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Central Excise - Case Laws
Showing 81 to 100 of 159 Records
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2019 (12) TMI 587 - CESTAT KOLKATA
Clandestine Removal - inputs - search and seizure in the factory premises - shortage of finished excisable goods - Computer printouts - third party documents - admissible evidence or not - Section 36B of Indian Evidence Act - time limitation - whether the search and seizure operation were made according to the provisions of Section 100 of the Cr.P.C. read with Section 18 of the Act or not? - HELD THAT:- The search and seizure proceedings are made in violation of Section 100 of Cr PC read with Section 18 of the Act, for the reason that department has failed to follow the provisions of Section 36-B of the Act.
Also, at the time of sealing and desealing of the external data storage device as well as the time of obtaining printouts therefrom, a certificate should have been obtained as per the provision of Section 36-B of the Act. No such certificate has been brought on record without which the evidentiary value of these printout get vitiated. As no certificate from the responsible person of the Appellant was obtained by the department, the credibility of the computer printout gets vitiated.
Hon’ble Apex Court in case of ANVAR P.V VERSUS P.K. BASHEER AND OTHERS [2014 (9) TMI 1007 - SUPREME COURT] has held that the computer printout can be admitted as evidence only if the same are produced in accordance with the provisions of Section 65B(2) of the Evidence Act. A certificate is also required to accompany the computer printouts as prescribed under Section 65B(4) of Evidence Act, 1972. It has been clearly laid down in para 15 of this judgment that all the safeguards, as prescribed in Section 65B(2) & (4), of the Act, is required to be met so as to ensure the source and authenticity, pertaining to electronic record sought to be used as evidence. Electronic records being more susceptible to tempering, alteration, transposition, excision etc. without such safeguards, the whole trial based on proof of electronic records can lead to travesty of justice. The provisions of Section 65B of Indian Evidence Act and Section 36B of Central Excise Act, 1944 of the Act are parimateria.
The shortage was detected on the basis of eye estimation and also on average weight without physical weighment. The department failed to gather any of documents from the factory of the appellant or elsewhere. Further, the loose documents which were recovered from the residence of Shri Ravi Bhushan Lal were not put to test for ascertaining to the authorship of these documents. Moreover, these documents could not be proved with the corroborative evidences. The investigating authority failed to elucidate the system adopted for the preparation of the relied upon documents which were allegedly based on these documents. The details contained on the loose sheets and third party documents are actually not comprehensible and, therefore, cannot be accepted as admissible piece of evidence.
The charges of clandestine removal of the goods cannot be upheld merely on assumptions and presumptions, but has to be proved with positive evidence such as purchase of excess raw materials, consumption of excess electricity, employment of extra labour, seizure of cash, transportation of clandestinely removed goods etc. - The shortage which was detected by the officers is based on average weight method basis and, therefore, mere admission by the directors, who deposited the duty for the shortage, is not enough to proof that the goods were clandestinely cleared from the appellant factory - thus, the shortage was detected on average basis is not sustainable.
Penalty - HELD THAT:- There is no no material evidence was brought on record to prove the charges to attract penalty against them, except the statements which were relied upon by the department without following the mandate of Section 9-D of the Act - penalties set aside.
A similar issue has come up for consideration of this Tribunal in case of BIHAR FOUNDARY & CASTINGS LTD., M/S. GAUTAM FERRO ALLOYS VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, RANCHI [2019 (8) TMI 527 - CESTAT KOLKATA]. The Tribunal has held that in view of non-compliance of mandatory requirement of 36-B of the Act the case the clandestine removal cannot be made applicable merely based on the printouts taken from the laptop computer obtained during the search. And the appeals were allowed by setting aside the order passed by the Adjudicating Authority - The ratio of this case is applicable in toto in case at hand also thus the demand is not sustainable and liable to be set aside.
Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 552 - SUPREME COURT
Validity of Rule 5 of CER - Whether an assessee who chooses once to pay duty in terms of Rule 96-ZP(3) can be compelled to pay duty calculated in accordance with the said Rule for all times to come without any regard to the actual production is a question which requires examination?
HELD THAT:- The question posed before us did not arise at all on facts and the question which has been referred is not something which the assessee disputes.
The matter is sent back to a Division Bench to decide the questions stated in para 20 of Bhuwalka Steel Industries Limited and Another [2017 (3) TMI 1357 - SUPREME COURT].
