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Central Excise - Case Laws
Showing 81 to 100 of 260 Records
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2012 (12) TMI 853
Wrong Availment of Cenvat Credit - procedure was not proper in contravention of provisions of Rule 6(1) r.w.e. III of the Rule 6(3) and Rule 6(3)(b) of the Cenvat Credit Rules, 2004 - Held that:- As decided in REPRO INDIA LTD. Versus UNION OF INDIA [2007 (12) TMI 209 - BOMBAY HIGH COURT] exempted goods can be exported under Bond/UT-1 in terms of Rule 19 of the Central Excise Rules, 2002. It has also been held that in terms of Rule 6(6)(v) of the Cenvat Credit Rules, 2004, the provisions of Rule 6(1) and 6(3) are not applicable in respect of excisable goods cleared without payment of duty for export under Bond. In view of this, the orders of Commissioner confirming the duty demand of CENVAT Credit cannot be sustained. Consequently, also set aside the order for recovery of interest on the dues.
Wrong availment of CENVAT Credit on aggregates (i.e. IC engines, transmission assembly and sheet metal components etc.) used captively in the manufacture of exempted tractors cleared for export - Held that:- Parts of tractors are unconditionally exempted vide Sr. No. 92 of Notification No. 6/2006-CE dated 1.3.2006 when captively used in the manufacture of tractors within the factory. By virtue of Section 5A, Central Government may, in public interest, exempt either absolutely or subject to any condition (to be fulfilled before or after removal) as may be specified in the Notification, excisable goods of any specified description from the whole or any part of the duty of excise leviable thereon - upheld the demand of duty and also Commissioner's order for recovery of interest on these demands confirmed by the Commissioner - these demands were raised invoking normal period of limitation - ingredients of Section 11AC are not present in this case and, therefore, penalty equal to duty imposed by the Commissioner needs reduction - penalties to reduced to Rs. 1.25 crores and Rs.1 crore in respect of Appeal respectively - appeal allowed partly.
CENVAT Credit of advertisement services used in relation to manufacture of tractors cleared within the country - Held that:- Assessee is not entitled to take the CENVAT Credit on advertisement services used in relation to manufacture of tractors cleared within the country. Therefore, the CENVAT Credit taken is to be reversed. So far as the interest is concerned, in terms of Rule 14 of the Cenvat Credit Rules, 2004, interest is payable from the date of taking wrong credit - penalty of Rs. 2000/- imposed on the assessee by the Commissioner is set aside.
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2012 (12) TMI 852
Non maintenance of separate accounts of the inputs used in manufacture of dutiable as well as exempted goods - Waiver of pre-deposit of duty, interest and penalty - Held that:- Applicants are required to reverse the proportionate credit in respect of the inputs/input services used in manufacture of exempted goods as they are not maintaining separate records in respect of the inputs used in manufacture of dutiable as well as exempted goods - directed to deposit Rs.15 lakhs within a period of eight weeks and report Compliance on 13.09.2012.
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2012 (12) TMI 837
Rebate claim rejected - fake and non-existent weavers from whom unprocessed fabrics were procured as declared by Alert Circulars issued by the Surat Central Excise Commissioner - contravention of Rule 7(2) of the Cenvat Credit Rules, 2002 - Held that:- In order to get the credit of CENVAT, Rule 7(2) cast a duty upon the appellants to take all reasonable steps to ensure that the inputs or the capital goods in respect of which the appellants had taken credit of CENVAT are the goods on which appropriate duty of excise as indicated in the documents accompanying the goods, has been paid - See Sheela Dyeing & Printing Mills P. Ltd. vs. C.C.E. & E, Surat-1 [2008 (7) TMI 209 - HIGH COURT GUJARAT]
As in the present case the petitioners have admittedly not taken the steps enumerated in the Explanation to Rule 7(2) of the Cenvat Credit Rules thus the Revenue Authority rightly denied rebate of duty - against assessee.
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2012 (12) TMI 832
Rejection of refund claim - Doctrine of Unjust enrichment - Held that:- Both the lower authorities failed to appreciate the fact that when it is apparent on record that the appellant is availing the benefit of SSI exemption under Notification no. 8/2003 and clearing the goods without payment of duty, the question of unjust enrichment does not arise - as the appellant has paid a sum of Rs.1.5 lakhs during the course of investigation & no show-cause notice has been served on the appellant for appropriation of the amount collected by them during the course of investigation impugned order is not sustainable in the eyes of law and same is set aside and appeal is allowed with consequential relief.
