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Central Excise - Case Laws

Showing 121 to 140 of 268 Records

• 2014 (2) TMI 639 - CESTAT MUMBAI
  

  Denial of CENVAT Credit - ineligible credit - Input service distributor (ISD) - Interest u/s 11AB - Credit on Insurance policy - Held that:- CENVAT Credit taken on the Insurance Policy, he submits that Shri Newton Misquitta, Senior Manger (Accounts) had confirmed that the Insurance Policy taken pertained to insurance of empty containers in respect of imported vitrified tiles. Similarly, marine cargo policies pertained to mainly imports of vitrified tiles, which were traded by the appellant. Again some of the policies pertained to insurance of their showrooms located all over India, which was used for sale of the imported goods as well as domestically manufactured goods. Thus, it is clear that the appellant took ineligible CENVAT Credit on the insurance services received by them - availment of CENVAT Credit on ineligible documents, the adjudicating authority has observed that the documents on the strength of which credit was taken are not proper documents and these facts were also admitted by the employees and, therefore, the credit taken on ineligible documents needs to be reversed.

  Service Tax credit can be distributed only if the services were received at the manufacturing premises and if it is received elsewhere, it is not permissible to avail of the Service Tax credit. Input Service Distribution scheme is a special scheme and if anyone wants to avail the benefit thereof, the terms and condition should be complied with completely. From the statements of the officials of the appellant firm, it clearly emerges that the credit was distributed by the Head Office without any registration and without ascertaining the receipt of the services at the Alibag factory. Services received at the depots were also distributed to the Alibag factory and also services received at the other factories of the appellant. Thus, as regards the denial of CENVAT Credit of ₹ 2.92 Crore, the appellant is not prima facie eligible for the benefit of the same - Following decision of SQL Star International Ltd. Vs. Commissioner of Customs, Hyderabad [2011 (7) TMI 868 - Andhra Pradesh High Court] - Conditional stay granted.

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• 2014 (2) TMI 638 - CESTAT MUMBAI
  

  Manufacture - Packing from loose receipt in unit boxes - Held that:- Appellants have clearly admitted that in respect of shoes which are received in loose form and which are re-packed in cardboard boxes wherein details such as brand name, MRP, size of the shoes, colour of the shoes, etc. are affixed, they are liable to pay excise duty - Therefore, bulk of the demands confirmed in the impugned orders have been admitted to by the appellants and are not disputed. They are disputing the liability only in respect of shoes received in pre-packed form i.e. in card board boxes where the MRP is affixed and the appellant undertakes affixing of stickers on the shoes indicating bar codes, MRP and logo of the appellant on the bottom of the sole. However, in the statements recorded under the provisions of the Central Excise Act, the appellants have clearly admitted that they have no evidence in respect of this claim. Further, it is also an admitted fact that opportunity was given to them by the adjudicating authority to lead evidence about the receipt of shoes in pre-packed form; however, the appellants were not able to lead any evidence in spite of sufficient time being granted and the appellants admitted that they have no evidence in this regard.

  Therefore, the claim of the appellant that they had received about 10% to 15% of the shoes in pre-packed form from the karigars is only a mere claim without any supporting evidence. In the absence of any supporting evidence, such a claim cannot be entertained and, therefore, the adjudicating authority was right in concluding that the activities undertaken by the appellants amounted to ‘manufacture' as defined in Section 2(f) (iii) of the Central Excise Act, 1944 read with Third Schedule thereof - Following decision of RAFIQUE MALLICK Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI-I [2005 (6) TMI 466 - CESTAT, MUMBAI] - Decided against assessee.

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• 2014 (2) TMI 637 - CESTAT MUMBAI
  

  Availment of CENVAT Credit - Waiver of pre deposit - Held that:- Shri Mukesh Sangla has clearly admitted the issue of cenvatable invoices without supply of goods, and these statements have not been retracted. The statement of Shri Kirti Kala, Cashier recorded on 8.3.2009 as also of Shri Paras Patidar, Marketing Manager of M/s Signet Overseas Ltd. dated 22.2.2009, also confirmed the issue of cenvatable invoices without supply of goods. From these statements also it comes out that this has been done on instruction of Shri Mukesh Sangla, the MD. The investigation has also brought on record that LRs issued for transportation of goods were in names of the companies which were found non-existent. Based on the evidences available on record, the charge against the appellant Shri Mukesh Sangla stands clearly established. Therefore, the appellant has not made out a case for complete waiver of pre-deposit of the penalty imposed on him. The fact that the main appellant has made pre-deposit and the same should be considered as sufficient for hearing the appeal of the present appellant, has no legal basis.

