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Showing 1 to 20 of 82066 Records

2025 (6) TMI 848

Condonation of gross delay of 440 days in filing the present appeal - Extended period of limitation - classification of goods - flue gas - to be classified as Nitrogen under CTH 28043000 or not - it was held by CESTAT that 'This Bench vide the decision in the case of TATA Steel Limited [2023 (8) TMI 698 - CESTAT KOLKATA], has held that 'The flue gas generated during the course of manufacture metallurgical coke, is not a manufactured product and is also not marketable.'

HELD THAT:- There is a gross delay of 440 days in filing the present appeal, which has not been satisfactorily explained by the appellant.

The appeal is dismissed on the ground of delay as well as on merits.
2025 (6) TMI 847

Maintainability of appeal - appellant submitted that these appeals could be disposed of owing to low tax effect - Recovery of excess availed CENVAT Credit - higher valuation of pan masala at the end of supplier process amounting to manufacture or not - HELD THAT:- The submission of learned counsel for the appellant is placed on record.

The Appeals stand disposed of owing to the low tax effect.
2025 (6) TMI 846

Related persons or not - applicant and the other entity, namely CBPL are ‘Related persons’ in terms of Section 4 of Central Excise Act - clearance of cement in bulk and those packed in 50 KG bags, without marking MRP - appellant failed to discharge onus to prove - it was held by CESTAT that 'It is not the allegation of the Revenue that the said CBPL was a/was not a related party to the appellant, in any manner, but it was a clear admission by the appellant itself.'

HELD THAT:- These appeals are not pressed, as according to the learned senior counsel appearing for the appellant out of three issues that were raised before the Tribunal only one has been considered and no findings have been recorded on the other two issues.

These appeals are disposed of as not pressed with liberty to go back to the Tribunal.
2025 (6) TMI 845

EOU - de-bonding and discharge of central excise duty on semi-finished and finished goods lying in stock - HELD THAT:- The Tribunal has taken note of a similar issue of de-bonding and discharge of central excise duty on semi-finished and finished goods lying in stock on the date of final exit order in the case of the assessee itself.

It has further been noted that against the order of the Tribunal, a Central Excise Appeal, namely C.E.A.No.103 of 2015, was preferred before the High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh, which was dismissed as infructuous on 14.03.2016.

It is also pertinent to note here that the High Court in the case of the assessee itself, by an order dated 14.03.2016, had upheld the order of the Customs, Excise & Service Tax Appellate Tribunal and has dismissed the appeal as infructuous. The aforesaid orders have attained finality.

Appeal dismissed.
2025 (6) TMI 844

Wrong availment of Cenvat Credit by the appellant of Service Tax paid on ‘outdoor catering services’ provided to its employees during the period January, 2015 to June, 2017 - HELD THAT:- It is evident that issue relating to eligibility of availing Cenvat Credit on ‘outdoor catering service’ was subject to divergent views and was finally settled by the Hon'ble Supreme Court only the year 2021 in the matter of Toyota Kirloskar Motor Pvt. Ltd. [2021 (5) TMI 880 - KARNATAKA HIGH COURT] and also by the Larger Bench of the Tribunal in Wipro Ltd. [2018 (4) TMI 149 - CESTAT BANGALORE - LB]. Till then this issue was interpretational in nature due to conflicting views of different forums. In such situation, as stated aforesaid, mere wrong availment of Cenvat Credit cannot be equated with suppression of fact, fraud or wilful misstatement with intent to evade duty. It was merely a question of interpretation at the relevant time due to divergent views as explained earlier.

As the show-cause notice has been issued by invoking the extended period of limitation, the same is not sustainable.

Appeal allowed.
2025 (6) TMI 843

Denial of CENVAT Credit - service tax paid on services of transportation of employees of the appellant to the factory - service tax paid on the services of canteen for the appellant’s employees - suppression of facts or not - extended period of limitation - penalty.

Commissioner (Appeals) invoked extended period of limitation on the ground that the appellant had never informed the department about the nature of the input services they are utilizing and inputs and capital goods they are consuming for manufacturing the finished goods.

HELD THAT:- The Deputy Commissioner was either not aware or had forgotten the very basics of the scheme of the assessment and filing of returns under the Central Excise Act and Rules. According to him, the appellant had erred in not filing the returns so as to reflect the nature of the CENVAT credit availed - The Deputy Commissioner gravely erred in concluding that it was possible for the appellant to file the returns giving details of the inputs and input services on which it availed CENVAT credit and also that it had an obligation to do so. Had the Deputy Commissioner gone through the Rules, he would have understood the correct position.

