted goods cleared every month properly during the periods from November 2007 to January 2011 and from November 2008 to December 2010 - Rule 6(3)(a) and Rule 6(3)(ii) of CENVAT Credit Rules - HELD THAT:- The appellant’s claim that sufficient balance was available in CENVAT Credit account to reverse the credit and no pecuniary benefit was derived in any manner has not been contested by Revenue. Under the CENVAT credit scheme there was no co-relation of the raw material and the final product, and the manufacturer is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. The government has not been deprived of duty on the date it became due as sufficient credit was available to take care of the debits made even without taking the disputed credit into account.
The Hon’ble High Court of Karnataka in COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX LARGE TAXPAYER UNIT, BANGALORE VERSUS M/S BILL FORGE PVT LTD, BANGALORE [2011 (4) TMI 969 - KARNATAKA HIGH COURT] has examined the judgment of the Hon’ble Supreme Court in UOI AND ORS. VERSUS IND-SWIFT LABORATORIES LTD. [2011 (2) TMI 6 - SUPREME COURT] and distinguished the same. The Hon’ble High Court held that when the assessee has not taken the benefit of the CENVAT credit, there is no liability to pay interest. Once the credit entry was reversed, it is as if the CENVAT credit was not available.
Also, no interest is payable in the circumstances and the question of imposition of a penalty does not arise.
The impugned orders are hence set aside, and the appeals are allowed.
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2024 (4) TMI 900 - CESTAT MUMBAI
Refund of accumulated credit - appellant who pays service tax under reverse charge mechanism can also be called ‘output service provider’ or not - manufacturer of goods having ‘nil’ tariff rate of duty is eligible for Cenvat Credit at all.
Refund claim - HELD THAT:- The comprehensive coverage of MODVAT was achieved by 1996-97 by introduction of Central Value Added Tax (CENVAT).Later CENVAT scheme also allowed credit of services and the basket of inputs, capital goods and input services could be used for payment of both central excise duty and service tax. Thus, it does not stand to reason, for denying input tax credit and its refund in certain situations, on the ground that the legal provisions of such a refund is not applicable to such other persons, who have been made liable to pay service tax under Section 68(2) ibid.
Further, it is also found that the above issue is no more open to dispute as in the appellants’ own case COMMISSIONER OF CE & SERVICE TAX, KOLHAPUR VERSUS ROYAL FOODSTUFF PVT. LTD. [2018 (8) TMI 601 - CESTAT MUMBAI], the Tribunal has held that they are eligible to refund of CENVAT credit under Rule 5B ibid and distinguished the other cases where the Tribunal had ordered for dismissal of the appeals filed by the appellants.
Eligibility to CENVAT credit to a manufacturer of goods having ‘nil’ tariff rate of duty - HELD THAT:- The provisions under Sub-rule (6)(v) to Rule 6 clearly provide that the restriction or denial for non-availability of Cenvat credit under various sub-rules of Rule 6 shall not be applicable for manufacture of exempted goods which are cleared for export. Thus, the findings of the learned Commissioner (Appeals) in denial of Cenvat credit on the ground that the appellants being manufacturer of Nil rated goods, would stand covered by the restriction under Rule 6(1) ibid is incorrect and is not legally sustainable.
Furthermore, the above issue is no more res integra in view of the judgement delivered by the Hon’ble High Court of Bombay in the case of UNION OF INDIA VERSUS SHARP MENTHOL INDIA LTD. [2011 (4) TMI 27 - BOMBAY HIGH COURT] where it was held that since the exempted menthol crystals as well as dutiable peppermint oil manufactured out of duty paid menthol have been exported by the assessee, the provisions of Rule 6(1) to 6(4) of the 2004 Rules are not applicable and as per Rule 5 of 2004 Rules, the assessee was entitled to avail the Cenvat credit of duty paid on menthol used in the manufacture of exempted menthol crystals and utilize the said credit for payment of duty on clearance of peppermint oil either for home consumption or for export. In the present case, since the peppermint oil has been exported on payment of duty, the assessee was entitled to claim rebate of the duty paid on peppermint oil.