  Since prima facie Shri Mukesh Sangla is found instrumental in issuing the bogus invoices, we direct him to pre-deposit an amount of Rs.1 lakh within a period of six weeks towards the penalty imposed on him and report compliance on 1.1.2014. On such compliance, pre-deposit of balance of amount of penalty shall stand waived and recovery thereof stayed during the pendency of the appeal - Conditional stay granted.

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• 2014 (2) TMI 636 - CESTAT NEW DELHI
  

  Classification - product 'pentane' cleared by the appellant under sub heading 2711.19 of the Central Excise Tariff as other 'petroleum gases and other gaseous hydrocarbons' - revenue issued SCN after audit objections classifying under sub heading 2710.90 - Held that:- product 'pentane' cleared by the appellant under sub heading 2711.19 of the Central Excise Tariff as other 'petroleum gases and other gaseous hydrocarbons' and paying Central Excise duty @ 8% ad valorem after availing of the benefit of sl. No. 24 of notification No.6/2000-CE dated 1.3.2000 and sl. No.34 of notification No.3/2001-CE dated 1.3.2001 - The 'pentane' disputed product, in question is being classifiable by other units of M/s. GAIL India under sub-heading 2711.19 only. They have also filed the same classification. If the Revenue was not in agreement with the said declaration of such classification, it was open to the officers to raise the objection to the same and to initiate proceeding for change in classification.

  SCNs proposing change in classification from 2711.19 to 2710.90 was issued because of Audit objection. The Department had initially classified the Pentane under Chapter sub-heading 2711.19 only. The above technical aspect was explained to Audit and they have accepted the technical aspect and have agreed to classification under 2711.19 and audit objection has been closed. I am also in agreement with the technical description of Pentane and its correct classification under 2711.19. In view of the settlement of dispute, the show cause notice in question deserves to be dropped - there was no suppression or misstatement on the part of the appellant so as to justifiably invoke the longer period of limitation - Decided in favour of assessee.

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• 2014 (2) TMI 635 - CESTAT NEW DELHI
  

  Waiver of pre-deposit of demand on account of penalties - under-valuation and clandestine removal - Difference of opinion - Held that:- matter referred to larger bench with the following questions:

  Whether in view of the facts of active involvement of M/s Suraj Medical Agencies, Sh. Roshan Lal Kawatra, Sh. Kashmir Chand and Sh. Ashok Kumar in the clandestine manufacture and clearance of medicaments by M/s Gold Star Pharmaceuticals Pvt Ltd, pre deposit of penalty imposed upon them under rule 26 of the Central Excise Rules 2002 is demandable as recorded by the Member (Technical).

  Whether considering the case laws cited by the ld. Advocate Stay is to be granted to M/s Suraj Medical Agencies, Sh. Roshan Lal Kawatra, Sh. Kashmir Chand and Sh. Ashok Kumar as held by the Hon'ble Member (Judicial).

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• 2014 (2) TMI 634 - CESTAT MUMBAI
  

  CENVAT Credit on capital goods - assessee has availed 100% credit in the first year itself instead of 50% - levy of penalty - Held that:- Respondent are entitled to take CENVAT credit of duty paid on capital goods up to 50% in the financial year in which the capital goods have been procured and remaining 50% of duty paid on capital goods is entitled as CENVAT credit in the subsequent year. As in this case, the respondent have availed the CENVAT credit of 100% of the duty paid on capital goods in the year in which the capital goods have been procured. - respondents are not entitled to take credit more than 50% in the year in which the capital goods have been procured. But in the subsequent year, they are entitled for the said credit. - Therefore, the argument advanced by the AR that they are required to reverse entire credit is not correct. - Levy of interest and penalty amounting to ₹ 5000/- confirmed.

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• 2014 (2) TMI 633 - CESTAT MUMBAI
  

  Exemption of goods vide serial No. 214 of Customs Notification No. 21/2002 dated 01/03/2002 - goods supplied against International Competitive Bidding (ICB) - Lower appellate authority had denied the benefit on the ground that the appellant has not produced essentiality certificate from the DGHC - Imposition of of interest and equivalent amount of penalties - Held that:- From the certificate given by the Project Implementing Authority, it is clear that the appellant has made the supply in respect of a contract awarded under International Competitive Bidding and the goods are required in connection with the petroleum operations undertaken under petroleum exploration licence or mining leases and the certificate had been issued by the General Manager (Project), Oil and Natural Gas Corporation. Therefore, it is clear that the goods have been supplied against a contract granted under International Competitive Bidding. From the said certificate is also seen that the appellant's name figures as a sub-contractor and the goods supplied by the appellant is also covered by the said certificate. It is clear from the project authority certificate that the goods are required in petroleum operations undertaken by ONGC.

