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Central Excise - Case Laws
Showing 1 to 20 of 88 Records
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2022 (8) TMI 1508 - KERALA HIGH COURT
Recovery of CENVAT Credit taken and utilized wrongly for payment of the Service Tax with interest and penalty - maintenance of separate records as required under the Cenvat Credit Rules or not - HELD THAT:- The core circumstance for consideration either in the appeal before the Tribunal or this Court is whether the order of Commissioner dropping further action pursuant to notice dated 18.10.2012, basing on the report of Range Officer is legal and tenable. It is not pointed out in either of the forums that the report of range officer is erroneous on any ground or circumstance. The consequence of accepting the report of Range Officer must result in the very finding recorded by the Tribunal and the commissioner.
For the assessment year 01.04.2011 to 31.03.2012, the Commissioner while seized of the matter sought a clarification from the jurisdictional Range Officer regarding the practice followed by the assessee availing Cenvat Credit and it is on the basis of the said report as well as the certificate issued by the chartered accountant, that separate accounts are being maintained the Tribunal dismissed the appeal filed by the Department and the assessee’s case was accepted. When the departmental officer himself admits that there is no violation of any of the Rules and the assessee has followed 6(2) of the Cenvat Credit Rules the Tribunal is justified in dismissing the appeal.
There are no good ground to interfere with the order of the Tribunal - appeal dismissed.
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2022 (8) TMI 1450 - CESTAT AHMEDABAD
CENVAT Credit - denial on the grounds that the same was availed on the basis of fake and fictitious invoices issued by non-existent units - recovery of refunded rebate amount - submissions not discussed separately - violation of principles of natural justice - HELD THAT:- In the present matters Ld. Commissioner has passed the impugned common orders on the basis of common findings without discussing the submission separately of each Appellant and their involvement. Therefore the entire matter needs to be reconsidered by the adjudicating authority.
Appeal allowed by way of remand, directing the Adjudicating authority to decide the matter afresh and pass the order accordingly.
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2022 (8) TMI 1391 - CESTAT AHMEDABAD
CENVAT Credit - input services - dredging services received by the appellant for dredging the navigation channel leading to its jetty - lower authorities have denied the cenvat credit in respect of dredging service to the appellant on the ground that the land of jetty is owned by GMB, the channel developed by the EBTL is not for their exclusive use by the appellant - HELD THAT:- This tribunal in ESSAR BULK TERMINAL LIMITED VERSUS C.C.E. & S.T. -SURAT-I [2021 (9) TMI 816 - CESTAT AHMEDABAD] in the appellant’s own case on these issues which are involved in the present case also and by giving a detail finding, relying on some judgments held that the dredging service received by the appellant for construction of navigation channel is an input service and the credit was allowed.
From the above judgment, it is seen that the entire fact and the legal position of the present case is exactly same as was in the above cited decision of this tribunal. The only difference is, in the present case the show cause notice are periodical whereas, the allegation and contents of the show cause notice are common.
As regards submission of the appellant that the cost of service was borne by the appellant only hence credit is available to them, it is found that it is undisputed fact that the entire cost charged by the service provider to the appellant only and the same was expenditure exclusively of the appellant. For this reason also as held by the Hon’ble Bombay High Court in M/S. COCA COLA INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, PUNE-III [2009 (8) TMI 50 - BOMBAY HIGH COURT], the appellant is entitled for cenvat credit on input service, dredging service.
Appeal allowed.
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2022 (8) TMI 1374 - SC ORDER
Condonation of inordinate delay of 272 days in filing the Review Petition - no satisfactory explanation given - HELD THAT:- No case for review of Order dated 8th March, 2021 is made out. Consequently, the review petition is dismissed on the ground of delay as well as on merits.
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2022 (8) TMI 1323 - DELHI HIGH COURT
Monetary limit for filing revenue appeal - HELD THAT:- It is not disputed by Mr. Harpreet Singh, learned senior standing counsel for the appellant/revenue, that the tax effect is below the threshold limit prescribed in the circular dated 22.08.2019.
Appeal closed.
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2022 (8) TMI 1253 - CALCUTTA HIGH COURT
CENVAT Credit - substantial error of law or not - mismatch between the consumed quantity of inputs between respondent’s stock account of raw materials i.e. RG 23A Pt. 1 and ER-6 return - period 2012-13 to 2015-16 - gross inconsistencies in the records maintained by the respondent - availment and utilization of irregular Cenvat Credit in fraudulent manner by showing higher quantity of consumption of inputs for production of finished goods in their stock account (RG-23A Pt. 1) as compared to ER-6 returns during the said period - extended period of limitation.
HELD THAT:- The tribunal has pointed out that the department has not objected to the inter unit transfer of input which was the consistent case of the assessee. The tribunal also examined the sample stock account for pre-form submitted by the assessee and, in fact, a screen shot of the said stock account has been incorporated in the order passed by the tribunal.
