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Central Excise - Case Laws
Showing 21 to 40 of 159 Records
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2019 (12) TMI 1123 - CESTAT MUMBAI
CENVAT Credit - exempt goods or not - manufacture and clearance of insulated wires and cables to SEZ Developers - applicability of Rule 6 of the Cenvat Credit Rules, 2004 - HELD THAT:- This Tribunal in THE COMMISSIONER OF CUSTOMS & CENTRAL EXCISE, HYDERABAD VERSUS M/S. SUJANA METAL PRODUCTS LTD. [2015 (3) TMI 781 - ANDHRA PRADESH HIGH COURT] has held that Since both during the period prior to and w.e.f. 10-2-2006, the supplies made to SEZ are held to be “export”, the application of provisions of Cenvat Credit Rules for recovery of amounts on goods supplied to SEZ units in terms of Rule 6 of CCR, 2002/CCR, 2004 does not arise.
Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 1122 - CESTAT BANGALORE
Reversal of CENVAT Credit - process amounting to manufacture or not - activity of cutting and slitting of Brass Strips, Phosphor Bronze Strips and Copper Strips - HELD THAT:- The appellant is engaged in the activity of cutting and slitting of Brass Strips, Phosphor Bronze Strips and Copper Strips falling under Chapter Sub-heading 7409 2100, 7409 1100 and 7409 3100 of the First Schedule of the Central Excise Tariff Act (CETA), 1985. Also, while procuring the raw materials, appellant has paid the full amount inclusive of excise duty and thereafter availed CENVAT credit of the duty paid on inputs and after converting the coils into strips by undertaking portion of slitting and cutting, clearing the final goods by utilizing the CENVAT credit availed on inputs as also in cash.
The appellant had a bona fide belief that their activity amounts to manufacture and they have taken the registration by disclosing the complete facts and has been paying duty from time to time on clearance of final products which is also not disputed by the department - Appellants have also produced ER-1 returns for the disputed period wherein the details of CENVAT credit availed in respect of inputs and the duty paid on the final products are clearly shown - Further, in total, the appellants have availed CENVAT credit to the tune of ₹ 90,89,714/- during the relevant period but had paid an amount of ₹ 97,41,477/- which is more than the credit availed by them.
This issue is squarely covered by the decision in ASHOK ENTERPRISES VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI [2007 (11) TMI 67 - CESTAT, CHENNAI] where it was held that even if duty wasn’t payable on final good (there being no manufacture), there was no question of recovery of credit, having been utilized towards payment of duty.
Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 1093 - KERALA HIGH COURT
Rectification of mistake - error apparent on the face of record - subsequent change in law - Levy of penalty - appellant herein had paid the duty before issuance of SCN - whether a subsequent declaration of law through decision of the apex court can be considered as a mistake apparent on the face of the record, enabling a rectification under Section 35C(2) of the Act?
HELD THAT:- In a catena of decisions of the Hon’ble apex court it is held that, 'a mistake apparent on the record' must be an obvious and patent mistake and the mistake should not be such which can be established by a long drawn process of reasoning. The power to rectify a mistake should be exercised when the mistake is a patent one and should be quite obvious. The mistake cannot be such, which can be ascertained by a long drawn process of reasoning. Further, while rectifying a mistake, an erroneous view of law or a debatable point cannot be decided; or an incorrect application of law can also not be corrected.
When the appeal was decided by the Tribunal through Annexure A order, the decision was taken based on the law as it stood then. In a subsequent decision of the hon'ble Supreme Court the law was declared as otherwise, based on a change of opinion. Such a change of opinion of law cannot be taken as a 'mistake apparent on the face of the record' which could be rectified by invoking Section 35C(2) of the Central Excise Act. Further, such material cannot be used for unsettling the settled position attained through disposal of the appeal, alleging that there occurred any mistake apparent from the face of the record. It cannot be utilized for reopening a concluded decision, which had attained finality between parties inter se - thus, the above appeal has to succeed.
The question of law framed is answered in favour of the appellant and against the Revenue.
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2019 (12) TMI 1090 - CESTAT AHMEDABAD
Export of goods or not - clearance of Aviation Turbine Fuel (ATF) when loaded into flight operating on international route - whether the said clearance should be considered as exported by the appellant or otherwise? - necessary documents not supplied to appellant - principles of natural justice - HELD THAT:- A report was submitted by the Assistant Commissioner vide letter dated 20/02/2013 which was not given to the appellant and the de novo order was passed on the back of the appellant without putting them to notice of what is observation of Assistant Commissioner, why they have not accepted the documents submitted by the appellant. The Assistant Commissioner was supposed to only establish that the ATF supplied is amount to export or otherwise. So, the same can be established not only on the basis of ARE-3 but on the basis of other documents - there is a violation of principle of natural justice in passing the de novo order.
Appellant may be supplied the letter/report given by the Assistant Commissioner and also an opportunity of personal hearing for making any additional submission, if required. Thereafter, a reasoned order may be passed - The appeal is allowed by way of remand to the Adjudicating Authority.