  As regards the condition No.29 referred to in Notification No.21/2002, those conditions have been stipulated to be complied by the importers of goods and do not apply to domestic manufacturers. So long as the goods are exempt, the condition to be satisfied by the domestic suppliers is that they should be supplied under International Competitive Bidding which the appellant has fulfilled in these appeals. Therefore, we have to uphold the contention of the appellant and reject the contention of the Revenue - Following decision of CST LTD. Versus COMMISSIONER OF CENTRAL EXCISE, HYDERABAD [2008 (2) TMI 755 - CESTAT, BANGALORE] - Decided in favour of assessee.

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• 2014 (2) TMI 632 - CESTAT MUMBAI
  

  Benefit of exemption Notification No. 61/86-C.E., dated 10-2-1986 - Benefit to driver's seats meant for hydraulic excavators - Appellants are engaged in activities involving purchase of various parts of Loaders, Backhoe Loaders, Road Rollers from different suppliers in India and abroad, repacking these parts with new packing material and affixing their Logo, fixing of MRP and selling under their own brand name - Held that:- all the items in question viz. Loader, Backhoe Loader and Road Roller are self propelled, work with internal combustion engine using fuel such as diesel, have four wheels and are rubber tyred (road roller may have two rubber tyres and one roller, or only rollers). These move also on roads. Thus, these have all the characteristics of motor vehicles. In addition, these items have attachments which enables to execute and move earth, mud etc. from one place to another. In case of road rollers, it helps in compacting and setting the road due to vibrating techniques in compaction jobs.

  "Parts, components and Assemblies of Automobiles" is further qualified by "falling under any heading of the tariff", both in the third Schedule to the Central Excise Act as also Notification No. 11/2006. Thus the expressions used are very very wide and does not restrict to few parts or assemblies but to all parts and falling under any heading of the whole schedule to Tariff. We also note that a large number of such parts, components and assemblies are interchangeable indifferent types of vehicles (though manufacture assign their part numbers). Thus keeping in view the way the two expression "parts, components and Assemblies of Automobiles" and "Any heading" is used, we consider that Parts, components, and assemblies of Loader, Backhoe Loader and Road Roller are covered by the said entry/expression.

  In order to avoid the terminology automobile, (being not defined in Act/Tariff) specific heading of the Central Excise Tariff were introduced in the Notification No. 49/2008-C.E. (NT) in February 2010 vide Notification NO. 9/2010-C.E.(NT). Apparently this was done in haste and Government had to further amend the amendment made in February, 2010 within two months to specifically include headings relating to earth moving machinery. Not only this, corresponding amendment in Third Schedule was forgotten and the next year retrospectively amendment had to be brought with effect from 27.02.2010/29.04.2010. Thus a holistic look of these amendments, only supports that Parts, components and assemblies of automobiles included that of Loader, Backhoe Loader & Road Roller and were covered from June, 2006 onwards.

  Circular dated 16.12.2008 was not issued in 2006 when "Parts, components and assemblies of Automobiles" were brought into Third Schedule to the Central Excise Act or specified under Section4A (which would have indicated the objects and purpose of amendments). It has been issued after almost three years. In any case, it is settled legal position, that Circular contrary to the judicial decision are not binding - Circular dated 16.12.2008 is with reference to Hydraulic Excavators which are motor vehicle, the same is required to be ignored in view of decisions on the issue by Higher Judicial forumsParts, components and assemblies of Loader, Backhoe Loader and Road Rollers are covered by "parts, components and assemblies of Automobiles - this is not a fit case for invoking the extended period of limitation as ingredients to invoke the same are absent. Accordingly, demand within the normal period of limitation is only confirmed. We also do not consider the case fit for imposing penalty under Section 11AC or Rule 25 or confiscation of goods under Rule 25 - Following decision of KRISHNA FABRICATORS P. LTD. Versus COLLECTOR OF C. EXCISE, BANGALORE [1991 (4) TMI 270 - CEGAT, NEW DELHI] - Accordingly, penalties and confiscation are set aside - Decided against Revenue.