Thus, it is found that there are no strong grounds to deny refund of CENVAT credit under Rule 5B of CENVAT Credit Rules, 2004. Consequently the impugned order dated 29.09.2015 is not legally sustainable.
The appellants are eligible for total refund of CENVAT credit of Rs. 12,65,459/- in respect of the claims given - the impugned order is set aside - appeal is allowed in favour of the appellants.
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2024 (4) TMI 899 - CESTAT KOLKATA
Short payment of Central excise duty - reversal of irregular credit - revenue neutrality - difference in book stock and physical stock - Proof of replacement of goods - Extended period of Limitation.
Short payment of duty - stock transfer of goods to their sister concern - HELD THAT:- Demand has been raised on the appellant holding that certain elements of cost have not been added while ascertaining the assessable value. It is observed that the department has not adduced any evidence to the effect that which cost was not included and why such cost is to be included. In the absence of any specific cost not added in the assessable value by the appellant, we observe that the allegation of the department is not substantiated.
Revenue Neutrality - HELD THAT:- The entire exercise is revenue neutral and thus the demand is liable to be set aside on this ground alone - reliance placed on the decision of this Tribunal in the case of M/S. HINDALCO INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, BHUBANESWAR-II [2023 (5) TMI 720 - CESTAT KOLKATA] wherein on similar facts, this Tribunal has held that when the entire exercise is revenue neutral, the demand is not sustainable as the duty paid will be available as credit for their sister unit and there is no loss of revenue to the exchequer.
The demand confirmed in the impugned order on this count is not sustainable and accordingly, the same is set aside.
Short payment of duty on the goods sent free of cost to customers - HELD THAT:- The appellant has adopted the valuation method of 110% of the cost, to pay duty on the free supplies to customers - it is observed that when similar goods are not sold by the appellant, the valuation adopted by the Appellant is valid and thus we hold that there is no short payment of tax. Accordingly, the demand confirmed in the impugned order on this count is not sustainable and hence the same is set aside.
Denial of CENVAT Credit taken on the goods rejected by the customers and returned to the supplier and subsequently replaced - HELD THAT:- When the goods are purchased as inputs but are later returned for being defective and are replaced by the supplier, credit cannot be denied to the supplier. In support of this contention reliance placed on the decision of the Tribunal in the case of ERICSSON INDIA PVT. LTD. VERSUS COMMISSIONER OF C. EX. & S.T., JAIPUR [2014 (10) TMI 896 - CESTAT NEW DELHI], Approved in COMMR. OF C. EX. & S.T., JAIPUR-I VERSUS ERICSSON INDIA PVT. LTD. [2018 (1) TMI 1266 - RAJASTHAN HIGH COURT].
Proof of replacement of goods - HELD THAT:- It is observed that the SAP entries will prove that the goods retuned have been replaced or not. However, credit on the goods returned cannot be denied to the appellant on only procedural ground. Accordingly, the demand confirmed in the impugned order on this count is not sustainable and hence the same is set aside.
Denial of CENVAT Credit related to services not used in relation to manufacture of final products - HELD THAT:- It is observed that the credit in this case has been availed by the Appellant on certain installation and other services which were availed in respect of Erection, Commissioning, Installation provided by the Appellant at the head office. It is observed that there is no specific finding in the impugned order for denial of this credit to the appellant. Accordingly, the appellant is eligible for this credit.
Demand of duty on account of difference in book stock and physical stock in respect of Plate Hardox and MS Plate - HELD THAT:- The duty has been demanded from the appellant on the assumption that the said goods have been removed without payment of duty. We observe that the department has not produced any evidence to substantiate the allegation that the goods have been clandestinely removed by the Appellant without payment of duty. It is a settled law that no demand can be raised without any evidence or proof of clandestine removal. Since there is no evidence available on record to substantiate the allegation of clandestine removal, the demand confirmed in the impugned order on this count is not sustainable and accordingly the same is set aside.