After examining the facts and figures in the said stock account, the tribunal pointed out that there is inter unit transfer from unit-3 to unit-1 which is included in the total issued quantity of unit-3; whereas the same is shown as inter unit receipt from unit-3 in unit-1 stock account and is also apart of total receipt of unit-1 and thereby the same will also be part of consumption of unit-1 in the column ‘total issue’. Further, the tribunal was satisfied with the inter unit transfer of raw material as captured by the appellant in the stock account is netted off while filing ER 6 returns as the same is for single excise registration number and all units are treated as one single assessee. Therefore, after being satisfied with the factual position, the tribunal held that the assessee shown excess consumption of inputs in its stock records cannot be sustained.
Further, before the tribunal, the assessee had produced the chartered accountant’s certificate showing the detailed reconciliation of each raw material type and the tribunal has found that the adjudicating authority has incorrectly understood the total matter and erroneously proceeded to confirm the demand on irrelevant ground. Furthermore, the tribunal had agreed with the submission made on behalf of the assessee that there is no allegation levelled against the assessee showing the excess procurement of inputs and there has been no investigation in this regard by the department. Further, with regard to invoking the extended period of limitation, the tribunal found there is absolutely no justification to do so and there is no explanation given by the department for the gross delay in initiating proceedings.
The learned tribunal has examined the factual position and rightly noted that the show cause notice was issued by the adjudicating authority based on assumption and presumption without conducting any investigation and enquiry.
The revenue has not made out any ground to interfere with the order passed by the tribunal - Appeal dismissed.
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2022 (8) TMI 1252 - CESTAT AHMEDABAD
CENVAT Credit - allegation of availing the cenvat credit of the duty paid on inputs/ raw materials without physically receiving and using the said goods in their factory and to compensate the same they were showing excess generation of As - invoices issued by first state / second stage dealers - HELD THAT:- To avail Cenvat credit, the inputs or capital goods should have suffered the appropriate duty by the producer/manufacturer of such goods and the goods should be received by the manufacturer availing credit in his factory and the inputs or capital goods so received should be utilised in or in relation to the manufacture of final products. In respect of inputs received from a first or second stage dealer, an additional condition is stipulated to the effect that the inputs or capital goods were supplied from the stock on which duty was paid by the producer of such goods and only an amount of such duty on pro rata basis has been indicated in the invoices issued by him.
CENVAT Credit - alleged non receipt and use of Aluminium wire Rod, Aluminium Ingot, Aluminium Scrap, Copper Ingot and Scrap, Nickel and Zinc Ingot and Scrap etc. - HELD THAT:- The department in the present case itself admitted that the Appellant shown the receipts and use of the goods in their factory, therefore we do not find any reason for disallowance of cenvat credit in this matter specifically when the supplier of the goods/ raw material, nowhere admitted that, they have not supplied the goods to appellant and any evidences in relation to diversion of disputed raw materials. When the inputs are used in the manufacture of dutiable final products, the benefit of cenvat credit in respect of such input cannot be denied. There is no provision in the Central Excise Law and Cenvat Credit Rules for determination of Cenvat amount on the basis of SION norms - There was specific provision in the Act and the Rules for determination of capacity of production on the basis of capacity of furnace and rolling mill. Since there was no similar provision in the law for determination of cenvat amount on the basis of SION norms, the entire proceeding in the impugned matter is void.
Apart from the input-output ratio, which has been made the basis, there is no other evidences on record to show that the appellant either did not receive the raw materials, on which they have taken the credit or after receiving the same and availing the credit, the same stand removed by them in the open market. Further in the entire case there is no admission in the statements of Appellant’s directors or employees to the effect that the raw materials were not actually received by them and they were showing excess consumption of the raw materials to accommodate such non-receipted raw materials. There is also no admission in the said statements to the effect that raw materials stand diverted in the open market - credit cannot be denied to Appellant merely by relying the SION norms and transporters statements. All these factors lead to show that the findings, arrived at by the adjudicating authority are on the basis of assumptions and presumptions and in the absence of any independent evidence, cannot be upheld.
CENVAT Credit - non -receipts of raw materials from M/s Metal Plast Exim (India) Pvt. Ltd. and M/s Nico Extrusions Pvt. Ltd, Kalyan by relying the records of transporters and statements of transporters - HELD THAT:- M/s Metal Plast Exim (India) Pvt. Ltd. was a 100% EOU unit and M/s Nico Extrusions Pvt. Ltd. Kalyan was registered warehouse of Appellant. The goods were duly found to have recorded in the Appellant’s factory and were consumed in the production. The payment was made through banking channels to supplier and transporters which is not denied. Both the suppliers nowhere stated that they have not supplied the alleged goods to the Appellant. In such case we do not find any reason to disallow the credit to the Appellant - it is well settled law that no cenvat demand is sustainable on the basis of third party documents and their statements. In the present matter the goods were found to be duly shown as received and entered in the factory of the Appellant. The statutory records of the Appellant concern show the receipt and consumption of the goods. Pertinently it is noted that there is no statement of the supplier that the goods were not supplied to the appellant. There are no reason to disallow credit to the Appellant.