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2019 (12) TMI 1063 - ALLAHABAD HIGH COURT
Refund of excise duty - unjust enrichment - allegation that the appellant has not passed on the duty to the buyers, as such is entitled to refund - rejection on the ground that the invoices issued by the appellant between 11.09.2003 to 30.01.2004 clearly show that the Central Excise Duty @ 16% separately was charged from the customers/buyers - Presumption of incidence of duty.
Whether the Tribunal was under obligation to consider all the material evidence available before it and while discarding the same, it was incumbent upon the Tribunal to record reasons?
HELD THAT:- From the bare perusal of Section 12 (B) of the Act, 1944, the intention of the legislature is crystal clear that it is the duty of the concerned to prove that he has not passed on the excise duty to the buyer.
From the material placed, particularly two sets of invoices and letters written by the appellant to the buyers and the relevant portion of the order dated 10.12.2009, the position which emerges out is to the effect that the Tribunal has not considered the invoices placed by the appellant before it along with the letters of appellant written to the buyers and after considering both the material evidence viz. invoices and letters written by the appellant to the buyers, the Tribunal has not recorded reasons for coming to the conclusion that the appellant is not entitled for refund of the amount in issue.
A judgment is the expression of the opinion of the Court arrived at after due consideration of the evidence and the arguments, it means a judicial determination.
Thus, the law can by summarised that the 'judgment' means a decision adjudicating upon the legal rights and liabilities of the parties after appreciating the evidence on record in a particular fact-situation, and that has to be duly supported by reasons - the Tribunal was under obligation to consider all the material evidence available before it and while discarding the same, it was incumbent upon the Tribunal to record reasons and in not doing so, the Tribunal erred in law and fact both.
Considering the undisputed submissions made by the learned counsel for the appellant that certain documents were filed by the appellant before the Tribunal through supplementary affidavit and the Tribunal failed to consider the same, we are of the view that the matter may be remanded back to the Tribunal to decide the same afresh - appeal allowed by way of remand.
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2019 (12) TMI 1062 - CESTAT HYDERABAD
CENVAT Credit - capital goods/input services - rails utilised in the construction of railway-line from Muddanur Railway Station to the factory premises of the appellant which was to run for merely 10 kms - input services used for the construction of the appellants’ manufacturing units - HELD THAT:- The goods which are used in the manufacture of capital goods which are further used in the factory of the manufacture are inputs. Therefore, the input is not necessarily to be used in the manufacture of final product. By virtue of explanation goods used in the manufacture of capital goods which are further used in the factory of the manufacturer of capital goods also falls within the definition of input. In 2009, this explanation has been amended to the effect as recorded above. Also definition of capital goods is not confined to cl. of Rule 2(a) CCR, 2004 but extends to all other clauses therein. As per clause (iii) thereof it is clear that if anything is component, spare & accessories to such input as may full under cl (i) of Rule 2(a) CCR, 2004, same also becomes capital goods - the goods which are denied CENVAT Credit in these appeals are such without which the capital goods/inputs relevant to manufacture the final product cannot function. Thus, the goods under question also became the capital goods.
There is no denial for the rails/sleepers to partly within the manufacturing unit/factory of appellant. Irrespective it extends outward but admittedly is used for the transport of rawmaterial inside the factory for manufacturing final product. Thus is the part and parcel for the manufacturing unit composed of capital goods which cannot function without these rails - further, there is no evidence on record to show that any of the capital goods as that of pipes, pumps etc. or other steel structures as mentioned in the above tables to have been used in construction of factory shed or for laying of the foundation. Those rather appear to have been used in connecting the machinery installed in the factory premises of the appellant which is meant for manufacture of the final product or are such as have been used as an integral part thereof.
Hon’ble Apex Court in the case of VIKRAM CEMENT VERSUS CCE, INDORE [2006 (2) TMI 1 - SUPREME COURT] has held that the repair and maintenance of pumps and pipes outside the factory premises having nexus with the manufacture of final products even if utilised outside the factory premises would be eligible for CENVAT Credit.
No evidence found by the department that rails/sleepers and other goods have no nexus with the manufacture of cement, the final product of the appellant, we are of the opinion that the adjudicating authority has wrongly denied the availment of CENVAT Credit to the appellants while confirming the reversal of the credit already availed - credit on rails allowed.
Input services used for the construction of the appellants’ manufacturing units - HELD THAT:- The said issue also stands no more res-integra as was held by Tribunal, Bombay in COMMISSIONER OF C. EX., NAGPUR VERSUS ULTRATECH CEMENT LTD. [2010 (7) TMI 302 - CESTAT, MUMBAI] that the input services with respect to the Thermal Power though situated outside the factory premises are Cenvatable due to the nexus thereof with the manufacture of the final product
Credit also denied on the ground that manufacturing activity not started - HELD THAT:- The fact that manufacturing activity has not yet been started, is also not sustainable to deny the CENVAT Credit to the appellant. There is no rule or statutory provision which makes the manufacturing unit to be functional or the registration thereof, a condition precedent for availing credit. The CENVAT Credit shall be available on the documents evidencing receipt of eligible inputs, capita goods or input services even before the date assessee started the manufacturing activity or obtained the service tax registration. The credits can very well be adjusted after the manufacturing is started or registration is taken - Hon’ble High Court of Karnataka in the case of COMMISSIONER OF SERVICE-TAX VERSUS TAVANT TECHNOLOGIES INDIA PVT LTD [2016 (3) TMI 353 - KARNATAKA HIGH COURT], while relying upon its previous decisions in the case of MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX [2011 (9) TMI 450 - KARNATAKA HIGH COURT], Karnataka has held that for availing as well as refund of untilized credit registration of Service Tax is not required.
