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Central Excise - Case Laws
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2024 (5) TMI 461 - DELHI HIGH COURT
Reward to informers - Wilful and deliberate disobedience - Disbursement of reward to the petitioners in terms of the policy of the respondents within a period of two months - The petitioners argued that since the appeal had been concluded and no further appeal was pending, the matter pertaining to the amount payable by the assessee had been finalized, warranting the release of the reward. - HELD THAT:- This Court notes that the assessee-company had voluntarily deposited a sum of ₹ 4,40,00,000/- with the respondents. After the dismissal of the application of the assessee-company under the Resolution Scheme, a further amount of ₹ 4,46,00,000/- was demanded by the GST Department on account of non-payment of redemption by the assessee, which the assessee-company was directed to deposit. Against the aforesaid further demand of ₹ 4,46,00,000/-, the assessee-company has already filed a writ petition being W.P.(C) 9311/2022, which is pending adjudication before the learned Division Bench.
Thus, when the demand of the respondent-department with respect to payment of ₹ 9 Crores by the assessee-company still stands and further demand of ₹ 4,46,00,000/- has been raised by the respondents against the assessee-company, and the said issue is still pending adjudication before the learned Division Bench in W.P.(C) 9311/2022, it cannot be said that the proceedings against the assessee-company, have been closed.
This Court also takes note of the submissions made by learned counsel for the respondents that the respondents cannot go beyond their Scheme, as no discretion is vested with the respondents to release any amount towards the reward, before finalization of the proceedings against the assessee-company - it is held that there is no willful and deliberate disobedience of the order by the respondents.
The petition is disposed off.
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2024 (5) TMI 460 - CESTAT KOLKATA
Process amounting to manufacture or not - tilting, separating and pressing with hydraulic press - Revenue submitted that the respondent has manufactured foot oil, pressed wax and paraffin wax by applying hydraulic press and the products are marketable as separate commodities - HELD THAT:- The respondent has imported slack wax and residue wax. Slack wax and residue wax both have oil content varying from 30 to 70% and the respondent only separated those by tilting the drums, where 90% of the oil was emptied and separated. About 10% of the oil was separated by squeezing for which a pressing machine was used by the respondent. It is observed that the separation or emptying the drum and separating the oil from the slack wax and residue wax does not involve any process amounting to manufacture. No machinery or equipment was utilized for the purpose of such separation - the process undertaken by the respondent cannot be considered as a process amounting to manufacture as defined in Section 2(f) of the Central Excise Act, 1944.
Thus, no process amounting to ‘manufacture’ as defined under Section 2(f) of the Central Excise Act, 1944 has been undertaken by the respondent in the process of separation of foot oil, pressed wax and paraffin wax from the slack wax and residue wax imported by them. Thus, the findings of the Ld. Commissioner (Appeals) in the impugned order is agreed with and it is held that no process amounting to ‘manufacture’ as defined under Section 2(f) of the Central Excise Act, 1944 has been undertaken by the respondent.
The respondent also relied upon the decision of the Tribunal in the case of KERALA MINERALS & METALS LTD. VERSUS COMMISSIONER OF C. EX., KOCHI [2007 (4) TMI 38 - CESTAT, BANGALORE] and the decision of the Tribunal Kolkata in the case of INDIAN RARE EARTHS LTD. VERSUS COMMISSIONER OF C. EX., BBSR-I [2001 (9) TMI 167 - CEGAT, KOLKATA], wherein it has been held that separation of mineral sand by physical and mechanical process does not amount to manufacture.
Thus, no process amounting to ‘manufacture’ as defined under Section 2(f) of the Central Excise Act, 1944 has been undertaken by the respondent - there are no infirmity in the impugned order and hence, the same is upheld.
Appeal of Revenue dismissed.
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2024 (5) TMI 459 - CESTAT AHMEDABAD
Reversal of CENVAT Credit - by-product, namely, Ammonium Sulphate arising during the course of manufacture of final product, namely, Potassium Cyanides, Sodium Cyanides - Rule 6(3) of Cenvat Credit Rules - HELD THAT:- On the very same issue in the appellant’s own case [2024 (4) TMI 323 - CESTAT AHMEDABAD], it has been decided that the Ammonium Sulphate being a by-product arising out of manufacture of final product namely, Potassium Cyanide and Sodium Cyanide, the same will not be liable for payment of an amount in terms of Rule 6(3) of Cenvat Credit Rules, 2004.
