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Central Excise - Case Laws
Showing 1 to 20 of 685 Records
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2020 (12) TMI 1230
Adjudication not finalised even after lapse of more than 10 years - Denial of CENVAT Credit - recovery of rebate claim - petitioner purchased their raw material from J & K based manufacturer who did not purchase any crude Mentha oil from the farmers - HELD THAT:- The subject matter in the present petitions is squarely covered by the ratio of pronouncement in the case of M/S GPI TEXTILES LIMITED VERSUS UNION OF INDIA AND OTHERS [2018 (9) TMI 25 - PUNJAB & HARYANA HIGH COURT] where it was held that the notices in the present cases having been issued more than decade back and the proceedings having not been concluded within reasonable time, the same deserves to be quashed.
Filing of the appeal before the Jammu & Kashmir High Court against order dated 28.08.2018 passed by CESTAT, Chandigarh pertaining to supplier of the petitioners (purchaser) - HELD THAT:- It would have no bearing upon the findings recorded above, keeping in view the peculiar facts & circumstances of the case and law laid down referred to above. Moreover, the Jammu & Kashmir High Court has not granted any interim order in favour of the respondent(s)/ Revenue on the appeal filed after 1 ½ year of passing of order of the Tribunal in case of supplier (seller) of goods to the petitioner (purchasers).
The show cause notices having been issued long back more than a decade are not sustainable in the eyes of law, and thus, deserve to be quashed - petition allowed.
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2020 (12) TMI 1172
CENVAT Credit - input services - Warranty Services - whether warranty services are part of the manufacturing and sale activity as they are required for the purpose of ensuring sale of the goods or not? - HELD THAT:- It is the Warranty Service which implies that the value is already included in the sale price of the goods. Moreover, there is no requirement in the definition of Input Service that the value is to be included in the assessable value for the purpose of Central Excise before the credit can be allowed. There is no such restriction in the definition of input service.
Appeal allowed - decided in favor of appellant.
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2020 (12) TMI 1124
CENVAT Credit - common input services for taxable as well as exempt goods - maintaining separate accountal of input and input services used in or in relation to manufacture of exempted and dutiable final products - alteration of option exercised under Rule 6(3) of the Cenvat Credit Rules in mid 2012-13 - time limitation - equivalent penalty under Rule 15(2) of the Cenvat Credit Rules read with Section 11AC of the Act.
Whether for the purposes of Rule 6(2) and Rule 6(3) of the Cenvat Credit Rules it was obligatory on the part of the appellant to maintain separate accountal of input and input services used in or in relation to manufacture of exempted and dutiable final products prior to manufacture of the final products or reversal of the cenvat credit of the duty and tax involved in respect of exempted inputs and input services on proportionate basis after manufacture of the final products also satisfies the requirement of Rule 6(2) of the Cenvat Credit Rules? - Whether, in the facts and circumstances of the instant case, the appellant is required to make payment of an amount equal to 6% of the value of the exempted goods and 7% of the value of the exempted services in terms of Rule 6(3)(i) of the Cenvat Credit Rules? - HELD THAT:- It is acknowledged both in the impugned order and the show cause notice that the appellant had reversed on proportionate basis the duty/tax paid on inputs and input services which were used, to the extent they related to exempted final products. There is no denial of this fact although issues have been raised regarding alleged discrepancies in the quantum of the reversals made, which we find had been duly attended to by the appellant by way of reversal with interest. It is also acknowledged in the impugned order that in all such cases of reversal, wherever required, the same has been effected along with payment of interest - It is now a settled proposition that reversal of cenvat credit even after manufacture of the goods and/or clearance thereof amounts to not taking of the credit on the exempted goods and that in case of common inputs and input services used in or in relation to the manufacture of dutiable and exempted final products, credit proportionate to use of inputs and input services in exempted products, if reversed, the assessee is not required to make payment of an amount in terms of Rule 6(3)(i) of the Cenvat Credit Rules - The demand of ₹ 58,96,13,230/- confirmed by the impugned order is unsustainable since the appellant has reversed the cenvat credit on input and input services attributable to the exempted product, including in some cases with interest if applicable - Reliance can be placed in the case of M/S GAYA MARKETING VERSUS THE STATE OF BIHAR THROUGH THE PRINCIPAL SECRETARY CUM COMMISSIONER, THE JOINT COMMISSIONER OF STATE TAXES, THE ASSISTANT COMMISSIONER OF STATE TAXES, GAYA. [2020 (1) TMI 1355 - PATNA HIGH COURT].