Since the demands of central excise duty and the reversal of Cenvat Credit confirmed in the impugned order are held to be not sustainable, the question of demanding interest and imposing penalty on the appellant does not arise.
The impugned order is set aside - appeal allowed.
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2024 (4) TMI 860 - CESTAT AHMEDABAD
Reversal of proportional CENVAT Credit - manufacture as well as trading activity - demand on the ground that the sale of tyre tube and flap in set to their depot is a trading activity which as per amendment made on 01.04.2011 such trading activity is a exempted service accordingly proportionate credit is required to be reversed - HELD THAT:- The activity of selling the tyre duly fitted with tube and flap whether a trading activity or otherwise is pending before the Hon’ble Supreme Court in appellant’s own case in SLP (CE) No. 34310-34311/2011 wherein two orders were issued by the Hon’ble Supreme Court dated 14.10.2011 and 08.11.2011. In view of this position unless it is decided that the activity is a trading activity or otherwise the consequential liability of proportionate credit in respect of service tax cannot be concluded.
Moreover the appellant have vehemently argued that the quantification of proportionate credit is incorrect, this is also reason that the matter needs to be reconsidered as regard the correct quantification of the demand. In this position the entire matter on all the issues need to be reconsidered only after the outcome of the Hon’ble Supreme Court judgment in the appellant’s SLP pending.
The impugned order is set aside - Appeal is allowed by way of remand to the adjudicating authority for passing a fresh order.
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2024 (4) TMI 859 - CESTAT ALLAHABAD
Refund claim - rejection on the grounds of unjust enrichment - requirement to be credited to Consumer Welfare Fund constituted under Section 12C of Central Excise Act 1944 - HELD THAT:- It is quite evident that the appellant has categorically stated in the letter that they are charging the central excise duty from their customer, while maintaining the selling price at the same level by increasing the discount given from 40% to 52.10%. Undisputedly appellant himself admits that they are charging the central excise duty from their customers. That being so the burden of duty paid has been passed on the customer. The reason for giving additional discount to the customers can be many including the product competitiveness.
Appellant have argued that they had increased the discount percentage on the goods so that the burden of duty is not passed on. However this argument though attractive is without any merits. From the table in para 4.11 it is evident that for determination of the assessable value they have claimed deduction of 40% or 52.10% whereas the price of the goods to the customer remained the same. What they have recovered from the customers is the price of the goods and not the cum duty price. Above analysis clearly establishes that the appellant has passed on the burden of the duty paid on to their customers.
In case of COMMISSIONER OF C. EX., MUMBAI-II VERSUS ALLIED PHOTOGRAPHICS INDIA LTD. [2004 (3) TMI 63 - SUPREME COURT], Hon’ble Supreme Court has held even on merits, the respondent has failed to make out a case for refund. Since relevant factors stated above have not been examined by the authorities below, we do not find merit in the contention of the respondent that this Court should not interfere under Article 136 of the Constitution in view of the concurrent finding of fact.
If on examination of facts and documents the conclusion is that burden of the duty has been passed on to the customers the refund could not have been directed to the appellants but would have to be credited to the consumer welfare fund.
There are no merits in this appeal - appeal dismissed.
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2024 (4) TMI 858 - CESTAT KOLKATA
Levy of Excise Duty - appellant has retained certain portion of freight without paying the same to the transporters on such freight amounts retained - place of removal - Extended period of limitation - HELD THAT:- It is seen from the record that the appellant is paying VAT at their factory gate as is evidenced by the invoices enclosed with the appeal papers. Therefore, ‘the place of removal’ in this case would be the factory gate of the appellant. This issue is no more res integra. The Hon’ble Supreme Court in the case of COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, NAGPUR VERSUS M/S ISPAT INDUSTRIES LTD. [2015 (10) TMI 613 - SUPREME COURT] has held The fact in the present case 'deliverable state of goods, arises only at the time of safe delivery of goods at the customers' premises specified in the purchase order However, with reference to section 24 of the Sales of Goods Act, it was observed that in the instant case the property in the goods have passed only at the site of buyer. Therefore such place constitutes the 'place of removal of goods for section 4 of the Central Excise Act.