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2019 (12) TMI 551 - CESTAT BANGALORE
CENVAT Credit - input services - transport of goods by road on outward carriage - Circular No. 1065/4/2018-CX dated 08/06/2018 - HELD THAT:- After the decision of the Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [2018 (2) TMI 117 - SUPREME COURT], the CBEC has issued the Circular dated 08/06/2018 wherein the field formation have been given the liberty to examine each and every case on the basis of the law laid down in various cases. Also, after the Circular issued by the Board various Benches of the Tribunal have remanded the case back to the original authority to examine the eligibility of cenvat credit of service tax on transportation of goods up to the customer’s premises after the period w.e.f. 01/04/2008.
In view of the decision of the Madras High Court in the case of BATA INDIA LIMITED, HOSUR VERSUS THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX, CHENNAI-III [2019 (3) TMI 519 - MADRAS HIGH COURT] and also in view of the Board Circular No. 1065/4/2018-CX dated 08/06/2018, the matter needs to be remanded to the original authority to verify certain factual aspects such as whether the sale is on FOR basis, whether the freight is integral part of the sale price, whether the duty paid on the value inclusive of freight amount etc.
The matter is remanded back to the original authority to pass a fresh order after examining the various documents for the disputed period - appeal allowed by way of remand.
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2019 (12) TMI 550 - CESTAT BANGALORE
CENVAT Credit - allegation that the appellant has not paid service tax correctly and also did not reverse an amount of 6% of the value of exempted goods cleared - invoices issued beyond one year - HELD THAT:- The appellant has reversed the said credit before issuance of show-cause notice with penalty of 15%. Therefore there is no justification for imposing penalty and more over, the appellant had sufficient CENVAT credit in their account during the relevant period. Similarly the CENVAT credit on GTA was reversed by the appellant along with interest and also 15% penalty which is sufficient and therefore no penalty is required on this CENVAT credit which was reversed.
Demand of reversal of 6% on containers used for packing inputs on which credit has been availed - HELD THAT:- Even if the amendment in Rule 6(1) w.e.f. 01/03/2015 wherein Explanation has been added to Rule 6(1), it is clear that Rule 6(1) would apply only when inputs or input services are used in relation to the manufacture of exempted goods - Further, it is an admitted fact that MS drums have not been manufactured by the appellant and therefore Rule 6(1) is not applicable even after the insertion of Explanation w.e.f. 01/03/2015.
Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 549 - CESTAT BANGALORE
CENVAT Credit - input services - transport of goods by road on outward carriage - Circular No. 1065/4/2018-CX dated 08/06/2018 - HELD THAT:- After the decision of the Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [2018 (2) TMI 117 - SUPREME COURT], the CBEC has issued the Circular dated 08/06/2018 wherein the field formation have been given the liberty to examine each and every case on the basis of the law laid down in various cases. Also, after the Circular issued by the Board various Benches of the Tribunal have remanded the case back to the original authority to examine the eligibility of cenvat credit of service tax on transportation of goods up to the customer’s premises after the period w.e.f. 01/04/2008.
In view of the decision of the Madras High Court in the case of BATA INDIA LIMITED, HOSUR VERSUS THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX, CHENNAI-III [2019 (3) TMI 519 - MADRAS HIGH COURT] and also in view of the Board Circular No. 1065/4/2018-CX dated 08/06/2018, the matter needs to be remanded to the original authority to verify certain factual aspects such as whether the sale is on FOR basis, whether the freight is integral part of the sale price, whether the duty paid on the value inclusive of freight amount etc.
The matter is remanded back to the original authority to pass a fresh order after examining the various documents for the disputed period - appeal allowed by way of remand.
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2019 (12) TMI 548 - CESTAT AHMEDABAD
CENVAT Credit - duty paying invoices - forged documents - credit has been denied to the Appellants on the ground that the Appellant purchased Scrap of S.S /M.S whereas the invoices were issued for SS Circle, MS Rounds & Bars, MS Flats and Pipes falling under chapter 72 which are not their inputs - penalty - HELD THAT:- The Appellants have shown purchase of goods in their statutory records and account books and the transactions stands recorded therein. Further no dispute has been raised about the transportation of said goods to the Appellant Units. The Appellant has also shown production of goods from the purchased goods and it stands recorded in books of accounts as well as statutory records. No evidence of falsification of statutory or accounts is on record - Also there is no dispute about the consumption of impugned material and clearance of finished goods manufactured. Even if it is assumed that the dealer’s records does not show the purchase of impugned goods, but the fact remains that the Appellant’s record are showing receipt of goods. Only on the basis of statements, the cenvat cannot be denied when the records are not held to be untrue or falsified.