In the present case also the impugned orders are not sustainable - The appeals are allowed.
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2024 (5) TMI 412 - CESTAT AHMEDABAD
Penalty u/r 26(1) of Central Excise Rules, 2002 - charge of abating the evasion of duty by M/s. Phenix Construction Technologies - The appellant argued that the case of the main party involved in the duty evasion had been settled under the SVLDRS - HELD THAT:- The appellant has been penalized under Rule 26 (1) in connection with the duty evasion made by M/s. Phenix Construction Technologies and the case of M/s. Phenix Construction Technologies has been settled under SVLDRS-2019 and the appeal was disposed of by this Tribunal vide order dated 10.06.2021, hence, the personal penalty of the appellant is not sustainable in the light of various judgements.
Reliance can be placed in SHRI V.K. AGGARWAL AND SHRI J.K. AGGARWAL VERSUS COMMISSIONER OF CENTRAL TAX, CGST AND CENTRAL EXCISE, NEW DELHI [2023 (9) TMI 178 - CESTAT NEW DELHI] and M/S. SIEMENS LTD. (FORMERLY KNOWN AS M/S. MORGAN CONSTRUCTION CO. PVT. LTD.) , MR. SUNIL CHELLANI VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III [2023 (5) TMI 377 - CESTAT MUMBAI] where it is settled that once the main case of duty evasion is settled under SVLDRS, 2019, the penalty on the Co- Noticee/appellant shall not survive.
The penalty is set aside. The Appeal is allowed.
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2024 (5) TMI 411 - CESTAT AHMEDABAD
Levy of service tax - Construction service provided to Government body - commercial or industrial construction services or not - extended period of limitation - HELD THAT:- Though the demand pertains to various service providers and of different services but no bifurcation as per service recipient was provided either in the show cause notice or in the adjudication order. Therefore, before crystalizing the demand, it is necessary that the service recipient vise bifurcation should be made, The levy of service tax depends on the nature of service and the category of the service recipient particularly when the assessee claim exemption on account of service provided to Government.
After passing the impugned order various judgments were delivered on the identical issue which was neither before the Adjudicating Authority nor the same was considered. The issue on limitation also needs to be reconsidered properly. Therefore, the matter has to be remanded to the Adjudicating Authority.
The impugned orders are set aside. Appeals are allowed by way of remand to the Adjudicating Authority.
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2024 (5) TMI 410 - CESTAT ALLAHABAD
CENVAT Credit - only one tank furnace installed in factory in which dutiable as well as exempted goods were being manufactured - maintaining separate records/ inventory for the inputs/input services - HELD THAT:- Similar issue has been considered by the this bench in case of Geeta Glass Works [2018 (1) TMI 968 - CESTAT ALLAHABAD] where it was held that 'the objection adopted by the adjudicating authority cannot be accepted inasmuch as the provisions of Rule 6 (1) of the Cenvat Credit Rules requires as assessee to maintain separate account only in respect of cenvatable inputs and there is no requirement for maintenance of such records in respect of non cenvatable inputs. Further, we also note that there is no requirement of storing both types of inputs separately. Similarly, use of a common furnace would also not be a legal objection.'
From the above decision and the amendments made in the provisions of Rule 6 (3) permitting proportionate reversal credit in respect of common inputs used for manufacture of both dutiable and exempted goods which have been held to be retrospective, the demand made, by asking the appellant to pay the amounts @ 8% of value of exempted goods cannot be sustained. In any case this will be relevant only if on verification it is found that appellant was not maintaining separate records for common inputs used in manufacture of both dutiable and exempted goods.
It has been the case of the appellant that they were maintaining the separate records, and have referred to Annexure 5 in Volume II of the Paper book. These documents as per which the separate records were claimed to have been maintained have to be reconsidered by the original authority and re-determine the issues involved. These documents cannot be brushed aside for the reasons stated in the impugned order.
The impugned order is set aside - matter remanded back to original adjudicating authority for de-novo consideration - appeal allowed by way of remand.