The adjudicating authority below has wrongly denied the CENVAT Credit to the appellant - Credit allowed - appeal allowed - decided in favor of appellant.
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2019 (12) TMI 1061 - MADRAS HIGH COURT
Finalisation of assessment of petitioner - direction to respondent to finalise the assessment of the petitioner-Industrial Unit as directed by the Hon'ble Supreme Court in its decision UNION OF INDIA VERSUS SUPREME STEELS AND GENERAL MILLS [2001 (10) TMI 90 - SUPREME COURT] with consequential relief of refund with interest.
HELD THAT:- The respondents may pass appropriate order in terms of the above ratio of the Hon'ble Supreme Court within a period of 3 months from the receipt of this order and finalize the pending proceedings in accordance with law - Petition disposed off.
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2019 (12) TMI 1060 - CESTAT HYDERABAD
Refund of CENVAT Credit - closure of factory - period of limitation - goods cleared to the SEZ units without payment of duty - rejection of refund on the ground that the SEZ supplies were not to be treated as export of goods and that refund applications were not filed within the time limit - whether the application for refund of Cenvat credit under Rule 5 of CCR, 2004 could be sanctioned after 01.04.2012 on the ground that the factory has been closed after a period of six years from the closure of such factory or otherwise?
HELD THAT:- When the Rule 5 of CCR, 2004 was amended w.e.f. 01.04.2012 there is no saving clause indicating that with respect to credits which were accumulated prior to this date the new provisions do not apply - The General Clauses Act allows continuation of any right, privilege, obligation or liability acquired or accrued under any Act or enactment so repealed and also affects the previous operation of any Act or enactment so repealed. In this case, refund claims were filed prior to 01.04.2012 and these claims did not include refund claim on the ground that factory has been closed.
The issue was raised before this Tribunal in the first round of litigation which has been rejected by this Tribunal in M/S LATA’S HYDROCARBON RESOURCES PRIVATE LTD., VERSUS CC, CE & ST, HYDERABAD-IV [2016 (12) TMI 321 - CESTAT HYDERABAD]. The order of this Tribunal has not been set aside by any higher judicial forum. In pursuance of the remand by this final order, the original authority has sanctioned the refund claim. Therefore, all proceedings which had begun prior to 01.04.2012 have concluded unimpeded by the unamended Rule 5 of CCR, 2004 for a different amount on a different ground. A separate refund claim was filed after 01.04.2012 which is the issue in dispute.
The appellant was not entitled to refund as there was no saving clause when Rule 5 of CCR, 2004 was amended - Further, the period of limitation of one year for filing the refund claim has also been violated as refund claim was filed more than six years after alleged closure of the factory.
Appeal dismissed - decided against appellant.
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2019 (12) TMI 1059 - CESTAT NEW DELHI
Refund of the credit which arouse on the ground of Notification No. 15/2015-CE wherein the education cess and higher education cess was merged with the excise duty - inability to utilise this amount for the discharge of the excise duty in future - N/N. 15/2015-CE dated 01.03.2015 - rejection of refund claim on the ground that there is no such provisions under Rule 5 of the Credit Rules, which stated that a manufacturer who clears a final product or any intermediate product for export without payment of duty under bond or letter of undertaking (LUT) for a service provider, who provides an output service, which is exempted without payment of service tax shall be allowed the refund of Cenvat Credit as per the prescribed formula.
HELD THAT:- The same situation has come up before Hon’ble Supreme Court in case of M/S. SRD NUTRIENTS PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE GUWAHATI [2017 (11) TMI 655 - SUPREME COURT] wherein the refund of not utilised credit was permitted to be refunded and Hon’ble Supreme Court held that the EC and HEC is part of the excise duty, and therefore, the refund can be granted to him under the provisions of Section 11B of the Central Excise Act.
The appellant is entitled for the refund of unutilised credit pertaining to education cess and higher education cess - appeal allowed - decided in favor of appellant.
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2019 (12) TMI 1058 - CESTAT BANGALORE
100% EOU - insecticide procured by the appellant was sent to farmers and the produce viz. gherkins were brought back to the EOU and later exported after undertaking further processing - applicability of N/N. 22/2003-CE dated 01.03.2003 - HELD THAT:- It is not disputed that the appellant was a 100% EOU engaged in the manufacture and export of gherkins (vegetables). The said item in question viz. ‘Neemazol TS 1%’ was procured without payment of duty in terms of Notification 22/2003 which is covered in Sl. No. 26 of Annexure I of the said Notification. Further as per Clause (a) of the Notification, items falling under Sl. No. 14 to 26 of Annexure-I were permitted to be taken out of EOU to fields and farms of contract farmers of the EOU for production and bring back the produce to the unit for export subject to fulfillment of certain conditions - Further, in the present case, the insecticides procured by the appellant was sent to the farmers and the produce viz. gherkins were brought back to the EOU and later exported after undertaking further processing.