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2012 (12) TMI 831
Classification of sugarfree chewing gum – Sub-heading 2106 90 99 v/s 2106 90 91 - Held that:- The products in question are "food preparations not elsewhere specified or included" (Heading 21.06). Explanatory Notes to HSN Heading 21.06 also justify this classification. As per these notes, Heading 21.06 includes, inter alia , "Sweets, gums and the like (for diabetics in particular) containing synthetic sweetening agents (Eg: Sorbitol) instead of sugar”. Admittedly, the subject products are gums containing synthetic sweetening agents instead of sugar. Therefore they have been rightly classified under Heading 2106 of the CETA Schedule.
However, the HSN Explanatory Notes appear to be of no aid to sub-classification of the goods, therefore, classification of the goods as “diabetic foods” must be based on evidence of the chewing gums having been medically prescribed as “diabetic foods” and marketed as “diabetic foods”. The Revenue whose burden it was to gather such evidence to justify classification of the chewing gums as diabetic foods under S.H. 2106 90 91 failed to do so. On the contrary the assessee has been able to show that the subject products were not marketed as diabetic foods, thus the “orbit” chewing gums were rightly classified under the residuary sub-heading 2106 90 99 - in favour of assessee.
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2012 (12) TMI 830
Eligibility to take Cenvat credit – Whether storage up to the place of removal used in the definition of input service will cover storage at the place of removal also – Held that:- The place where goods are stored after clearance from the factory on payment of duty can be considered as "place of removal" for the purpose of Rule 2(l) of Cenvat Credit Rules, 2004 is no longer res integra because of the clarification issued by the CBEC in the matter and approved by the decision in the case of LG Electronics (2010 (4) TMI 322 - CESTAT, NEW DELHI) and Ambuja Cements v. Union of India [2009 (2) TMI 50 - PUNJAB & HARYANA HIGH COURT]. Therefore the godowns at Agra and Farrukhabad are to be considered as "place of removal" for the appellant notwithstanding the fact that sugar is an item subjected to specific rate of duty.
Rule 2(l) of Cenvat Credit Rules specifically includes many post manufacturing activities like service relating to sales, promotion etc and therefore standard prescribed for inputs cannot be adopted for input services. Therefore not convinced by the argument advanced by Revenue that these services have no nexus the goods manufactured.
No reason to deny Cenvat credit of tax paid on Rent of godown at Agra/ Farrukhabad, Sugar handling charges at the said godowns & Security services availed at the said godowns - cash disbursement is for procurement of raw material, and has direct nexus with the manufacturing activity & so is the case of insurance of cashier. In the matter of Vehicle Hire charges and insurance of company owned vehicles already there are decisions of the High Courts allowing credit of service tax paid on such service. In the case of charges of gay rope mask, assessee submits that this is services required for their efficient functioning at the place of procurement of raw material and it has got direct nexus in the manufacturing activity - appellants are eligible for the disputed Cenvat credits.
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2012 (12) TMI 829
Refund of pre-deposit - Held that:- The actions of the adjudicating authority and the appellate authority show a design to refuse the refund under one pretext or the other. This cannot be approved of at all.
Amount involved should be refunded forthwith along with interest from the day commencing after expiry of three months from the date of filing of the original refund application to the date of actual refund of money to the appellant - matter can be referred before the Tribunal if the refund is not sanctioned before 30.9.2012 for appropriate further action in the matter - appeal allowed in above terms.
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2012 (12) TMI 798
Refund claim for the excise duty - denial of claim - Held that:- Purchaser being the defence organisation of Government of India, the question of passing on the excise duty to any other person does not arise and ordnance depot not being a manufacturer of any goods, could not have taken Cenvat Credit - Refund claim of respondent accepted - against Revenue.
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2012 (12) TMI 797
Carry forward and set-off of underutilized cenvat credit - change of status due to amalgamation - Held that:- Merger causes diminishing of the status of amalgamating companies after amalgamation. No Right existing before amalgamation cannot be claimed to be a right existing amalgamation - Carry forward and Set-off of unutilised cenvat credit in the hands of amalgamated company is denied - in favour of Revenue.
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2012 (12) TMI 796
Reversal of Credit proportionate to the inputs used in or in relation to the manufacture of the exempted goods - Held that:- The applicants are procuring iron ore and metallurgical coke and only screening the same and during the process of screening the iron ore fine and coke breeze come into existence which is not fit for use in the manufacture of pig iron and the same are being cleared without payment of duty. As the provisions of Rule 6 of the Cenvat Credit Rules are amended retrospectively and the manufacture has to reverse the credit proportionate to the inputs used in or in relation to the manufacture of the exempted goods, the applicants are directed to deposit Rs. 8,00,000/- within six weeks.