CENVAT Credit - credit denied on the ground that Appellant in collusion with the transporters and suppliers, High Sea Seller, have wrongly availed the credit on inputs without actual receipts of the goods in factory and without actually using the said goods in the manufacture of their finished goods on the strength of Bill of Entries issued by ICD - HELD THAT:- Department in the present matter nowhere produced any corroborative evidences related to the diversion of imported raw materials/ substitute of imported raw material in factory/ any buyer of imported raw material who admitted that the Appellant had delivered the said imported goods to them. Moreover in the said matter Transporters did not turne up for cross-examination, hence their statement cannot be relied upon. During the investigation the transporter admitted the payment from the appellant towards transportation, high seas sale supplier had also confirmed the sale to the appellant. The bills of entry filed by the Appellant and clearances of the goods from customs substantiate the purchase of goods by the Appellant and appellant also account for the said goods in their books of account - the case on merit is not sustainable due to lack of evidence to establish the allegations.
CENVAT Credit - case of the Revenue is that the Appellant has availed the Cenvat Credit on inputs mainly copper/Nickle, supplied by M/s Metec Asia Pvt. Ltd. without actual receipts of the said goods in their factory and without using the said goods in manufacture of their finished goods - HELD THAT:- The facts are established that the appellant have received the inputs in their factory used in the manufacture of final product and same was cleared on payment of duty. Therefore, there are no substantial evidence which result the disallowance of credit. The evidences placed by department before us are not cogent to establish that appellant is guilty of fraudulent availment of Cenvat credit. Mere suspicion or assumptions and presumptions cannot be the basis for such serious allegation of fraudulent availment of credit - the impugned demand alleging fraudulent availment of credit is not sustainable.
CENVAT Credit - demand of Rs. 81,76,443/- in respect of invoices issued by Supplier M/s Meal Links Alloys Ltd., M/s N.D. Metal Ind. Ltd., M/s Merchandiser Pvt. Ltd. and M/s Kothari Metals - HELD THAT:- The contention of the Ld. Commissioner is that investigation shown that the supplier of the material has not actually supplied the material as the transporter denied the transportation of the material not sustainable in the absence of any corroborative evidences. In this case the appellant's submission is that they had received the material in question from the suppliers, the suppliers in his statement admitted that supply of the material and payments made through banking channel the material was duly entered in the statutory records and issued for manufacture of finished goods - as the material in question is received by the appellant under the cover of duty paying invoices and payments were made through banking channel, there is merit in the contention of the appellant - the impugned orders are not sustainable in the eyes of law.
It is well settled law that statements recorded by the Central Excise officers during the course of investigation cannot be relied upon, unless procedure prescribed under Section 9D of the said Act is scrupulously followed. Such statement would have no evidentiary value if the person making it is not subjected to examination-in-chief before the adjudicating authority and also not produced for cross- examination as stipulated under Section 9D(1)(b) of Central Excise Act, 1944 - Since the Revenue failed to prove alternative source of receipt of raw materials and also money flow back from manufacturer/supplier to the assessee, it can not be said that they had not received the inputs especially when statements relied upon by the Revenue are contrary to the documentary evidence on record produced by the Appellant - this contention cannot be accepted.
The reliance of third party i.e transporters documents /statements was placed while confirming demand against present appellant is also observed to be unjustified and unreasonable - the demands of whatever nature cannot be confirmed solely on the basis of third party’s evidence/record.
The appellant have satisfied the requirement of receipt of inputs along with cenvatable invoices and use of such inputs in the manufacture of final product, accordingly, the Cenvat credit taken by them is in accordance with the scheme of the Act read with Cenvat Credit Rules - Appeal allowed - decided in favor of appellant.
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2022 (8) TMI 1251 - CESTAT AHMEDABAD
Clandestine Removal - Re-rolled products - no invoices or sales bills have been issued by the Appellant for the goods mentioned in the most of the entries of the said records and the good have been removed without payment of duty and without issue of invoice - reliability of third party evidences - cross-examination of witnesses - wrongful availment of benefit of N/N. 08/2003 –C.E. dtd. 01.03.2003 - levy of penalty under Rule 26 of Central Excise Rules 2002 on partner of Appellant and broker.
HELD THAT:- The entire case was made out on the basis of search conducted with the third party which is the broker and the records recovered from the broker. The Ld. Adjudicating authority for confirmation of demand also relied on the statement of broker and partner of appellant’s firm. However it is on records that in the present matter partner of appellant firm filed affidavit and in his affidavit he had clearly negated the contents of his earlier statements and therefore no reliance can be placed upon his statement. Department had demanded excise duty on finished goods, alleging that the Appellant have clandestinely removed the goods by relying on the broker’s records and oral statements and without any corroborative evidence either from the Appellant’s premises or from the Customers documents etc. Despite the appellant requested for cross-examination of witnesses, the lower adjudicating authority has rejected the request of appellant.