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2024 (5) TMI 375 - CESTAT KOLKATA
Suppression of production and clandestine removal of excisable goods without payment of duty - demand confirmed on the basis of certain loose sheets/documents recovered from the trading firm located in the same premises where the appellant-company is also located - demand also based on statements recorded from the Director Shri Amit Agrawal - corroborative evidences or not - Penalty imposed on Shri Amit Agrawal, Director - HELD THAT:- The installed capacity of the unit was 6,000 M.T. only. As per the records, the appellant has produced 5377.140 M.T. of the goods and cleared the same on payment of duty. There is no evidence brought on record to show any increase in the installed capacity of the unit during the material period. There is no evidence available regarding excess consumption of electricity or procurement of raw material or utilization of labour to produce excess goods clandestinely. If the excess production of 1365.257 M.T. is added, then that would amount to production of 6742.397 M.T. (5377.140 M.T. + 1365.257 M.T.) by the appellant during a period of 11 months, whereas the installed capacity of the unit itself is only 6,000 M.T. per annum. The adjudicating authority has not given any finding as to how it is possible to produce excess quantity beyond the installed capacity. Thus, the demand has been confirmed much beyond the installed capacity of the unit without adducing any evidence in support of clandestine manufacture and clearance.
The entire allegation is based on certain loose sheets / documents recovered during the course of search. The clandestine removal has not been corroborated with any other evidence. The burden of proving clandestine removal with positive, tangible and cogent evidence is on the Department, to establish that the appellant has manufactured and clandestinely cleared the goods.
For the purpose of establishing clandestine clearance, there must be documentary evidence, to support the said allegation. The entire demand in this case has been made only on the basis of some loose sheets and the statement of Shri Amit Kumar Agrawal. Oral statements being secondary evidence, cannot prevail over documentary evidences. There is no shortage or excess of raw material or finished goods found at the time of search in the factory of the appellant. No parallel invoice was found during the course of search operations. There is no verification done at the customer’s end regarding receipt of the clandestinely manufactured and cleared goods.In the absence of any such evidence, the allegation of clandestine removal cannot be substantiated only on the ground of assumptions and presumptions.
In the entire records of proceedings, there is no evidence to indicate that there was clandestine manufacturing. There is no independent tangible evidence on record of any clandestine purchases or receipt of the raw materials required for the manufacturing of the alleged quantity of finished goods for its clandestine removal from the factory - There is also no cogent evidence of disproportionate and unaccounted receipt and consumption of the basic raw materials and packing material, required for manufacturing alleged quantity of unaccounted finished goods. There are no tangible proof of unauthorized payment for procuring such unaccounted raw material and packing material - thus, the unaccounted production in the factory of the appellant-company has not been established.
There is no corroborative evidence brought on record to substantiate the allegation of clandestine manufacture and clearance of finished goods by the appellant. In the absence of such corroborative evidence, the demand of central excise duty confirmed in the impugned order is not sustainable. In view of the above discussions and the decisions, the demand of Rs.56,52,591/- confirmed in the impugned order, on the basis of the loose sheets/documents found in the trading firm is not sustainable. and hence we set aside the same.
As the demand itself is not sustainable, the question of demanding interest and imposing penalty on the appellant does not arise.
Penalty imposed on Shri Amit Agrawal, Director - HELD THAT:- It is observed that a Statement dated 26.02.2009 was recorded from him by showing 5000 pages of loose sheets after conclusion of search operation at 9.15 pm on 26.02.2009. and it cannot be considered as a certificate of correctness of each and every transaction appearing in loose sheets. Hence, the statement given by him cannot be considered as an admission of his guilt. Since the offence alleged to have been committed by the appellant company is not established, it is held that imposition of penalty on the basis of the same allegation is not sustainable. In the absence of any evidence to show specific role played by a Director and his active involvement, in the commission of the offence, penalty cannot be imposed under Rule 26 of the Central Excise Rules, 2002.
The allegations of clandestine removal and clearance of goods without payment of duty has not been established - the role of the Director in the alleged clandestine manufacture and clearance of the goods is not established - no penalty is imposable on him under Rule 26 of the Central Excise Rules, 2002. Accordingly, the same is set aside.
The impugned order is set aside - appeal allowed.
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2024 (5) TMI 367 - MADHYA PRADESH HIGH COURT
Interest on delayed refund - scope and ambit of Section 11 B and 11 BB of the Central Excise Act, 1944 and Section 35 F and 35 FF of the Central Excise Act, 1944 - HELD THAT:- The issues raised in the present appeal is covered by the judgments in the case of THE PRINCIPAL COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX VERSUS M/S GREEN VALLIEY INDUSTRIES PVT LTD [2023 (7) TMI 1176 - MEGHALAYA HIGH COURT] and COMMISSIONER OF CENTRAL EXCISE, PANCHKULA VERSUS M/S RIBA TEXTILES LIMITED [2022 (3) TMI 693 - PUNJAB & HARYANA HIGH COURT] where it was held that 'On such basis, the Tribunal found that the deposit had not been made on account of any duty or interest which would attract the implied bar under Section 11B of the Act. It was a possible view taken on the set of facts that presented themselves before the Tribunal and, in this appellate jurisdiction, such interpretation does not call for any interference.'