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• 2014 (2) TMI 631 - CESTAT MUMBAI
  

  Duty demand - Exemption under notification No.8/2003-CE dated 01/03/2003 - Imposition of equivalent amount of penalty - Held that:- Notification No.10/2013-CE(NT) dated 02/08/2013 issued under Section 11C of the Central Excise Act, 1944, extends the benefit of small scale exemption under notification No. 8/2003-CE dated 01/03/2003 to plastic containers and plastic bottles meant for use as packing material by the person whose brand name such goods bear during the period 16/06/2003 to 26/02/2010. Therefore, the appellant is rightly entitled to the benefit of the said exemption. Therefore, the impugned order is not sustainable in law - Decided in favour of assessee.

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• 2014 (2) TMI 592 - CESTAT MUMBAI
  

  Default in payment of duty - Rule 8 (3A) of the Central Excise Rules, 2002 - Default continued for more than 30 days - Held that:- Rule 8 (3A) of the Cenvat Credit Rules, provides that if the appellant had defaulted in payment of duty and if the default continues for more than 30 days, in subsequent clearances of excise goods, duty liability has to be discharged through PLA and amount lying in Cenvat Credit amount cannot be utilised for payment of duty. If the contention of the appellant is accepted, the provisions of 8(3A) of the Central excise Rules, 2002 would be rendered otiose. It is a well settled position of law that statutory provisions should not be interpreted in such a way as to make the provisions a nullity or surplusage - However, liability should be only ₹ 2.22 crore, which can be verified subsequently at the time of final hearing - Conditional stay granted.

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• 2014 (2) TMI 591 - CESTAT MUMBAI
  

  Duty demand - Imposition of equivalent penalty u/s 11AC - Held that:- appellant is in appeal against the impugned order where the claim of excess reversal of credit has not been contested by the appellant before the Commissioner (Appeals). Therefore the same is not a subject matter before me. Accordingly, I reject the claim of excess reversal of the credit. Further, I find that in the case of J.K. Cement Works (2008 (12) TMI 624 - CESTAT NEW DELHI) this Tribunal has considered the issue in hand before me and in that case the goods were destroyed in the floods before the inputs could be used in manufacturing of final product and in that case also no information was given and the credit was reversed on being pointed out by the department. In that case, this Tribunal held that penalty is not imposable in such situation - Therefore, mandatory penalty under Section 11AC of the Act is not imposable on the appellant - Decided in favour of assessee.

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• 2014 (2) TMI 590 - CESTAT MUMBAI
  

  Reversal of CENVAT Credit - Assessee availed CENVAT Credit in two installments - Assessee imported Glass Printing Machine - Appellant exported this machine in 2006 under bond without reversal of CENVAT Credit taken - Held that:- capital goods imported by the appellant has been exported. On export of capital goods, the appellant is eligible for rebate of the duty paid thereon under Rule 18 of the Central Excise Rules or the appellant can export the goods without payment of duty under bond under Rule 19 of the said Rules. In respect of the goods on which credit has been taken, Circular issued by Board in 1996 as well as in 2000, clearly says that the manufacturer assessee is entitled to clear the inputs or capital goods for export (on which credit has been taken) under bond without payment of duty - appellant has made out a strong case in their favour for grant of stay. Accordingly, we grant unconditional waiver from pre-deposit of the dues adjudged against the appellant and stay recovery thereof during the pendency of the appeal - Following decision of Videocon International Ltd. [2008 (7) TMI 275 - CESTAT, AHMEDABAD] - Registry is directed to list the appeal for final hearing - Decided in favour of assessee.

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• 2014 (2) TMI 589 - CESTAT MUMBAI
  

  Classification of goods - Manufacture of printed ATM Rolls, printed lottery ticket rolls and printed bus ticket rolls - Classification under CETH 49019900 or 48234000 - Adjudicating authority dropped proceedings against assessee - Held that:- From the HSN explanatory notes, it is seen that heading 4823 excludes products like lottery tickets, scratch cards, raffle tickets and tombolo tickets. Similarly, HSN explanatory notes to heading 4901 clearly shows that "certain printed articles may be intended for completion in manuscript or typescript at the time of use but remain in this heading provided they are essentially printed matter. Thus, printed forms, travel tickets, circular letters, identity documents and cards printed with messages, notices, etc. requiring only the insertion of particulars, eg. Dates and names are classified in this heading. The said notes further say that tickets for admission to places of entertainment, tickets for travel by public or private transport or other similar tickets are also included in Chapter 49.