As per the provisions of section 9D it is clear that during adjudication, the adjudicating authority is required to first examine the witness in chief and also to form an opinion that having regard to the facts and circumstances of the case, the statements of the witness are admissible in evidence. Thereafter, the witness is offered to be cross-examined. It is a settled principle of law that if the authority wants to rely upon the statement of any witness, the opportunity of cross-examination ought to have been given to enable the party to prove its case. Non-providing of the opportunity of cross-examination amounts to violation of the natural justice and in absence of denial of natural justice, such documents/statements cannot be relied upon.
It is well settled law that there has to be some concrete evidence in the form of receipt of raw materials, shortage of raw materials, clandestine manufacture including use of electricity, excess or shortage of inputs found in the stock, flow back of funds, purchase of final products by parties alleging receipt and removal of goods and any such evidence which would show clandestine manufacture of goods. It is also an admitted facts that the documents recovered from the premises of Broker are third party documents and same cannot be relied upon without any corroborating evidences. Therefore, the entire case is based on entries found recorded in the record of broker does not have reliability and credibility.
There is no sufficient material on record to establish clandestine manufacture and clearance by Appellant. We, accordingly, set aside the confirmation of demand, interest and imposition of penalty. Penalty imposed upon Shri Nagjibhai Dodiya, Partner of Appellant firm is also set aside - As regards penalty imposed upon Shri Himanshu Nandlal Jagani, Broker, having held that there was no clandestine removal, clearance from the factory of Appellant, penalty upon said broker cannot be upheld.
Appeal allowed - decided in favor of appellant.
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2022 (8) TMI 1250 - CESTAT NEW DELHI
Valuation of goods - related party transaction - value of the goods cleared by the appellants to the related firm should have been determined in the manner specified in Rule 8 and in terms of Rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 or not - HELD THAT:- The mere fact that buying and selling undertakings / body corporate are interconnected will not affect the applicability of Section 4 as far as the valuation for the purpose of excise duty is concerned. It shall still be the transaction value. Value other than transaction value, in terms of Rule 9 and proviso thereof (Rule 8), shall be ascertained case where an interconnected undertakings are also related in the manner specified in either of the sub clauses (ii) (iii) or (iv) of Clause (b) of sub section (3) of section 4 of Central Excise Act, 1944, as already mentioned above. In the present case, the department has alleged the buyers of appellant to be the related persons of appellant to appreciate the said allegation but in the light of above discussion it is also observed that the word ‘related’ is held to have same meaning as is assigned to it in clause 41 of Section 2 of Companies Act, 1956 - From the very definition of ‘related’, it becomes clear that the definition is applicable to persons as individuals and not to the companies or Undertakings or body corporates. Companies are the separate legal entity as defined from its owner / members / share holders of/ Directors of companies are simultaneously the body corporates.
The only case of the department rests on two counts: (i) the appellant has shown three of said companies as its ‘Associated and Joint ventures’ in their balance sheet; and (ii) The directors of appellants are the directors in either of the three undertakings - In the present case, it is observed that the Department has not produced any evidence of proving the mutuality of interest of three other companies with the appellant. There is no evidence that M/s. Mahendra Strips Pvt Ltd. Raipur, M/s. Super Ispat (Raipur) Pvt Ltd., and M/s. Animesh Iron, Raipur along with the appellant are so associated that they have interest directly /indirectly in the business of each other. There is no evidence to show any financial flow back as the sale of impugned companies appeared to be where, some business transaction on principal to principal basis. There is no evidence produced by the department to falsify the said fact.
The department has failed to produce on record either by explaining or by production of material evidence as to how the appellant and three of companies could be termed s related or amongst them the buyer when related and distribution of the appellant or the sub distribution of distributor or that of the appellant and the buyer are so associated. They have interest directly or indirectly in the business of each other as provided in the statute for the applicability of the Rule 9 of Valuation Rules.
The excise duty on the sale of M S ingots / sponge iron by the appellant to the three other companies is not to be arrived at by considering the transaction value, in terms of Rule 9 of the Central Excise Rules as mere mention in balance sheets about the buyer to be the ‘Associated or Joint Ventures’ will not be sufficient to prove that the buyers fall in either of (ii)(iii) or (iv) sub clause of section 4 (3) (b) of Central Excise Act, 1944. The question of confirmation of demand as proposed by the impugned Show Cause notice does not arise. The order under challenge is held to have passed based upon wrong interpretation arrived at by the Adjudicating Authority.
Appeal allowed - decided in favor of appellant.