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2012 (12) TMI 795
Breakage of glass bottles during the manufacture of aerated beverages - denial of credit relying on Boards circular dated 9.7.2010 - Held that:- The period of demand in the present case is November 2009 to June 2010 i.e. prior to the issue of the circular dated 9.7.2010 to be treated as prospective in nature and cannot be held to be retrospective.
During the period in dispute, there was a Board circular dated 17.9.1975 which clarifies that the breakage of bottles in the manufacture of aerated beverages upto 0.5% is condonable and manufacturer is not liable to reverse the credit - in favour of Appellant.
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2012 (12) TMI 770
Invoking extended period of Limitation - Suppression of facts – Held that:- As decided in HYDERABAD POLYMERS (P) LTD. Versus COMMISSIONER OF C. EX., HYDERABAD [2004 (3) TMI 66 - SUPREME COURT OF INDIA] once the earlier Show Cause Notice, on similar issue has been dropped, it can no longer be said that there is any suppression. The extended period of limitation would thus not be available.
As in the present case department had issued a show cause notice dated 28.08.2008 demanding duty for the period from April 2004 to June 2008 invoking extended period under proviso to Section 11A(1) on the ground that the process undertaken by the appellant amounts to manufacture and they had suppressed the relevant facts from the department. On the basis of the same facts the department has issued show cause notice for subsequent period from July 2008 to 4.12.2008 on 6.7.2010 again invoking the extended period, which in view of the Apex Court's judgement in the case of Nizam Sugar Factory (2006 (4) TMI 127 - SUPREME COURT OF INDIA) is not permissible - in favour of assessee.
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2012 (12) TMI 769
Cenvat credit denied - ISD has availed cenvat credit of the invoices issued by the service provider - Waiver of the pre-deposit of Duty, Interest and Penalty - Held that:- The provisions of Service Tax Rules cannot be invoked for denying the cenvat credit of the input services which were availed by the ISD and distributed. It is undisputed that the ISD has received the services and taken the credit and distributed services to various locations, including current appellant. Thus the appellants have made out a prima-facie case for the waiver of the pre-deposit of the amounts involved.
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2012 (12) TMI 768
SSI Notification No.8/2003-CE – denial as use of others Brand Name/Trade Name – Penalty - Held that:- As per the provisions of SSE Notification No.8/2003-CE & as decided in CCE, TRICHY Versus GRASIM INDUSTRIES LTD. [2005 (4) TMI 64 - SUPREME COURT OF INDIA] if the goods are manufactured with the brand name which resembles to the brand name registered with the other person, the manufacturer is not entitled for the benefit of the Small Scale Exemption Notification
Admittedly, the brand name PYRO ELECTRIC is registered with M/s. Pyro Electric Instruments Goa Pvt. Ltd. and the applicants are manufacturing goods with the brand name by adding the word INSTRUMENTS the manufacturer assessee is not entitled for the benefit of Notification - the applicants failed to make out a case for total waiver of duty, thus directed to deposit Rs.25,00,000/- within a period of eight weeks & report Compliance.
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2012 (12) TMI 767
Clandestine clearances of M.S. Ingots - Duty Evasion - Penalty u/s 11AC – Held that:- Duty evasion of Rs. 2,49,079/- is based on shortage of 77 M.T. of M.S. scrap vis-a-vis the balance recorded in the RG-23A register. The stock taking had been conducted in presence of Shri S.P. Gupta who accepted the shortage and had even debited an amount of Rs. 1,20,551/- representing the Cenvat credit availed on this quantity. In view of this, the appellant's plea that shortage was not real shortage is difficult to accept. Therefore, the duty demand of Rs. 2,49,079/- based on the presumption that the 77 M.T. of M.S. scrap found short had been used for manufacture of M.S. ingots which were cleared clandestinely without payment of duty appears to be on strong footing.
The appellant have not shown the purchase of scrap/sponge iron valued at Rs. 4,43,89,566/- during November 2008 - January 2009 period is their books of account. Therefore, the department justified in presuming that this scrap/sponge iron was used in unaccounted manufacture of M.S. ingots which were cleared without payment of duty and without issue of invoicing. The fact that the appellant had declared an unaccounted income of Rs.85 lakhs for 2007-2008 to Income tax authorities also indicates that they were having substantial unaccounted sales. The presence of a truck fully loaded with scrap, found in the appellant's factory also indicated that they were purchasing M.S. scrap their principal raw material without any invoices - not a case for total waiver - directed to deposit the balance amount of duty demand i.e. Rs. 70,42,769/- alongwith interest and Shri Jiwan Singla, Director of the appellant company an amount of Rs.4,00,000/- within a period of eight weeks from the date of this order.
