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Central Excise - Case Laws
Showing 81 to 100 of 668 Records
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2021 (11) TMI 895 - CESTAT CHENNAI
Clandestine removal - CTD bars and rods - shortage of inputs - department has been able to sufficiently establish the basis of the duty demand or not - penalty - HELD THAT:- When the Tribunal had not made any observations with regard to the shortage of raw materials and had clearly remanded to look into the transactions between the traders and M/s. MMSD and the method adopted by the appellant to clandestinely clear the finished products through M/s. MMSD, the quantification of shortage of raw materials on the basis of EXIM Policy, was totally unwarranted and purposeless. The input output ratio given in the EXIM Policy (Sl. No. C513) has been adopted to calculate the input output ratio of manufacture of CTD bars. The appellant herein has neither imported raw materials nor do they export their finished products. This ratio has not been made the basis for quantification of duty in the Show Cause Notice.
Though the remand was to look into the demand of ₹ 12,90,032/-, the duty confirmed in the impugned order is ₹ 21,15,379/-. This is because the Commissioner has added ₹ 11,48,044/- which has been already upheld by the Tribunal to the amount of ₹ 9,67,335/- arrived by him. I cannot understand the logic of the adjudicating authority in adding the amount that has already been upheld by the Tribunal. Though the Tribunal has remanded the matter to look into the penalty that has to be imposed after readjudication of the issue of ₹ 12,90,032/- that has been remanded, the issue of penalty in regard to ₹ 11,48,044/- has to be recorded separately. The duty demand that has been already upheld by the Tribunal cannot be added to the amount of adjudication in denovo adjudication. The adjudicating authority has confirmed the total demand of ₹ 21,15,379/-. There is no demand of ₹ 21,15,379/- at the time of adjudication. The demand adjudicated is only ₹ 12,90,032/-. There cannot be confirmation of a higher amount.
The Commissioner having analysed merely the shortage of raw materials, the argument of the learned counsel that they requested for cross-examination of mahazar witnesses and the adjudicating authority did not allow the same acquires relevance - though in the Show Cause Notice it is alleged that 615.28 MTs of CTD bars were clandestinely removed through M/s. MMSD and duty demand of ₹ 12,90,032/- was raised, in the present order, the adjudicating authority has held that the CTD bars unaccounted would be 461.37 MTs only. Then it has to be explained through which of the traders, the same were shown to be purchased. The allegation on this issue is that the clearance was camouflaged through fake invoices of many traders. The evidences in this line are not discussed.
Department has not been able to establish with preponderance of probability the duty demand in respect of 615.28 MTs of CTD bars received by M/s. MMSD as alleged in the Show Cause Notice - the demand confirmed in regard to the CTD bars received by M/s. MMSD requires to be set aside - Since the remand was for reconsidering the penalty, the duty demand upheld by the Tribunal with respect to ₹ 11,48,044/- having attained finality, the equal penalty confirmed in the earlier adjudication order would sustain.
Appeal allowed in part.
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2021 (11) TMI 894 - CESTAT BANGALORE
Process amounting to manufacture or not - Ethanol Blended Petrol - whether the production of 10% Ethanol Blended Petrol (EBP) which involves the blending of 10% duty paid ethanol with 90% duty paid Motor Spirit (MS, commonly known as petrol) amounts to manufacture in terms of Section 2(f) of the CEA? - liability of excise duty prior to the issuance of Notification Nos.61,62,63, & 64/2008-CE dated 24.12.2008 - HELD THAT:- The dispute involved in this case pertains to the period from 16.12.2008 to 23.12.2008. We find that by placing reliance on the decision of BHARAT PETROLEUM CORPN. LTD. VERSUS COMMR. OF C. EX., LUCKNOW [2009 (2) TMI 170 - CESTAT, NEW DELHI], this Tribunal has set aside the Order-in-Appeal and allowed the appeal filed by M/s Bharat Petroleum Corporation Limited holding that the process of blending of small quantity of MFA with MS and HSD does not amount to manufacture and thus, would not attract payment of Central Excise duty.
The issue arising out of the present dispute is no more open for any debate - Appeal allowed - decided in favor of appellant.