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2022 (8) TMI 1249 - CESTAT KOLKATA
SSI Exemption - use of brand name of others - classification of Soya Bari - grant of turnover upto the value of Rs 1 crore, the time when the appellant crossed this turnover limit of one crore needs to be ascertained - extended period of limitation as per proviso to Section 11A (1) of the Central Excise Act, 1944 - N/N. 32/1999-CE (as amended from time to time) - Revenue neutrality.
Appellants contention is that they were under the bonafide belief that their goods manufactured by them were classifiable under 23.04, and attracted Nil rate of duty till the issuance of Notification No 3/2006 classifying the said goods under 21061000 and attracting the duty @ 8%.
HELD THAT:- As per the Section 11 A (1) of Central Excise Act, 1944, the normal period for making the demand in respect of the duties short levied or short paid/ Not levied or not paid is one year. However in case where the short levy/ short payment or non levy/ non-payment is on account of fraud, collusion or any willful misstatement or suppression of facts or contravention of any of the provisions of Act or the rules made thereunder with intent to evade payment of duty, the demand as per proviso to this section can be made within five years.
From the N/N. 32/1999-CE it is quite clear that the said exemption notification is conditional exemption notification and also provides for the manner in which it is to be given effect to. The appellants have made the claim to the said notification, to argue that the in terms of this notification they will be entitled to refund of the duty paid by them and hence the issue is completely revenue neutral and hence extended period of limitation cannot be invoked for making the demand from them.
The appellants have not been able to show any ground by which they could claim that they entertained a bonafide belief that goods manufactured and cleared by them were not subject to excise duty or attracted nil rate of duty or were exempt from payment of duty. It is settled law that the bonafide belief is not the blind belief and need to be established before that plea can be taken.
Without any evidence to show how the appellants claim bonafide belief in the matter to the effect the goods manufactured by them do not attract any excise duty, the argument made in this regard cannot be accepted.
Appeal dismissed.
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2022 (8) TMI 1248 - CESTAT NEW DELHI
Refund claim - Compounded Levy Scheme - entitlement for pro-rata abatement/refund of duty for the period during which the machine admittedly was inoperative - rejection of refund on the ground of time limitation - applicability of N/N. 17/2007-CE dated 01.03.2007 - HELD THAT:- The issue herein is squarely covered in favour of the appellant-assessee by the ruling of Hon’ble Rajasthan High Court in the case of COLLECTOR OF CENTRAL EXCISE, JAIPUR-II VERSUS JUPITER INDUSTRIES [2006 (4) TMI 164 - HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR] which have been followed by Division Bench of this Tribunal in the case of M/S PARADISE STEELS PVT. LTD. VERSUS CCE & CGST, JAIPUR [2018 (9) TMI 1480 - CESTAT NEW DELHI], where it was held that since this is the case of one machine being inoperative for part of the month after payment of Central Excise duty, has not produced any goods and therefore, duty cannot be charged under compounded levy for the whole month.
The appellant is entitled to refund for the period, the machines remained un-operative for the part of the month of pro rata basis - revenue is directed to grant the refund of the amount of Rs. 55,483/- from the date of deposit till the date of refund, with interest as per Rules - Appeal allowed.
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2022 (8) TMI 1247 - CESTAT AHMEDABAD
Levy of penalty u/r 26 of CER - manipulation of costing and the clandestine removal of the goods from the Job Worker’s Factory premises - HELD THAT:- From the statement of the appellant with reference to the case against the company, there is a clear admission that the appellant have manipulated the cost of the product and the goods were clandestinely removed from the premises of the Job Worker. In these appeals, the appellant’s plea is that he was working as Import/Export Manager and not dealt with the transaction made with the Job Worker.
The appellant is the sole Authorised Signatory for the company and he has given statements with reference to the offence committed by the company. Therefore, his submission that he was not involved in the activity of Job Work has no support.
The learned Commissioner (Appeals) has already taken a lenient view and substantially reduced the penalty from Rs.50000/- and Rs.20,000/- to Rs.20,000/- and Rs.8,000/- respectively. The role of the appellant is clearly established therefore, no further relief can be extended to the appellant.
Appeal dismissed.
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2022 (8) TMI 1199 - BOMBAY HIGH COURT
Interest on delayed refund of unutilised CENVAT Credit - refund was issued after the expiry of three months, or not - time limitation - section 11BB of CEA - HELD THAT:- As held by the Apex Court in RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. [2011 (10) TMI 16 - SUPREME COURT], a fiscal legislation has to be construed strictly and one has to look merely at what is said in the relevant provision; there is nothing to be read in; nothing to be implied; and there is no room for any of intendment. The liability of the revenue to pay interest under Section 11BB of the Act commenced from the date of expiry of three months from the date of receipt of application for refund under Section 11BB(1) of the Act.