The Commissioner (Appeals) has wrongly held that the appellant is required to take the permission of the Development Commissioner for procurement of the item in question. During the relevant period duty free goods from local manufacturers could be procured only against CT-3 certificate issued by the Range Officer having jurisdiction over the EOU and in the present case also the appellants have procured the insecticide against CT-3 certificate issued by the jurisdictional Range Officer. Further, we find that the original authority has rightly held that the items procured by the appellant were covered by Sl. No. 26 appearing in Annexure-I to Notification No. 22/2003-CE dated 01.03.2003 read with Clause (a) (i) read with Clause 5 of the said Notification - Further, the item procured by the appellant in terms of the Notification was ultimately used for export of goods and therefore the appellants are clearly entitled to the exemption.
Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 1057 - CESTAT AHMEDABAD
Refund of accumulated CENVAT Credit - export or goods or not - input used in the manufacture of final product which has been supplied to 100% EOU considering the same as export or otherwise - whether the supply to 100% EOU is considered as export for the purpose of refund under Rule 5 of Cenvat Credit Rules, 2002?
HELD THAT:- The very same issue has been considered by the Hon’ble Gujarat High Court in the case of COMMISSIONER - CENTRAL EXCISE AND CUSTOMS VERSUS NBM INDUSTRIES [2011 (9) TMI 360 - GUJARAT HIGH COURT] where it was held that clearances made by one 100% EOU to another 100% EOU which are "deemed exports" are to be treated as physical exports for the purpose of entitling refund of unutilized Cenvat credit contemplated under the provisions of Rule 5 of the Cenvat Credit Rule, 2004.
Thus, there is no dispute that refund under Rule 5 is admissible in respect of the supply made to 100% EOU - It is also observed that the definition of export of goods has been given in Rule 5 has been amended and as per the new definition only those exports where the goods are taken out of country is considered as an export of goods, therefore, at the most the refund under Rule 5 may not be admissible after 01.03.2015 which is further make it explicit that prior to this amendment refund in respect of export made to 100% EOU was permissible.
Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 1017 - CESTAT MUMBAI
Benefit of exemption - texturized yarn - independent processor who does not have facilities of manufacture of POY in their factory - bifurcation of their existing unit into two units for implementing, product management concept policy and requested separate Registration on the basis of information provided by them and as requested the existing manufactory - N/N. 6/2000-CE dated 1.3.2000 as claimed in declaration No 1/2000-01 dated 8.5.2000 - Rejection of declaration filed u/r 173B of the Central Excise Rules, 1944 - demand of duty alongwith interest and penalty.
Whether the benefit of exemption under Notification No 6/2000-CE dated 1.03.2000 is admissible to the appellant post 26.04.2000, the date from which they obtained two Central Excise Registrations by bifurcating their existing facility into two units? - HELD THAT:- Coming to the phrase “independent texturizer” used in the Notification No 6/2000-CE, we are of the view that independent texturizer, is a person (legal or natural) who procures the partially oriented yarn from the open market and then clears the texturized yarn after texturizing the same. We are holding this view because the phrase “independent texturizer” used in the notification is followed by the phrase “who does not have the facilities in his factory (including plant and equipment) for producing partially oriented yarn (POY) of polyesters”, which implies that he has no facility to produce the partially oriented yarn. Thus procurement of the partially oriented yarn which is the raw material to start with for him can be only by way of purchase. Undisputedly KSF(PUY) and KSF (POY) are having common sales tax registration and PAN and are proprietorship concerns of M/s CEL, before and after bifurcation.
The phrase interpreted was “his factory” i.e. the factory of manufacturer. In our view said decision is distinguishable, in view of the use of word “independent” to qualify the “texturizer”, in the notification under consideration. In our view if the phrase is considered as a whole then we find that word “independent” qualifies the “texturizer” and not the factory. So if the texturizer is procuring the “partially oriented yarn” from any of his factory then he will not qualify to be an “independent texturizer”. Thus the benefit of exemption cannot be admissible to him.
Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification - When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue - The benefit of the exemption notification 6/2000-CE and its successor notification will not be admissible to the appellants.
Valuation of the goods cleared by the appellant - HELD THAT:- We are not in agreement with the approach made by the Commissioner in rejecting the deductions claimed by the appellants for determining the assessable value from the sale value at depot. Commissioner should have considered and allowed the admissible deductions from the sale value for determination of assessable value - Hence for the determination of the correct assessable value and the quantum of duty short paid or evaded, the matter needs to be remanded back to the Commissioner.
Whether appellants have mis-declared, mis-stated to wrongly avail the benefit of exemption notification? - HELD THAT:- By bifurcating the existing unit, to claim the benefit of exemption notification, appellant have created a colourable instrument, a façade to evade the payment of legitimate central excise duty - The contents of letter are self explanatory and clearly show that appellants have in garb of the “product management”, sought to create a colorable instrument a façade in name of product management group for evading the payment of legitimate duty due. The intention of the appellant is also clear from the fact that they had been selling the said goods from their depots by charging the duty @ 36.8% ad valorem instead of the duty actually paid by them after bifurcation. They never declared the pricing mechanism to the department at the depot at the time of seeking an amendment in registration hence they had misstated the facts with the intention to evade payment of duty and hence in our view extended period of limitation has been correctly invoked against the appellants in the present order.