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2021 (11) TMI 893 - CESTAT NEW DELHI
Refund of CENVAT Credit - Credit under protest - rejection on the ground of time limitation - HELD THAT:- The reversal of CENVAT credit on 29.10.2005 was under protest, ifso facto, as the same was reversed during the pendency of the adjudication proceedings and the appellant had contested the amount in dispute. The refund claim is within time as the same is filed within 2 months from the date of order-in-appeal.
The adjudicating authority is directed to grant refund of the said amount in cash, as required under the Transitional Provisions of CGST Act, and is further directed to pay interest @ 12 p.a. from the date of reversal of the cenvat credit amount till the date of payment, (as per Section 35 FF, which provide for interest from the date of deposit till the date of refund) - Appeal allowed - decided in favor of appellant.
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2021 (11) TMI 868 - CESTAT NEW DELHI
Grant of interest under Section 35FF, from the date of deposit till the date of refund - HELD THAT:- The applicable section for grant of interest is Section 35FF, which provides for grant of interest on the amount refundable pursuant to order of the Appellate Court. It is further provided in this section that interest should be granted from the date of deposit till the date of refund, without any discrimination.
Division Bench of this Tribunal in M/S. PARLE AGRO PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS & SERVICE TAX, NOIDA (VICE-VERSA) [2021 (5) TMI 870 - CESTAT ALLAHABAD] wherein interest on pre-deposit (made during investigation), have been enhanced from 6% to 12%, following the ruling of the Apex Court in SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS [2006 (1) TMI 55 - SUPREME COURT].
The Adjudicating Authority is directed to grant interest @ 12% per annum from the date of deposit till the date of refund. Such interest should be granted within a period of 45 days from the date of receipt or service of the copy of this order.
Appeal allowed - decided in favor of appellant.
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2021 (11) TMI 867 - CESTAT MUMBAI
CENVAT Credit - input or not - aseptic trading material - case of the Revenue is that since the advertisement pertained to traded goods of which credit itself was not available, hence the appellants are required to reverse the credit of advertisement service attributed to traded packaging material - HELD THAT:- The fact is not in dispute even as admitted in the show-cause notice that the advertisement service was in respect of trading of packaging material, however, for the purpose of calculating the reversal amount, the turnover of packaging machine was also taken into account.
The advertisement papers presented clearly shows that the advertisement is in respect of packaging material and it nowhere indicates the trading of packaging machinery - Since advertisement service was not used for trading of packaging machines, the value of packaging machines for calculating the reversal amount of CENVAT Credit cannot be taken into account.
The demand of CENVAT Credit in respect of input services i.e. advertisement services attributed to packaging machine is prima facie wrong. It is found that this issue has neither been raised by the appellants before the adjudicating authority nor has been considered by the adjudicating authority, hence the same needs to be reconsidered.
Matter remanded to the adjudicating authority to reconsider the case - appeal allowed by way of remand.
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2021 (11) TMI 833 - CESTAT AHMEDABAD
CENVAT Credit - input services - Works Contract Service used for Repair of their factory premises - inclusion part services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises - HELD THAT:- It is obvious that a exclusive part can only exclude what is otherwise included in the inclusive part, therefore. If anything is covered in the exclusive part it remains excluded irrespective of the fact that the same was specifically included in the main definition or the inclusive part. This is so because the exclusive part comes at the end of the definition and not before the inclusive part.
Appeal dismissed.
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2021 (11) TMI 832 - CESTAT CHENNAI
CENVAT Credit - input services - GTA services for carrying the waste namely ‘sludge’ to the dumping yards - HELD THAT:- The appellants have to remove the waste from the factory to the demarcated dumping yards as required by the Pollution Control Board. If they do not comply with this mandatory requirement, their license for manufacture will be cancelled. Therefore, it can be stated that these services availed by the appellant are in relation to the activity of manufacture within the factory.
The very same issue is considered by the Tribunal in the case of AMPHENOL INTERCONNECT INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE PUNE [2018 (9) TMI 810 - CESTAT MUMBAI] where it was held that the service tax paid for transportation of such waste material should be considered as input service, for the purpose of availment of Cenvat benefit.
The credit availed by the appellant is eligible - Appeal allowed - decided in favor of appellant.
