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Central Excise - Case Laws
Showing 101 to 120 of 225 Records
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2013 (8) TMI 498
Cenvat credit - Outward transportation of the goods - Commissioner disallowed benefit - Held that:- Commissioner relied on decision of ABB Ltd. Vs. CCE [2009 (5) TMI 48 - CESTAT, BANGALORE] and rejected appeal however, this decision is now reversed by Karnataka High Court [2011 (3) TMI 248 - KARNATAKA HIGH COURT] - Therefore following this decision - Decided against Revenue.
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2013 (8) TMI 467
Classification of goods under tariff heading no. 30.03 (medicament) - ‘Moisturex’ - ‘Care or cure’, is the clue for the resolution of the lis arising in these cases. If the product by name ‘Moisturex’ is held to be a medicament for cure, the decision goes in favour of the assessee and if the product is held to be one for care of the skin, the decision benefits the Central Excise – Held that:- ‘Moisturex’ cream is prescribed by the dermatologist for treating the dry skin conditions and that the same is also available in chemist or pharmaceutical shops in the market. The cream is not primarily intended for protection of skin. The ingredients in the cream, the pharmaceutical substances do show that it is used for prophylactic and therapeutic purposes - Heading 33.04 dealing with beauty or make-up preparations and preparations for the care of the skin has specifically excluded medicaments - Having regard to the pharmaceutical constituents present in the cream ‘Moisturex’ and its use for the cure of certain skin diseases, have been classified as medicament liable to be classified under the Heading 30.03 (medicament) – Reliance is placed upon the judgment in the case of Alpine Industries vs. Collector of Central Excise, New Delhi [2003 (1) TMI 103 - SUPREME COURT OF INDIA] – Decided in favor of Assessee.
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2013 (8) TMI 466
Rule 6(3)(b) of Cenvat credit Rules – No separate accounts maintained for dutiable as well as exempted goods - Appellant is engaged in the manufacture of barley malt – Records revealed the manufacture of malt culms and jao bhusi (cattle feed) - Appellant’s contention is that jao bhusi and malt culms are not their product but only a waste – Held that:- Fact that these goods i.e. malt culms and jao bhusi are regularly being sold by them at the nil rate of duty. Since goods Jao bhusi and the malt culm are cleared at nil rate of duty and appellant is not maintaining separate accounts for dutiable goods as well as for exempted goods - Rule 6(3) are squarely applicable – Decided against the Assessee.
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2013 (8) TMI 465
Cenvat credit on sil covers / sil sheet - sil covers / sil sheet are used to cover their final product ‘malt’ for the purpose of protecting it from the rain and moisture – Held that:- Sil cover/ Sil sheets are used to cover the final product to protect it from rain / rainy water and the moisture. These are used after final product Barley malt is manufactured – Cenvat Credit not allowed – Decided against the Assessee.
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2013 (8) TMI 464
Demand under Rule 6(3) - Cenvat credit availed - Held that:- bagasse emerges in course of crushing of the sugarcane - neither the show cause notice nor the impugned order in appeal mentions as to which common Cenvat credit availed inputs have been used in manufacture of sugar and, molasses (dutiable final product) and bagasse (exempted final product). Since Bagasse emerges at sugarcane crushing stage, there is no possibility of any inputs-chemicals etc. having been used at that stage - Following decision of BAJAJ HINDUSTAN LTD. Versus COMMISSIONER OF CENTRAL EXCISE, MEERUT-I [2013 (4) TMI 180 - CESTAT NEW DELHI] - Decided in favour of assessee.