Whether the appellant had altered the option exercised under Rule 6(3) of the Cenvat Credit Rules in mid 2012-13 and whether the same was not permissible as per “Explanation I” of Rule 6(3)? - HELD THAT:- The materials on record clearly establishes that in this case the appellant had not exercised at any point of time during the period 2012-13 the option in terms of Rule 6(3)(i) of the Cenvat Credit Rules prior to July, 2020. No document to the contrary has been disclosed either in the show cause notice SCN or in the impugned order. In the impugned order it has been acknowledged by the Commissioner also that Explanation I to Rule 6(3) of the Cenvat Credit Rules does not bar exercising option in the middle of a financial year. However, according to him such option has to be exercised by physically writing to the Range Officer with assessee particulars and Cenvat Account Balance, which has not been done in the instant case - there has been no violation of the provisions of Explanation I to Rule 6(3) of the Cenvat Credit Rules.
Whether the demand confirmed is barred by limitation? - penalty - HELD THAT:- At all material point of time the Department was fully aware of and/or was made aware of by the appellant of all relevant facts, including the manner of compliance by the appellant with the requirements in terms of Rule 6(2) of the Cenvat Credit Rules. In these circumstances, as per principles laid down by the Apex Court consistently, there can be no case of suppression of any material fact or wilful misstatement or contravention by an assessee of any provision of the Act or the rules made thereunder with intent to evade duty/tax and hence there can be no invocation of the extended period of limitation in terms of the Proviso to Section 11A(1) or Section 11A(4) of the Act. The demand in such cases can only be for the normal period under Section 11A(1) of the Act - For the same reasons no penalty can be imposed upon an assessee in such cases in terms of Rule 15(2) of the Cenvat Credit Rules or Section 11AC of the Act.
Whether in the facts and circumstances of the case penalty equivalent is imposable upon the appellant under Rule 15(2) of the Cenvat Credit Rules read with Section 11AC of the Act? - HELD THAT:- The demand of interest in terms of Section 11AA of the Act and penalty imposed under Rule 15(2) of the Cenvat Credit Rules read with Section 11AC of the Act are also unsustainable.
Appeal allowed - decided in favor of appellant.
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2020 (12) TMI 1100
Classification - Scope of the term Textile - Demand based on CBIC circular and Trade Notice issued by the Commissioner - Maintainability of petition - alternative remedy of preferring an appeal - Section 35B of the Central Excise Act - non-compliance of the mandatory provisions of Section 37C of the Central Excise Act, 1944 - HELD THAT:- When the statute provides for a particular procedure, the authority has to follow the same and cannot be permitted to act in contravention of the same. It has been hitherto uncontroverted legal position that where a statute is required to do something in a certain way, the thing must be done in that way or not at all. The other methods or mode of performance are impliedly and necessarily forbidden. The aforesaid settled legal position is based on a legal maxim “expressio unius est exclusio atlerius”, meaning thereby that if a statute provides for a thing to be done in a particular way, then it has to be done in that manner and in no other manner and following other course is not permissible.
We should quash and set-aside the impugned Order in Original passed by the respondent no.2 dated 30.6.2020 and remit the entire matter to the respondent no.2 for fresh consideration after giving an adequate opportunity of hearing to the writ-applicants and also keeping in mind the prima facie observations made by this Court in this judgment
The writ-applicants have prayed to quash and set-aside the CBEC Circular/Order No.8/92 dated 24.9.1992 and also the Ahmedabad Collectorate Trade Notice No.78/94 dated 9.5.1994, as relying on the same, the goods manufactured by the writ-applicants are being classified as the articles of plastics under the Heading 3926 of the Central Excise Tariffs. The challenge to the CBEC Circular/Order and also the Trade Notice referred to above is substantially on the ground that the excise duty is being demanded from the writ-applicant based on such order and trade notice, whereas identical goods are being accepted as textile products in case of several other manufacturers and no duty is being charged.
It appears that the understanding of the word ‘textiles’ in common parlance has not been considered by the Board as well as by the Ahmedabad Collector while issuing the impugned Order and the Trade Notice respectively. Instead of considering the method of weaving as a relevant factor, the nature of the raw material seems to have been taken into consideration while issuing such Order and Trade Notice. The Board’s Circular and the Collector’s Trade Notice prima facie appear to be contrary to the law laid down by the Apex Court about what is ‘textiles’, and cannot be relied upon for classifying woven fabric - Both the goods in question are being manufactured by the writ-applicants by weaving; it being warp knitting in case of the Agro Shade Net and weaving by warp and weft in case of the Geo Grid fabrics. Both these commodities are in the nature of fabrics, and the respondents have also accepted the fact that the Agro Shade Net are fabrics manufactured on the Raschel knitting machine, whereas the Geo Grid fabrics are woven fabrics manufactured on the weaving machines.