There are no investigations to the effect that the Appellant purchased goods from elsewhere to the extent of quantity of goods allegedly not received by them. Also there is no evidence to show that the consideration paid for the Appellant’s purchase and through banking channels towards alleged fictitious purchase and cash was received back by the Appellants - the revenue could not establish the fraudulent availment of cenvat credit beyond doubt - Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 547 - CESTAT BANGALORE
CENVAT Credit - input services - rent for the premises leased for the purpose of back office as well as for the purpose of residential accommodation for its Managing Director and other officials who visit Bangalore on official work - HELD THAT:- Perusal of the rental agreement shows that the premises can be used for residential/guesthouse and back office purposes and the appellant have used the same for the official purpose only.
The issue is squarely covered by the decision of the Tribunal in the case of R. K. Marbles [ 1766107 ] where the Tribunal has allowed the CENVAT credit on renting of immovable property service.
Thus, the inclusive clause in the definition of input service covers the impugned input service - credit allowed - appeal allowed - decided in favor of appellant.
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2019 (12) TMI 546 - CESTAT KOLKATA
Clandestine removal - TMT Tor and Bars - corroborative evidences or not - Department has to establish that the appellant had the manufacturing capacity to produce the goods alleged to have been clandestinely cleared. No evidence has been brought on the record that the appellant had manufacturing capacity beyond the goods cleared with payment of duty. No charges of extra electricity consumption or alternate source of electricity has been alleged.
HELD THAT:- It is evident from the Panchanama that the Kingston make pen-drive was recovered from the possession of the Director of the company, Shri Pramod Kumar Gupta. Whereas the appendix to the recovery memo clearly indicates that the documents were retrieved and made relied upon were from HP Pen Drive - the contention of the Learned Advocate is agreed upon that the alleged documents were not retrieved from the pen drive recovered from the possession of the Director of the company, Shri Pramod Kumar Gupta. In such circumstances, the charges of clandestine removal are based on the documents which do not belong to the appellant company.
There were 5 computers installed in the office when the Panchanama was drawn and it was found that no incriminating documents or data was present in the said 5 computers. This clearly proves that the department does not have any source data of the said pen-drive and in absence of any certification to support the alleged data of the pen-drive, the said electronic data cannot be relied upon to prove the charges of clandestine removal. Hence, demand based on the said alleged pen-drive is not maintainable in the eyes of law and thus liable to be set aside.
No evidence as regards to purchase of excess raw material, use of excess electricity, deployment of extra labor force to prove the illicit manufacturing and clearance activity has been brought into the record. No evidence as regards to purchaser of the raw material, transportation of finished goods, receipt of cash payment etc has been brought into the record. The Department is solely relying upon the statement of the Director of the company and only some of their employees. The statement of the Director is not conclusive and mere observatory in nature wherein he has stated that it might be possible that some of the entries will not match the corresponding invoices. Such a statement cannot be said to be of conclusive proof of clandestine removal in absence of corroborative evidence - Similarly, the statement of employees cannot be relied upon when the request of cross-examination has been denied on vague ground. Even otherwise Revenue chose not to examine any witnesses in adjudication, and in such a case their statements cannot be considered as evidence.
The demand of duty, penalty and interest against the appellant and its Director is set aside - appeal allowed - decided in favor of appellant.
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2019 (12) TMI 545 - CESTAT CHANDIGARH
Demand of differential duty - export of consignment of cobalt bearing tools - demand on the ground that the duty payable on the said export goods was ₹ 8,21,837/- whereas the appellant has paid a duty of ₹ 19,584/- on the said goods as they had cleared as scrap - extended period of limitation - HELD THAT:- In the case of COMMISSIONER OF C. EX., SURAT-I VERSUS NEMINATH FABRICS PVT. LTD. [2010 (4) TMI 631 - GUJARAT HIGH COURT], the suppression was admitted by the assessee and the said suppression came in the knowledge of the department at the time investigation, in that circumstances, the Hon’ble High Court held that mere knowledge cannot absolve the assessee not to invoke extended period of limitation.