The Deputy Commissioner recorded that the wrong availment of CENVAT credit came to light only during audit and therefore, the omission on the part of the assessee (of not giving details and availing CENVAT credit) “vis-a-vis the clear and unambiguous statutory provisions” certainly amounts to mis-statement as also suppression of material facts”. The Commissioner (Appeals) held that it was for the appellant to avail correct CENVAT credit and it could have sought clarification from the department and it had not done so and therefore, held that it was a clear cut case of deliberate attempt to avail CENVAT credit of duty/tax pertaining to inputs and input services that were not eligible.

If scrutiny by officers reveals short payment or non-payment of duty, a demand can be raised under section 11A. Quite logically, as per section 11A, the relevant date prescribed for reckoning the time limit under section 11A is “the date of filing of the return” and if no return is filed, “the last date on which the return should have been filed”. This is the date on which the officer acquires knowledge of the activities of the assessee in the form of the Return if it is filed - If the officer fails scrutinize the Returns and raise a demand within time and audit points it out later, the fault lies at the doorstep of the officers who failed to scrutinize the return and issue an SCN demanding duty within time and not at the doorsteps of the assessee, even if the assessee had wrongly self-assessed the duty. Extended period of limitation can be invoked ONLY if one or more of the elements necessary to invoke it are present.

The Commissioner (Appeals) held that the appellant could have sought but had not sought clarification from the department. Clearly, there is no obligation on any assessee to seek any clarification from the department. Not seeking any clarification from the department does not lead to a presumption of “clear cut case of deliberate attempt to avail CENVAT credit of duty/tax” on ineligible inputs or input services. There is no such legal presumption.

Conclusion - i) The extended period of limitation was wrongly invoked in this case because none of the elements to invoke extended period of limitation were established. ii) Since the elements required to impose penalty under section 11AC are the same as for invoking extended period of limitation, the penalty also needs to be set aside.

The impugned order is set aside - appeal allowed.
2025 (6) TMI 842

Levy of Central Excise Duty - physician sample sent by the appellants’ as a job worker to the principal manufacturer - HELD THAT:- The issue, whether the physician sample sent by the appellants’ as a job worker to the principal manufacturer should be leviable to the Central Excise duty under Rule 4 ibid read with Section 4A ibid, is no more res integra in view of various judgements delivered by the judicial forum.

Reliance can be placed in COMMISSIONER OF CENTRAL EXCISE, GOA VERSUS COSME REMEDIES LTD. AND VICA-VERSA [2016 (4) TMI 323 - CESTAT MUMBAI] where it was held that the valuation of physician samples sold by CRL to Cosme Farma Laboratories should be based on the transaction value under Section 4(1)(a) of the Central Excise Act, and not under Rule 4 of the Central Excise Valuation Rules.

Conclusion - Where physician samples are manufactured on job work basis and cleared to the principal manufacturer on payment of duty at transaction value (cost of raw materials plus job charges), valuation under Rule 8 and Rule 11 is appropriate and the department cannot demand duty based on Rule 4 and Section 4A.

The adjudged demands confirmed on the appellants cannot be sustained for judicial scrutiny. Therefore, the impugned order is set aside - appeal allowed.
2025 (6) TMI 841

CENVAT Credit - goods whose receipt as “inputs” in the factory premises and subsequent utilization in the manufacture of dutiable final goods is undisputed - reliance placed on the inculpatory statements of the witnesses to provide non-receipt of nickel, and consequently, non-manufacture of copper nickel alloy ingots - impugned Order has been passed after a delay of 4 years - invocation of extended period of limitation - levy of penalties.

HELD THAT:- The penalties have been imposed on the ground that they have aided and unaided M/s J. V. Industries to avail inadmissible cenvat credit and M/s J. V Industries has opted for SVLDR Scheme 2019 and SVLDRS Form-4 has been issued to them, in that circumstances, no penalty can be imposed against the appellant as the matter against the appellant are also closed.

Denial of CENVAT Credit - HELD THAT:- The said issue has been examined by this Tribunal in the appellant’s own case [2018 (5) TMI 380 - CESTAT CHANDIGARH (LB)] wherein the majority order was that M/s. JSL Stainless Ltd. was entitled to avail Cenvat Credit on the goods supplied by M/s. National Udyog and M/s. Ridhi Sidhi Alloys Pvt. Ltd.

Further, in terms of Rule 3 of CCR, 2004, the manufacturer is entitled to take cenvat credit on inputs which have been received in their factory. Admittedly, in the case, it is the finding of the adjudicating authority that the appellant has received coppor ingots in their factory. Although, the description in the invoices is not as per the observation made by the adjudicating authority, the same cannot be fetal to deny cenvat credit to the appellants as held by the Hon’ble Allahabad High Court in the case of Juhi Alloy [2014 (1) TMI 1475 - ALLAHABAD HIGH COURT] wherein the Hon’ble High Court observed 'Ultimately, the issue in each case is whether, within the meaning of Rule 9(3) of the Rules of 2004, the assessee has taken reasonable steps to ensure that the inputs in respect of which he has taken Cenvat credit were goods on which appropriate duty of excise was paid. Once it is demonstrated that reasonable steps had been taken, which is a question of fact in each case, it would be contrary to the Rules to cast an impossible or impractical burden on the assessee.'

