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Central Excise - Case Laws
Showing 1 to 20 of 106 Records
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2020 (2) TMI 1672 - TRIPURA HIGH COURT
Withdrawal of tax concessions - benefit in terms of the promise for grant of exemptions - HELD THAT:- The Supreme Court in case of Union of India & Ors. v. Unicorn Industries [2019 (9) TMI 791 - SUPREME COURT] which squarely covers this issue against the respondents, where it was held that the withdrawal of the exemption to the pan masala with tobacco and pan masala sans tobacco is in the larger public interest. As such, the doctrine of promissory estoppel could not have been invoked in the present matter. The State could not be compelled to continue the exemption, though it was satisfied that it was not in the public interest to do so.
Appeal is disposed of accordingly.
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2020 (2) TMI 1661 - GUJARAT HIGH COURT
Principles of natural justice - non-grant of opportunity for cross-examination of the witnesses - Reliability of statements of witnesses - HELD THAT:- The Court is of the view that the order, which has been rendered is essentially based upon the statements, which have been relied upon by the department, then the persons making those statements were required to be permitted to be cross-examined by the petitioner.
In the instant case, this Court also do not propose to examine any other aspect or merits, else it would not be proper thereafter to remand the matter and as the counsel for the respondents also could not controvert or dispute the settled proposition of law and as it is also not disputed that the statements, which have been taken into consideration for casting the order, the persons making those statements have not been permitted to be cross-examined on the perception that the same was only a delaying tactic - Therefore, without observing anything further on the merits, the order is required to be quashed and set aside only on the ground of authority’s denial to grant cross-examination, as requested, had vitiated the order and, therefore, the concerned respondent no.2 shall afford an opportunity to cross-examine the persons, authorities, whose statements have been relied upon as well as the officers involved in the investigation and cast the order afresh after applying mind to the facts and circumstances of the case and it may be observed at this stage that so far as other merits are concerned, the Court has not gone into and it would be absolutely appropriate to the authority to apply its mind and pass appropriate order as expeditiously as possible.
Petition disposed off.
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2020 (2) TMI 1605 - CESTAT MUMBAI
Recovery of CENVAT credit - documentation that was not consistent with the requirements prescribed in rule 9 of CENVAT Credit Rules, 2004 - period from April 2009 to August 2009 - HELD THAT:- The identical controversy dealt with by Commissioner of Central Excise, Nashik has upheld the eligibility for CENVAT credit despite the alleged deficiencies. In doing so, reliance was placed on the decision of the Tribunal in EVEREADY INDUSTRIES INDIA LTD. VERSUS COMMISSIONER OF C. EX., LUCKNOW [2006 (11) TMI 521 - CESTAT, NEW DELHI] and of the Hon’ble High Court of Delhi in COMMISSIONER OF CENTRAL EXCISE VERSUS PRIYADARSHINI CABLE LTD. [2005 (1) TMI 127 - HIGH COURT OF DELHI AT NEW DELHI]. Furthermore, the decision of the Tribunal in ACE TYRES LTD VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX, HYDERABAD-IV [2017 (2) TMI 533 - CESTAT HYDERABAD] on identical facts, has also held that CENVAT credit cannot be denied.
Penalties - HELD THAT:- With the demand being unsustainable in consequence, the penalties imposed on the assessee as well as the individual also fail.
Appeal allowed - decided in favor of appellant.
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2020 (2) TMI 1574 - GUJARAT HIGH COURT
Area Based Exemption - exemption under Notification No. 30/2004-C.E. - absolute or conditional in nature - lapse of credit lying unutilised - unutilized Cenvat credit lying in balance related to capital goods and input service, can be demanded or not - HELD THAT:- Once the Tribunal has come to the conclusion that refund which was granted to the respondent-assessee has become final in view of Rule 6(6) of the Rules, 2004, lapsing of Cenvat credit provided under Rule 11(3) related to goods already exported would not be applicable. Therefore, invocation of Rule 11(3) of the Rules, 2004 is rightly held to be not applicable in the facts of the case.