The matter is remitted to the respondent no.2 for fresh consideration of all the issues discussed in this judgment - Appeal allowed by way of remand.
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2020 (12) TMI 1056
Valuation - inclusion of Freight charges in the assessable value - place of removal - premises of the buyers - appellant paid duty on the assessable value without including the value of freight, as according to the appellant, freight was incurred beyond the place of removal which is the factory gate of the appellant - HELD THAT:- The sale invoices raised by the appellant clearly mentioned at serial number 4 that "our responsibility ceases when goods leave factory". Rule 5 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 also provides that the cost of transportation from the place of removal to the place of delivery is not includable in the assessable value. The cost of transportation has also been separately mentioned in invoices and this cost is paid by the buyer. It is, therefore, evident that the factory gate is the place of removal and duty is charged at the price of the goods charged at the factory gate. Merely, because the payment of transit insurance has been made by the appellant would not mean that the place of removal would be the place of the buyer - the payment of transit insurance by the appellant is not a decisive factor for determining the place of removal.
The Supreme Court in COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, NAGPUR VERSUS M/S ISPAT INDUSTRIES LTD. [2015 (10) TMI 613 - SUPREME COURT] considered this situation in detail. According to the Department, the said Industry evaded Central Excise duty by mis-declaring that the factory gate was the place of removal and not the buyer's premises and, consequently, the freight charges were required to be added in determining the assessable value. The Commissioner held that the premises of the customer was actually the place of removal and not the factory gate of the Industry.
In regard to the payment made by the appellant to the buyer for any transit loss, the appellant has submitted that such charges were paid only in cases where the transit loss was more than 30 kg and even these cases, the charges were recovered from the transporters.
The Commissioner (Appeals) was not justified in holding that the value of freight charges was required to be added in the assessable value of the goods - Appeal allowed - decided in favor of appellant.
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2020 (12) TMI 950
Reversal of irregularly availed CENVAT Credit - Rule 6(1) of the Cenvat Credit Rules - benefit of N/N. 65/95-CE available - Interpretation of statute - N/N. 65/95-CE - whether Notification No. 65/95-CE is a notification which grants exemption “absolutely” as envisaged under Section 5A(1) of the Act and consequently sub-section (1A) of Section 5A is attracted? - HELD THAT:- Referring to and relying upon the decisions of the Hon’ble Karnataka High Court in COMMISSIONER OF CENTRAL EXCISE VERSUS M/S FEDERAL MOGUL TPR INDIA LTD. [2015 (8) TMI 308 - KARNATAKA HIGH COURT], of the Coordinate Bench of the Tribunal in M/S INCOPAC PARTS PVT. LTD. VERSUS CCE & CGST, JAIPUR [2018 (7) TMI 1366 - CESTAT NEW DELHI] and BALKRISHNA PAPER MILLS LTD, LAXMI BOARD AND PAPER MILLS LTD, COMMISSIONER OF CENTRAL EXCISE, THANE-I VERSUS COMMISSIONER OF CENTRAL EXCISE, THANE –I AND LAXMI BOARD AND PAPER MILLS LTD [2015 (11) TMI 210 - CESTAT MUMBAI], all involving similar issue, it has been held in the said order dated 28.07.2020 that the finding in the impugned order that availment of cenvat credit by the appellant during the material periods was by contravening the provisions of Rule 6(1) of the said Rules is incorrect and unsustainable and there is no irregularity or wrong availment of cenvat credit by the appellant; the appellant had the option to avail or not to avail the exemption under N/N. 65/95-CE and since it paid duty on the goods manufactured without availing the exemption, the appellant was eligible to avail the cenvat credit involved.
CENVAT Credit is rightly availed - appeal allowed - decided in favor of appellant.