Conclusion - i) As the Appellant No.1 has received the goods in their factory and paid duty thereon which has been used by the appellant in the manufacture of the final product, which has been cleared on payment of duty, in that circumstances, cenvat credit cannot be denied to the Appellant No.1. ii) As it is held that Appellant No.1 has taken cenvat credit correctly, in that circumstances, no penalties can be imposed on the Appellants No. 1 and 4 to 9.

There are no merit in the impugned order, the same is set-aside - appeal allowed.
2025 (6) TMI 840

Valuation of goods - correctness of assessable value arrived as per Rule 8 of the Central Excise (Valuation) Rules, 2000 for the stock transferred goods - CAS-4 method not followed in arriving at the cost of production - demand of differential duty amount of Rs. 6,21,940/- along with interest and penalty - HELD THAT:- The appellant in the appeal paper book has calculated the amount of duty paid during the period April 2010 to August 2010 claiming excess payment of Rs. 2,92,094/-. Even though this calculation was given to the learned Commissioner, however, the same was not addressed in the impugned order. It is found that they have already discharged the duty liability for the period October 2010 to December 2011 and there is no liability for the period April 2010 to August 2010 as excess duty has been paid. The Department in the impugned order has not justified as to how the differential amount of Rs. 6,01,051/- arose when the detailed differential duty of Rs. 1,15,09,310/- had been furnished by the appellant. In these circumstances, the confirmation of demand of said amount of Rs. 6,01,051/- cannot be sustained.

Imposition of penalty - HELD THAT:- It is found that the appellant has been discharging duty during the period by applying the methodology under Rule 8 of the Central Excise (Valuation) Rules without adopting CAS-4 method which later recalculated and the differential duty was paid on the basis of CAS-4 method with interest, therefore, imposition of penalty cannot be sustained.

Conclusion - i) The Department in the impugned order has not justified as to how the differential amount of Rs. 6,01,051/- arose when the detailed differential duty of Rs. 1,15,09,310/- had been furnished by the appellant. In these circumstances, the confirmation of demand of said amount of Rs. 6,01,051/- cannot be sustained. ii) The appellant has been discharging duty during the period by applying the methodology under Rule 8 of the Central Excise (Valuation) Rules without adopting CAS-4 method which later recalculated and the differential duty was paid on the basis of CAS-4 method with interest, therefore, imposition of penalty cannot be sustained.

Appeal allowed in part.
2025 (6) TMI 839

Disallowance of Cenvat Credit under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act along with interest and has also imposed equal penalty under Rule 15 of the Cenvat Credit Rules, 2004 - duty has been demanded from the appellant on the ground that no manufacturing process was involved in making bright bars from the bars and rod and therefore no duty was required to be paid by the suppliers of these bright bars and accordingly, the appellants were not eligible to avail cenvat credit on these inputs - HELD THAT:- This issue is no more res integra and different Benches of the CESTAT have struck down the demand denying the Cenvat credit on inputs where the suppliers have already paid the Central Excise Duty raised on the ground that those inputs were not resulting from a process which amounted to manufacture.

The impugned order is not sustainable in law - Appeal allowed.
2025 (6) TMI 762

Availment and utilisation of ineligible credit - duty paying documents - eligibility to avail the input credit on imported goods based on invoices issued by a dealer who is not registered as an ‘importer’ consequent to the amendment in Rule 9 of the Central Excise Rules, 2002 vide notification No.8/2014-CE (N.T) dated 28.02.2014 - Department was of the view that an existing dealer cannot dispose off the stock of imported excisable goods where the Cenvat credit is being passed on, without obtaining registration under category of “importer” from Central Excise - extended period of limitation.

HELD THAT:- On a bare reading of the amended Rule 9 of the CER, 2002, it is unable to decipher any mandate flowing therefrom requiring a dealer who is already registered as a ‘dealer’ with the Department and issuing invoices for the excisable goods that he trades in, upon which the recipient can avail cenvat credit, to yet again obtain a separate registration as an ‘importer’. The amendment made to the rule 9 ibid vide notification 8/2014 ibid only requires that an importer who issues an invoice on which CENVAT credit can be taken shall get registered.

Any room for interpretative confusion, that may have prevailed, has been decisively obliterated by the said Notification read in conjunction with the Board Circular. The intent and purpose are clear. An assessee who conducts business, both as an importer and a First Stage Dealer, may take only one registration as he has been exempted from the requirement of taking a second registration. The requirement to register, in so far as a First Stage Dealer who is also an importer is concerned, is at the option of the assessee and any assessee needing separate registration for his own business purposes, may so register.