Admittedly the facts of clearance of the said subject goods on lower duty was in the knowledge of the department itself in the year 2000, therefore, the extended period of limitation cannot be invoked in the facts and circumstances of the case - Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 544 - CESTAT MUMBAI
Benefit of N/N. 14/2002-CE dated 01 Mar 2002 - appellant is a composite mill engaged in spinning of cotton yarn from cotton fibres, weaving of grey fabrics and processing of said grey fabrics with the aid of power - legal fiction created in law - HELD THAT:- The issue is no longer res-integra as settled by the judgment of Hon’ble Supreme Court in the case of M/S. SPORTS & LEISURE APPAREL LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NOIDA [2016 (8) TMI 128 - SUPREME COURT] where it was held that explanation II to the said exemption Notification Nos. 14/2002 and 15/2002 create legal fiction and that was the precise purpose for which this explanation was added. It is trite law that a fiction created by a provision of law is to be given its due play and it must be taken to its logical conclusion.
Benefit cannot be denied - appeal allowed - decided in favor of appellant.
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2019 (12) TMI 543 - CESTAT ALLAHABAD
Benefit of N/N. 4/97-CE dated 01.03.1997 - Ready Mix Concrete (RMC) and concrete mix (CM) - manufacturing at site - whether CM and RMC are one and the same thing? - HELD THAT:- The appellant could not establish that the goods manufactured by the appellant were anything other than ‘Ready Mix Concrete’. The revenue has established that the goods manufactured were ‘Ready Mix Concrete’.
The ruling of Hon’ble Supreme Court in the case of M/S LARSEN & TOUBRO LTD. & ANOTHER, ECC CONSTRUCTION GROUP VERSUS COMMISSIONER OF CENTRAL EXCISE, HYDERABAD [2015 (10) TMI 612 - SUPREME COURT] is squarely applicable in the present case - The Hon’ble Supreme Court in the said case has settled the issue in respect of ‘Ready Mix Concrete’ and have held that Concrete Mix and Ready Mix Concrete are two different products and the said Notification No.4/97-CE extends the exemption benefit only for ‘Concrete Mix’ and the said exemption would not be available for Ready Mix Concrete.
Appeal dismissed - decided against appellant.
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2019 (12) TMI 542 - CESTAT ALLAHABAD
Clandestine manufacture - absence of any evidence about the alleged manufacture of goods - corroborative evidences or not - detailed examination carried out or not - HELD THAT:- For demand of such Central Excise duty, revenue has not produced any evidence about the excess production of Final product nor produced any evidence in respect of procurement of excess raw material - There is no evidence on record about the dispatch of excess quantity of goods through the transporters. Further, customers were also not identified and the consumption of power was also not taken into consideration.
The retrieval of data by Government Examiner of questioned documents only establishes that such data was maintained by M/s KIL - such maintenance of data by representative of M/s KIL does not establish actual payment by the appellant. No evidence of actual payment has been brought on record by revenue.
The manufacture of such quantity of goods on which Central Excise duty of around ₹ 5.5 crores was demanded is not established - Since Central Excise duty is on manufacture and manufacture is not established, therefore, there is no basis for demand of Central Excise duty to the tune of ₹ 5,58,89,762/- - Since the demand is not sustainable the penalty is on the appellants are not sustainable.
Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 541 - CESTAT MUMBAI
Appropriation of refund - Revenue is aggrieved by the sanction of ₹ 20,12,525/-, which is sought to be reversed - also aggrieved by the sanction of ₹ 30,00,000/- though partially appropriated - HELD THAT:- No appeal had been filed by Revenue before the first appellate authority against the sanction of ₹ 30,00,000/-. Accordingly, that sanction cannot be agitated before the Tribunal in an appeal arising from a decision of the first appellate authority on challenge by the assessee. It is seen that the sanction of ₹ 20,12,525/- is a consequence of the finding by the first appellate authority that such deposit had been effected in relation to the show cause notice dated 5th March 2009. Those proceeding culminated in the order of the first appellate authority dated 6th September 2010 setting aside the demand.
As the order of the first appellate authority which led to sanction of refund in the impugned order is non-existent and the show cause notice requires fresh disposal, the interim deposit should stand restored - appeal by way of remand for deciding eligibility only in relation to the claim for ₹ 20,12,525/-.