The appeal sans merit and is hereby dismissed.
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2024 (5) TMI 366 - CESTAT CHENNAI
Levy of interest on irregular/excess Cenvat Credit availed but not utilised - invocation of extended period of limitation - levy of equal penalty - HELD THAT:- The issue of leviability of interest on irregularly availed Cenvat Credit is no more res integra in view of the Hon’ble High Court of Karnataka’s decision in the case of 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], wherein it was held 'Without the liability to pay duty, the liability to pay interest would not arise. The liability to pay interest would arise only when the duty is not paid on the due date. If duty is not payable, the liability to pay interest would not arise.'
The invocation of extended period on irregularly availed Cenvat Credit and excess credit is settled in view of this Tribunal’s decision in the Appellants own case [2023 (11) TMI 467 - CESTAT CHENNAI] in Final Order No. 41026/2023 dated 09.11.2023 wherein this Tribunal held that 'the appellant though have taken credit irregularly or wrongly in the books it was never utilized. So, it is not justified to attribute any motive to evade tax to the conduct of the appellant. Even irregularly availed CENVAT Credit has been reversed by the appellant on being pointed out much before the issuance of the Show Cause Notice. As such, invoking extended period is not justified in this appeal.'
It is found that the appellant though have taken credit merely in the books, it was never utilised. So, it is not justified to attribute any motive to evade tax to the conduct of the appellant. Even irregularly availed Cenvat credit has been reversed by the appellant on being pointed out much before the issuance of the Show Cause Notice. As such, invoking the extended period is not justified in this appeal.
Thus, interest is not leviable on the irregular availment of credit and excess credit and also that extended period of limitation is not invokable - the impugned order is set aside - appeal allowed.
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2024 (5) TMI 365 - CESTAT KOLKATA
Benefit of SSI exemption as per N/N. 8/2003-CE dated 01.03.2003 denied - evidence regarding manufacture and trading activities were produced by the appellant or not - refund claim of duty paid on denial of exemption - time limitation - HELD THAT:- The order of the Ld.Commissioner(Appeals) is not sustainable as the Ld.Commissioner(Appeals) has not considered the documents recovered during the course of investigation and merely held that the appellant has failed to produce the evidence regarding the quantum of manufacturing and trading during the impugned period. As the order of Ld.Commissioner(Appeals) is without any basis, therefore, the order passed by the Ld.Commissioner(Appeals) is set aside and the order of the adjudicating authority is affirmed dropping the proceedings against the appellant which was passed after verification of the records produced by the appellant during the course of adjudication as well as thereafter. Therefore, the appellant is entitled for benefit of SSI exemption Notification No.8/2003-CE dated 01.03.2003 - the appellant is not liable to pay any duty.
Refund claim - HELD THAT:- As no demand is sustainable against the appellant and the refund claim has been filed by the appellant within 1(one) month of the order of dropping the proceedings against the appellant by the adjudicating authority, the refund claim filed by the appellant is within time and the appellant is entitled for the said refund claim.
Appeal allowed.
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2024 (5) TMI 325 - CESTAT AHMEDABAD
Entitlement to Cenvat credit on the entire credit distributed by their head office despite the fact that the appellant company having three units - period April 2008 to March 2012 - HELD THAT:- In view of strict interpretation of Rule 7 prevailing prior to 01.04.2012, the entire credit distributed by the head office of the appellant to the appellant’s unit alone is absolutely in the order and the same cannot be disputed.
This issue has been considered by the Hon’ble Bombay High Court in the case of THE COMMISSIONER, CENTRAL TAX, PUNE-I COMMISSIONERATE VERSUS M/S. OERLIKON BALZERS COATING INDIA P. LTD. [2018 (12) TMI 1300 - BOMBAY HIGH COURT] wherein it was held that 'our attention is invited to Rule 7 of the CENVAT credit Rules, 2004 as substituted w.e.f. 1.4.2016 which has made it mandatory for distribution of input services to the various units providing output services. This is evidence by the use of words “shall distribute the Cenvat Credit” in the substituted Rule 7 as Cenvat Credit Rules 2004 w.e.f. 1.4.2016. Therefore, on plain reading of Rule 7 as existing both pre and post amendment 2012 covering period involved in these proceedings, the respondent - assessee was entitled to utilize the CENVAT credit available at its Pune unit.'