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2021 (11) TMI 830 - CESTAT MUMBAI
CENVAT Credit - variance in the inventory of the Cenvat inputs maintained by the appellants - value of net shortages in the input inventory - HELD THAT:- The shortages and excesses if any found are theoretical due to huge quantity of inputs handling. It is not a case of the Department that the appellant have ever removed any Cenvat inputs without payment of duty from their factory. Therefore, even though there is any shortage or excess, the input was available within the factory premises or consumed in the production.
It can be seen that the same facts and circumstances existing in the present case, even though there is some theoretical variation in the inputs was found and on that ground the CENVAT Credit cannot be denied.
The CENVAT Credit cannot be denied to the appellant on a theoretical variance in the inputs - Appeal allowed - decided in favor of appellant.
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2021 (11) TMI 829 - CESTAT MUMBAI
CENVAT Credit - common input - Furnace Oil - liability to pay 10% of the value of the exempted goods in terms of Rule 6(3) of CCR - appellant had suo moto reversed the proportionate credit before issuance of show-cause notice - HELD THAT:- There is no dispute to the fact that the appellant suo moto reversed the proportionate CENVAT Credit in respect of furnace oil before issuance of show-cause notice and also paid the interest @ 13%. However, subsequently the appellant also paid the remaining 11% interest in terms of Section 73 of the Finance Act, 2010. We find that even without considering the Finance Act, 2010 for the prior period and even subsequent to the validity of this retrospective amendment provision this issue was considered. In catena of judgments, various Courts and Tribunal has consistently held that if the assessee reversed the proportionate credit even though belatedly and paid the interest for delay in reversal, the demand of 5%/10% in terms of Rule 6(3) will not sustain. Therefore, since the appellant admittedly reversed the proportionate credit in respect of furnace oil used in or in relation to manufacture of exempted goods and also paid the interest @ 24%, the demand of 10% of the value of exempted goods will not sustain.
Once the proportionate credit in respect of the inputs used in the manufacture of exempted goods has been reversed and interest thereupon was paid in case of any delay in reversal, the demand of 10% of the value of exempted goods under Rule 6(3) will not sustain - since the appellants have reversed the proportionate credit along with payment of 24% interest, the demand of 10% of value of the exempted goods in terms of Rule 6(3) is not sustainable - Appeal allowed - decided in favor of appellant.
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2021 (11) TMI 784 - CESTAT CHANDIGARH
Refund of education cess and higher education cess - restriction in terms of Notification Nos. 19/2008-CE dt. 27.03.2008 and 34/2008-CE dt. 10.06.2008 - HELD THAT:- It is an admitted fact that earlier orders of this Tribunal have been accepted by the Revenue and no appeal has been filed against those orders. In the absence of any challenge to the orders of this Tribunal, the adjudicating authority was duty bound to implement the orders of this Tribunal which they failed to do so. Further, in earlier round of litigation, the orders of this Tribunal were final. The decision relied upon by the ld. AR in the case of ASSISTANT COMMISSIONER, INCOME TAX, RAJKOT VERSUS SAURASHTRA KUTCH STOCK EXCHANGE LTD [2008 (9) TMI 11 - SUPREME COURT] is not applicable to the facts of this case as in that case, the issue was alive by filing the application for rectification of mistake. There is no such case in these matters, therefore, the said decision cannot be applied here.
The adjudicating authority is directed to implement the orders passed by this Tribunal in earlier round of litigation as chart mentioned herein above within 30 days of receipt of this order - Appeal disposed off.
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2021 (11) TMI 783 - CESTAT CHENNAI
Refund of Excise Duty, paid under protest - goods are sold as waste and scrap - appellant submitted that since the goods are cleared as ‘waste and scrap’, they are not liable to pay duty - time limitation - principles of unjust enrichment - HELD THAT:- The litigation with regard to the demand raised in the Show Cause Notice dated 06.08.2009 has continued till 27.02.2018 whereby the Commissioner (Appeals), Coimbatore has set aside the demand, interest and penalties confirmed in the Order-in-Original. Though after the first adjudication and consequent appeal (whereby the demand was set aside), the appellant ought to have filed the refund claim within a period of one year, since the Department has adjudicated the Show Cause Notice for a second time and confirmed the demand again, it cannot be said that the refund claim filed by the appellant is time-barred.