The notification and the circular make it amply clear, without room for any doubt whatsoever, that there is no requirement for a First Stage Dealer who is already registered with the Department to take yet another separate registration as an importer. Thus, there is no diktat in the amended Rule 9 of the CER 2002 that would require a first stage dealer who is duly registered with the Department, and entitled to issue invoices on which cenvat credit can be availed, to yet again obtain a separate registration, merely because he also chooses to import goods and to trade in them - when such invoices issued by the person as a first stage dealer are also prescribed documents as per the extant provisions of Rule 9(1)(a) (iv) of the Cenvat Credit Rules, 2004 to avail cenvat credit. Thus, the benefit of cenvat credit availment on the invoices received by the appellant in the instant case from its unit at Raigad, cannot be denied to the appellant.

The show cause notice as well as the impugned order in original concedes that the Appellant is a dealer, duly registered with the Department. It is also undisputed that the invoices issued by the appellant are in accordance with Rule 11 of the CER, 2002 - when Rule 9(1)(a)(iv) of the Cenvat Credit Rules, 2004 stipulate that cenvat credit shall be taken by the manufacturer on the basis of an invoice issued by a first stage dealer or a second stage dealer, as the case may be, in terms of the provisions of Rules, 2002, and when there is no dispute as the duty paid nature of the invoice, or receipt of the inputs covered thereunder and use thereof, the credit taken by the appellant is even otherwise not deniable on merits.

When the appellant brought the notification and the circular to the authority’s notice, along with the binding decisions of the Tribunal governing the issue, judicial discipline warranted that the adjudicating authority adhere to the same and ought to have extended the benefit to the appellant. Thus, the adjudicating authority committed an egregious error in denying the benefit of the notification and circular to the appellant even after the binding decisions of this Tribunal were brought to the authority’s attention.

Conclusion - i) A registered dealer is not mandatorily required to obtain separate importer registration for issuing invoices on imported goods for Cenvat credit purposes. ii) Invoices issued by a first stage dealer are valid documents for availing Cenvat credit under Rule 9(1)(a)(iv) of the Cenvat Credit Rules, 2004. iii) Extended period of limitation can only be invoked in cases of deliberate suppression or fraud, not mere procedural lapses.

Appeal allowed.
2025 (6) TMI 761

Time limitation for demand - demand raised for the period August 2015 to March 2016 is barred by limitation, given the date of issuance of the show cause notice on 17.05.2017 or not - Revenue submits the expression “wholly” figuring in the notification could not be taken as providing any scope for usage of any imported raw material and therefore, the decision relied upon by the appellants is incorrect in its contents to that extent and is sub-silentio - HELD THAT:- In view of the findings of 2018 (2) TMI 2016 Cestat-Mumbai in the case of Eurotex Industries and Exports Limited vs CCE Pune [2018 (2) TMI 216 - CESTAT MUMBAI], this court find that there was sufficient scope of interpreting even if the submission of the learned Authorised Representative that the expression “wholly” cannot be construed to provide for any usage of imported raw material. This court at the moment is refraining from giving the decision on merits. However, it is found that there was sufficient scope for legal interpretation encoupled with the fact of the situation in which audit was conducted and everything was found from the records as also the stated position that there was an earlier show cause notice also. This court is inclined to accept that the matter involved legal interpretation and therefore, intent to evade cannot be surmised.

This court allows the benefit on the ground of limitation and allows the appeal with consequential relief. Appeal allowed.
2025 (6) TMI 760

Recovery of Education Cess and the SHE Cess - overlapping demands - applicability of doctrine of double jeopardy - HELD THAT:- The Appellant has rightly claimed that there has been an over-lapping of demand since Show Cause Notices have been issued pertaining to the same period. It is found that out of the confirmed demand in the present proceedings Rs.29,33,057/- in respect of demand of Education Cess and SHE Cess and Rs.29,33,057/- in respect of disallowance of Cenvat Credit towards payment of Education Cess and SHE Cess, the period involved is covered by the earlier Show Cause Notice - demand set asode.

Amount utilized by the Appellant in October 2013 towards reversal in terms of Rule 6(3) of Cenvat Credit Rules, 2004 and payment of duty of Rs.24,273/- in terms of Rule 16 of Central Excise Rules, 2002 - HELD THAT:- The Appellant claims that they have submitted enough documentary evidence which has not been considered by the Adjudicating authority. The appellant is required to be given one more opportunity to produce these documents before the Adjudicating authority, who will get these facts verified and take a considered decision.

Error in quantification of the demand to the extent of about Rs.1.00 Lakh - HELD THAT:- The matter remanded to the Adjudicating authority. The Appellant is directed to submit all the documentary evidence towards their dispute about the quantification before the Adjudicating authority.