Thus, the entire demand which is contrary to the Provision of Rule 7 and the various judgments given on this issue, the demand is not sustainable - the impugned order is set aside - appeal is allowed.
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2024 (5) TMI 324 - CESTAT BANGALORE
Recovery of the cenvat credit wrongly availed along with interest and penalty - input services or not - Management Consultancy or Business Services - credit availed based on the invoices issued by M/s. Biocon Ltd. for mark-up fees / milestone fees against permanent services agreed to be provided - January 2009 to November 2012 - burden to prove on manufacturer.
The adjudicating authority has held that the permanent services include ineligible services like supply of electricity, back-up power, steam, supply of water, extending canteen facilities, Effluent Treatment Plant(ETP) charges, potable water supply charges, etc.; hence not input service; accordingly the mark-up fees / milestone fees paid to the Biocon Limited in connection with ineligible permanent services are not covered under the scope of Rule 2(l) of the Cenvat Credit Rules, 2004.
HELD THAT:- The reasoning of the adjudicating authority deserves to be rejected on two grounds: on going through the individual services i.e. supply of electricity, back-up power, steam, supply of water, extending canteen facilities, Effluent Treatment Plant(ETP) charges, potable water supply charges, etc. necessary for manufacturing activities and it cannot be said to have not been used in or in relation to the manufacture of finished excisable goods from the same premises, which was taken over by the appellant from Biocon Limited. Secondly, putting all these individual services under the taxable category of ‘Management Consultancy Services’ on which service tax paid by Biocon Limited and not objected to by the Department for the relevant period from 2009 to 2012 cannot be questioned in the hands of the receiver i.e. appellant while availing cenvat credit on the said taxable services.
This principle has been upheld by the Hon’ble Supreme Court in the cases of SARVESH REFRACTORIES (P) LTD. VERSUS COMMISSIONER OF C. EX. & CUSTOMS [2007 (11) TMI 23 - SUPREME COURT] and COMMISSIONER OF CENTRAL EXCISE & CUSTOMS VERSUS MDS SWITCHGEAR LTD. [2008 (8) TMI 37 - SUPREME COURT] which has been followed subsequently by this Tribunal in a series of cases - it was held in the case of MDS SWITCHGEAR LTD. that 'A quantum of duty already determined by the jurisdictional officers of the supplier unit cannot be con tested or challenged by the officers in charge of recipient unit.'
There are no reason to deny the cenvat credit availed by the appellant on Business Support Services received against Support Services Agreement dated 18.07.2007 on which service tax paid by M/s. Biocon Limited under the Management Consultancy Services during the said period - the impugned order is set aside.
Appeal allowed.
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2024 (5) TMI 273 - CESTAT CHENNAI
Classification of goods - Sulphuric Acid, used in the manufacture of Agricultural Grade Zinc Sulphate - classified as fertiliser under Chapter 31 of CETA or classifiable under 28332990 of CETA - benefit of exemption N/N. 04/2006-CE (Sl.No. 32) dated 01.03.2006 - HELD THAT:- The appellants have relied on the decision in the case of PUNJAB MICRO NUTRIENTS LTD. VERSUS COLLECTOR OF C. EX. [1990 (4) TMI 122 - CEGAT, NEW DELHI] in support of their contention that the benefit of exemption Notification No. 04/2006-CE dated 01.03.2006 is available for procuring Sulphuric Acid without payment of duty.
The ratio of the above decision has been followed in the case of Himgiri Metal Pvt. Ltd. Vs. Commissioner of Central Excise, Meerut-I [2014 (12) TMI 1030 - CESTAT NEW DELHI] where it was held that 'The only requirement in the present Notification which was also introduced in the previous Notification by way of including Explanation is to explain the meaning of fertilizer. It stands mentioned in the Explanation that fertilizer shall have the meaning assigned to it under Fertilizer (Control) Order, 1985.'
In Jyothi Chemicals & Fertilisers [2023 (8) TMI 1141 - SC ORDER], the plea raised by appellant that Zinc Sulphate (agricultural grade) is known as fertiliser in common parlance was not considered as the said plea was not raised by appellant therein before earlier forums.