Extended period of Limitation - HELD THAT:- There are substantial force in the appellant’s contention that the issue was that of interpretation and was resolved only after the judgment of the Hon’ble Supreme Court in Ispat Industries case. Therefore, the confirmed demand for the extended period is liable to be set aside on account of limitation also.
The appeal is allowed both on merits as well as on account of limitation.
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2024 (4) TMI 819 - CESTAT BANGALORE
Refund of Excess duty, claimed pursuant to finalisation of provisional assessments - duty burden has already been passed on to the ultimate consumer at the time of clearance of goods or not - principles of unjust enrichment - HELD THAT:- In the respondent’s own case PRINCIPAL COMMISSIONER OF CENTRAL TAX VERSUS M/S. VIKRANT TYRES LTD, [PRESENTLY KNOWN AS JK TYRES AND INDUSTRIES – PLANT-I] [2021 (10) TMI 586 - KARNATAKA HIGH COURT], the Hon’ble High Court Karnataka considering more or less similar arguments and scrutiny of the claims from the angle of applicability of unjust enrichment and the refund sanctioned by the Revenue to the respondent from time to time, held that The authorities have admitted that the credit notes were issued by the assessee to their dealer representing various discounts which have been actually passed on, in accordance with marketing circulars/policies. It is also observed that on verification of sample depot invoices at the time of completion of provisional assessment, that the assessee has not issued any cenvatable invoice from the depot which are prescribed document for availment of cenvat credit under Cenvat Credit Rules, 2004. Thus, it cannot be held that the assessee has not subjected to the test of unjust enrichment.
The said judgment of the Hon’ble High Court is binding on all concerned being the judgment of the jurisdictional High Court in view of the judgment of the Larger Bench of the Tribunal in J.K. TYRE & INDUSTRIES LTD. VERSUS ASST. COMMR. OF C. EX., MYSORE [2016 (11) TMI 911 - CESTAT BANGALORE]. Besides, the aforesaid judgment of the Hon’ble Karnataka High Court has been accepted by the Revenue.
The impugned order of Learned Commissioner(Appeals) is upheld and the Revenue’s appeals being devoid of merit are dismissed.
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2024 (4) TMI 818 - CESTAT BANGALORE
Invocation of Extended period of Limitation - denial of N/N.12/2012-CE dated 17.03.2012 - Solar Inverters - Combiner Box / Array Guard - PV Logs and parts - HELD THAT:- In the present case, the appellant has challenged the confirmation of demand invoking extended period of limitation advancing the argument that all the facts have been disclosed to the Department through their ER-1 Returns and hence suppression of facts cannot be invoked against them. It is found that the appellants are engaged in the manufacture of parts of Solar Power Generating System viz. Solar Inverters, Combiner Box / Array Guard and PV Logs. But on going through one of the sample ER-1 return, filed with the Department, for the period February 2014, it is found that under the heading ‘Description of Goods’, the item is mentioned as “power”, “ELE”, “Solar”. Thus, there is no correct declaration of the description of the goods mentioned in the ER-1 Returns which have been manufactured and cleared by them by raising invoices mentioning a different description.
The mis-declaration of the description of the goods would invite extended period of limitation in view of the judgment of the Hon’ble Supreme Court in the case of COMMR. OF CEN. EXC. AHMEDABAD VERSUS URMIN PRODUCTS P. LTD. AND OTHERS [2023 (10) TMI 1112 - SUPREME COURT].