The refund claim is filed within one month after passing of the second Order-in-Appeal which is dated 27.02.2018. The claim having been made within one year from the date on which the demand was set aside by the Commissioner (Appeals) finally, the rejection of refund claim as time-barred under Section 11B of the Central Excise Act, 1944 is not justified. Moreover, the amount having been paid as duty pursuant to the Show Cause Notice, the question of unjust enrichment does not arise.
There are no hesitation to hold that the appellant is eligible for the refund - appeal allowed - decided in favor of appellant.
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2021 (11) TMI 782 - CESTAT AHMEDABAD
MODVAT Credit - stock lying as on 31.03.2003 in terms of Notification No.25/2003-CE(NT) dated 25.03.2003 - Credit in respect of inputs in transit before 31.03.2003 - Modvat Credit in respect of inputs which were in transit was denied on the ground that the goods were only in transit and were not in stock as on 31.03.2003 - HELD THAT:- The appellant have obtained the report under RTI given by the Range Superintendent to the Commissioner (Adjudication) vide letter dated 5.12.2005. From the said report, it is clear that the Range Superintendent has recorded the Grey Stock in transit therefore, it is not in dispute that there is a stock which was covered under the consignment which were in transit as on 31.03.2003.
Whether in terms of the notification allowing the credit on the stock as on 31.03.2003 whether the goods in transit shall be considered as stock as on 31.03.2003? - HELD THAT:- This tribunal in the earlier round of appeal remanded the matter making a categorical observation that the issue to be decided in the light of the judgments in the case of ELECON FABRICS VERSUS COMMISSIONER OF CUS. & C. EX., RAJKOT [2007 (6) TMI 57 - CESTAT, AHMEDABAD] where it was held that there is no dispute that the said goods have been received and utilized by the appellants. Private records including the subsequent returns filed by them indicates the details of such receipts and utilization. Inasmuch as the Board envisaged the condonation of procedural lapses to ensure the credit being taken as a transitional measure, the order of the Commissioner (Appeals) is set aside.
Thus, it is clear that even though the goods have not arrived in the factory but the assessee have purchased the goods and the said goods were in transit, the same was considered as stock as on 31.03.2003 and Modvat Credit was allowed. Therefore, ratio of the judgment is clearly applicable in the facts of the present case.
The appellant is entitle for Modvat Credit also in respect of stock which was in transit accordingly the Modvat Credit is allowed - Appeal allowed.
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2021 (11) TMI 781 - CESTAT HYDERABAD
CENVAT Credit - short payment of service tax - erroneous availment of CENVAT Credit - suppression of facts or not - extended period of limitation - penalty - HELD THAT:- Apparently and admittedly out of the total demand of ₹ 11,64,424/- major amount of ₹ 6,89,256/- pertaining to the alleged excess availment of input service tax credit has already been held not assessable by both the adjudicating authorities below. The remaining amount of ₹ 4,75,168/- pertaining to the alleged irregular availment of inputs service tax credit taken on any irregular service (₹ 2,20,969/-) and alleged irregular availment of inputs service tax credit taken on common inputs service ₹ 2,54,199/- was reversed in August, 2016 itself immediately after the audit team raised the objection. Also, it is admitted fact that appellant carried much more balance in their CENVAT credit account when they reversed the aforesaid amount, due to which the authorities below have accepted that there is no liability of the appellant to pay interest thereupon.
Whether the case in hand was merely a case of wrong apportionment of credit between the appellants both units, a bonafide clerical error or it was a case of intentional malafide intention to evade payment of duty? - HELD THAT:- Though the amount was not proportionately bifurcated between both the units of the appellants but simultaneously it is an admitted fact that the amount of ₹ 2,54,199/- was not further distributed to the second unit of the appellant despite being claimed by the first unit. So the eligibility of claim of credit of ₹ 8,28,621/- stand admitted - deficiency was made good even before the issue of impugned show cause notice dated 28.7.2013 and the credit were properly being recorded in their ER 1 returns at the time of taking the same and also at the time of reversing the same. Once those have been properly recorded in the books of accounts of the appellants, the allegation of intentional evasion remains only assumption having no legs to stand upon.
Extended period of limitation - penalty - suppression of facts or not - HELD THAT:- When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. Above all, suppression of facts is clearly qualified by word wilful in the section. Hence, presence of mensrea to evade duty has to be there. From the facts, it is found that since there has been prompt reversal by the appellant that too of a such amount which was meant for the appellants own both units, however was utilised only by one unit. Hence allegation of wilful mis-statement with an intent to evade payment rather not at all justified - Though the adjudicating authority below had been right while dropping the demand on the same ground by holding it to be mere clerical error, they have definitely got wrong while still imposing penalty.