The Division Bench of this Court in SWARAJ MAZDA LIMITED VERSUS UNION OF INDIA [2008 (7) TMI 420 - HIGH COURT OF JUDICATURE AT BOMBAY] also held that perusal of Section 11BB shows that if any duty recovered is found to be refundable, still the payment is not made within a period of three months from the receipt of application for refund then interest is liable to be paid.
The respondent shall pay interest to petitioner in compliance with provisions of Section 11BB of the Act for the period after the expiry of three months from the date of respective applications till the date of payment of refund amount in accordance with law - Petition disposed off.
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2022 (8) TMI 1198 - CESTAT NEW DELHI
Clandestine Removal - MS ingots - reliance placed on third party evidences - reliability of statements - demand based on document recovered from the premises of Shree Ram Transporting Co - HELD THAT:- The present case has been originated pursuant to the search being conducted not in the premises of M/s. H R Steel Pvt Ltd. but in the premises of M/s GI&SW and in the premises of transporter of said M/s. GI&SW i.e,. Shree Ram Transporting Co. It is further observed that the sole basis for confirmation of demand herein is the document recovered from the premises of Shree Ram Transporting Co. i.e. ‘Mangla register’ and the statements of Shri Vikram Bisht, of GI&SW, Shri Rohtas Bidhuri and Shri Suparas Banthia - In absence of any documents to corroborate the entries of ‘Mangla register’, the said document is held to be nothing but an evidence of third party having no bearing on the present appellant. Such a document cannot be used to adversely affect the appellant. The onus was on the department to procure such documentary evidence from the appellants premises which would have corroborated the said ‘Mangla register’ but apparently and admittedly nothing was recovered from the appellants premises.
In the present case, there are no other evidence or document in the form of some verification of the raw material of appellant or the material received in the appellants premises from M/s. GI&SW. No transportation material in the appellant premises was recovered. None of the documents as mentioned, got recovered from appellant’s premises. It stands clear that ‘Mangla register’ relied upon by the Adjudicating Authority below is nothing but a third party evidence. It has been settled in catena of decisions that third party evidence cannot be used for duty demand and for imposition of penalty.
The duty demand has wrongly been confirmed against M/s. H R Steels Pvt. Ltd. Once there is no evidence of any clandestine removal or duty evasion, as alleged, by M/s. H R Steels Pvt Ltd., no question arises for imposition of penalty on its Director or the Manager. Resultantly, the order imposing penalty on Shri Suresh Chand Sharma, Manager and Shri Harish Dang, Director is also held to be not sustainable.
Penalty imposed upon the partners of M/s. GI&SW - Rule 26 of CER, 2002 - HELD THAT:- Apparently M/s. GI&SW is not a co-noticcee in the present case despite that the search was conducted in their premises. The penalty imposed upon both of its Directors have been confirmed under Rule 26 of CE Rules, 2002 - A bare reading of Rule 26 makes it clear that penalty under that Rule is applicable only in the case where the person is dealing with the goods which are liable for confiscation - In the present case, apparently and admittedly, no goods were confiscated, question of invoking Rule 26 does not at all arises. Otherwise also there is no evidence on record to show that these partners were in any way concern with these goods - the imposition of penalty upon both the partners is also not sustainable.
Appeal allowed - decided in favor of appellant.
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2022 (8) TMI 1154 - CESTAT KOLKATA
Valuation - adoption of valuation in respect of their finished goods cleared to depot at Gaziabad Branch on the basis of transaction value under Section 4 (1)(a) of the Central Excise Act, 1944 instead of Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 as amended - suppression of facts or not - levy of equal amount of penalty imposed under the provisions of Rule 25(1)(d) of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944 - HELD THAT:- In the peculiar facts and circumstances of this case, the plea for vacating the penalty is tenable. The substantive dispute between the Department and the Assessee revolved around the question whether valuation adopted by the assesse on the basis of transaction value under Section 4(1)(a) of the Central Excise Act, 1944 or should have followed the provisions of Rule 7 of the Central Excise Valuation (Determination of price of Excisable Goods) Rules, 2000. The penalty provision stands attracted where duty of excise has not been levied or paid or has been short-levied or short-paid by the reason of fraud, collusion or any willful mis-statement or suppression of facts or contravention of any of the provisions of the Act or the Rules made thereunder with intent to evade payment of duty.
Thus, the prerequisite being there should be material to establish either fraud, collusion or willful mis-statement or suppression of facts or contraventions of the provisions of the Act or the Rules and all these have been committed with an intent to evade payment of duty.
In the show cause notice dated 10-06-2016, except for stating that the assessee has contravened the provisions of the Rules, there is no specific allegation so as to hold the assessee guilty of having committed fraud, collusion or suppression of facts or made any wilful misstatement with an intent to evade payment of duty. The authority is bound to record a prima facie finding that there was an intent to evade payment of duty by suppressing the material facts or by making wilful misstatement or by committing fraud or collusion. Thus, in the absence of any such specific allegation in the show cause notice, the authority cannot mechanically impose penalty under Section 11AC of the Act - The provisions of Section 11AC of the Act are attracted in the event of establishing fraud, collusion or suppression of facts or made any wilful misstatement with an intent to evade payment of duty. This has not been done in the present case.