Whether interest on the demand made can be sustained? - HELD THAT:- This is a civil liability of the assessee, who has retained the amount of public exchequer with himself and which ought to have gone in the pockets of the Central Government much earlier - Upon reading Section 11AB together with Sections 11A and 11AA, the interest on the duty evaded is payable and the same is compulsory and even though the evasion of duty is not mala fide or intentional.
Whether penalties are imposable on appellant? - HELD THAT:- The order of Commissioner to the extent of imposing penalties under Rule 173Q of the Central Excise Rules, 1944 or Rule 25 of the Central Excise Rule 2002 as the case may be read with Section 11AC of the Central Excise Act, 1944 upheld - However the quantum of penalty needs to be redetermined after determination of actual duty evaded by the appellants.
Whether penalties are imposable on four functionaries in the unit? - HELD THAT:- In view of the specific finding recorded by the Commissioner, to the effect that the four functionaries were instrumental and in knowledge of the entire façade being created to evade payment of duty, the penalties imposed on these functionaries are upheld - However, the quantum of penalty needs to be re-determined after ascertaining the duty evaded.
CENVAT/ MODVAT Credit - exemption under Notification 6/2000-CE - HELD THAT:- The benefit of CENVAT/ MODVAT credit can be allowed only on establishing the claim to such credit by way of production of requisite documents before the adjudicating authority - Since the matter is being remanded for re-determination of the value and quantum of duty short paid by the appellants, appellants may make the claim towards admissible CENVAT/ MODVAT credit before the adjudicating authority in remand proceedings, who will consider the claim and allow the admissible CENVAT/ MODVAT Credit.
Appeal allowed in part and part matter on remand.
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2019 (12) TMI 1016 - CESTAT KOLKATA
CENVAT Credit - Furnace Oil consumed for generation of electricity, a part of which was not used in or in relation to manufacture of their final product - recovery alongwith interest and penalty - HELD THAT:- The appellant assessee had rightly availed Cenvat Credit on Furnace Oil used in the generation of electricity in a captive power generating machine, even though a part of such generated electricity is used in factory office, workers’ canteen etc.
In terms of the definition of ‘input’ as was prior to 01.04.2011, input includes goods used for generation of electricity used in or in relation to manufacture of final products or for any other purpose, within the factory of production - Further, the terms ‘factory means any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured or process, connected to manufacturing, is carried out. Oxfotd Dictionary defines the terms ‘precincts’ as “the area within the walls or perceived boundaries of a particular building or place”. Hence, the terms ‘factory’ includes all the facilities, including that of manufacturing process, within its boundary wall.
As was prior to 01.04.2011, CENVAT credit was available on goods used in generation of electricity and consumed within the boundary wall of the factory of production in or in relation to manufacture of final products, or for any other purpose which may not have direct relation to manufacture - This view was also ratified by the Hon’ble Supreme Court in the judgement in the case of Maruti Suzuki Ltd. Vs. Commissioner of Central Excise, Delhi-III [2009 (8) TMI 14 - SUPREME COURT] wherein the Hon’ble Court has inter alia observed that assessee is entitled to credit on the eligible inputs utilized in the generation of electricity to the extent to which they are using the produced electricity within their factory (for captive consumption) - However, with effect from 01.04.2011, with the abolition of the phrase “used in or in relation to manufacture of final products” from the definition of ‘input’ vide Notification No.3/2011-CE(Nt) dated 01.03.2011, the scope of input has not only been more widened, it has also become more inclusive. With effect from 01.04.2011, ‘input’ inter alia, includes all goods used for generation of electricity for captive use.
It would be pertinent to mention that the Show Cause Notice alleges consumption of Furnace Oil whereas the appellants have tried to convince the authorities below that after installation of the electricity there was no occasion for them to continue with the old system and they had stopped using any Furnace Oil for generation of electricity for smooth running of their manufacturing facility - Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 1012 - DELHI HIGH COURT
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) - cut-off date for settlement of case - quantification of demand - validity of circular issued by CBIC - Form of declaration under section 125 (1) - HELD THAT:- In view of Rule 3 of the Scheme, 2019, which is floated under the provisions of Finance Act, 2019, and looking to the definition of “amount in arrears” as stated hereinabove, by no stretch of imagination it can be said that paragraph Nos.vii and viii of the Circular dated 25.09.2019 is said to be in violation of the Scheme, 2019. Even if the demand is quantified and no appeal is preferred or even if the appeal is preferred but the assessee is applying under the aforesaid Scheme, 2019, it will mean to be covered by Clause 3(b) - Moreover, looking to Rule 3 of this Scheme, 2019, cut-off date of 30.06.2019 is not made applicable in all the four eventualities.