Rejection of the amount taken as re-credit by the Appellant - HELD THAT:- It is submitted that once a proper reconciliation is done towards these amounts, it will get clarified that Appellant has not taken any excess re-credit as is being held in the impugned Order-in-Original. Since these details have to be checked and verified properly to come to a proper conclusion, it is found that even this matter is required to be looked into by the Adjudicating Authority. Accordingly, we are remanding this matter to him.

Penalty - Appellants have also pleaded that since the issue was that of interpretation the penalty imposed on them should be set aside - HELD THAT:- It is found that this is a reasonable request from their side. The issue as to whether the Basic Excise Duty can be utilized for payment of Education Cess and SHE was under litigation and was ultimately held in favour of the assessee. Considering the same, the penalty of Rs.6,13,158/- imposed on the Appellant set aside.

Conclusion - The demands relating to Education Cess and SHE Cess and the related disallowance of Cenvat Credit set aside on the ground of overlapping demands barred by double jeopardy and res judicata.

Appeal disposed off.
2025 (6) TMI 759

Proper valuation and tax treatment of tooling advances - requirement to re-work on value of tools to be adopted as per explanation 1(c) to rule 6(3A) of CENVAT Credit Rules 2004 - bona fide mistake in interpreting law or wilful suppression - extended period of limitation - Penalty - HELD THAT:- As per Explanation 1(c) to rule 6 of CENVAT Credit Rules 2004, value for the purpose of sub rules (3) and (3A), in case of trading shall be the difference between the sale price and the cost of goods sold (determined as per the generally accepted accounting principles without including the expenses incurred towards their purchase) or 10% of the cost of goods sold whichever is more. Accordingly, the value of the traded goods (tools manufactured by the subcontractor on which the appellant added a margin) as represented by the difference between the sale price (price billed to the customer) and the cost of goods (price paid to the subcontractor) should have been worked out for reversal of credit as per rule 6(3). The claim hence requires verification. Appellant has also stated that in case of doubt the matter may be remanded to Original Authority for verifying the issues and taking a decision afresh.

The appellant has stated that this trading margin amount collected had also been amortised. If if found true and in the absence of any other charge of a blame worthy conduct, the act though incorrect, can be taken as a reasonable cause for non-compliance with the rule and not a case of deliberate suppression of fact / deception, thereby not attracting the larger period for demand of duty and imposition of penalty. If not, it is a case of deception to be dealt with accordingly.

The matter remanded back to the Original Authority for de novo adjudication - The lower authority shall follow the principles of natural justice and afford a reasonable and time bound opportunity to the appellant to state their case both orally and in writing if they so wish, before issuing a speaking order in the matter - appeal allowed by way of remand.
2025 (6) TMI 758

Undervaluation of the goods cleared by BIPL occurred due to inadvertence or whether it was deliberate - suppression of material facts and contravention of the provisions of the Central Excise Act, 1944 or not - levy of penalty u/s 11AC of the Central Excise Act, 1944 - cenvat credit availed by WAL on the supplementary invoice of BIPL - ineligible availment of cenvat credit or not - HELD THAT:- The entire sequence of transactions have been elaborated in detail and we are satisfied that the appellant’s adoption of the system generated cost of production for the items cleared to WAL as the provisional value, without recognizing the fact that the system while generating the cost of production for the said items did not take into consideration the anterior conversion charges at WAL which were hitherto being fed in consequent to their change from job work procedure to duty paid clearance procedure, was an entirely plausible inadvertent error.

The appellant has also categorically averred in its reply that they have shown their bonafides by suo motu working out the differential duty liability and paying the same along with applicable interest before the issuance of the notice. It is also pertinent that when WAL was paying duty and clearing the goods to BIPL they were availing credit and subsequently when BIPL paid duty and returned the job worked items to WAL, they availed credit. Thus, while there has been a short payment of duty in the intermediate stage, equally it has only resulted in the respective party availing less credit and paying more duty in cash while clearing the hose assembly. Had the duty been paid on the correct value by BIPL, the same would have been availed as credit by WAL and used for payment of duty on the Hose Assembly cleared from their end.

It is satisfied that the mistake that has resulted in understating the value is a Bonafide mistake without any intention to evade payment of duty. It is also noted that neither the SCN nor has the adjudicating authority too in the impugned Order in Original, attributed any positive or deliberate act of wilful misstatement or suppression of facts with intent to evade payment of duty on the part of the appellant. That is to say there is no evidence adduced by the Department that the mistake of BIPL which is claimed to be inadvertent, was in fact intentional - the Revenue has not discharged its burden of proving that the appellant had made these transactions with any malafide intent or with an intent to evade payment of duty.