Appeal allowed - decided in favor of appellant.
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2021 (11) TMI 780 - CESTAT BANGALORE
CENVAT Credit - clearance of both dutiable and exempted items manufactured - non-utilization of separate inventory for input services utilized in terms of Rule 6(2) of CENVAT Credit Rules, 2004 - issue pertains to 2006-2007 - invocation of extended period of limitation - HELD THAT:- Even if extended period was applicable, the show-cause-notice should have been issued by April 2012. However, the show-cause-notice was issued on 17.08.2012 that is beyond the permissible period of 5 years without the any authority of law. The appellants have submitted the same during the proceedings before the learned Commissioner. However, it is found that learned Commissioner instead of giving reasons as to how the show-cause-notice was hit by limitation simply observes that the appellant’s claim that the show-cause-notice was received by them on 22.08.2007 is factually incorrect and it was a clear mis-representation of facts.
The show-cause-notice clearly covers the period 2006-2007 even assuming that the Returns for the month of March 2007 are filed in the month of April 2007, the 5 years period comes to an end by April 2012. When the show-cause-notice itself is issued in August 2012 which is clearly beyond the period of limitation, even if extended by 5 years therefore, it is to be held that the show-cause-notice is clearly hit by limitation and will not survive legal scrutiny.
Appeal allowed - decided n favor of appellant.
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2021 (11) TMI 730 - CESTAT NEW DELHI
Area Based Exemption - availment of inadmissible cenvat credit (on inputs) on improper and inadmissible documents - extended period of limitation - HELD THAT:- The disallowance under each of the annexures to the show cause, is of similar nature. Further, from the demonstration made by the counsel for the appellant, it is satisfying that this is a case of only clerical error and the appellant’s Plant No.9 has received the inputs in question, making the proper entries in the records and have further made the payments through its bank accounts. It is also found that there is no other allegation as to diversion of raw materials or of any fraudulent activity on the part of the appellant.
Extended period of limitation - HELD THAT:- The extended period of limitation is not available to the Revenue. Further, cenvat credit in dispute is allowable to the appellant/assessee.
Appeal allowed -
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2021 (11) TMI 658 - GAUHATI HIGH COURT
Recovery of amount deposited in the Escrow account - forfeiture for the alleged violation of the conditions of the exemption notification availed by the appellant - manufacture of Pan Masala and Pan Masala containing tobacco - exemption under Notification No. 8/2004-CE dated 21.01.2004, as amended by Notification No. 28/2004-CE dated 09.07.2004 - Period from March 2004 to March 2005 - monetary amount involved in the appeal.
Maintainability of appeal - monetary involvement is below ₹ 1 Crore as notified by the Central Board of Indirect Taxes & Customs (CBIT&C) circular dated 22.08.2019 - HELD THAT:- In so far as the High Court is concerned, the Monetary Limit prescribed is 1(one) Crore below which no Appeals can be filed before the High Court. However, Clause 4 of the said instructions prescribes that where substantial questions of law are involved, the matters will be contested irrespective of Monetary Limit prescribed - In matters where a common principle may be involved, the High Court can entertain appeal subject of course to the provisions of Section 35G of the Central Excise Act.
A reference to Section 35G of the Central Excise Act, 1944 shows that an appeal shall lie to the High Court from every order passed by an appellate Tribunal provided that the High Court is satisfied that the matter involves substantial questions of law. The appeal under Section 35G is a qualified appeal and not an absolute and/or unqualified and/or unrestricted appeal - The High Court has no jurisdiction to go behind or question the facts found by the Tribunal unless on the ground of perversity.
A perusal of the order dated 31.03.2017 passed by the Commissioner, will reveal that the show-cause Notices which were issued against the assessee for wrong utilization of credit during the period of March, 2004 to March, 2005 has already been dropped by the Additional Commissioner, Central Excise, Dibrugarh vide order dated 30.01.2009 and there is no pending show cause Notice issued to the assessee in relation to admissibility of CENVAT credit - Tribunal had correctly rendered a finding that the benefit of exemption has been denied to the assessee. Since, as discussed above, the findings arrived at by the Addl. Commissioner, Central Excise, Dibrugarh in its Order- in-Original dated 30.01.2009 were not challenged by the Department before any higher forum, the same had therefore attained finality.