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2013 (8) TMI 463
Rule 6(3) of Cenvat Credit Rules, 2004 - Appellant did not maintain separate accounts for the input services used in or in relation to the manufacture of product dutiable as well as exempted products - Two options were available to them, i.e., either to pay 5%/10% of value of the exempted goods or pay an amount equal to the credit attributable to the input services used in or in relation to manufacture of exempted goods subject to the provisions of Sub-rule (3A) – When mistake was pointed to the appellant of taking full credit of the input services, he reversed not only the credit taken on input services used in the manufacture of exempted goods but also the credit taken on input services used in the manufacture of dutiable goods. In other words, the appellant reversed the entire credit taken along with interest thereon – Held that:- Rule 6(3) (i) will not have any application, when a credit is taken wrongly and the same is reversed along with interest as it tantamount to non-taking of the credit, relying upon the judgments in the case Hello Minerals Water (P) Ltd [2004 (7) TMI 98 - HIGH COURT OF JUDICATURE AT ALLAHABAD], wherein it is held that “reversal of Modvat credit amount to non-taking of credit on the input and even if such reversal was done after the clearance of the goods the said action amounts to non-availment of credit - In view of this decision along with various other decisions s.a. in the case of Chandrapur Magnet Wires (P) Ltd.[ 1995 (12) TMI 72 - SUPREME COURT OF INDIA], the reversal of credit by the appellant on the entire service tax taken along with interest thereon both in respect of dutiable goods as well as exempted goods amounts to non-availing of credit and, therefore, the provisions of Rule 6(3)(i) are not attracted and the confirmation of demand by the adjudicating authority directing the appellant to pay an amount at the rate of 5%/10% of the value of the exempted goods is not sustainable in law. Consequently, the imposition of penalties on the appellant and appellant firm and its manager are also not sustainable in law and accordingly, they are set aside – Decided in favor of Assessee.
Penalty under Rule 15(3) of Cenvat Credit Rules, 2004 – Held that:- Appellant has initially availed credit and only on pointing out by the department they have reversed the credit and, therefore the appellant is liable to penalty under Rule 15(3) of the Cenvat Credit Rules 2004 for contravention of the provisions of Cenvat Credit Rules. The maximum penalty imposable under he said Rule is ₹ 2000/- and accordingly the appellant is liable to pay penalty of ₹ 2000/-.
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2013 (8) TMI 462
Stay Application - Pre-deposit of amount - In respect of four traders - Appellant-RUL not submitted any assessment order of Sales-tax/VAT Authority of respective State. Moreover, report sent by Joint Excise and Taxation Commissioner does not incorporate the names of M/s Goverdhan Sales Agency and M/s S.S. Traders as their registered assesses. Similarly, registration of M/s New General Company was cancelled in 1995 by the said Authority. In respect of M/s V.K. Trading company, applicant did not show any evidence in respect of their contention about existence of said firm- appellant-RUL does not have a prima facie case in respect of these four traders – Held that:- Pre-deposit of Rs. 15 lakhs within six weeks. Decided against the Assessee.
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2013 (8) TMI 461
Transfer of manufactured product to another unit - Captive Consumption – Rule 8 of Valuation @ 110%/115% of cost of production - Appellants manufactured wire rods and stock transferred the same to their Borivali unit on payment of duty. - On scrutiny of records by the department, it was observed that the appellants while computing the cost of production of wire rods only took into consideration the cost of production of the billets instead of 115% /110% of the cost of production of the billets, which resulted in short payment of duty – There is short payment of duty inasmuch as the assessable value of wire rods should be 115%/110% of the cost of production of billets – Held that:- As per the case of Nirlon Ltd. vs. CCE [2004 (10) TMI 363 - CESTAT, MUMBAI], the concept of revenue neutrality is not novel to a manufacturer where the goods are modvatable. Thus the Goregaon factory is aware that whatever duty is discharged while clearing the goods to Tarapur unit the latter will be in a position to take such duty as Modvat credit. Despite that if an unit chooses to suppress certain facts and thereby short pays duty, the consequences of such action would befall him.
As per the Larger Bench in Jay Yuhshin Ltd. v. CCE, New Delhi [2000 (7) TMI 105 - CEGAT, COURT NO. I, NEW DELHI] - Revenue neutral situation comes about in relation to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assessee's manufactured goods – In case two assessees albeit belonging to the same group - We are not aware as to what financial considerations the Goregoan unit had in mind when it chose to deliberately understate the value of the goods manufactured and cleared by it to the Tarapur unit nor are we expected to go into such calculations. Revenue neutrality is a concept known to both the units. The allegation of evasion does not get mitigated by the fact that one unit is entitled to take Modvat credit of duty paid by the other – Held that:- The appellants recognize the cost as 115%/110% of the cost of production which is nothing but a conscious and positive act on the part of the appellant. Similarly, short payment of duty by under valuation of wire rods is equally a conscious and positive act of suppression of facts on the part of the appellant - Raising a hypothetical question and taking shelter of revenue neutrality does not come to the appellant's rescue – Decided against the Assessee.