The questions of law proposed by Revenue cannot be termed as substantial questions of law - Appeal dismissed.
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2020 (2) TMI 1491 - CESTAT KOLKATA
Reversal of CENVAT Credit or not - irregular Cenvat credit of Cess on custom duty - levy of interest - HELD THAT:- On perusal of the entire case records, it is seen that the Appellant has done the said reversal from the opening balance of Cenvat credit in ER-1 return of the month of May 2014 which has already been verified and hence in my considered view, there is no further reversal required in the matter. Hence the demand to the extent of ₹ 94,120/- as confirmed by the ld. Commissioner (Appeals) deserves to be set aside accordingly.
Demand of Interest - HELD THAT:- The Appellant has asserted that it had sufficient credit balance in its account and also produced a Chartered Accountant certificate for the same. Based on the applicable provisions under Rule 14 of the CENVAT Credit Rules, as was in force during the period from April 2012 to March 2013, it is held that the Appellant is not required to pay any interest.
The Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE, MUMBAI- I VERSUS M/S BOMBAY DYEING & MFG. CO. LTD [2007 (8) TMI 2 - SUPREME COURT] has held that where before the utilization of the credit amount, if the entry is reversed, it amounts to not taking credit. Once the credit is reversed before its utilization in the Cenvat account it does not amount to taking of credit. Thus, the provisions of Rule 14 of Cenvat Credit Rules and Section 11AB of the Act are not attracted and neither the penalty nor the interest is chargeable.
Since the appellant had sufficient credit balances as noted above, in any case, there would be no loss of Revenue to the exchequer. Therefore, the imposition of interest in the present proceedings cannot sustain and hence, the same is set aside - Appeal allowed - decided in favor of appellant.
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2020 (2) TMI 1429 - SC ORDER
Refund of Excise Duty - Time Limitation - relevant date - pre-deposit - Whether payment towards Excise duty can be construed to be payment made towards pre-deposit? - It was held by the High Court that The amounts were paid involuntarily and, therefore, are deemed to be under protest and should be considered as deposits deserves to be rejected - HELD THAT:- There are no ground to interfere with the impugned order(s)passed by the High Court.
SLP dismissed.
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2020 (2) TMI 1381 - SC ORDER
Maintainability of appeal - appropriate Forum - Section 35G(1) of the Central Excise Act, 1944 - whether the issue relates to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment as would bar jurisdiction of this Court?
HELD THAT:- Issue notice, returnable in four weeks.
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2020 (2) TMI 1380 - CESTAT, BANGALORE
Levy of Excise Duty - affixation of Brand name or not - Commissioner, in the order impugned before the Tribunal observed that mere embossing of initials of the raw material supplier cannot be equated with affixing of a brand name and, therefore, concluded that no duty could be imposed as it could not be said that brand name had been indelibly fixed - HELD THAT:- Heading 7113 contained in Chapter 71 of Central Excise Tariff deals with articles of jewellery and parts thereof, of precious metal or of metal clad with precious metal. Under the sub-headings of Heading 7113, the rate of duty prescribed is 14%. However, the notification dated 1 March, 2005 reduces the rate of duty under Heading 7113 to 2% for articles of jewellery on which brand name or trade name is indelibly affixed or embossed on the articles of jewellery itself. ‘Brand name or trade name’ has been defined in the Explanation to mean, a name or a mark, such as a symbol, monogram, label, signature or invented words or any writing which is used in relation to a product, for the purpose of indicating a connection in the course of trade between the product and some person using such name or mark with or without any indication of the identity of that person.