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2019 (12) TMI 530 - MADRAS HIGH COURT
Imposition of penalty u/r 26(2) of CER, 2002 - CENVAT Credit - the buyers had or were likely avail such credit of such duty under the provisions of the CENVAT Credit Rules, 2004 - the appellant had not only reversed the credit at the time of removal of the goods and again before the issue of SCN on the mistake being pointed out - It is contention of the revenue that having purchased the goods from the second stage dealer, the appellant ought not to have passed on input credit on the strength of a CENVATABLE excise invoice and therefore the appellant was liable to pay the penalty equivalent to the benefit that was available to the buyers on account of the invoice issued by the appellant.
HELD THAT:- The power to impose penalty under the provisions of the Central Excise Rules, 2002 is traceable to Section 37 of the Central Excise Act, 1944. As per Section 37 (3) of the said Act the central government can make rules to impose penalty of ₹ 5000 where no other penalties is provided under the Act - Under 37 (4) of the Central Excise Act, 1944, which is an exception to sub-clause (3), any manufacturer, producer or licensee of a warehouse can be made liable to a penalty not exceeding the duty leviable on such goods or ten thousand rupees, whichever is greater. It specifies specific instances for which Rules can be framed.
From a reading of the above Sub-Sections to Section 37, it is evident that penalty under Rule 26 of Central Excise Rules, 2002 is traceable to power vested with the Rule making authority under Sub-clause (3) and not under Sub clause (4) of Section 37 of the Central Excise Act, 1944. Therefore, maximum penalty which can be imposed is only ₹ 5000/- under Rule 26 of the Central Excise Rules, 2002 - Even otherwise, the language adopted in Clause (ii) to Sub- Rule (2) to Rule 26 is clear. Any person, who issues any excise duty invoice without delivery of goods specified therein or abets making such invoice; or any other document or abets in making such document, on the basis of which the user of the said invoice or document is likely to take or has taken any in-eligible benefit under the Act or the rules made their under like claiming of Cenvat Credit under the Cenvat Credit Rules, 2004 or refund, such person shall be liable to a penalty not exceeding the amount of such benefit passed on or Five Thousand Rupees, which ever is greater.
Section 7(5) of the said Act cannot be regarded as confiscatory.
For the present case, it will suffice to state that the penalty under Rule 26(2)(ii), is relatable only to penalty under Section 37(3) of the Central Excise Act, 1944 and therefore, there is no scope to levy penalty above ₹ 5000 under Rule 26(2)(ii) of the Central Excise Rules, 2002 when read in harmony with Section 37(3) of the Central Excise Act, 1944 - the appellant has not committed any fraud. The appellant has also compensated the revenue for any perceived loss to the revenue. Rule 26(2) is intended only to target those manufacturers and dealers who create fictitious invoice/documents to enable a buyers to wrongly avail ineligible of Cenvat Credit without actual supply by them or removal of goods.
The intention of the rule making authority under Rule 26 of Cenvat Credit Rules, 2004 is not to recover the amount more than once, ie. once from the person like the appellant who has purportedly passed on such ineligible credit wrongly and again from the buyer. Rule 14 can be pressed into service only against buyer who wrongly avails such ineligible credit. The power to recover the amount under Rule 14 of Cenvat Credit Rules, 2004 is not contemplated against persons like the appellant. It is also no where stated that the appellant had wrongly availed credit - Since the appellant has paid the duty/ Cenvat Credit twice, first at the time of removal of goods by issuing Central Excise invoice by debiting the Cenvat Credit Account and thereafter once again for the second time before issue of show cause notice together with interest, the imposition of penalty under Rule 26 of the Central Excise Rules, 2002, will have to be construed as excessive.
The penalty imposed on the appellant under Rule 26 of the Central Excise Rules, 2002 be reduced to a token penalty of ₹ 5,000/- in consonance with Section 37(3) of the Central Excise Act, 1944 - appeal allowed in part.