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2020 (12) TMI 910
Seeking payment of interest on the rebate sanctioned beyond the period of three months from date of filing of claim as per Section 11BB of the Central Excise Act, 1944 - HELD THAT:- A circular of the Central Board of Excise and Customs, New Delhi, dated 01.10.2002 reiterating an earlier circular dated 02.06.1998 that stressed the importance of disposing rebate/refund claims within three months from date of receipt of such application, stating that the provisions of Section 11 BB would stand attracted 'automatically' in the case of any refund sanctioned beyond the period of three months, was also noticed - The conclusion of the Court was to the effect that the liability of the revenue to interest under Section 11BB commences from the date of expiry of 3 months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which the the order of refund was made.
The ratio of the judgment of the Hon'ble Supreme Court in the case of RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. [2011 (10) TMI 16 - SUPREME COURT] is applicable on all fours to the present matter.
Petition disposed off.
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2020 (12) TMI 909
Principles of Natural Justice - Exemption to goods cleared from a unit located in the state of Jammu and Kashmir - benefit of N/N. 01/2010-CE dated 06.02.2010 - opportunity of hearing not provided to the petitioner - HELD THAT:- We have noticed the facts stated by the learned counsel for the parties, however, we are not dwelling on those for the reason that no findings, as such, are being recorded by this Court. The matter is being examined only with reference to violation of principles of natural justice. It is the admitted case of the parties that before passing the impugned order, the petitioner was not afforded opportunity of hearing by the authority concerned and the claim made by it, was rejected. It is a case in which the claim regarding exemption was made by the petitioner with reference to notification No. 01/2010-CE dated 06.02.2010, while it was already enjoying benefits as are available in terms of the notification No. 56 of 2002 dated 14.11.2002. The aforesaid claim of the petitioner was not accepted by the competent authority, in terms of the prayer of the petitioner, but without even issuing a show cause notice to it. In case, the competent authority was satisfied with the claim made by the petitioner, a notice may not be required to be issued. But if the authority was of the opinion that the claim made by the petitioner may not be tenable, a notice is certainly required to be issued so that the grounds on which the claim of the petitioner was sought to be rejected could be discussed.
The matter is remitted back to the competent authority to be decided afresh after affording due opportunity of hearing to the petitioner - Petition allowed by way of remand.
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2020 (12) TMI 908
CENVAT Credit - few transactions of which consignments were either fake or fictitious - 8 vehicles with respect to 24 invoices were found non-existent in the database - owners of 9 vehicles denied transportation by written communications - CENVAT Credit - HELD THAT:- During the course of search at the factory premises of the appellant neither incriminating documents were recovered nor any shortage/excess of raw materials/finished goods were found by the officers of the anti-evasion. The employees of the appellant in their statements have clearly stated that they have physically received the goods and utilized in the manufacture of their final products.
The adjudicating authority is required to first conduct examination-in-chief of the witnesses whose statement is relied upon by the department and then to form an opinion whether the statements of the witness is admissible in evidence with respect to the facts and circumstances of the case and then only the witness shall be offered for cross-examination - in the present case, since no examinationin-chief has been conducted by the learned adjudicating authority, therefore the statements of witnesses are inadmissible in evidence and are eschewed from evidence.
Also, the department has not confronted various evidences to the appellant, which further creates doubt about the said half-baked investigation conducted by the department - it is found that the investigation conducted at the end of transporter is not reliable piece of evidence and cannot be used against the appellant.
The appellant has taken all reasonable steps as mentioned in Rule 9 of the Cenvat Credit Rules. The appellant has produced duty paid invoices under cover of which goods were received in the factory, showing names of manufacturer and supplier thereon and produced weighment slips evidencing receipt of goods. The payments have been made through the banking channels and the goods received have been duly entered into the RG-23 register - there is no evidence adduced by the department to show any flow back of money in the show cause notice. The department is not disputing the fact that these dealers raised invoices giving all particulars required to be given under the provisions of Cenvat Credit Rules in respect of materials supplied to the appellant. There is no evidence in the show cause notice that goods are not duty paid.
The investigation conducted by the department at the end of the transporter by searching the vehicles from the site ‘www.vahan.nic.in’ is an evidence which cannot be relied upon inasmuch as by the said evidence, the department is fastening the liability against the appellant, especially when the department could have investigated from the concerned State RTO in order to get the details of the truck owners. This exercise has not been done in the present case, thus, the said evidence cannot be relied upon in order to deny the lawful credit availed by the appellant.
The department is alleging the non-existence of premises of manufacturer/dealers, relying solely upon the alert circulars issued by the different Commissionerates. In the present case, the department has neither relied upon nor stated in the SCN about the Panchnama drawn at the concerned premises. If the said evidences have not been relied upon, then there is no material for the appellant to controvert the same, which is in clear violation of the principle of natural justice. It is well settled law that, merely on the basis of alert circulars, it cannot be said that particular premises are non-existent.