The cut-off date of 30.06.2019 is applicable only in the eventualities which are covered under Rules 3(a) and 3(c) - The cut-off date of 30.06.2019 is not applicable for the cases which are covered under Rules 3(b) & 3(c). This cut-off date has been clarified in a Circular dated 25.09.2019 which is annexure P-1.
The respondents are directed to follow scrupulously the Scheme, 2019 and the provisions of the relevant Act whenever any benefit is to be given for the Central Excise and for the Service Tax. As and when the individual case will come to the Court in detail, the provisions of the Scheme, 2019 and the relevant Act shall be matched with the facts of that individual case - petition dismissed.
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2019 (12) TMI 1011 - DELHI HIGH COURT
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) - Permission for withdrawal of petition - HELD THAT:- Permission to withdraw this writ petition is granted.
If application is preferred by this petitioner under the aforesaid Scheme, the same shall be decided by the concerned respondent authorities in accordance with law, rules, regulations, Government policy and the “Sabka Vishwas” (Legacy Dispute Resolution) Scheme, 2019, and, after giving an adequate opportunity of being heard to this petitioner, as early as possible and practicable - Petition disposed off.
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2019 (12) TMI 940 - MADHYA PRADESH HIGH COURT
Power of review of its own order by High Court - error apparent on the face of record or not - clandestine manufacturing and supply of scented tobacco to various manufactures - Review is sought for on the ground that Mr. Devi Prasad Pande, Partner of M/s Sarita Roadways has stated in his statement before the authority that he transported the scented tobacco to M/s. RS Industries and M/s. RS Company, which shows that both are the same companies, therefore, slight change in their name becomes insignificant.
HELD THAT:- There is no error apparent on the face of the record warranting review.
The Apex Court in the case of HARIDAS DAS VERSUS SMT. USHA RANI BANIK & ORS [2006 (3) TMI 686 - SUPREME COURT] where it was held that Perusal of the Order XLVII, Rule 1 shows that review of a judgment or an order could be sought: (a) from the discovery of new and important matter or evidence which after exercise of due diligence was not within the knowledge of the applicant; (b) such important matter or evidence could not be produced by the applicant at the time when the decree was passed or order made; (c) on account of some mistake or error apparent on the face of record or any other sufficient reason.
The Apex Court has held that rehearing of a case can be done on account of some mistake or an error apparent on the face of the record or for any other sufficient reason - In the present case, there is no error apparent on the face of the record and the petitioner in fact under the guise of review is challenging the order passed by this Court, which is under review.
There are no reason to review the order - review petition dismissed.
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2019 (12) TMI 939 - CESTAT AHMEDABAD
CENVAT Credit - capital goods - Area based exemption availed - N/N. 39/2001-CE dated 31.07.2001 - allegation that the department that they had claimed depreciation of said capital goods under Section 32 of the Income Tax Act, 1961 and they are not taking/availing Cenvat credit in terms of Cenvat Credit Rules, 2004 - compliance with the condition of Rule 4(4) of Cenvat Credit Rules, 2004 or not - HELD THAT:- The appellant have received the capital goods in the year 2005-06; they, though claimed depreciation under Section 32 of Income Tax Act on the said capital goods but the said depreciation was returned by filing a revised Income Tax return in the subsequent Financial Year; Cenvat credit to the tune of ₹ 2,72,769/- is related to service tax paid on the construction of factory building, however, on the said building the appellant had claimed depreciation.
The appellant during the relevant Financial Years i.e. 2005-06 when the capital goods were received and in the Financial Year 2006-07 when the depreciation was claimed, the appellant were suffering losses therefore, even though the depreciation was claimed it does not have any effect under the Income Tax. The objective of non-claiming of depreciation is to avoid double benefit i.e. one is the benefit of Cenvat credit and the other is depreciation in Income Tax which reduce the income tax liability. Since the appellant had no profits in relevant Financial Years, even claiming of depreciation did not lead to double benefit - thus, compliance of Rule 4 (4) of Cenvat Credit Rules, 2004 has been made.
Denial also on the ground that appellant have taken 100% credit instead of 50%, we find that the year of receipt of capital goods is 2005-06, whereas the credit was taken in October 2007 - HELD THAT:- As per Rule 4(4), it is clear provision that part of taking 50% credit is applicable only if Cenvat credit is availed in the year of receipt of capital goods. As per proviso to sub-rule, the assessee is entitled for the credit of remaining 50% in the subsequent Financial Years. That means, in the subsequent year of receipt of capital goods, the appellant is entitled for 100% Cenvat credit. Therefore, on this ground, the denial of Cenvat credit is not correct and legal.
CENVAT Credit - input services - construction services - denial of credit on the ground that appellant have claimed depreciation on building - HELD THAT:- The appellant even though claimed the depreciation on the building which was subsequently returned, the credit was taken in respect of service tax paid on construction of factory building, as submitted by the appellant - Cenvat credit in respect of setting-up of factory building is clearly covered in terms of inclusion clause of definition of Input Services as provided in Rule 2(l) of Cenvat Credit Rules, 2004.
Merely because the appellant have availed Cenvat credit showing it of building as capital goods, admissibility of Cenvat credit of service tax paid on construction of building does not get extinguished. It was held in plethora of judgments by this Tribunal that merely because the credit was taken under wrong head, the same is not sufficient to deny the credit.