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2012 (12) TMI 741
Denial of Cenvat Credit - input service distributor - services of M/s. Ernst & Young Pvt. Ltd. were used for the project of Certified Emission Reduction Sale of Carbon - Held that:- The services availed from M/s. Ernst & Young Pvt. Ltd., were admittedly for modernisation of the power plant of the appellant. Such power plant is used for manufacture of paper which is liable to Central Excise. In addition, if the appellant, by way of entering into an agreement with the England based company gets profit by way of earning carbon credit, it cannot be held that said services of M/s. Ernst & Young Pvt. Ltd., were for the purpose of earning the credit.
Show cause notice itself admits the factum that the consultancy service provided by M/s. Ernst & Young Pvt. Ltd., to the appellants was to facilitate them in installing projects of high technical equipments to the power plant in which fossil fuel like rich husk are used which reduces carbon emission. They again submitted that installing projects of high technical equipment is nothing but Modernisation of a factory and as per Cenvat credit Rules, 2004, services used in relation to modernisation are eligible for Cenvat credit. Admittedly, the main activity of the appellant is to manufacture paper for which electricity is used from captive power plant & as the paper being manufactured by them is leviable to excise duty no reason to deny the benefit of Cenvat credit availed on the said services - in favour of assessee.
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2012 (12) TMI 740
Cenvat Credit denied - Non mentioning or incorrect address of the appellants on the invoices - Held that:- As Services availed were for sales promotion and those were rightly availed by appellant, distantly located units of the appellant availed the benefit of cenvat credit in a distributed fashion which is otherwise guarded by Revenue by a centralised registration process. No doubt, mere submission of document shall not ipso facto grant relief to claimant but once the facts and circumstances of the case bring out the identity of the receipient of service, denial of cenvat credit may cause absurdity and when claim is otherwise permissible - Cenvat Credit allowed - in favour of assessee.
Transportation of staff by bus - Held that:- In absence of evidence whether Transport facility is used either for manufacture or in relation to manufacture or providing output service, thus in absence of nexus and integrity, the appellant fails to succeed - Cenvat Credit disallowed - against assessee.
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2012 (12) TMI 739
SSI exemption under Notification No.1/93-CE - denial of exemption as goods selling under brand name belonging to another person - whether just by adding the word "Dugar" before the word "Tetenal" and using the brand name "Dugar Tetenal" on the goods would disentitle the respondent company for the benefit of SSI exemption - Held that:- As decided in CCE, Trichy Vs. Rukmani Pakkwell Traders 2004 (2) TMI 69 - SUPREME COURT OF INDIA] that use of part of brand name or trade name of another person, so long as it indicates a connection in the course of trade, would be sufficient to disentitle the person for the SSI exemption.
As it is not disputed that the word "Tetenal" used along with the "Dugar" on the goods manufactured by the respondent company is the brand name of M/s. Tetenal Vertribs GmBH, Germany, with whom the respondent had technical collaboration and as such, the word "Tetenal" indicates a connection in the course of trade with M/s.Tetenal Vertribs GmBH, Germany. We, therefore, hold that the impugned order extending the benefit of SSI exemption under Notification No.1/93-CE to the respondent company in respect of the goods cleared with the brand name "Dugar Tetenal" is not sustainable and is liable to be set aside - in favour of Revenue.
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2012 (12) TMI 738
Rectification of mistake - Held that:- There is no dispute of availment of credit of duty paid by the current appellant, by their sister unit to whom the goods were cleared. The assessee having paid the duty liability before issuance of Show Cause Notice and there being no malafide attached to such under-valuation, the interest liability confirmed by the lower authorities needs to be set aside - final Order needs rectification - nin favour of Assessee.
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2012 (12) TMI 709
Transfer of balance CENVAT credit from one PLA account to another PLA - seeking waiver of pre-deposit of dues - Held that:- Balance amount in PLA could have been obtained as refund in cash and deposited in the other account - there is no time limit for taking refund of balance in PLA. If there is any violation, it is only technical in nature and hence, there is no justification for any demand and imposition of penalty - waiver of pre-deposit of dues allowed - stay of recovery thereof till disposal of the appeal.
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