The order of the learned Commissioner denying the benefit of exemption under Notification No.12/2012-CE dated 17.03.2012 and confirming the demand invoking extended period has been upheld. However, even though the appellant had deposited the amount in August 2014, which has been appropriated in the impugned order passed in February 2016, the interest liability has not been calculated and mentioned in the order; therefore, the reduction of penalty to 25% as per Section 11AC(1)(c) could not have been availed by the appellant.
Thus, the appellant be given a fair chance by communicating the quantum of interest payable and in the event the appellant discharges the interest amount within 30 days from the date of communication of the amount, the benefit of reduced penalty of 25% under Section 11AC(1)(c) may be extended.
Appeal disposed off.
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2024 (4) TMI 817 - CESTAT NEW DELHI
CENVAT credit of service tax paid - goods transport agency [GTA] service availed for outward transportation of goods on Free on Road [FOR] destination basis from the factory gate or depot of the appellant to the premises of the customers - place of removal - rules 2(l) of the CENVAT Credit Rules, 2004 - HELD THAT:- It is clear from rule 2(l) of the 2004 Rules that w.e.f. 01.03.2008, ‘input service’ means any service used by a manufacturer, directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal - The word ‘place of removal’, therefore, assume importance. According to the appellant, the ‘place of removal’ will be the premises of the buyers as the sale is on FOR destination basis, while according to the department the ‘place of removal’ would be the factory gate of the appellant.
The ‘input service’ would mean any service used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the ‘place of removal’ and ‘place of removal’ would be a depot or any other place of premises from where the excisable goods are to be sold after the clearance from the factory - prior to 11.07.2014 it was section 4(3)(c) of the Central Excise Act that defined ‘place of removal’ and w.e.f. 11.07.2014 rule 2(qa) of the 2004 Rules itself defines ‘place of removal’.
A perusal of the aforesaid judgment of the Supreme Court in COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [2018 (2) TMI 117 - SUPREME COURT] would indicate that the Supreme Court did not lay down the principles for ascertaining the ‘place of removal’ in the context of admissibility of CENVAT credit on GTA services and the judgment only dealt with the change brought about by the amendment made in rule 2(l) of the 2004 Rules on 01.03.2008.
In COMMISSIONER, CUSTOMS AND CENTRAL EXCISE, AURANGABAD VERSUS M/S ROOFIT INDUSTRIES LTD. [2015 (4) TMI 857 - SUPREME COURT], the Supreme Court noticed that the ‘place of removal’ becomes a determinative factor for the purpose of valuation and it has to be seen at what point of time sale is effected, namely whether it is on the factory gate or a later point of time when the delivery of goods is effected to the buyer at the premises of the buyer. The Supreme Court observed that the charges which are to be added have to be upto the stage of transfer of the ownership in as much as once the ownership in goods stands transferred to the buyer, any expenditure incurred, thereafter, has to be on the account of the buyer and cannot be a component which would be included while ascertaining the valuation of goods.
It is not possible to accept the contention of the learned authorised representative of the department that sale value is included in the case of FOR sale, but it cannot be presumed that it will also result in availment of CENVAT credit since ‘place of removal’ was not defined in the 2004 Rules till 11.07.2014. Prior to 11.07.2014, ‘place of removal’ was defined in section 4(3)(c) of the Central Excise Act, which definition would be applicable to the 2004 Rules by virtue of rule 2(t) of the 2004 Rules. With effect from 11.07.2014, ‘place of removal’ has been defined in the 2004 Rules.
Thus, it has to be held that the appellant would be entitled to avail CENVAT credit of the service tax paid on GTA service from the factory or the depot of the appellant to the premises of the buyers since the sales are on FOR basis.
The order passed by the Commissioner (Appeals), therefore, cannot be sustained and is set aside. The appellant would be entitled to avail CENVAT credit - appeal allowed.