  Therefore, printing is not merely incidental to the use of the product as such printing imparts a substantial character and quality to the product. It is true that while actually using, certain particulars are required to be entered in these rolls by the ATM or the lottery machine or in the bus ticket vending machine. Nevertheless the product is specifically meant to be used as ATM receipts, lottery tickets and bus ticket. It is the printing done on the thermal paper which has imparted these characteristics and therefore, it has to be held that printing is not merely incidental to the use of the products - impugned goods prior to enactment of Finance Bills 2012 merit classification as "products of the printing industry" - The said amendment introduced by way of Note 14 to Chapter 48, was only prospective and was not given any retrospective effect. This itself indicates that prior to the insertion of Note 14 to Chapter 48, the impugned products merit classification under Chapter 49 - Decided against Revenue.

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• 2014 (2) TMI 588 - CESTAT KOLKATA
  

  Waiver of predeposit - trading activity or manufacturing activity - Liability to pay duty - digital Thermometer, indicator, digital scaler etc. - Held that:- it is not the case where the Applicant was merely purchasing various items and selling them as such; but they were processing the said goods further to make them fit to be marketable. The resultant products were classifiable under various chapter sub-headings of Central Excise Tariff Act, 1985. We find that the Applicant has itself treated the activities carried by them as a manufacturer and subsequently, taken the Central Excise Registration for manufacture of the excisable goods - Applicant were not merely doing the trading activities of the goods - Applicant has not been able to make out a case for full waiver of the dues adjudged - Conditional stay granted.

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• 2014 (2) TMI 587 - CESTAT NEW DELHI
  

  Non Compliance of provisions of Section 35 B(2) by the committee of Chief Commissioners while passing the review orders - Committee of Commissioner has simplicitor signed the proposals presented before them by the junior officer to file an appeal against the Order of Commissioner (Appeals) - Held that:- Commissioner of Central Excise-I and Commissioner of Central Excise-II who allegedly constitute the Committee of Commissioners, simply appended their signatures to the aforesaid note on 7th January and 8th January, 2008 respectively. This shows that there was no meeting of the aforesaid two officers to consider the case. The record also does not disclose that these two officers applied their mind to the issue and recorded any opinion, as per the requirement of Section 35B of the Central Excise Act that the order of the Commissioner (A) was not legal or proper and warranted to be challenged by filing an appeal.

  there should be a meaningful consideration which should be reflected on the note sheets in order to comply with the requirement of Section 35(2) of the Act. In this case, the file does not show any such satisfaction or opinion having been recorded by the Committee of Commissioners - commissioner merely signed the proposals placed before him by the junior officer by writing the words ‘accepted’ - there is no application of mind by the Committee of Commissioners and they have merely appended their signatures to the note sheets prepared by the subordinate officers. In that view of the matter, the review order has to be held as not sustainable and consequently appeals have to be held as not maintainable - Decided against Revenue.

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• 2014 (2) TMI 586 - CESTAT NEW DELHI
  

  Excisability - Manufacture - dispute regarding manufacturer - demand imposed in relation to availing the facility of Cenvat credit of duty paid on the furnace oil used in the manufacture of electricity - Held that:- no reversal liability of Cenvat credit would arise in respect of assessee where no separate accounts are being maintained in case of fuel which is being used for dutiable as also for exempted final product. If the expert bodies, judicial as well as quasi judicial, have interpreted the law in favour of the assessee, the assessee cannot be held guilty of any suppression or mis-statement etc. Inasmuch as the show cause notice stand issued by invoking the longer period of limitation, I hold that demand is barred by limitation - Following decision of M/s. Diamond Cements Ltd. Versus Commissioner of Central Excise Bhopal [2012 (6) TMI 73 - CESTAT, NEW DELHI] - longer period of limitation was not available to the Revenue. Consequently, the imposition of penalty upon them would not be justified. However, inasmuch as a part of the demand would fall within the limitation period, the matter is being remanded for quantification of the same - Decided in favour of assessee.

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• 2014 (2) TMI 583 - CESTAT MUMBAI
  

  Exemption under Notification No. 56/2002-CE dated 14/11/2002 - Reversal of CENVAT Credit - Held that:- We have perused the Notification 56/2002-CE and the conditions prescribed therein for availing of exemption by way of refund, reversal of refund wrongly availed, submission of statement, determination by the jurisdictional Assistant Commissioner of the refund due to the appellant and so on. As per these conditions, the appellant is required to reverse the credit of the excess amount taken within 5 days from the date of date of determination by the Assistant Commissioner. In the instant case, the determination by the Assistant Commissioner was vide order dated 02/04/2012 whereas the appellant had reversed the excess credit taken in July, 2011 itself. Therefore, in terms of the conditions of sub-para 2C, the appellant is not prima facie liable to pay any interest nor the appellant liable to any penalty. Therefore, the appellant has made out a strong case in their favour for grant of stay - Stay granted.