Tribunal has all along taken a consistent view that when the entire demand along with applicable interest has been paid by the Appellant before issuance of show-cause notice, there was no occasion to issue any show-cause notice - the penalty is set aside - appeal allowed.
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2022 (8) TMI 1153 - CESTAT AHMEDABAD
Reversal of CENVAT Credit - common input service attributed to taxable as well as exempt goods - activity of manufacture of its own, manufacture on job work basis - clearance of inputs in as such condition - trading of goods on High Seas Basis - Rules 6 of Cenvat Credit Rules, 2004 - applicability of N/N. 214/86-CE dated 25.03.1986 - suppression of facts or not - time limitation.
Goods on job work basis - HELD THAT:- The appellant have manufactured goods on Job work Basis in terms of Notification No.214/86-CE dated 25.03.1986. In terms of Rule 3 of Cenvat Credit rules, 2004, it is specifically provided that input and input service used in the manufacture of job work goods under Notification No. 214/86-CE, the credit is admissible. In view of basis explicit provision credit of input or input service used in relation to job work goods cannot be denied - the demand related to manufacture of job work goods is clearly not sustainable.
Trading of Goods on High Seas Basis - time limitation - suppression of facts or not - HELD THAT:- This issue has been raised by the auditors and auditors accepting that the proportionate credit in respect of common input service attributed to Trading of Goods on High Seas Basis should be reversed and the appellant complying with the direction of CERA Audit, they have reversed the proportionate credit of Rs. 5,857/-. In this peculiar fact no further demand invoking Rule 6 can be raised. Moreover, the activity of Trading of Goods on High Seas Basis was clearly in the knowledge of the department. Therefore, no suppression of fact can be alleged against the appellant. Hence, the demand is also not sustainable on the ground of time bar.
Trading of goods by way of removal of input as such - HELD THAT:- Undisputedly the removal of input as such was made on payment of duty in terms of Rule 3(5) of Cenvat Credit Rules, 2004. As per this provision for all the purposes the removal of goods is treated as removal of goods of payment of duty. In this clear position by any stretch of imagination, it cannot be said that the goods cleared on payment duty is exempted goods or service. Therefore, there is no application of Rule 6(3) for payment of an amount as prescribed therein.
The demand raised in terms of Rule 6 of Cenvat Credit Rules, 2004 by both the Lower Authorities is not sustainable - Appeal allowed - decided in favor of appellant.
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2022 (8) TMI 1152 - CESTAT ALLAHABAD
Levy of penalties u/r 26 of the Central Excise Rules - Clandestine Removal - Cigarettes - reliability upon the statements recorded and third party records - HELD THAT:- There are no case of transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any manner dealing with, any excisable goods, which he knows or has reason to believe are liable to confiscation under the Act or the rules thereunder, is made out. Accordingly, it is held that penalty under Rule 26 is not imposable on this appellant.
Levy of personal penalty on Directors - it is alleged that these two were Directors of the company – M/s Musk Tobacco, when it was incorporated - HELD THAT:- Admittedly, these appellants have resigned from the Directorship Smt. Bushra Gupta on 25.01.2007 and Smt. Megha Gupta on 21.10.2005. Thus, it is found that these two Directors have resigned before commencement of production of cigarettes in June, 2007, which is not disputed. Thus, it is held that these two appellants had no role in transporting, removing, depositing, keeping, concealing, storing etc., as required for imposition of penalty under Rule 26 of the Central Excise Rules. Accordingly, the appeals are allowed and the penalty imposed are set aside.
Sh. Vidyut Gupta - it is alleged that he along with his father Sh. Raj Kumar Gupta has played an active role in setting up of factory/ procurement of machine, monitoring of payment, monitoring of raw material supply etc. - HELD THAT:- Admittedly this appellant was neither a Director nor an employee of M/s Musk Tobacco. It appears that this appellant along with his father Sh. R. K. Gupta had provided the infrastructure and machinery for manufacture of cigarette to M/s Musk Tobacco. Further, they also gave guidance as and when required by the then Directors of M/s Musk Tobacco due to their experience in cigarette manufacturing. Considering the facts and circumstances and the documents on record, it is found that this appellant was not involved in day-to-day affairs of M/s Musk Tobacco and further was not involved in transporting, removing, depositing, keeping, concealing, etc., of excisable goods. Accordingly, the penalty imposed on this appellant is set aside.