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2013 (8) TMI 449
Levy of Textile Cess - Textile Cess was demanded from the petitioner which had been further confirmed – Petitioner contended that the job work undertaken by them was not a process of manufacturing textile – Held that:- The petitioners were job workers and were doing bleaching, dyeing etc. on the textile so supplied to them, they will be treated as extended hand of hand-loom and power-loom textile manufacturers - The hand-loom and power-loom textile manufacturers instead of getting work of bleaching etc. done by themselves, have engaged the petitioner on job work basis - The petitioner received the textile and after doing the needful return the textile to such manufacturers - Section 5A imposes cess for the purposes of the Act, 1963, a duty of excise on all textiles and on all textile machinery manufactured in India -The word 'manufacture' is not defined in the Act, 1963 - The Textile Committee had been set up to carry on inspection to enable the exporters to claim replacement entitlements under the registered exporter policy as finds mention in the statement of objects to Amending Act No.51 of 1973 – order of Demand was quashed.
The textile manufactured out from hand-loom and power-loom industry had been exempted under section 5A, obviously no inspection in respect of textile manufactured by such industry was required and therefore, it was reasonable to conclude that the activity undertaken by an extended hand of these manufacturers will also be not liable to pay the impost of cess under the Act. - Decided in favor of assessee.
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2013 (8) TMI 428
Interest on wrong availment of Cenvat Credit – Appellant availed ineligible Cenvat Credit – Held that:- As per the Hon'ble apex Court in the case of Ind-Swift Laboratories Ltd. [2011 (2) TMI 6 - Supreme Court], - there is no difference between the expression "credit taken" and the "credit utilised" for the purpose of recovery of wrongly availed credit Rule 14 of Cenvat Credit Rules, and if any credit has been taken wrongly, even though not availed, interest liability would accrue – Interest payable on the wrong availment of Cenvat Credit – Decided against the Assessee.
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2013 (8) TMI 427
Manufacture of Jewellary - Exemption - Affixing brand name on Jewellary - Pre-deposit – Stay application - Notification No.5/2006-CE, dated 01.03.2006 stipulates the payment of duty on articles of jewellery on which brand name or trade name is indelibly affixed or embossed on the articles of jewellery itself – The contention of the Revenue that the alphabets 'I' or 'Q' are brand name. The jewellery demonstrated by the learned senior counsel would show that alphabet 'I' or 'Q' were used with the letters 'A', 'B' and 'H'. According to the applicant, the said alphabets were used to identify the job worker, which is in conformity with illustration referred in the Board's Circular F.No.B-1/1/2005-TRU, dated 04.03.2005.
Held that:- As per the case of Austrailian Foods (India) Pvt. Ltd. [2013 (1) TMI 330 - SUPREME COURT], where no brand name was affixed or inscribed on the cookies. In that case, the Hon'ble Supreme Court allowed the appeal of the Revenue as the brand name used the word "cookie man" accompanied with the logo on the plastic pouches/containers in which the goods were sold.
In the present case, the notification imposed a pre-condition that "the brand name or the trade name is indelibly affixed or embossed on the articles of jewellery itself'. Thus, the said decision appears to be not applicable to the facts of the present case - Demand is barred by limitation would be looked into at the time of final hearing – Applicant is directed to deposit Rs.7 crores (Rupees Seven Crores only) within a period of four weeks.
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2013 (8) TMI 426
Clandestine removal – Confiscation of goods - Goods were found without entry in the RG-I register - Held that:- Except for finding that the goods were lying in the factory, there is neither any material to show that there was intention to evade duty, on the contrary, the evidence that has come on record only indicates that the goods were not subjected to quality control test and they were kept on hold, they were to be cleared by the quality control department and only thereafter were to be sent to the packing department after the quality control test was concluded - Revenue, in the present case has not acted in a reasonable manner in the matter of enforcing the penal clause against the petitioner. Enforcement of penal clause has to be done subject to strict proof of intention to evade payment of duty. In the present case, neither intention to evade duty is established nor is there any material to establish the same and on the contrary the explanation of the petitioners and the fact that the material was not subjected to quality control test has been totally ignored. Merely because in the statement, the Commercial Manager of the petitioners has stated that the goods were manufactured that by itself cannot be a ground for holding that the goods were ready for despatch to the customer - The confiscation of the goods ordered by the lower authorities is liable to be set aside - Question of imposing penalty either on the appellant-assessee or its partner does not arise – Decided in favor of Assessee.