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2024 (4) TMI 816 - CESTAT NEW DELHI
CENVAT Credit - common input services used for the exempted goods, namely electricity cleared from the manufactory of the Appellant - CENVAT Credit availed on common input services used for exempted services alleged to be Trading of goods, but claimed to have cleared inputs as such - Extended period of limitation - Interest - penalty.
Whether the computation of demand of the amount of Rs.97,01,260/- on account of CENVAT Credit availed on common input services used for the exempted goods, namely electricity cleared from the manufactory of the Appellant is correct? - HELD THAT:- The Appellant in this case has been paying the amount of CENVAT Credit as was arrived by them by application of the formula prescribed under Rule 6 (3A) of the CENVAT Credit Rules in terms of the option exercised by them - the appellant has never submitted data of the electricity duly certified by the Chartered Accountant despite having many opportunities, which finds mention in the findings of the adjudicating authority.
However, the issue whether the figures taken by the Department standalone Balance-sheet pertaining to Godawari Power and Ispat Ltd, do not require verification at the original stage. In view of the emphatic submissions made, this matter requires reconsideration at the original stage and needs to be remanded.
Whether the demand of the amount of Rs 83,62,788/- on account of CENVAT Credit availed on common input services used for exempted services alleged to be Trading of goods, but claimed to have cleared inputs as such is correct? - HELD THAT:- The profit earned out of such clearances, alleged to be trading, and common use of the input services has not been controverted in any manner by the ld. Counsel of the appellant. Therefore, these are triggers to decide this issue as to whether the clearances by earn of substantial profit would remain within the ambit of “inputs cleared as such” under Rule 3(5) or would it be tantamount to the “trading of the goods”, besides use of common input services.
The appellant has reversed the Cenvat Credit on these goods which they had traded. In view of the said factual position, it is directed that the amount so reversed is liable to be appropriated against the demand. Accordingly this matter remanded to the original authority to recalculate the differential demand taking due note of the CENVAT credit which is already reversed.
Whether the aforesaid demands are correct and justified in involving the extended period of limitation? - suppression of facts or not - HELD THAT:- It is settled principle in law that existence of ingredients leading to invocation of extended period of limitation is a “question of the fact” and the facts of the case in hand will determine whether the extended period of limitation could have been invoked, unlike the “question of law” where the determination can be made on the basis of the available judicial precedents - the appellant succeeded in suppressing critical information from scrutiny. Hence the extended period is rightly invokable in the case.
Penalty - HELD THAT:- Since it is established, that appellant had suppressed the material facts and misstated with intent to evade payment of amount of Cenvat credit, the penalty under Section 11AC shall be natural consequence as has been held by Hon’ble Supreme Court in case of UNION OF INDIA VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS AND COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE VERSUS M/S. LANCO INDUSTRIES LTD. [2009 (5) TMI 15 - SUPREME COURT]. The Apex court held the application of Section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section (2) of Section 11A.
Interest liability for delayed payment of amount of CENVAT credit - HELD THAT:- The interest liability for delayed payment of amount of CENVAT credit also cannot be disputed. Appellant has not paid the amount, payable by them as per admitted position under Rule 6 (3A) on the exempted goods cleared by them by the due date and hence demand of interest on the delayed payment is justified.
The appeal is allowed partially and also by way of remand.
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2024 (4) TMI 785 - GUJARAT HIGH COURT
CENVAT Credit - inputs - denial on the ground that the use of such goods for repair and maintenance of plant and machinery by the respondent assessee cannot be considered to have been used “in or in relation to the manufacture of final products”, as they are not used coextensively in the process of manufacturing of the petroleum products by the respondent assessee - HELD THAT:- Considering the fact that the Tribunal has relied upon the decision in the respondent assessee’s own case, as well as in view of the fact that now the issue is no more res-integra in view of the decision of the Hon’ble Supreme Court in case of Kisan Co-operative Sugar Factory Ltd. [2023 (12) TMI 1303 - SUPREME COURT] wherein the Hon’ble Apex Court has held that the interpretation of the expression “used in or in relation to manufacture” is of a very wide import and takes within its scope and ambit all items used in the process of manufacture whether directly or indirectly and whether contained in the final product or not. The items used for maintenance of plant and machinery are also items used in the manufacture of finished goods. Hence, credit on the items used for maintenance, repair, upkeep or fabrication of plant and machinery are admissible to the assessees.