The appellant have rightly availed the Cenvat credit on capital goods and on construction service - Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 938 - CESTAT AHMEDABAD
Clandestine removal - SSI Exemption - use of brand name - rural area - N/N. 8/2003 – CE dated 01.03.2003 - demand against the Appellant Unit is based upon the pen drive said to be seized from the table drawer of office in factory - HELD THAT:- The statement of buyer of goods has been relied upon who on the basis of alleged sales data found in pen drive have stated that they received the goods without payment of duty.
Coming to the submission of the Appellant, we find that the pen drive was taken under possession by the officers vide panchanama dated 19.10.2010 - The panchnama dated 19.10.2010 does not record the sealing of the pen drive in presence of the panch witness or any director/ employee of Appellant unit. It is only in panchnama dated 02.12.2010 that it is recorded that the pen drive was sealed earlier and was opened in presence of panchas. Even this Panchnama dt. 02.12.2010 is disputable as on Page No.1 it records that the panchnama proceedings of opening of pen drive and taking out printout were started at 5PM, but on the 3rd Page it records that the proceeding started at 3.00 PM and completed at 4.30. We also find that the pen drive was opened on 19.10.2010 during the visit of the officers. However the panchnama dated 19.10.2010 is silent about any alleged sales data found in pen drive.
The alleged data finds mention only in panchnama dated 02.12.2010. In such case we find that the panchnama proceedings are not reliable piece of evidence having observed the serious discrepancies in panchnama proceeding - the appellant has vehemently argued that the Pen drive data cannot be relied upon as requirement under section 36B of Central Excise Act, 1944 was not followed.
Acceptable evidences or not - HELD THAT:- Section 65B of the Evidence Act, 1872 and Section 36B of the Central Excise Act, 1944 are parimateria and hence the ratio laid down by the Apex Court is squarely applicable for the invocation of the provision of Section 36B of the Central Excise Act, 1944 and any reliance placed on the computerized printouts, without following statutory procedures and conditions of Section 36B, are not acceptable as evidence. Further as required under sub-section (4) of Section 36B, no certificate has been obtained as well as none of the conditions under Section 36B(2) of the Act, 1944 was observed. In such situation, the printout cannot be accepted as evidence to support the clandestine removal of the goods.
Cross-examination of persons - HELD THAT:- The pen drive data did not contain the name of Appellant, the quantity and description of goods was also not appearing. When the statements were solely based upon pen drive data with no corroborative evidence either from the Appellant Unit or from side of persons whose statements were recorded, in that case it was incumbent on the part of adjudicating authority to allow cross examination. In absence of same the demands could not have been confirmed against Appellant.
In the present case, the statements were relied upon as corroborative evidences, but the cross-examination of such persons who made such statements was denied without valid ground. There is no other corroboration evidencing alleged clandestine removal. Hence in such view of facts we hold that the demand based upon pen drive and statements is not sustainable. Apart from above, there are no evidence in the form of documentary evidence or physical evidence of clearance of goods or purchase of goods was found either from the Appellant unit or buyers of goods.
Confiscation of goods bearing brand name “KLMN” - HELD THAT:- The Appellant has produced certificate issued by the Gram Panchayat that the factory is situated in rural area. In terms of para 4 (c) of the Notification No. 8/2003 – CE dated 01.03.2003 the factory situated in rural area even if manufacturing others branded goods is eligible for said exemption. Therefore, the Appellants are eligible for SSI Exemption and the goods cannot be confiscated.
Since we have held that the demand against M/s JBC is not sustainable, the penalty upon Appellant Unit and other co-appellants is also not sustainable - appeal allowed - decided in favor of appellant.
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2019 (12) TMI 937 - CESTAT AHMEDABAD
Classification of goods - Bulk Milk Cooler - whether classified under CETH 84186990 or under CETH 84198990 of CETA - benefit of N/N. 6/2006 – CE dated. 01.03.2006 and N/N. 12/2012 – CE dated. 17.03.2012 - Rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - HELD THAT:- The Appellant intimated the jurisdictional authorities on 12.01.2012 vide their letter that they are availing exemption from duty on said goods under notification No. 6/2006 - CE dated 01.03.2006 ( Serial No. 5) and 12/2012 dated 17.03.2012 (Serial No. 232). The Stationary Bulk Mill Cooling equipment were supplied by Appellant to Milk Co-operative Societies for use as cold storing and preserving the Milk along with dairy products. The Appellant along with such Bulk Milk Cooler were also clearing bought out items viz. DG Sets, Solar Panels, Milk Pump, Water Pump, Stabilizer etc. and were cleared as per option of customers. The goods were assembled at the premises of co-operative societies. The goods covered under the exemption were “Goods specified in List 7 intended to be used for the installation of a cold storage, cold room or refrigerated vehicle, for the preservation, storage, transport or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat.”
It is an undisputed fact that “Bulk Milk Cooler” were supplied for installation of cooling facility for preservation and storage of Milk by cooling by Mechanical Appliances. The goods in question are Stationary Pre-cooling equipment which is also not disputed and the product broucher also shows the same. When the bulk milk cooler are in stationary stage and are used for cooling the milk so as to bring down the temperature to 4 degree centigrade with intention of storage and preservation, it is clear that the goods are for use as cold storage of Milk.