Appreciating the ratio of the above decisions as applicable to the facts obtaining in these appeals, the impugned Order cannot sustain and ordered to be set aside - appeal allowed.
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2024 (5) TMI 272 - CESTAT NEW DELHI
Re-quantification of interest (on the refund of the pre-deposit) payment to the appellant - relevant time - interest to be paid from the date of deposit of the amount or from three months from the date of communication of the order? - HELD THAT:- The pre-deposit has been made by the appellant during February/March 2006 and May 2013. During the relevant period, Section 35(FF) of CEA, 1944, as reproduced above, laid down for payment of interest on delayed refund of pre-deposit only after the expiry of three months from the date of communication of the order of the appellate authority, till the date of refund of such amount. There is no dispute that the said impugned order was passed after the amendment in Section 35FF ibid, but it has to be borne in mind that in terms of proviso below amended Section 35(FF) of CEA, 1944, the payment of interest on pre-deposit made prior to 06.08.2014 has to be governed by pre-amended Section 35(FF) of CEA, 1944 only.
It is also that CESTAT, being a creature of the statute, cannot traverse beyond the provisions of the Statute. This view has been held in a catena of decisions viz., M/S. KALI AERATED WATER WORKS REPRESENTED BY ITS PROPRIETOR K.P.D. RAJENDRAN VERSUS THE CUSTOMS EXCISE AND SERVICE TAX, THE COMMISSIONER OF CENTRAL EXCISE NGO 'A' COLONY, TIRUNELVELI [2022 (11) TMI 795 - MADRAS HIGH COURT]. This view is resonated in similar other decisions viz., M/S VEER OVERSEAS LTD. VERSUS CCE, PANCHKULA [2018 (4) TMI 910 - CESTAT CHANDIGARH], AJAY EXPORTS VERSUS COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI [2015 (12) TMI 996 - CESTAT MUMBAI] and MAA MAHAMAYA INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX VISAKHAPATNAM-I, COMMISSIONERATE [2014 (11) TMI 747 - ANDHRA PRADESH HIGH COURT]. Accordingly, the provisions regarding payment of interest as provided in the Central Excise Act, 1944 shall prevail, and the Tribunal cannot intervene in this regard.
There are no infirmity in the impugned order - appeal dismissed.
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2024 (5) TMI 271 - CESTAT ALLAHABAD
Principles of Res-judicata - suo-moto re-credit taken instead of filing refund application - Refund of amount of duty deposited by the Appellant under the unamended Section 35F of CEA - eligibility for exemption under Notification No. 6/2006-CE dated 01.03.2006 - HELD THAT:- Both the parties agreed that in earlier round of litigation, this Tribunal in SARASWATI ENGINEERING LIMITED VERSUS COMMISSIONER OF CGST & CENTRAL EXCISE, KANPUR [2021 (8) TMI 1144 - CESTAT ALLAHABAD] decided the Appellant’s entitlement to interest for the period starting from the date of deposit till its realization. Both the parties are also ad-idem to the fact that the said order dated 04.08.2021 was not challenged further. Once this is so, the said order dated 04.08.2021 attained finality between the parties and the Assistant Commissioner was bound by the said order. The impugned order of the Commissioner (Appeals) taking a contra view on the issue of entitlement and period of interest, is therefore contrary to the principle of judicial discipline as enunciated by the Hon'ble Supreme Court in UNION OF INDIA VERSUS KAMLAKSHI FINANCE CORPORATION LTD. [1991 (9) TMI 72 - SUPREME COURT], wherein the Hon’ble Supreme Court was pleased to hold 'the mere fact that the order of the appellate authority is not “acceptable” to the department — in itself an objectionable phrase — and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws.'
It is also found that the direction in the impugned order directing the adjudicating authority to decide the issue of entitlement to interest afresh, is also barred by principle of res judicata, as the said issue was conclusively decided in order dated 04.08.2021 and therefore the parties cannot be allowed to re-agitate the said issue again.
Further, it is a settled law that once an order has not been challenged before the appropriate authority, it cannot be reopened and challenged in collateral proceedings subsequently by the same authority - the impugned order violates principle of judicial discipline and is liable to be set-aside on this ground alone.
The impugned order is set aside and the appeal is allowed.