Entitlement on the Cenvat credit on the M/s. Gratings/G.I. Coated Gratings - HELD THAT:- In view of the observation made by the Tribunal in [2020 (2) TMI 749 - CESTAT AHMEDABAD] it is observed that the M.S. Gratings were used as accessory for supporting and holding for approaching how to plant and processing units of refinery and platforms for approaching or reaching out the plant is part and parcel of the entire plant and machinery particularly in large scale manufacturing unit, without which the operation of the plant is not possible. It was therefore held by the Tribunal that, therefore the M.S. Gratings used as accessory in such structure is used in relation to the manufacture of final product - the Tribunal has not committed any error in following a Coordinate Bench’s decision in the case of the respondent assessee itself.
There is no error committed by the Tribunal giving rise to any question of law, much less any substantial question of law arising from the impugned order - Appeal dismissed.
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2024 (4) TMI 784 - CESTAT MUMBAI
CENVAT Credit - inputs and input services - disallowance of entire cenvat credit availed by the appellant on the inputs and input services utilized in the manufacture of goods on which central excise duty was paid and ER-1 returns were filed - HELD THAT:- Revenue has unilaterally come to a conclusion without assigning any justification through the said show cause notice as to how the appellant was required to clear the goods under full exemption under serial No. 47A of N/N. 04/2006-CE dated 01.03.2006. As per the provisions of law, Revenue should have issued the appellant with a show cause notice calling upon them to show cause as to why they should not clear the goods at nil rate of duty applying the provisions at serial No. 47A ibid. Such proceedings would have given complete opportunity to the appellant to explain as to why the said serial number of the said notification was not applicable to the appellant.
Without giving any opportunity to the appellant to present their defence on the contention of Revenue that the appellant should have cleared the goods availing full exemption, Revenue has unilaterally decided that the said serial number of the said notification was applicable to the appellant.
These present proceedings are not sustainable - the impugned order is set aside - appeal allowed.
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2024 (4) TMI 722 - CESTAT NEW DELHI
Invocation of Extended period of limitation - contravention of provision of rule 9(1)(f) of CCR - Levy of penalty u/r 15(3) of CCR - HELD THAT:- The Commissioner (Appeals) has also not recorded any specific reasons of invoking the extended period of limitation - only reason given in the show cause notice for invoking extended period of limitation is that the appellant had contravened the provision of rule 9(1)(f) of CCR.
It has been presumed that CENVAT credit was availed by the appellant with intention to increase its CENVAT balance with the logical consequence of non-payment of duty in cash and with intent to evade payment of duty. It is a well settled legal position that all show cause notices can be issued only within the normal period of limitation. To invoke extended period one of the aggravating factors necessary must be established. In this case, the only reason for invoking extended period of limitation given in the show cause notice was that the appellant had availed CENVAT credit on the strength of ineligible documents in violation of Rule 9(1)(f) of CCR. The intention to evade payment has been presumed. The impugned orders and the OIO also do not indicate, let alone establish, the existence of any of the five aggravating factors.
As the show cause notice was time barred and consequently the impugned orders which affirm the proposals in the show cause notice cannot be sustained and need to be set aside - Appeal allowed.
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2024 (4) TMI 721 - CESTAT KOLKATA
Clandestine Removal - corroborative evidences or not - entire demand has been raised on the basis of three private unauthenticated seized documents from the office of M/s. EFPL - penalty - HELD THAT:- Although it is the claim of the Revenue that truck numbers are mentioned on the said documents which were involved in clandestine removal of goods, no investigation was conducted with regard to the truck owners or drivers to find out as to whether those vehicles were used by the appellant for clandestine removal of the goods, in support of the allegation of clandestine clearance.