The finding of the adjudicating authority that since the appellant has not chosen to pay the 1% penalty prescribed under Section 11(6) of the CEA, 1944 it goes to prove wilful suppression and misstatement of facts with intent to evade payment of duty is literally turning the provision on its head. It is evident from a plain reading of the said Section 11(6) that it applies only to a person chargeable with duty under Section 11(5), which in turn is attracted only where during the course of any audit, investigation or verification, it is found that any duty has not been levied or paid or has been short levied or short paid for the reasons mentioned in clauses (a) to (e) of sub-section (4), namely the ingredients that are necessary to attract the invoking of extended period of limitation - in the absence of any of the aforesaid ingredients of sub-section (4) there was no necessity for the appellant to have paid the penalty stipulated under Section 11(6) and the finding of the adjudicating authority in this regard is unsustainable.

The appellant BIPL has deliberately suppressed material facts and contravened the provisions of the CEA 1944 and the rules made thereunder with intend to evade payment of duty, and to impose equivalent penalty on the appellant, are wholly untenable. The adjudicating authority has erred in imposing equivalent penalty on the appellant in these facts and circumstances and it cannot sustain.

Conclusion - i) The undervaluation by BIPL is inadvertent and bona fide. ii) Penalty under Section 11AC imposed on BIPL is set aside. iii) CENVAT credit availed by WAL on the supplementary invoice is lawful; and (4) Penalty imposed on WAL is set aside.

Appeal allowed.
2025 (6) TMI 757

CENVAT Credit availed on the inputs used commonly for the manufacture of their taxable activities as well as sale of exempted assets - failure to discharge liability under Rule 6(3) of Cenvat Credit Rules, 2004 - extended period of limitation - HELD THAT:- A plain reading of Rule 6 makes it abundantly clear that the said rule applies only to the manufacture and clearance of exempted goods and for such goods cenvat credit is not allowed. Rule 6(1) mandates that Cenvat credit shall not be allowed on manufacture of exempted goods. The term ‘exempted goods’ has been explained in the Explanation 1 inserted by Notification dated 1.3.2015 which says it shall include 'non-excisable goods’ cleared from factory for a consideration. For the purpose of applicability of said explanation in Rule 6 it has to fulfil the condition of manufacture of goods which means the exempted goods must be manufactured there only. Nothing contained in Rule 6 applies on the clearance of non-manufactured goods even if exempted/non-dutiable and its clearance. Once if Rule 6 ibid is held to be applicable in a given situation, then only the applicability of Rule 2(d) can be looked into but that is not the case here.

Even after the insertion of Explanation 1 to Rule 6 (1) ibid vide Notification dated 1.3.2015, the mandatory requirement ‘manufacture' of the goods, whether taxable or exempted, is a sine qua non for applicability of the said Rule. It is an admitted position that the scrap/assets cleared by the appellant were not manufactured by the appellant as they are into the manufacturing of ‘Sponge Iron’ and ‘Liquid Carbon Dioxide’. These scrap/assets in question were neither the main products nor bye products. In umpteen number of decisions of Tribunal, even the waste, emerged during the course of manufacture of main product and sold, has been held not to hit by the provisions of Rule 6 or 2(d) ibid as the case may be.

The decision of the Tribunal in the matter of M/s. Lally Automobiles Pvt. Ltd. vs. CST, Delhi [2017 (12) TMI 27 - CESTAT NEW DELHI], relied upon by Revenue is distinguishable, as in that case the assessee was engaged in trading activity which is not even taxable during the relevant period.

Conclusion - The essential requirement for invoking Rule 6 ibid is the manufacture of exempted goods. The explanation inserted therein w.e.f. 1.3.2015 includes ‘non-excisable goods’ only when they are being manufactured there and cleared for consideration. In the present case since there is no manufacture by the appellant of the assets/scrap cleared by them, Rule 6 ibid is not attracted resultantly no demand/ recovery can be made.

The demands in question are not sustainable. Accordingly the impugned orders are set aside - Appeal allowed.
2025 (6) TMI 756

Rejection of claim of interest on refund - entitlement to interest on refund amount when the refund was sanctioned within two months of the filing the refund application - HELD THAT:- Section 11B of CEA, 1944 as it stood then provides for ‘claim for refund of duty and interest, if any, paid on such duty’. It provides the procedure and prescribed the limitation of one year from the relevant date for filing application for refund. The ‘relevant date’ as per Explanation (B)clause (ec) of section 11B ibid means in case where the duty becomes refundable as a consequence of judgment, decree or a direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction. Section 11 BB ibid at that time provides for interest on delayed refunds when the duty ordered to be refunded u/s. 11B ibid is not refunded within three months from the date of receipt of application for refund. Since there is no such delay herein, as the refund was granted within two months of filing refund application, no interest can be allowed under the said provision.