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2024 (5) TMI 206 - CESTAT ALLAHABAD
Territorial jurisdiction to Grant Refund - Authorities at Noida or the Assistant Commissioner, Ghaziabad, had the jurisdiction to grant refund of the duty paid - Refund of excess duty in cash - price variation clause - HELD THAT:- The present litigation attained finality with the order of this Tribunal being Final Order No.A/70802/2016-EX[DB] dated 10.06.2016 [2016 (11) TMI 1203 - CESTAT ALLAHABAD]. Subsequently, an appeal was filed by the Commissioner, GST Noida before this Tribunal against the Order-In-Original No.R-373/D-III/GZB/2016-17 dated 19.01.2017 and the same was dismissed by the Tribunal in COMMR., CENTRAL TAX (CENTRAL GOODS & SERVICE TAX) , NOIDA VERSUS M/S. TTL LTD. [2019 (7) TMI 2018 - CESTAT ALLAHABAD]. Thus, cash refund of the entire amount already paid to the Appellant has attained finality as no further appeal before any of the superior courts has been filed by the Revenue.
The factory of M/s TTI Ltd. was located in Ghaziabad. Hence the territorial jurisdiction over the factory was of the Assistant Commissioner, Ghaziabad Division and not the Assistant Commissioner, Noida. Clearances of electric meters took place in Ghaziabad Division and the Central Excise duty was also paid in that Division. Hence, refund of the excess duty paid in Ghaziabad Division was to be sanctioned by the jurisdictional Assistant Commissioner, Ghaziabad. Initially refund claims were rejected by the Assistant Commissioner, Ghaziabad - While jurisdiction of the Commissioners is specified by the Government / Board by issue of a notification., no such notification is issued in case of the Assistant Commissioners of the Division, whose jurisdiction is determined with respect to the location of the factory. M/s TTL Ltd., Ghaziabad surrendered their Registration Certificate to the Assistant Commissioner, Ghaziabad on 09.03.2009 on merger with M/s QRG Enterprises Ltd. Order-in-Original dated 19.01.2017 was passed by the Assistant Commissioner, Ghaziabad after surrender of the certificate.
The refund was rightly sanctioned by the Jurisdictional Commissioner, Ghaziabad who was having jurisdiction over the factory premises located in Ghaziabad at the appropriate time in which disputed duty was paid which was to be refunded.
The impugned order cannot be sustained and the same is set aside - Appeal allowed.
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2024 (5) TMI 195 - CESTAT KOLKATA
CENVAT Credit - services utilized for setting up plant for manufacturing of finished products which started with effect from September 2015 - amendment in Rule 2 (l) of CCR, 2004 with effect from 01/04/2011 and the word “setting up” was removed because of which Cenvat Credit cannot be taken for the services used towards setting up of the factories - suppression of facts or not - extended period of limitation - HELD THAT:- There is no dispute that the Appellant is manufacturing goods which were exigible to Excise Duty payment when they are cleared from their factory. They have taken the Cenvat Credit on various input services which have been used before they commenced the manufacturing activities.
The issue is no more res-integra. This Bench in the case of Texmaco UGL Rail (P) Ltd, [2019 (7) TMI 1651 - CESTAT KOLKATA] has held 'the amendments have been made in the definition of input services effective from 1 stApril, 2011 to specifically exclude input services in forms of works contract or construction services used in relation to building or civil structure or part thereof. It also excludes similar services used for laying of foundation or making of structure for support of capital goods. Thus, the intention of legislature was to restrict input tax credits on above services, which are used during factory set up and hence the term “setting up” was removed from the earlier definition having specific exclusion clause in the new definition.'
There are substantial force in the Appellant’s submission that when they were taking the Cenvat Credit and reflecting the same in the ER-1 Returns during the period 2012 to 2015, the Department was very much aware that they were taking the Cenvat Credit for various input services. The Department was aware that till September 2015, they were not manufacturing the goods, nor clearing the same. Therefore, the Appellant cannot be fastened with the liability of suppression.
The confirmed demand for the extended period is also hit by time bar. Therefore, the Appeal stands allowed even on account of limitation.
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2024 (5) TMI 194 - CESTAT AHMEDABAD
Valuation - inclusion of freight and/or insurance charges is includable in the assessable value of excisable goods - sale of goods is on ex-factory basis - HELD THAT:- It is observed from the sale invoices of the appellant that the sale is ex-factory as clearly mentioned in the invoice and freight and /or insurance were charged separately. In this fact the freight and /or insurance is not includable in the assessable value as held by this Tribunal in the case of Gujarat Fluorochemicals Ltd [2024 (1) TMI 883 - CESTAT AHMEDABAD] wherein this Tribunal has held that 'freight charges are not to be included in the assessable value.'