Further, no evidence has been produced by the Revenue with regard to excess purchase and payment thereof. No evidence in the form of excess consumption of electricity was brought on record. Moreover, no payment for clandestine removal of the goods by illicit means has been brought on record. Mere documents recovered from the premises of a third party cannot be the basis to allege clandestine removal of goods - Moreover, it has not been ascertained as to who was maintaining those documents and who had kept these documents in the premises of M/s. EFPL.
Therefore, the Revenue has failed to establish their case of clandestine removal of the goods in question, particularly in view of the decision in the case of M/S. CONTINENTAL CEMENT COMPANY VERSUS UNION OF INDIA & OTHERS [2014 (9) TMI 243 - ALLAHABAD HIGH COURT] wherein the Hon’ble High Court of Allahabad has observed we are of the opinion that when there is no extra consumption of electricity, purchase of raw materials and transportation payment, then manufacturing of extra goods is not possible. No purchase of raw material out side the books have been proved.
Penalty - HELD THAT:- As there is no corroborative evidence available on record in support of the charge of clandestine removal of the goods, the demand of Central Excise Duty is not sustainable against the appellant. As the demand of duty is not sustainable, consequently, no penalty can be imposed on the appellants.
The impugned order is set aside - appeal allowed.
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2024 (4) TMI 672 - MADHYA PRADESH HIGH COURT
Appropriate forum - Maintainability of appeal u/s 35(H) of the Central Excise Act, 1944 - determination of question relating to rate of duty or excise or to the value of goods for the purpose of assessment - HELD THAT:- The appeal would not be maintainable before this Court. However, the appellant would be at liberty to assail the order by filing an appeal u/s 35(L) of the Act of 1944 before the Apex Court. However, on filing of the photocopy of the original documents, the certified copy of the original documents, if any, be returned to the learned counsel for the appellant.
Appeal disposed off.
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2024 (4) TMI 671 - CESTAT BANGALORE
Recovery of CENVAT Credit alongwith interest and penalty - input - goods used in the fabrication of various machineries, support structures, platforms for machineries and equipments etc. used in the factory - HELD THAT:- Undisputedly, the appellants during the relevant period used the aforesaid inputs in their factory in the fabrication / manufacture of various equipments, machineries, plants etc. and support structures holding the capital goods. The learned Commissioner in the impugned order following the judgment of the Larger Bench of this Tribunal in VANDANA GLOBAL LTD. VERSUS CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] decided the issue against the appellants holding that credit is not admissible on the aforesaid inputs used in the fabrication of various capital items.
The impugned orders are devoid of merit and accordingly the same are set aside - Appeal allowed.
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2024 (4) TMI 670 - CESTAT ALLAHABAD
CENVAT Credit - input service - hiring of aircraft - services were used for furtherance of cost of the business of manufacture of the goods or not - HELD THAT:- The definition of the input service is wide enough to cover all the services received by the appellant as input services without being directly used in the process of manufacture. If it is establish that the services were used by the manufacturer for the production of the finished goods which is one of the criteria to credit could not have been denied. In the present case, Commissioner (Appeals) have concluded that charter services were raised for transportation of the senior executive officials of the company for attending the business meeting in relation of the manufacture and sale of finished goods.
In case of MANGALORE REFINERY AND PETROCHEMICALS LTD VERSUS COMMISSIONER OF CENTRAL EXCISE & CENTRAL TAX, MANGALORE COMMISSIONERATE [2021 (6) TMI 715 - CESTAT BANGALORE], the Bangalore bench has held as far as air travel charges are concerned, the same has been used for the purpose of business trips undertaken by the company officials/guests for business related purposes and the same has been held to be input service.
There are no reason to differ with the findings recorded in the impugned order by Appellate Authority and the same is upheld - appeal dismissed.
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