The issue of wrong utilization of credit by the assessee during the period of March, 2004 to March, 2005 having been already dropped by the Additional Commissioner, Central Excise, Dibrugarh vide order dated 30.01.2009 and no appeal having been preferred by the Department against such finding, the matter has attained finality. The said finding of fact is also accepted by the Commissioner, Central Excise as is seen in the order dated 31.03.2017 - no substantial question of law arises in this appeal and we are therefore, not persuaded to accept this appeal in view of the mandate of Section 35G of the Central Excise Act, 1985.
The provisions of Section 35G mandates that an appeal under Section 35G of the Central Excise Act can only be admitted/heard by the High Court only on the substantial question of law framed. However, in the present proceedings, there was no substantial question of law framed by the appellant with regard to the ‘perversity’ as raised by the appellant - The Apex Court in S.R. TEWARI VERSUS UNION OF INDIA (UOI) AND ANR. [2013 (5) TMI 970 - SUPREME COURT] held that if the decision is arrived at on the basis of no evidence or thoroughly unreliable evidence and no reasonable person would act upon it, the order would be perverse. The Apex Court held that if there is some evidence on record which is acceptable and which could be relied upon, the conclusions would not be treated as perverse and the finding would not be interfered with.
Appeal dismissed.
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2021 (11) TMI 657 - CESTAT AHMEDABAD
CENVAT Credit - not following the procedure prescribed under Rule 9A of Cenvat Credit Rules and not filing proper declaration for availing the said credit - transitional credit as prescribed under N/N. 25/03-CE (NT) dated 25.03.2003 and N/N. 4/03- CE(NT) dated 30.04.2003 - HELD THAT:- The appellant have filed declaration of stock to the department which was verified by the Range Superintendent - As per the above report it can be seen that after proper verification some discrepancy was found for ₹ 1, 50,250/- which was reversed by the appellant. As per the procedure the proper stock verification was conducted by the Superintendent thereafter the Adjudicating Authority seeking further verification of all the records is unwarranted. We are of the view that the aforesaid verification report is conclusive one therefore; no further material is required for establishing the stock lying in the factory of the appellant as on 31.03.2004. Therefore, we are of the view that the Commissioner (Appeals) has gone beyond the direction given by the Tribunal in the earlier order dated 19.11.2010.
The appellant have complied with the procedure prescribed for availing transitional credit in respect of the stock lying as on 31.03.2004. Therefore, there is no reason to deny the Cenvat Credit.
Appeal allowed - decided in favor of appellant.
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2021 (11) TMI 656 - CESTAT AHMEDABAD
Demand of duty on Sulphur purchased - N/N. 12/2012-CE dated 17 March 2012 - use of Sulphur for manufacture of Sulphuric Acid/Oleum which in turn is used in the Urea Plant for manufacture of Molten Urea - Revenue’s objection is that the some quantity of Molten Urea is used as input for the manufacture of Malamine and therefore, the appellants are not entitled to benefit of notification - HELD THAT:- The issue involved is identical to the issue decided in the appellant’s own case GUJARAT STATE FERTILIZERS AND CHEMICALS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, VADODARA [2020 (2) TMI 1253 - CESTAT AHMEDABAD] where it was held that There are no merit in the Revenue’s arguments that benefit of Notification No. 12/2012-CE dated 17 March 2012 can be denied on the ground that during manufacture of Phosphoric Acid which in turn used in the manufacture of fertilizer and Phospho-gypsum is manufactured.
Appeal allowed on the terms of aforesaid decision.