As regards the reliance on Sandvik Asia Ltd. [2006 (1) TMI 55 - SUPREME COURT] is concerned, in that matter there was inordinate delay of 17-18 years on the part of revenue in refunding certain amount including interest to the assessee therein without any rhyme or reason and therefore the Hon’ble Supreme Court had taken the view that the assessee is entitled for compensation for the unjustifiable withholding of interest and refund amount. In that matter, the refund pertains to the assessment years 1977-78, 1978-79, 1981-82 and 1982-83 and the Hon’ble Supreme Court specifically observed that in view of express provisions of Income Tax Act, assessee is entitled for compensation by way of interest on the delayed payment of due amount which was wrongly withheld by the department.

Tribunal cannot exercise such sweeping powers which are bestowed upon the Constitutional Courts. Being a creature of statue, Tribunal cannot exercise powers contrary to the scheme of Statute. Time and again it has been held that the authorities which are acting under a statute must act within the four corners thereof. This Tribunal, being a statutory tribunal, exercise powers conferred by the statute. The powers of Tribunal are circumscribed by the statute and it cannot act beyond the statutory provisions. Since at the relevant time there was no provision in the Central Excise Act prescribing payment of interest from the period of deposit during investigation until refund, the same cannot be granted to the appellant. It is undoubtedly true if the department is negligent or there was inordinate delay in releasing the refund then certainly taking recourse to the law laid down by the Hon’ble Supreme Court in the matter of Sandvik India Ltd. as a compensatory measure interest on refund could have been considered but such is not the case here as there is no delay at all and within two months of filing application for refund the same was sanctioned.

Conclusion - The appellant is not entitled to interest on the refund amount where the refund is sanctioned within the statutory period of three months, and the amount deposited during investigation is treated as duty paid, not a pre-deposit for appeal.

There are no infirmity in the impugned order. The instant Appeal is accordingly dismissed.
2025 (6) TMI 755

Admissibility of exemption Notification No.05/2006-CE (Sl. No.10) dated 01.03.2006 as amended by N/N. 15/2009-CE dated 07.07.2009 and N/N. 12/2012-CE (Sl. No.186) dated 17.03.2012 - reinforced concrete girders manufactured at a factory located approximately 6 kilometers away from the actual construction site - denial of benefit of the Notifications on the ground that even though the site was with the approval of the BMRCL, however, it is not a part of the contract - HELD THAT:- Even though the premises has not been specifically allotted by BMRCL and mentioned in the contract, however, the site at which appellant would be carrying out pre-casting activities has been approved by BMRCL. The objection of the learned Commissioner is that the said letter is not part of the contract, therefore, not eligible to the benefit of the said Notification.

There are no merit in the said observation of the learned Commissioner in as much as in the certificate issued by BMRCL was in pursuance to the letter dated 04.08.2009 by the appellant forwarding the pre-casting yard plant where the pre-casting activities were to be carried out which has been subsequently approved by BMRCL in their letter dated 18.08.2009; therefore, the correspondence is forming part of the contract. Besides, on going through the Circular dated 18.05.1999, it is found that the meaning of site cannot be given a restricted meaning and to be given a wider meaning which has been ultimately found place in the subsequent Notification No.12/2012-CE dated 17.03.2012 by inserting an Explanation to the same. Therefore, merely because the site is away by 6 km from the project site, which is situated in a traffic congestion area having no place to carry out the pre-casting activities, it cannot be a valid ground for denying the benefit of the said Notification.

The judgment of the Larger Bench cited by the learned AR for the Revenue in the case of Asia Tech vs. CCE, Pune [2005 (9) TMI 123 - CESTAT, MUMBAI] is not relevant to the present case in as much as the question involved therein was whether PSC girders manufactured at site by the assesse for construction project are marketable goods attracting central excise duty under Tariff Heading 6807 of Central Excise Tariff Act, 1985 and also consequently, exempt from Notification No.59/90-CE.

Conclusion - In view of the fact that the letter dated 18.08.2009 issued by BMRCL forming part of the contract, appellants are eligible to the benefit of the exemption Notifications.

The impugned order set aside - appeal allowed.
2025 (6) TMI 754

Interest on the refund of a pre-deposit amount made under Section 35F of the Central Excise Act, 1944 - releavant date for calculation of interest - from the date of deposit or from the date of communication of the appellate order or the date of refund? - applicability of Section 35FF of the Central Excise Act, 1944 - HELD THAT:- From the above decision of the Hon’ble Supreme court in Willowood Chemicals Pvt. Ltd. [2022 (4) TMI 980 - SUPREME COURT] it is evident that when the statute is silent about the interest to be paid on deposits made in particular situation then the courts have leverage to decide upon the interest, but in cases where the statute provides for the payment of interest then in that case the courts should follow grant interest only in terms of the statute. Undisputedly in the present case the statute provided for the interest to be paid on the deposits made in terms of Section 35F at the time when the deposit was made.