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2019 (12) TMI 528 - CESTAT AHMEDABAD
CENVAT Credit - unit is availing benefit of refund of excise duty in terms of N/N. 39/2001-CE availed by the grinding unit where duty is paid through PLA (Cash) - input service distribution - credit of clinker unit denied on the ground that the invoices were billed in name of Grinding unit - HELD THAT:- The analogy cannot be agreed upon that credit is not available as the goods during the material time were cleared under the exemption Notification No. 39/2001 – CE dt.31.07.2001. Once the exemption benefit stands surrendered by the Appellant they are eligible for the benefits available to them. Even otherwise we find that there is no bar to avail cenvat credit on input and input services if the goods are being cleared under the exemption supra. Further the exemption benefit was only to the extent of refund of duty paid in cash and hence there is no reason to label the goods as exempted goods. The units availing the exemption in question were very much eligible to avail credit - Credit allowed.
CENVAT Credit - port services - denial on the ground that the Appellant has not explained whether the said input service is in respect of ship or goods - HELD THAT:- The registration requirement was only procedural and could not be made ground to deny credit distribution. Even otherwise also the Appellant unit has taken registration for input service distribution w.e.f 21.02.2008 - even for the subsequent period the Appellant unit was allowed credit by the revenue in adjudication proceedings and the revenue did not challenged said findings. Further when the grinding unit has surrendered the benefit under Notification No. 39/2001 - CE, there is no reason to deny credit to the Appellant unit in terms of Rule 7 of Cenvat Credit rules, 2004 - credit allowed.
CENVAT Credit - input services - port service, wharfage - dredging services - Misc. services - nature of service not known - manpower service in respect of Jetty - denial of manpower service on the ground that not available as it has got no connection with the manufacture of final product - telephone and mobile services - denial on the ground that it cannot be established that the mobile phone are used for manufacturing operations conducted by clinker unit and the landline phones installed in head office and other places are used in manufacture and clearance of final products of clinker unit - repair and maintenance services - HELD THAT:- The issue in no more res-integra in the light of Hon’ble Apex Court judgment in case of Maruti Suzuki Ltd. M/S. MARUTI SUZUKI LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-III [2009 (8) TMI 14 - SUPREME COURT] and Hon’ble High Court judgment in case of CCE, NAGPUR VERSUS ULTRATECH CEMENT LTD., [2010 (10) TMI 13 - BOMBAY HIGH COURT] and M/S. COCA COLA INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, PUNE-III [2009 (8) TMI 50 - BOMBAY HIGH COURT] wherein it has been held that all activity related to business are covered under the definition of Input Service. There is no dispute about the fact that all the impugned services has been used for business activity of Appellant and hence, we do not find any reason to deny credit - credit allowed.
CENVAT Credit - input services - GTA services received for transportation of clinker from clinker unit to grinding unit - outward transportation - benefit of abatement under N/N. 32/2004 – ST dt. 31.12.2004 - HELD THAT:- Credit allowed relying on the decision in the case of M/S SANGHI INDUSTRIES LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) [2019 (2) TMI 1488 - CESTAT AHMEDABAD] - credit allowed.
CENVAT Credit - input services - dredging service - denial on the ground that it has no connection with manufacture of final products - HELD THAT:- The same was in respec of jetty in the factory premises and is used for transportation as well as import and export of goods. Since the services are related with the business of the company, the Appellant are eligible to avail credit of the same - Credit allowed.
CENVAT Credit - manpower services - operation and maintenance services received for Power Plant - denial on the ground that power plant is situated outside the factory premises and the power so produced is supplied not only to clinker unit but also to grinding unit and residential colonies of Appellant and office - HELD THAT:- Credit is allowed placing reliance in the case of COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, AURANGABAD VERSUS ENDURANCE TECHNOLOGY PVT LTD [2015 (6) TMI 82 - BOMBAY HIGH COURT] - credit allowed.
CENVAT Credit - input services - Inspection of cement, sampling and analysis work for cement, clinker cement testing, cement packing loading work, cement stevedoring and cargo handling work, cement vessel operation at Kandla and wharfage and DLB Charges, Advertisement of cement in print media are related to grinding unit - HELD THAT:- Credit allowed placing reliance in the case of C.C.E. INDORE VERSUS M/S. KRITI INDUSTRIES (I) LTD. [2017 (1) TMI 382 - CESTAT NEW DELHI] - credit allowed.
CENVAT Credit - credit denied in respect of service tax paid by the service provider which is more than prescribed 10.2% - HELD THAT:- The assessment at the end of the service provider has not been challenged. The Appellant has paid the amount of service tax charged to them. In such case, the credit cannot be denied to them - Credit allowed.
Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 527 - CESTAT KOLKATA
CENVAT Credit - capital goods installed within the CPP - electricity generated from such capital goods was captively consumed for the manufacture of dutiable final products - applicability of Rule 6 of the CCR - Circular dt. 23 December 2013 - HELD THAT:- The electricity generated using the capital goods, in that case, acquires the nature of an intermediate product and even if such intermediate product is exempt from excise duty, Cenvat credit on the capital goods cannot be denied in terms of para 3 of the Board Circular dated 25 September 2002 - credit allowed.
CENVAT Credit - input services used in the Captive Power Plant - Rule 6(5) of the CCR - CBEC Circular Nos. 137/203/2007 dt. 1 October 2007 and 868/6/2008-CX dt. 9 May 2008 - HELD THAT:- The Board at para 2 of its Circular dated 1 October 2017 has clarified that the purpose of identifying the 17 specified services for special dispensation is these services are similar in nature to capital goods, that cannot be apportioned for maintaining separate records. Since these input services were undisputedly used in the manufacture of electricity further used, inter alia, in the manufacture of dutiable goods within the factory premises, it cannot be said that such services were exclusively used in the manufacture of exempted goods - the treatment to these services in so far as credit is concerned can be no different than capital goods - credit allowed.
CENVAT Credit - iron and steel articles used for repair and maintenance of capital Goods - time limitation - HELD THAT:- Having audited the records for the relevant period earlier and accepted the orders dropping the demand raised during the said period, full facts were within the knowledge of the department and Revenue now cannot claim suppression on the part of the Appellant while issuing the subsequent Notice dated 30 April 2014, with which we are concerned in the present proceedings, to justify invocation of extended period of limitation. The Commissioner misdirected himself in negating the challenge to invocation of extended period on the ground that the same set of invoices were not covered by the earlier proceedings - the demand on this count is set aside being barred by limitation.
Scope of SCN - CENVAT Credit - clearance/Sale of scrap and waste - Rule 3(5) of the CCR - HELD THAT:- The Commissioner has clearly travelled beyond the Notice in so far as he holds that even if it is assumed that sold waste and scrap were not capital goods and the provision of Rule 3(5A) was not applicable still the Appellant was liable to pay duty under Section 11A of the Central Excise Act. In the absence of any allegation in the Notice that such waste and scrap was the result of the manufacturing process, the demand for central excise duty could not sustain - demand set aside.
Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 525 - CESTAT KOLKATA
CENVAT Credit - inputs were cleared as such by the supplier - credit denied for the reason that the subject goods has not been manufactured by the supplier - Rule 3(5) of the CENVAT Credit Rules, 2004 - HELD THAT:- As per Rule 3(5) of the CENVAT Credit Rules, 2004, which deals with the bought out goods, states that when inputs or capital goods are removed ‘as such’ from the factory of the manufacturer, the manufacturer shall pay an amount equal to the credit availed in respect of such input or capital goods and such removal shall be made under the cover of central excise invoice in the manner prescribed in Rule 9 of the said Credit Rules. Further, as per Rule 3(6) of the Credit Rules, the amount paid under aforesaid Rule 3(5) shall be eligible as CENVAT credit as if it was a duty paid by the person who removed such goods - Therefore, in view of the specific provisions contained in Rule 3(5) and 3(6) aforesaid, the appellant company receiving input from the supplier who has removed the said goods ‘as such’ (being bought out goods) is legally entitled to credit even if the said goods have not been manufactured by the supplier.
Thus, the appellant is legally entitled to avail credit on inputs which though not manufactured by the supplier, has been removed by the supplier on the strength of duty paid excise invoice particularly in the fact of the case that goods have been physically received by the appellant for use in manufacture.
The entire proceedings against the appellant for denial of credit, there is no allegation or finding that the appellant has intentionally availed irregular credit with ulterior motive or that the credit has been availed wrongly in collusion with the supplier. In absence thereof, denial of credit would be harsh and highly unwarranted - credit is legally eligible and therefore the impugned demand is set aside.
Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 523 - CESTAT CHENNAI
CENVAT Credit - duty paying invoices - fake invoices - it was alleged that M/s. Star Delta Exim P. Ltd. was issuing invoices without supply of goods - denial of cross-examination - HELD THAT:- The foremost argument put forward by the ld. counsel is that though the investigation is initiated from M/s. Star Delta Exim P. Ltd., the supplier of the goods, he has not been made a party to the present proceedings. The evidence gathered by the department in the investigation done at the end of M/s. Star Delta Exim P. Ltd. has been used to issue a Show Cause Notice to the appellant herein. The appellant cannot have any knowledge of the accounts or the activity of the supplier and would not be in a position to challenge the allegations if the said supplier is not a party to the proceedings initiated against the appellant.
The department does not have a case that during the said dates the appellant did not manufacture finished goods. In the statement of Shri Pawan Kumar, director of M/s. Star Delta Exim P. Ltd. relied by the department, it is clearly stated that he was issuing fictitious invoices on commission basis to Chandra Proteco Ltd. - The Show Cause Notice has even then been issued merely relying upon the statement of the proprietor of Happy Transport. When the department has relied strongly on the statement of the proprietor of Happy Transport as well as that of Pawan Kumar, Director of M/s. Star Delta Exim P. Ltd., they ought to have given an opportunity for cross-examination of these witnesses. There are no plausible explanation put forward by the adjudicating authority for denying the cross-examination.
The Hon'ble High Court of Punjab & Haryana in the case of G-Tech Industries Vs. Union of India [2016 (6) TMI 957 - PUNJAB & HARYANA HIGH COURT] has emphasized the need for cross-examination of the witnesses when the statements are relied by the department.
The credit availed by the appellant is in order. There is no evidence put forward by the department to establish that appellant has availed credit on fictitious invoice. The department has failed to prove the allegations alleged in the Show Cause Notice - Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 522 - CESTAT NEW DELHI
Classification of goods - Beneficiale Liquid - DSN capsules - whether classifiable under CETH 2106 or under 3004? - Area Based exemption - N/N. 49/2003-CE dated 10.6.2003
HELD THAT:- From the perusal of the two entries, it is clear that the goods will be classified under the heading 2106, only if the products are not covered under Chapter heading 3004 of the Central Excise Tariff. It is the contention of the Appellant that their product is covered under the definition of medicament on the ground that these products are used for cure/treatment of diseases and being regularly prescribed by the medical practitioners. The Appellant has also produced the affidavit on this behalf, from the various medical practitioners along with the prescriptions. The prescription indicates that two products in question, namely DSN capsules and Liquid Beneficiale, are being prescribed by the medical practitioners in treatment of diseases to booster immune system. The products are prescribed by the doctors for removal of condition of weakness and also to boost immunity of the patients along with other medicines.
The entry that is Chapter 2106, which is relied upon by the Revenue is only residuary entry. The product which is more appropriately classified under the specific headings has to be preferred before resorting to classification of goods in the residuary entry. It is also a fact that merely because the product can be used otherwise it will not be become the foods supplement.
The adjudicating authority in the impugned order has held that the Appellant was not having the drug licence during the impugned period. However, the same is found to be incorrect, in view of submissions made by the learned Advocate and also by the production of copies of Drug Licence which proves the fact of having the valid licence for the manufacture, of the products namely ‘DSN Capsules’ and ‘Liquid Beneficiale’ - We are in agreement with the contention raised by the learned Advocate that the drug licence is issued under generic name and not in the trade name of the drugs manufactured. This fact is evident from the Drug Licence and also the composition of the products of the two drug licences.
There is no justification of classification of the two products in question under heading 2106, but they are appropriately classifiable under Tariff Heading 3004 of Central Excise Tariff Act - As we held the goods are classified under Heading 3004 of CETA, the Appellant would be entitled for the benefit exemption from central excise duty under Notification No. 49/2003 - appeal allowed - decided in favor of appellant.
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2019 (12) TMI 520 - CESTAT MUMBAI
CENVAT Credit - By-product/exempt goods - Bagasse - non-maintenance of separate account for inputs and input services for manufacture of dutiable and exempted products - Rule 6(3) of CENVAT Credit Rules, 2004 - HELD THAT:- The issue has already been settled by the Hon'ble High Court of Allahabad in Balrampur Chini Mills Ltd v. Union of India [2019 (5) TMI 972 - ALLAHABAD HIGH COURT] wherein the Hon'ble High Court observed that provisions of Rule 6 of CENVAT Credit Rules, 2004 are not applicable to the facts of the case.
The appellant is not liable to pay 6% of the value of bagasse cleared by them - appeal allowed - decided in favor of appellant.
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