Sh. Shankar Lal Pradhan - It is alleged that this appellant was involved harbouring and safe keeping in records of clandestine production, clearance and procurement by M/s Musk Tobacco - HELD THAT:- This appellant is neither a Director nor an employee of M/s Musk Tobacco. Further, he is not connected either as a supplier or buyer of finished goods. Only he has provided space in his residence to store the documents of M/s Musk Tobacco, without any knowledge that this relates to clandestine production and removal by M/s Musk Tobacco. Further, this appellant has given a cogent explanation with regard to the documents, registers, loose papers etc. found at his residence that these are regarding “Indira Awas Yojna‟ and birth/ death record of the Gram Panchayat - this appellant is also not liable to penalty under Rule 26 of Central Excise Rules as he has not done nor has been concerned in transporting, removing, depositing, keeping, concealing, etc., of excisable goods. Accordingly, the penalty imposed on this appellant is set aside.
The impugned order so far these appellants are concerned are set aside - appeal allowed.
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2022 (8) TMI 1151 - CESTAT ALLAHABAD
CENVAT Credit - electricity generated - period from April 2016 to June 2017 - Rule 6 of the CCR - HELD THAT:- It is not a dispute that the issue involved in this appeal is same as was examined by the Commissioner (Appeals) in the order dated 17.01.2019 for the subsequent period from April, 2016 to June, 2017 - The Commissioner (Appeals), after analysing the factual position and the provisions of law, allowed the appeal and the appeal filed by the department before the Tribunal was dismissed in COMMISSIONER OF CENTRAL GST & CENTRAL EXCISE, MEERUT VERSUS M/S NANGLAMAL SUGAR COMPLEX [2019 (6) TMI 1681 - CESTAT ALLAHABAD]
Thus, when the issue stands covered by the decision of the Tribunal in the matter of the respondent itself for the subsequent period, there is no informity in the order dated 23.07.2019 passed by the Commissioner (Appeals).
Appeal dismissed - decided agaist Revenue.
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2022 (8) TMI 1150 - CESTAT NEW DELHI
SSI Exemption - manufacture of air coolers by using the registered brand of others - mis-utilising the benefit of SSI Notification No. 08/2003-CE dated 01.03.2003 - admissibility of evidences - presence of corroborative evidences or not - HELD THAT:- On date of search Smt. Tej Kiran Kothari, the present respondent was not the proprietor of M/s Zenox Product. On this date of the search the proprietors of M/s Zenox India and M/s Zenox Products were Shri Kunal Chaudhary and Smt. Ranjana Chaudhary who are related as mother and son. Hence the allegations in the show cause notice exists as against Smt. Ranjana Chaudhary only she being the proprietor of M/s Zenox Products for almost an year prior the date of impugned search.
There appears no denial on behalf of the Department that Smt Tej Kiran Kothari while she transferred the business of firm M/s Zenox Products to Smt. Ranjana Chaudhary she had wound up her entire business under the said firm and had withdrawn everything from the premises of her business and had handed over the vacant possession thereof to the new landlord. M/s Zenox Products continued from the same premises thereafter but under the proprietorship of Smt. Ranjana Chaudhary. Hence it becomes clear that whatever articles including 106 coolers of “Zi Zenox” brand at the time of search, were found in those premises the ownership thereof and liability thereupon can be fasten only upon Smt. Ranjana Chaudhary but cannot be extended to Smt Tej Kiran Kothari.
The Department has failed to bring on record any bill book, challan book or price list or packing material or invoice with respect to M/s Zenox Products which pertain to the period prior to August 2015. Above all it is apparent on record that M/s Zenox India under the proprietorship of Shri Girdhari Singh Kothari was in existence since February, 2012. No such similar documents logo plates etc., of the period during February, 2012 to August, 2015 have been produced by the Department. In absence thereof the allegations raised in the impugned Review Order and appeal though stands established against Smt. Ranjana Chaudhary the proprietrix of M/s Zenox Products but cannot be extended to Smt. Tej Kiran Kothari the previous proprietrix of said M/s Zenox Products.
There is no evidence of similar arrangement of wrongly availment of SSI exemption to ever existed between M/s Zenox India and M/s Zenox Products when former was under proprietorship of Shri G S Kothari and later was under proprietorship of Smt. Tej Kiran Kothari - there are no reason to differ with the findings of Commissioner (Appeals) - appeal dismissed.
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2022 (8) TMI 1101 - SC ORDER
Valuation - physician samples were given free of cost by the distributors and not by the manufacturer - Determination of 'transaction value' - HELD THAT:- These appeals are disposed off in terms of the judgment rendered by this Court in COMMR. OF CENTRAL EXCISE & CUSTOMS, SURAT VERSUS M/S SUN PHARMACEUTICALS INDS. LTD. &v ORS. [2015 (12) TMI 670 - SUPREME COURT] where it was held that The transaction in question was between the assessee and the distributors. Between them, admittedly, price was charged by the assessee from the distributors. What ultimately distributors did with these goods is extraneous and could not be the relevant consideration to determine the valuation of excisable goods. When we find that price was charged by the assessee from the distributors, the Show Cause Notice is clearly founded on a wrong reason.
Application disposed off.
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