The said decision of the Hon’ble Supreme Court has been rendered in a situation where there was no provision for refund of the amount deposited or payment of any interest on the amount deposited in absence of any provision the Hon’ble Supreme Court has gone by the theory of interest to calculate that it is on account of holding of the capital of someone. However, the present case is not of the same type. In the present case the interest alongwith the rate of interest has been prescribed by the statue.

In terms of the decision in M/S ISOLUX CORSAN INDIA ENGINEERING AND CONSTRUCTION PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS (PRE.), LUCKNOW [2025 (3) TMI 17 - CESTAT ALLAHABAD] undisputedly appellant is entitled to interest on the amounts refunded to him after the dispute was finally determined in their favour by the order of this tribunal. However the interest as per these orders would necessary be governed by the provisions of section 11BB and should be paid after expiry of three months from the date of receipt of the application for refund and not from the date of deposit as has been held by the original authority in the orders dated 09.07.2019 and 18.07.2019. Even if it is held that appellant was entitled to refund of interest as per section 35 FF then also the interest could not have been paid from the date of deposit, in view of the Proviso to section 35FF, which provided that in respect of the amounts deposited prior commencement of Finance (No. 2) Act, 2014 the provisions as contained in erstwhile section 35FF shall apply.

Conclusion - The appellant is entitled to interest on the refund of the pre-deposit amount, but such interest is payable only after the expiry of three months from the date of communication of the appellate order, not from the date of deposit.

Appeal dismissed.
2025 (6) TMI 681

Recovery of CENVAT Credit availed - issuance of Paper Invoices to the appellant without actually dispatching any goods - corroborative evidence exists to prove that there was no actual movement of goods, but the entire transaction was on paper only or not - extended period of limitation - HELD THAT:- Out of 160 transactions between the Vendor and the appellant, the Department could get hold of the letter/statements of only 70 vehicle owner. Thus, there is no adverse statement in respect of 90 transaction. Even in respect of 70 Vehicles, there are some replies, which cannot be directly taken as evidence since they are not statements given under Section 14 of the CEA 1944. Even in cases where the statements have been recorded, the persons recording the statements have not reiterated that they have given such statement out of their free will before the Adjudicating authority. Hence, there are no such statements / letters to have any evidentiary value whatsoever. Viewed with the fact that the Revenue could lay hands only on 70 out of the 160 vehicle owners, it is found that the verification is not even complete in respect of all the transactions. On this ground itself the proceedings are vitiated and liable to be set aside.

The appellant has time again pleaded about the freight being paid by way of vouchers and payment to the vendor being made through banking channel. The relevant documents were provided to the investigating officials and to the adjudicating authority. The appellants have produced the copies of the Ledger pertaining to the Vendor showing the details of the Invoices raised by the Vendor and payments made by the appellant through banking channels. The Revenue has not brought in any evidence to the contrary.

From the Show Cause Notice, it is seen that the Vendor, Shree Ganesh Forging Company has not been made a co-noticee at all. Only the partner of the vendor has been made co-noticee for playing his role in the alleged contraventions. For all practical purposes, the partner is a different person from the partnership firm unlike in the case of proprietorship firm. Admittedly, the present proceedings have been taken up on the sole ground that this Vendor has misstated the description of goods and has carried out only paper transaction. There is nothing to indicate from the SCN that the Vendor had not accounted for these Invoices with his jurisdictional officials - By non- making of the vendor as a Co-noticee, to enable them to counter the allegation that they have only carried out paper transaction, is contrary to the statutory provisions as well as principles of natural justice. In such a case, the present proceedings against the appellant are erroneous and would have no legal legs to stand on. Even on this ground the Revenue’s case fails.

Extended period of limitation - HELD THAT:- The Revenue has failed to bring in any cogent evidence to the effect that the appellant has suppressed any factual details, so as to invoke the extended period provisions. Hence, the confirmed demand for the extended period is legally not sustainable on account of time bar. Accordingly, the appeal of the company allowed even on account of limitation.

Penalty - HELD THAT:- Since the appeal filed by the appellant company allowed both on merits as well as on account of limitation, the penalty imposed on the Director of the company also does not sustain.

Conclusion - i) The appellant produced sufficient documentary evidence to rebut the Department's allegations, and the Department failed to properly investigate or consider the factual evidence. Therefore, the demand on the ground of non-receipt of goods was not sustainable. ii) The Department's failure to consider the appellant's documentary evidence and the incomplete verification vitiated the proceedings. iii) Since the Department failed to establish such suppression, the invocation of extended limitation was held to be legally unsustainable. iv) The vendor was not given opportunity to respond to allegations of paper transactions, despite the entire proceedings being premised on the vendor's conduct. v) Since the demand was set aside on merits and limitation grounds, the penalty imposed on the Director was also held unsustainable and was set aside.

Appeal allowed.