The Circular dated 4 March, 2005 issued by C.B.E. & C., after referring to the speech of the Finance Minister that excise duty of 2% would be levied on branded jewellery only, clarified that for attracting excise duty, the article of jewellery must be marketed and sold under a brand name. Three illustrations have also been given in the said Circular dated 4 March, 2005. The first illustration is of a case where a jeweller “ABC Jewellers” gets his articles of jewellery from job workers who put a mark/sign/initials on the article of jewellery. This is only to identify that the article of jewellery was received from a particular goldsmith and, therefore, would not be a branded jewellery. The second illustration is of “ABC Jewellers”, while selling articles of jewellery to customers, puts a distinctive sign/mark/initials on the jewellery. This again was said to be for the purpose of identification so that when the jewellery is returned to ABC Jewellers, it can recognize the jewellery as its own. In such a case also, jewellery is not sold under a brand name and will not attract duty. The third illustration is when “ABC Jewellers” advertises and sells its products under a brand name “Star”.
It, therefore, clearly transpires that excise duty of 2% can be levied only on articles of jewellery on which brand name or trade name is indelibly affixed or embossed on the articles of jewellery. ‘Brand name’ or ‘trade name’ has been clearly explained in the Notification dated 1 March, 2005 and the Circular dated 4 March, 2005 issued by the C.B.E. & C. Each case would, therefore, have to be examined on its own facts to determine whether a particular name or mark or symbol that is affixed or embossed on the article of jewellery is a brand name or not.
What has to be seen in each case is whether the brand name or trade name, which could be a mark used in relation to the product, indicates a connection in the course of trade between the product and some person using such name or mark with or without any indication of the identify of that person.
The papers may, therefore, be placed before the Division Bench concerned with the aforesaid opinion of the Larger Bench for deciding the appeals on merit.
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2020 (2) TMI 1373 - MADRAS HIGH COURT
100% EOU - Rebate claim - It was the contention of the Department that the petitioner was not entitled to rebate claim under Rule 18 of the Central Excise Rules, 2002 as the goods on which excise duty was paid by the petitioner were exempt from payment of excise duty in terms of N/N. 24/2003-C.E., dated 31-3-2003 and exemption did not apply to such goods if brought to any other place in India - HELD THAT:- The petitioner was not required to pay excise duty in terms of Notification No. 24/2003, dated 1-4-2003. As per the said notification all excisable goods produced manufactured in an Export-Oriented Undertaking was exempt from whole of duty leviable thereon under Section 3 of the Central Excise Act, 1944 and additional duty of excise leviable thereon under Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and additional duty of excise leviable thereon under Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978. Only exception under the above exemption notification was under the proviso - The proviso was admittedly not applicable to the facts of the present case. As per Section 5(1A) of the Central Excise Act, 1944, the petitioner could not have paid excise duty. Therefore, the petitioner could not have also paid excise duty goods export to claim rebate.
As a “Export Oriented Unit” the petitioner would have been entitled to receive goods without payment of duty under various Customs as Central Excise Notification. Export-oriented units being engaged in generation of foreign exchange for the country have been exempt from payment of duty not only on their procurements but also on final products which are exported. Not only goods used by them are exempt in terms of Notification No. 22/2003-C.E., dated 31-3-2003 but also the final products are exempt under in terms of Notification No. 24/2003-C.E., dated 31-3-2003. The benefit of Notification No. 24/2003-C.E., dated 31-3-2003 conferred on export-oriented units has however resulted in a disability to the petitioner inasmuch as the petitioner procured goods on payment of excise duty and additional duty of customs and allowed such duty to be accumulated in their Cenvat Account. Had the petitioner availed the benefit of Notification No. 22/2003-C.E., dated 31-3-2003 there would have been no such accumulation.
Since 100% EOU like the petitioner are entitled to procure goods without payment of duty under Notification No. 22/2003-C.E., dated 31-3-2003 but had procured on payment of duty, the amount of duty paid can be directed to be refunded back to the petitioner as no duty was payable by them even otherwise - the respondent are directed to ascertain the amount that has remained unutilised in view of the denial of rebate claim and refund the same to the petitioner within a period of three months from date of receipt of a copy of this order - petition disposed off.