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2013 (8) TMI 425
Extension of period of limitation - RT-12 returns/ ER-1 returns were regularly being filed by the appellants to the department - Appellants were regularly being audited by the Central Excise officers and no objection on the issue of free supply of goods by the principal manufacturer as well as on amortisation cost was raised by the audit during their visits – Held that:- It is not the case of the department that the documents/ RT-12 returns and other records were not submitted to the officers of the audit team by the appellants. Once the officers have audited the records they were supposed to examine each and every issue in respect of appellants for the audit period – Therefore, finding of the Commissioner that it is not clear whether audit had in fact examined this issue or not is not sustainable - Extended period as provided under Section 11A of the Central Excise Act will not be applicable in the present case.
Show cause notice was issued on 05.01.2005 - Demand issued in the show cause notice beyond the period of one year is completely time barred - Since there is no finding from the RUDs 18 and 19 that there is any clearances after 04.01.2004, entire show cause notice is hit by time limitation – Decided in favor of Assessee.
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2013 (8) TMI 424
Wrong availment of Cenvat Credit on input - Cenvat Credit denied and demanded from the appellant by invoking proviso to Section 11A(1) of the Central Excise Act, 1944 (the Act) on the ground that the first appellant had not received the inputs but has taken the credit of the same during the period from April 2004 to October 2007 - Held that:- By denying cross-examination and re-examination of the evidence with regard to the transportation, these submissions have escaped consideration totally - Further, in case where only NOC had been issued by RTO as submitted, it cannot be said that the vehicle may not have been used. In such a case, evidence available to the department becomes only submission of the owner without any documentary evidence - There was a need for consideration as to whether cross-examination of the owners of the vehicles was required in the context of the facts and circumstances in respect of the each vehicle. Further, since the issue relating to SOL is based on data of logbook and statement of Managing Director of the appellant-company, there was a need for consideration of request for cross-examination - On the whole, the request for cross-examination has not been dealt with adequately - Matter is remanded to the original adjudicating authority for fresh consideration of the whole case.
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2013 (8) TMI 423
Penalty uner Rule 173Q - Quantification of the demand of duty - Commissioner rejected assessee's demand of quantification of the demand of duty - Held that:- The demand of duty is required to be re-quantified by treating the entire realization as cum duty price and by excluding the value of bought out monitors - Existence of sales invoices and purchase invoices of the appellants is not disputed, as the annexure to the show cause notice wherein duty calculation has been worked out, indicate the existence of such purchase invoices. Both the lower authorities instead of accepting the chart produced by the appellant has put onus on the appellant to produce the evidences of the value of monitors claimed as deduction by the appellant, instead of accepting the fact that the said value can be ascertained by themselves from the records available in their possession - invoices are not available in one case and not producing in another case itself indicates that department was not serious in arriving at the correct duty liability on the appellants - Following decision of CMS COMPUTERS PVT. LTD. Versus COMMISSIONER OF C. EX., MUMBAI - I [1998 (11) TMI 280 - CEGAT, MUMBAI] - Decided against assessee.
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2013 (8) TMI 422
SSI exemption - Use of trademark - Commissioner set aside penalty - Held that:- brand name or trade name can be any name, symbol, monogram or mark which indicates a connection between a person and the goods being manufactured or traded by him. Such brand name or trade name need not be registered with the trade mark authority. In fact the ‘brand name’ or ‘trade name’ symbolises the goodwill of a manufacturer or a trader or service provider which he has earned over the years so that any goods affixed with that mark are associated with that person. In this case, the mark ‘KPM’ is of M/s. K.P. Manufacturers and there is no dispute that the appellant had an agreement with M/s. K.P. Manufacturers for using the mark KPM on their goods for which a royalty was being paid - the mark ‘KPM’ of M/s. K.P. Manufacturers has to be treated as their unregistered trade mark which they were trying to popularise. Since, KPM is a brand name of M/s. K.P. Manufacturers, the use of this brand name by the appellant would disentitle them for the benefit of SSI exemption - Assessee has been paying the duty on the forgings affixed with the brand name KPM at normal rate and as such, there is no short payment of duty - Decided against Revenue.