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• 2014 (2) TMI 582 - CESTAT NEW DELHI
  

  Penalty u/s 11AC - Interest u/s 11A - Shortage in stock - Held that:- shortage was detected in the finished product as well as raw material referred supra and then the shortages were admitted by the Director of the company who was present at the time of check. Later on , duty involved on shortages as well as 25% of the duty amount towards penalty was also deposited by them. However, in appeal proceeding before Commissioner (Appeals), imposition of penalty was challenged on the ground of absence of mens rea and lack of departmental evidence pinpointing with intent to evade duty.

  Activities of evasion are carried out in the darkness of night and the person tried their best to not to leave any evidence and such person cannot be expected faithfully to put the details of such clearances in some register and append their signatures. The clandestine activity can at best be established by the substantial evidence. Evidence forthcoming clearly establish the clandestine nature of activities by the respondents. Such grave irregularities could not be there if persons involved in he controlling of company are not part of such design. Mens rea is clearly imputed. In the strict sense, the provisions of Section 11AC get attracted . However it is observed that duty amount and 25% of duty amount as penalty have already been paid even prior to issue of show cause notice, benefit of payment of 25% of duty as penalty is available.

  Regarding imposition of penalty under Rule 26 on the Director, I find from facts detailed above that large scale of shortages are detected total valued at Rs.66 lakhs (approx.). Such type of anomalies cannot happen without the involvement of Director. In this case, Mr. Harish Jugran has been overseeing the activities of the company. Without his involvement, such shortages could not be justified. Further Shri Harish Jugran admitted the shortages without any justification. There will be no economic sense left if affairs are allowed to drift in such way. Accordingly I feel , penalty under Rule 26 is imposable on Shri Harish Jugran, director - Revenue s appeal regarding imposition of penalty on the company as well as Director as this is a clear case of invocation of Section 11AC. Order of the Commissioner (Appeals) is modified to that extent - Decided partly in favour of Revenue.

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• 2014 (2) TMI 581 - CESTAT MUMBAI
  

  Duty demand - Imposition of redemption fine, interest and penalties - Whether physician samples manufactured on behalf of another manufacturer on principal to principal basis, the value of such samples is to be considered as transaction value under section 4 or deemed value under Seciton4A of the Central Excise Act - Held that:- Drug (price control) Order, 1995 in paragraph 7 specified how the retail price of formulation is to be determined. Further paragraph 8 of the said order empowers the Government to fix the retail price of a scheduled formulation in accordance with paragraph 7. Further paragraph 9 of the said order empowers Government to fix ceiling price of scheduled formulations. Further paragraph 14 provides for Carrying into effect the price fixed or revised by the Government, its display and proof thereof - requirement of displaying the retail price is only for the goods intended for sale. Since, physician samples are not intended for sale, requirement to indicate the retail sale price does not exist, in the law - Tribunal has been taking a view that physician samples manufactured on principal to principal basis are required to be assessed under Section 4(1)(a) of the Central Excise Act - Decided in favour of assessee.

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• 2014 (2) TMI 568 - CESTAT AHMEDABAD
  

  Calndestine removal of goods - Intention to evade duty - Demand of differential duty - Imposition of penalty - Held that:- Extended period has been invoked and has been upheld on the ground that when the goods have been cleared to the sister unit, the duty was paid only on notional value since supply has been made to the sister unit. The Commissioner (Appeals) has also observed that the advocate for the appellant could not explain whether they were following this practice all along. He has observed that the advocate could not give a proper explanation - appellant had Cenvat credit of more than Rs. 10 lakhs in their account, the differential duty demand is only Rs. 1.24 lakhs approximately. This being the position, the appellant did not gain any benefit by undervaluing the inputs. Further there is no finding that the sister unit did not take the credit of the amount for the goods were diverted by sister unit for imposition of penalty under Section 11AC of the Central Excise Act, 1944 since duty with interest has not been challenged, it is necessary for the department to establish that there was any intention to evade duty. The circumstances of the case clearly show that there could not have been intention to evade duty - Decided in favour of assessee.

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