The appellant has taken all reasonable steps as mentioned in Rule 9 of the Cenvat Credit Rules, therefore, the denial of Cenvat credit is wrong and liable to be set aside - Appeal allowed - decided in favor of appellant.
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2020 (12) TMI 883
Validity of order passed by Appellate Tribunal - Violation of principles of natural justice - invocation of Rule 26 of the Central Excise Rules, 2002 - invocation of provision of Section 112(a) and Section 112(b) of the Customs Act, 1962 simultaneously - cross-examination of the Panchas and other witnesses, whose evidences are the bone of the entire findings of the Appellate Tribunal not allowed.
HELD THAT:- Issue Notice to the respondent, returnable on 19th January 2021.
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2020 (12) TMI 878
Condonation of delay in filing appeal - opportunity to explain the delay not provided - respondents is that this submission is made because it is urged that the appeal is decided without opportunity to the petitioner and there is violation of the principles of natural justice - HELD THAT:- It appears rather indisputable that the petitioner is not heard by the first respondent, this Court is of the considered view that the impugned order could be quashed and the appeal could be restored on the file of the first respondent with liberty to the petitioner to file an application for condonation of delay, if such application is not already filed, and canvass for condonation of delay in filing the appeal while calling upon the first respondent to consider such application strictly in accordance with the provisions of the Central Excise Act, 1944 and the decisions on the jurisdiction to entertain the appeal beyond the proscribed period under the provisions of the Central Excise Act, 1944.
Appeal is restored on the file of the Commissioner, Central Excise (Appeals-I), Bengaluru, the first respondents, for reconsideration with liberty to the petitioner to file an application for condonation of delay, if such application is not already filed, observing that the first respondent shall consider the same in accordance with the provisions of the Central Excise Act, 1944 and applicable law - petition allowed.
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2020 (12) TMI 875
Excess availment of CENVAT credit - whether the appellant had taken excess CENVAT credit as arrived by the department, holding that it was paper transaction without or short receipt of raw materials? - Extended period of limitation - HELD THAT:- The value so arrived was compared with the value of raw material consumed as shown in the Balance Sheet of respective financial year. ER-1 return shows the amount of CENVAT credit taken on the quantity of raw material purchased and not on the quantity of raw material consumed. There is no provision for one to one correlation in CENVAT credit scheme - there is no other evidence on record like investigation from supplier of raw material, transporter or evidence of cash flow back or any inculpatory statement to substantiate that excess CENVAT credit taken was based on paper transaction i.e. without or short receipt of raw material against invoices. There is also no reference to any statutory provisions to justify/ support the said computation of excess CENVAT credit demanded in the instant case. Therefore the entire demand of excess CENVAT credit in the absence of any corroborative evidence is nothing but based on presumptions and is not permissible under the law.
The Tribunal in the case of BEER BROS. VERSUS COMMISSIONER OF CENTRAL EXCISE, NEW DELHI-I [2015 (9) TMI 1439 - CESTAT NEW DELHI] held that charge of excess cenvat credit on the strength of balance sheet only is not sustainable.
Extended period of limitation - HELD THAT:- In the present case, the entire demand is based on the audit objection and is alleged to have been detected only after the audit was conducted - The allegation of suppressing the facts from the department does not hold good in the event of periodic audit of the appellant as above. There is no other evidence in the impugned order to show that the appellant has willfully suppressed the facts from the department in order to evade payment of duty. As such extended period of limitation cannot be invoked in the present case.
Appeal allowed - decided in favor of appellant.
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2020 (12) TMI 856
Reversal of CENVAT Credit - clearance of sulphuric acid from the factory of the responden - demand raised under rule 6(3) of the CENVAT Credit Rules 2004 - Department entertained a view that sulphuric acid, cleared to the fertilizer units without payment of duty, is an exempted product and hence the respondent is liable to pay an amount in terms of rule 6(3)(i) of the Credit Rules - HELD THAT:- What is important to note is that for the demands raised under rule 6(3)(i) of the Credit Rules in respect of sulphuric acid for the earlier period, the Supreme Court in UNION OF INDIA & OTHERS VERSUS M/S. HINDUSTAN ZINC LTD. [2014 (5) TMI 253 - SUPREME COURT] held that sulphuric acid is a by- product and there is no necessity to maintain separate records for the zinc concentrate used in the production of sulphuric acid and that rule 57CC does not talk about emergence of final product and a by-product.