The undisputed fact is that the goods were used for intended purposes covered by the Notification. It is coupled with the fact that the Appellant had informed their jurisdictional authorities about the clearance of goods under exemption. In such case when the goods are covered by the exemption notification and there is no dispute about the use of goods, we are of the view that the intended benefit be given to the Appellant.
Clearances to interconnected undertaking M/s Krishna Allied Industries Ltd. - HELD THAT:- The sale price of said company would be chargeable to duty at the end of Appellant in terms of Section 4 (3) (b) (i), we find that said section is applicable where the goods are sold to or through any related party and the assessable value would be eventual sale price to the actual customer - Thus from the perusal of Rule 9, it is clear that in case of sale to interconnected undertaking the assessable value would be the transaction value to the interconnected undertaking only and the sale price of the interconnected undertaking will not merit any consideration.
Time limitation - HELD THAT:- From the facts of the case no contumacious conduct of the Appellant is appearing. They had bonafide belief that Bulk Milk Cooler is exempted from payment of duty by virtue of exemption notification. In such case it cannot be said that the Appellant had any intention to suppress the fact. Therefore, the demands are time barred also.
The Appellant being eligible for exemption are not liable for duty - Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 936 - CESTAT BANGALORE
Classification of services - Synthetic Filament Yarn of a denier of 600 - whether the synthetic filament yarn manufactured by the appellant falls under 5402 of CETA as contended by the department or under 5404 as contended by the appellants and as to whether the test result would be applicable prospectively or retrospectively? - benefit of N/N. 7/2003 CE and 30/2004 CE - Confiscation - imposition of redemption fine and penalty - extended period of limitation.
HELD THAT:- The appellants classified the impugned goods under 5404. The Heading 5404 refers to synthetic monofilament of 60 d or more and of which, no cross sectional dimensions exceeds 1 mm; strips and like (For Example, artificial straw) of synthetic textile material of an apparent width not exceeding 5 mm. This heading had two single ‘-'. One refers to monofilament yarn and the second ‘others’. Chemical Examiner has given a report that it is a multifilament yarn. The moment the yarn is of multifilament nature, it goes out of Heading 5402. Therefore, as far as the tariff entries till 2004-05 are concerned, the assessee’s contention of classification under 5404.90 cannot be accepted. From 2005-06 also, the heading remains of synthetic monofilament yarn of 67 decitex or more. Therefore, from 2005-06 the Heading is not applicable to the appellants on the basis of the Chemical Examiners report.
The impugned goods cannot be classified under 5404. Coming to the claim of the department that the impugned goods fall under 5402.39 / 540259.10, we find that whereas 5404 has no place for multifilament yarn, 5402 has an inclusive definition. Till 2004-05, 5402 covered synthetic filament yarn (other than sewing thread), including synthetic monofilament yarn of less than 60 d. The Heading has three single dash (‘_’) i.e., high tenacity yarn of nylon or other polyamides, high tenacity yarn of polyesters and textured yarn. Revenue wishes to classify the impugned goods under 5402.39 till 2005. However, for the goods to fall under 5402.39, they should be textured yarn. However, we find that from 2005-06, the scope of 5402 has been expanded to contain 5 single dash (‘_’) i.e., high tenacity yarn of nylon or other polyamides, high tenacity of polyesters, textured yarn, other yarn, single, untwisted or with a twist not exceeding 50 turns per meter, other yarn, single with a twist exceeding 50 turns per meter and other yarn, multiple (folded) or cabled.
Extended period of limitation - HELD THAT:- The appellants have kept the department informed about their intention to claim exemption under the above said Notification vide their letters dated 12.11.2003 and 15.3.2005. The test conducted in 2003 was in favour of the appellants. It was free for the department to get another test conducted in 2005 also. This having not done, extended period cannot be invoked - Suppression of fact cannot be alleged on the basis of statements of dealers to conclude that the goods cleared in the past are also similar to the goods tested. Unless such goods are available and tested, nature of the goods cannot be established on the basis of oral submissions. Therefore, we find that the invocation of extended period is not tenable.
Confiscation - redemption fine - HELD THAT:- As the department relies upon the test report obtained on 21.9.2006, apparently in favour of the department, we hold that the same cannot be applied retrospectively and to the goods cleared before the test report. Therefore, the confiscation of the goods cannot be upheld, as no mala fide intention of the appellants is evident - confiscation and imposition of fine in lieu of confiscation on the above goods cannot be justified.
Penalties - HELD THAT:- Department is free to collect the applicable duty on the said goods. As extended period cannot be invoked, penalty under Section 11AC is liable to be set aside - Penalty imposed on M/s. A.R. Trading Company under Rule 25 and penalty imposed on Shri T. C. Vijayan of Usha Traders, Madurai under Rule 26 of Central Excise Rules, 2002, are also liable to be set aside.
The appeal is partially allowed by way of remand to the original authority with a direction to restrict the duty demanded to the normal period.
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