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2013 (8) TMI 392
Remission under Rule 21 of the Central Excise Rules, 2002 and under Section 23 of the Customs Act – Fire Accident in the in the factory and the applicant - Applicants procured the raw material as well as the capital goods indigenously as also imported, without payment of duty – Held that:- Revenue is not disputing the incident of fire – Also, ld. Sr. Counsel appearing on behalf of the applicant made a statement that the duties in respect of Excise and Customs regarding which remission claim are not part of their insurance claim - Application for waiver of the pre-deposit of the dues is allowed and recovery thereof stayed during the pendency of the appeal – Decided in favor of Assessee.
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2013 (8) TMI 391
Cenvat Credit on iron and steel items like angles, channel, joist, bar, plates, sheets and coil falling under Chapter heading 72 under the category of capital goods - Appellant are engaged in the manufacture of sugar and molasses falling under Chapter 17 of the Central Excise tariff – Capital items which are in the nature of construction material and are not used in or in relation to the manufacture of final products i.e. Sugar and molasses – Held that:- Issue in relation to the Cenvat credit in respect of structural steel items like angles, channels sheets and joists etc. came for decision before the Larger Bench in the case of Vandana Global reported in [2010 (257) ELT 440 (Tri-LB - Del] in which it was held that these items are used for laying foundation and structural support which are neither the machinery items nor components or parts of plant and machinery and therefore are not covered in the definition of capital goods – Relying upon the decision in the case of Vandana Global, Credit of duty paid on these items used in foundation and supporting structures is not available to the assessee – Decided in favor of Revenue.
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2013 (8) TMI 390
Documents for availing Cenvat Credit in terms of rule 9(1) of Cenvat Credit Rules, 2004 - Appellant is engaged in the manufacture of Lead Oxide, Metallic Stearates, Zinc Oxide etc. they purchased a consignment of inputs and raw materials on high Sea Sales basis. The bill of entry was filed by them and the goods were cleared by availing the services of CHA and various other agencies. As the invoices raised by the services providers were either in the name of CHA, or the original importer a/c appellant - Appellant has availed Cenvat Credit on the Strength of debit notes as shown in Annexure 'A' to the show cause notice - Some bills do not have mention of service tax registration of the service providers, some bills do not have reference of separate service tax amount, some bills are not issued in the appellant's name - Some invoices do not have the reference of name of the service provided – Credit to be availed on the basis of proper documents – Held that:- learned Advocate submission for setting aside the impugned order and allowing the appeal by following the earlier decision of the Hon'ble member judicial, in their own case Appeal stands allowed with direction to the appellant to file affidavit that the credit shall not be subjected to repeated claim in different hands i.e. one in the hands of the appellant and other in the hands of others making abuse of those documents - Assessee to file affidavit for himself and no affidavit can be filed on behalf of the other persons, swearing that the other person will not claim the credit on the basis of the said documents - Unable to follow the above order and to allow the appeal on the short ground of filing of affidavit by the appellant on behalf of others – Case remanded back for deciding the issue on merit.
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2013 (8) TMI 389
Waiver of pre-deposit – Stay application - Issue involved is availability of Cenvat credit in respect of various iron and steel items used as supporting structures in the appellants' factor. The issue finally stand decided against the appellant by the Larger Bench of Tribunal in the case of Vandana Global Ltd. vs. CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] – Further, the appellants advocate agreed that the issue stand decided against them - Only contention raised that there was no malafide or mis-statement or suppression with intent to evade payment of duty on the part of the applicant and as such, the benefit of limitation should be extended to them – Held that:- The demand of around Rs.One crore fall within the normal period of limitation, they were directed to deposit the said amount within the period of 10 weeks (period suggested by learned Advocate).
As regards, the financial condition, appellants have not placed any document/evidence on record reflecting upon their poor financial condition - Two letters addressed to the Bank exchequer, throws no light on their actual financial condition - On the other hand, the report of jurisdictional Additional Commissioner (Rev) is very clear indicating progress in business of the appellant inasmuch as the production is admittedly higher than the previous corresponding period and payment of duty is also on the higher side.
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