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2020 (2) TMI 1372 - MADRAS HIGH COURT
Rebate Claim - petitioner challenged the order denying rebate of Central Excise duty all the way up to the 1st respondent, the Joint Secretary Revision Application, New Delhi under Section 35EE Central Excise Act, 1944 - Rule 18 of the Central Excise Rules, 2002 - period August to September 2009 - HELD THAT:- The petitioner has opted to pay Excise duty in terms of the Notification No. 29/2004-C.E., dated 9-7-2004. Therefore, it cannot be said that the organic cotton yarn exported by the petitioner was not liable to Excise duty so as to deny the benefit of rebate claim under Rule 18 of the Central Excise Rules, 2002 - Notification No. 30/2004 is a conditional notification which allows the manufacturer to clear the goods at nil duty provided no credit is availed on inputs of capital goods under the provisions of the Cenvat Credit Rules, 2002.
As per sub-clause (1A) to Section 5A of the Central Excise Act, 1944 in case of excisable goods which is fully exempt from payment of excise duty the manufacturer cannot be [levied] Excise duty. However, in the facts of the case it is noticed that organic cotton yarn is exempt under Notification No. 30/2004-C.E., dated 9-7-2004 under a conditional notification which the petitioner has not fulfilled - It is the choice of the manufacturer whether to opt for the benefit of one of the notification. It cannot be forced on the petitioner merely because the revenue would stand to gain by denying rebate of central excise duty paid on the exported organic cotton yarn under Rule 18 of the Central Excise Rules, 2002.
The fact that the petitioner had availed Cenvat credit on the inputs and capital goods and debited the same itself shows that the petitioner was not entitled to the benefit of Notification No. 30/2004-C.E., dated 9-7-2004 - Since the petitioner has utilised Cenvat credit for discharging Excise duty on the final product, show that the petitioner was therefore incapable of availing the benefit of Notification No. 30/2004-C.E., dated 9-7-2004.
The denial of rebate of Central Excise duty paid by the petitioner on the exported goods under Rule 18 of the Central Excise Rules, 2002 cannot be sustained - 2nd respondent is therefore directed to pay the rebate of excise duty paid on the exported organic cotton yarn within a period of 45 days from the date of receipt of copy of this order together with interest under Section 11BB of the Central Excise Act, 1944 - petition allowed.
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2020 (2) TMI 1253 - CESTAT AHMEDABAD
Demand of duty on Sulphur purchased - N/N. 12/2012-CE dated 17 March 2012 - use of Sulphur for manufacture of Sulphuric Acid/Oleum which in turn is used in the Urea Plant for manufacture of Molten Urea - Revenue’s objection is that the some quantity of Molten Urea is used as input for the manufacture of Malamine and therefore, the appellants are not entitled to benefit of notification.
HELD THAT:- Molten Urea which comes into existence is itself a chemical fertilizer, as held by Hon’ble Apex Court in the appellant’s own case GUJARAT STATE FERTILIZERS CO. VERSUS COLLECTOR OF CENTRAL EXCISE [1997 (2) TMI 105 - SUPREME COURT] - there are no merit in the Revenue’s case in so far as the use of Sulphur in manufacture of Urea is concerned - Exemption in respect of Sulphur used in manufacture of Urea is allowed.
Use of Sulphur in the manufacture of Sulphuric Acid/Oleum which in turn used in Caprolactam Plant - HELD THAT:- Caprolactam is manufactured along with Ammonium Sulphate, which is undisputedly a chemical fertilizer, and therefore, the appellant would be entitled to avail benefit of Notification No. 12/2012-CE in respect of use of Sulphur which in turn used in the manufacture of Ammonium Sulphate - The impugned order seeks to distinguish this decision on the ground that Ammonium Sulphate produced by the appellant in this stream is only a bye-product and Caprolactam is main product.