The judgment of the Supreme Court in UNION OF INDIA & OTHERS VERSUS M/S. HINDUSTAN ZINC LTD. [2014 (5) TMI 253 - SUPREME COURT] was subsequently followed by the Tribunal in several cases, including that of the respondent in M/S. HINDUSTAN ZINC LTD. VERSUS CCE & ST, UDAIPUR [2018 (2) TMI 1303 - CESTAT NEW DELHI] where it was held that Sulphuric Acid, which has emerged as a technical necessity, which is a by-product, cannot attract the provisions of the said Rule, as the same are applicable only to the “final products”.
Thus, when the Tribunal rejected the contention of the Department regarding the distinction made between ‘input’ and ‘input service’, it is not possible to accept the submission made by the learned authorized representative of the Department that the judgement of the Supreme Court in Hindustan Zinc Ltd. would not be applicable to the present case since it relates to ‘input services’ and not ‘inputs’ - appeal dismissed - decided against Revenue.
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2020 (12) TMI 846
CENVAT Credit - place of removal - input services relating to export of goods to Nepal upto and at the port, airport and land border Customs station by the appellant - requirement of Rule 2(l)(ii) of the Cenvat Credit Rules satisfied or not - HELD THAT:- In the instant case the documents on record evidences that the subject goods were exported under bond by the appellant on FOB basis. Further, all the said services were and had to be rendered and/or availed at or prior to the port of shipment premises. None of these services were or can be rendered after the said goods are removed from the port. They have to be rendered before the vessels containing the subject goods left the port, from where the removal of the said goods took place. In case of export consignments ownership transfer takes place through Bill of Lading and hence the exporter continues to be owner and holds the title to the goods till the respective export consignment is handed over to master of the vessel and goods are loaded on board the vessel and that all services rendered prior thereto were services upto the place of removal within the meaning of Rule 2(l)(ii) of the Cenvat Credit Rules.
In the case of COMMISSIONER VERSUS DYNAMIC INDUSTRIES LTD. [2014 (8) TMI 713 - GUJARAT HIGH COURT], the Hon’ble Gujarat High Court has held that where exports are on FOB basis, place of removal is the port and not factory gate and hence since the impugned CHA, shipping agent and container services were utilised for purposes of export of final products and exporters could not do business without them, the service tax paid on these services availed was admissible. It has been further held that the words “input services” cannot be given restrictive meaning in view of the phrase “means and includes” used in Rule 2(l) of the Cenvat Credit Rules.
The appellant has correctly availed of credit of the subject input services - Appeal allowed - decided in favor of appellant.
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2020 (12) TMI 845
Area Based Exemption - N/N. 33/99-CE dated 08.07.1999 - exemption on LPG and Solvex-GL - Whether the Commissioner(Appeals) is right in holding that Review Commissioner’s view that Solvex-GL, being gas is excluded from sub-serial No.13(i) of the schedule to the Notification No.33/99 CE dated 08.07.1999 as amended, is eccentric, irrational and egregious? - HELD THAT:- Notification No.33/99 provides for exemption to goods specified in the schedule appended to the Notification and cleared from a unit located in the state of Assam or Tripura or Meghalaya or Mizoram or Nagaland or Arunachal Pradesh as the case may be, from so much of the duty of excise, leviable thereon, under any of the said acts as is equivalent to the amount of duty paid by the manufacturer of goods from the account current maintained under Rule9 read with Rule 173 G of the Central Excise Rules, 1944.
On perusal of Schedule to the Notification at Sl.No.13, it is apparent that the exemption is available to the gas based intermediate products. Sub-Sl. No. 13(i) of the schedule relates to gas exploration and production. Whereas Sl.No.13 mentions about gas based inter-mediate products. Sub-Sl. No.(i) refers to gas exploration and production. It is evident that the schedule not only refers to certain products but also to certain processes. The only inference one can get is that the products generated in the processes mentioned are covered by the entry and are eligible for exemption. Going by the manufacturing process given by the respondents and not disputed by the Revenue, we find that Solvex GL is manufactured during the process of production of LPG gas which is subsequently bottled and sold.