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2021 (11) TMI 655 - CESTAT MUMBAI
Clandestine Removal - M. S. Ingots - alleged involvement in abetting / planning such surreptitious illegal activity - retraction of statements - opportunity of cross examination of witnesses - Rule 26 of the Central Excise Rules, 2002 - HELD THAT:- It is fundamental principle of judicial precedence that the decisions rendered by the courts and tribunal are not the law, legislated by the Parliament, and hence cannot be applied universally, but should be applied after establishing the relevance and significant similarity with the facts of case under consideration and the decision sought to be relied upon. The facts in case of clandestine clearance do not render themselves to such similarity and hence the decision sought to be relied upon need to be examined with caution. It is established principle, that clandestine activities are undertaken with secrecy, under cover of darkness and would not leave the complete trail of evidence for the investigating authorities to detect and discover the said activities - If on the basis of the evidences adduced which would be of the nature as enumerated at (ii) of para 40 of the said decision, the conclusions in relation to act of clandestine manufacture and clearance should be arrived at. In the instance case, there are sufficient evidences as enumerated therein have been put forth to establish the case against the appellant within pre-ponderence of probability.
Nothing has been brought on record to show that the demand made in present case based on the evidences and admissions/ confessions by the Director of Appellant 1, was covered under the earlier show cause notice. The earlier demand was based on certain studies conducted, and on the basis of electricity consumption was made. The demand was in nature of presumptive demand, and as per the submissions made by the appellant the appeal against the said order was dismissed not after consideration on merits but for the reason of non compliance with provisions of Section 35 F of the Central Excise Act, 1944. Appellants have also not placed on records any document evidencing such dismissal of the appeal filed by them.
There are no reason for not dismissing the appeals filed by these appellants under Rule 20 of CESTAT Procedure Rule, 1982, and also on merits ex- parte, for the reason that they were part of the entire activity of clandestine clearance undertaken by Appellant 1 - role of Appellant 3 & 4 has been clearly spelt out in planned activity of clandestine clearance, the fact admitted by them in their statements recorded under Section 14 of Central Excise Act, 1944. In view of the above admission of their involvement in activities of clandestine production and clearance by Appellant 1, the penalties imposed on them is upheld.
Appeal dismissed.
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2021 (11) TMI 654 - CESTAT MUMBAI
100% EOU - Levy of Central Excise Duty - cotton waste generated in manufacturing of the finished products and cleared in the domestic tariff area - period 08.03.1999 to January 2011 - proviso to Section 3 (1) of Central Excise Act, 1944 - HELD THAT:- Bare reading of proviso indicates that it is applicable, only in respect of the excisable goods which are produced or manufactured in India. In our view if the goods fail to qualify the test of manufacture as per Section 2 (f) and the law as laid down by various courts, then the proviso to section 3 cannot be pressed in to service for the purpose of levy of duty of excise as equivalent to the Customs duty. Further by the amendment made in proviso, to section 3(1), whereby the phrase “allowed to be sold in India” was replaced by the phrase “brought to any other place in India”, very clear that in case of manufactured goods by an EOU, the proviso shall apply in all situations.
Section 11A of the Central Excise Act, 1944 can be pressed into service for recovery of “duty of excise” and not for the recovery of any other tax or duty including the Customs Duty leviable under Customs Act, 1962. Hence there are no merits in the observations made by the Commissioner while distinguishing the decision of C T Cotton. The issue for consideration in the present case is demand of duty on the cotton waste arising during the course of manufacture of finished product exported by the appellants. Once it is held that the cotton waste is not a manufactured goods leviable to excise duty, all the subsequent arguments advanced by the Commissioner vis a vis contravention of the provisions of exemptions issued under Customs Act, 1962 and those of the Foreign Trade Policy, become irrelevant for these proceedings, initiated under provisions of Section 11A of the Central Excise Act, 1944.
Commissioner have referred to the first two show cause notices, where in the demand has been made in respect of the “Cotton Waste” cleared clandestinely by the appellant, treating it as the goods produced by the EOU. In view of the decision of the tribunal in case of M/S CT. COTTON YARN LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, INDORE [2013 (1) TMI 249 - CESTAT NEW DELHI], we are not in position to agree with the said observations. Distinction made by the Commissioner, by stating that C T Cotton was a case in which the Cotton Waste aroused from the indigenous raw material, also lack merits as the source of raw material do not determine whether a process amounts to manufacture or not in terms of Section 2 (f) of the Central Excise Act, 1944.
The demand of duty cannot survive in view of the decision in case of C T Cotton, for consideration of which the matter was earlier remanded back by the tribunal to original authority, we do not discuss the issue of limitation - Since we hold against the demand of duty, the demand for interest and penalty to is set aside.
Appeal allowed - decided in favor of appellant.
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