From the above decision of this Tribunal, it can be seen that the facts in the present case and the case referred above is identical. Accordingly, the ratio of the above judgment is directly applicable in the present case. Hence, issue is no longer res-Integra.
Thus, freight and/or insurance is not includable in the assessable value. Consequently, demand of duty on this count is not sustainable - the impugned order is set aside - appeal allowed.
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2024 (5) TMI 193 - CESTAT CHENNAI
Excisability of waste product - Requirement to pay the duty at the prescribed rates on the value of exempted goods namely Bagasse and Press Mud - HELD THAT:- The issue has already been decided by us in the case of M/S. PONNI SUGARS ERODE LTD. VERSUS THE COMMISSIONER OF GST & CENTRAL EXCISE, SALEM [2024 (5) TMI 3 - CESTAT CHENNAI] where it was held that 'impugned demand cannot sustain since Press mud is no different from Bagasse, which is also a waste product, which is also a result of the manufacturing process of a different product and, consequently, the impugned demand cannot sustain.'
Thus, the present demand against the appellant cannot sustain - the impugned order set aside - appeal allowed.
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2024 (5) TMI 192 - CESTAT NEW DELHI
Refund of Cenvat credit availed on Education Cess and Higher Secondary Education Cess carried forward as on the appointed day i.e. 30.06.2017 in terms of Section 142(3) of the CGST Act 2017 - Section 11B of Central Excise Act, 1944 read with 142(3) of the Central GST Act 2017 - violation of principles of natural justice - time limitation - HELD THAT:- Cess is commonly employed to connote a tax with a purpose or a tax allocated to a particular thing suggested by the name of the cess. In the present case, it is related to education. Cess is generally for such levy which is for some special administrative expense as shall be suggested by the name of the cess. Education cess was levied by virtue of Finance Act No. 2 of 2004 in Section 92 to 94 thereof to be charged as a duty of excise with an objective to fulfill commitment of the government to provide a finance universalized quality basic education.
No doubt the Cess are the part of the excise duty - the levy of EC and SHEC was however dropped and deleted by the Finance Act, 2015.
Whether the cess are cenvitable? - HELD THAT:- The definition of 'eligible duties and taxes' as per the explanation 3 under Section 140 of the CGST Act, 2017 was amended with retrospective effect from 01.07.2017 whereby it is specified that cesses are excluded from the definition of 'eligible duties and taxes', Thus, the credit is ab initio not available for utilization for GST. In view of the above, cesses are not be transitioned through TRAN-1, as per the transitional provisions specified under CGST Act, the credit balances not transitioned to GST regime shall lapse, and, as such, the argument of the appellant the impugned credits never lapse, as there is no provision retaining the same is not sustainable. The appellant cannot circumvent the said legal provision through the route of 142 (3) of the CGST Act.
As the amount of Cenvat credit balance of E. Cess & SHE Cess of Rs.7,97,27,333/- (of which refund had been filed by the appellant) was included in the carried forward amount by the appellant as on the appointed day i.e. 01.07.2017, in terms of Section 142(3) of the CGST Act 2017, refund of the same is not admissible to the appellant. Thus, it is clear that “taking” of the input credit in respect of Education Cess and Secondary and Higher Educatiion Cess in the Electronic Ledger after 2015, after the levy of Cess itself ceased and stopped, does not even permit it to be called an input Cenvat credit and therefore, mere such accounting entry will not give any vested right to the Assessee to claim refund of the said amount - there is no error when Commissioner (Appeals) has held that there is no provision in the Cenvat Credit Rules, 2004 or in Central Excise Act, 1944 to allow cash refund of cesses lying in he balance in Cenvat credit. Once it is not allowable, question to refund the same does not arises mere transitioning it to TRAN-1 shall not create any light to what was not allowable.
Violation of principles of natural justice - HELD THAT:- The appellant had filed the written submissions dated 02.01.2020 before original adjudicating authority. Personal hearing was also attended. There is no denial that notices of hearing were issued by Commissioner (Appeals) as well. Though appellant could not appear before him, without going into the plea by receipt of those notices, it is observed that Commissioner (Appeals) has duly considered the appellant’s reply dated 03.12.2017 and all the grounds of appeal taken by appellant. Hence it is not agreed that principles of natural justice have been violated.
Time limitation - HELD THAT:- There are no reason to differ from the findings arrived at in the impugned order.
Appeal dismissed.
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