The exemption cannot be restricted to products which are formed in the gaseous stage alone for the reason that the exemption refers to gas based intermediate products and gas exploration and production. The correct interpretation of gas based products would go to include all the products which are produced in the processes of production of gas/LPG. The argument taken by the appellants appears to be farfetched for the reason that even LPG for which the exemption was extended by the department is also in the bottle and sold in the liquefied form.
The Notification does not give any such interpretation. It is clear that the entry 13 of the schedule refers to certain products which are not gaseous in nature. The main heading ‘gas based intermediate products’ has to include all the products intermediate or finally produced or occurring or manufactured in the process of exploration and production of gas. The distinction that the department is trying to bring in between liquids and gases is not acceptable.
The Notification squarely covers the impugned product and the benefit of the same is available to the respondents - Appeal dismissed - decided against Revenue.
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2020 (12) TMI 819
CENVAT Credit - Capital goods - Inputs - Cement and Steel items such as Angles, Channels, Joist etc. - period from 2010-11 to 2012-13 - applicability of Explanation 2 to the definition of inputs inserted with effect from 7 July 2009 - HELD THAT:- The Appellant has taken us through the sample invoices, which can be traced to the line item wise details and wherefrom it is evident that the credit in respect of goods classifiable under Chapter 84, 85 & 90 of the CETA is also included within the disputed amount. The Appellant has also enclosed a Chartered Accountant Certificate dated 23 August 2016 certifying that the credit of ₹ 2,42,79,485/- pertains directly in respect of the plant, machinery, equipments and other goods squarely covered by the definition of capital goods. Therefore, cenvat credit of ₹ 2,42,79,485/- does not at all pertain to cement and steel items falling under Chapter 72/73 but explicitly covered by the definition of capital goods under Rule 2(a) of the Cenvat Credit Rules and the demand to that extent does not survive.
Applicability of Explanation 2 to the definition of inputs inserted with effect from 7 July 2009 - HELD THAT:- There is no blanket or absolute bar in claiming credit on the disputed items, unless used for the purposes specifically excluded in Explanation 2 to the definition of inputs. The Appellant had placed a Certificate dated 1 June 2015 from the Chartered Engineer, M/s. Associated Services in support of their contention that the disputed items were used in the fabrication of the storage tanks within the factory premises. The adjudicating authority has not disputed the said Certificate from an expert and does not disclose any basis either to come to the conclusion that the disputed items were used for the specifically excluded purposes. Infact, no independent enquiry has been made by the adjudicating authority while blindly following the contested audit objection for the period 2010-11 - the Certificate of the Chartered Engineer could not have been disregarded and it was incumbent upon the adjudicating authority to either contradict the Chartered Engineer’s Certificate or accept the same and the glossing over of the said Certificate was not in consonance with law. That Cement and Steel items when used in the fabrication of storage tanks is eligible for credit as inputs even after insertion of the Explanation 2 in July 2009 as has already been decided in favour of the assessee.
The credit on the disputed items is available as inputs having been used in the fabrication of storage tanks - Appeal allowed - decided in favor of appellant.
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2020 (12) TMI 811
Clandestine removal - finished goods found short during the stock taking - Department was also of the view that N/N. 67/95CE dated 16-03-1995 was not applicable to the Appellants since it applied only to ‘inputs’ which are captively consumed and not to ‘finished goods’ as was the case of the appellants - demand is time barred as the show cause notice has been issued on 15.09.2016 for the alleged clearances in 2012 - time limitation - HELD THAT:- The charge of clandestine clearance cannot stand as the department has not been able to provide clinching evidence in support of the same. Clandestine clearance is a serious charge and has to be proved with positive evidence which is lacking in this case - It may be noted that not even one buyer of the clandestinely cleared goods has been identified by the department.
Shortages detected during stock-taking - whether the shortages detected were real or only notional. The appellants have doubted the manner of stock taking itself as it was not done in the presence of any panchas and no panchnama was drawn? - HELD THAT:- The appellants have been saying right from the investigation stage itself that the shortages were because of minor weighment errors which had accumulated over the years since no stocktaking had been done right from the date of production of those items. The shortage, when compared to the total production over the years, comes to a very nominal percentage as indicated in para 6.3 above. This has not been contested by the department. Such nominal percentage differences are to be expected while weighing, keeping the nature of the products in mind which are not amenable to precise weighment - the shortages noticed are not actual but only notional and, hence, no differential duty is payable.
DI pipes - appellant’s consistent stand has been that the shortages were because of damaged pipes which were reissued for re-melting in the factory itself but inadvertently not reduced from the recorded stock of DI Pipes - HELD THAT:- These damaged pipes were all recorded in the Daily Stock Account of Scrap and also reflected in the ER-1 returns. Further, since these were captively consumed they were exempt from duty under notification 67/95-CE dated 16.03.1995. The Commissioner’s finding that the exemption does not apply to ‘finished goods’ is legally not sustainable because of the specific definition of ‘inputs’ in the said notification which covers virtually all excisable goods including the goods manufactured by the appellants.
Time Limitation - HELD THAT:- The whole demand is time-barred as the shortages were noticed in December, 2012, and the show cause notice has been issued on 15.09.2016. There is no ground made out by the department to justify invoking the extended time period.
Appeal allowed - decided in favor of appellant.
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2020 (12) TMI 810
Reversal of CENVAT Credit - certain activities carried out by it on imported China pipes and cleared after making payment of excise duty - process amounting to manufacture or trading of goods - Rule 6(3) of the CCR, 2004 - time limitation - HELD THAT:- The issue is no longer res integra after the judgment of the Tribunal in the case of SUYASH AUTO-PRESS COMPONENTS & ASSEMBLIES P. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-III [2018 (5) TMI 208 - CESTAT MUMBAI] where it was held that the removal of input under Rule 3(5) was made admittedly on payment of duty. Therefore, there is no case of trading activity which is an exempted service. Accordingly, there is no application of Rule 6(3) of the Cenvat Credit Rules, 2004.
In the instant case of the Appellant also, there is no dispute that the goods where cleared after payment of excise duty and thus once the duty has been paid on such goods and accepted by the department, the same cannot be treated as a trading activity to trigger the mis chive under Rule 6(3) of the CCR, 2004.
Extended period of limitation - HELD THAT:- Further, it is also on record that the Appellant’s activities were known to the department since inception as earlier also a SCN dated 01/04/2015 was served on the Appellants for recovery of Cenvat credit availed on imported china pipes which were cleared after payment of duty. Thus, the current proceedings are on the same foot. By treating the activities of the Appellant as trading of goods cannot be sustained by invoking extended period of limitation as the department was very well in knowledge of the entire proceedings since inception. Thus, the demand cannot sustain on limitation ground as well.
Appeal allowed - decided in favor of appellant.
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2020 (12) TMI 798
Application for early hearing - HELD THAT:- Application for Early hearing is allowed.
Registry is directed to list the appeal for hearing on 02/12/2020.
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2020 (12) TMI 753
Refund of unutilized CENVAT Credit - surrender of registration under Rule 5 of the Cenvat Credit Rules, 2004 - rejection on the ground that neither the refund claim is covered under Section 11B of the Central Excise Act, 1944 nor under Rule 5 of the Cenvat Credit Rules, 2004 - interest on delayed refund - HELD THAT:- This Tribunal in the case of M/s Shree Krishna Paper Mills & Ind. Ltd. [2018 (4) TMI 1155 - CESTAT CHANDIGARH] has observed that although this Tribunal has denied refund claim in the case of Phoenix Inds Ltd [2014 (10) TMI 677 - CESTAT MUMBAI] but the Regional Bench at Chandigarh is bound by the decision of Hon‘ble High Court of Punjab & Haryana; therefore, relying on the decision of Rama Industries Ltd [2009 (2) TMI 136 - PUNJAB AND HARYANA HIGH COURT], it is held that the appellant is entitled for refund claim of unutilized cenvat credit lying in their cenvat credit account at the time of surrender of the registration under Rule 5 of Cenvat Credit Rules, 2004.
Grant of interest on delayed refund after three months of filing of the refund claim - HELD THAT:- In the case in hand, the claim of interest by the appellant during the course of arguments is a consequential relief, as it has been held that the appellant is entitled for refund, then they are entitled for interest also after three months of filing of the refund claim. It is a fact on record that at the time of filing of refund claim before the adjudicating authority, the appellant was not aware that the adjudicating authority will not sanction their refund claim within three months of the filing of the same. Therefore, claim of interest on delayed refund could not be raised before the adjudicating authority - Admittedly, it has been held that it is a consequential relief, therefore, the appellant is entitled for interest after three months from the date of filing refund claim.
The issue of claim of interest is a legal issue and can be raised at this stage, as the appellant has succeed on merits that they are entitled for refund claim, therefore, the adjudicating authority shall entertain the claim of interest of the appellant after three months from the date of filing refund claim - Appeal allowed - decided in favor of appellant.
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