Revenue neutrality - HELD THAT:- A small quantity of Hydrozylamine Sulphate (HX/HAS) sold by the appellant and they have admitted their liability in respect of duty free Hydroxylamine Sulphate sold by them in the open market on payment of duty and their argument is only Revenue neutrality - in so far as demand of duty on Sulphur used in the quantity of Hydroxylamine Sulphate sold by them in the open market needs to be confirmed.
Use of Sulphuric Acid in maintaining PH balance in cooling towers - HELD THAT:- Issue decided in INDO GULF FERTILIZERS & CHEMICALS VERSUS COMMISSIONER OF C. EX., ALLAHABAD [1999 (6) TMI 80 - CEGAT, NEW DELHI] where it was held that the benefit of Notification 81/75-C.E. in respect of sulphuric acid used in the cooling tower in appellants’ unit.
Use of Sulphuric Acid in the manufacture of Phosphoric Acid (and Phospho Gypsum) which in turn used to produce Ammonium Phosphate - benefit denied on the ground that bye-product Phospho Gypsum is also manufactured and sold in the open market on payment of duty - HELD THAT:- It is not in dispute that Ammonium Sulphate is fertilizer. In this regard, the arguments in respect of Sulphuric Acid used in the manufacture of Urea would equally apply that Sulphuric Acid was in turn used for production of Ammonium Sulphate - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE, MUMBAI VERSUS M/S NATIONAL ORGANIC CHEMICAL INDUSTRIES LIMITED [2008 (11) TMI 6 - SUPREME COURT] where it was held that inevitable and automatic emergence of ethane and methane can’t be a ground for denying the exemption - benefit of exemption cannot be denied.
There are no merit in the Revenue’s arguments that benefit of Notification No. 12/2012-CE dated 17 March 2012 can be denied on the ground that during manufacture of Phosphoric Acid which in turn used in the manufacture of fertilizer and Phospho-gypsum is manufactured.
Penalty u/s 11AC - HELD THAT:- No penalty can be imposed under Section 11AC, as there is no apparent malafide intention and the issue relates to interpretation.
However, we find that liability for Central Excise duty would arise nonetheless in respect of Sulphur used in the manufacture of Phosphoric Acid which was cleared on payment of duty.
The demand except for the demand within limitation on the quantity of Sulphur used in the manufacture of Hydroxylamine Sulphate (HX/HAS) and Phosphoric Acid sold by them on payment of duty. In these circumstances the benefit of limitation is also extended - Appeal allowed in part.
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2020 (2) TMI 1252 - CESTAT AHMEDABAD
Violation of condition of N/N. 5/99 CE dt. 28.02.99, 6/2000 – CE dt. 01.03.2000 - concessional duty on clearances of sheets and pipes subject to the condition that the products should have contained not less than 25% by weight of fly ash or phosphorous Gypsum or both by usage, is denied - denial on the ground that actual weight mixtures report seized from the factory and production shown in the actual wet mixture, the goods contain fly ash less than 25%.
HELD THAT:- The exemption notification in question i.e 5/99 – CE dt. 28.02.99, 6/2000 – CE dt. 01.03.2000 and other analogues notification during the material time provided exemption to the goods falling under chapter 68 of the CETA of Description “Goods, in which not less than 25% by weight of fly-ash or phosphor-gypsum or both have been used” subject to condition of maintenance of proper accounts.
The undisputed position emerging from actual production and consumption based upon actual wet mixture reports the use of Fly ash in Sheets were above 25%. The CBEC vide Circular No. 6/92 dt. 21.10.92 clarified to maintain shift wise register for ascertaining the percentage of fly ash in final product. Vide Circular No. 477/43/99 – CX.4 dt. 10.08.99, the Board clarified that the percentage by weight of fly ash has to be calculated taking into account the weight of fly ash used with reference to the weight of the finished product in dry condition.
It is an accepted position of revenue that weight of fly ash used should be with reference to the weight of the finished product in dry condition and thus the percentage of fly ash has to be determined with respect to weight of finished goods without moisture content.
In case of ETERNIT EVEREST LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, INDORE [1999 (8) TMI 888 - CEGAT, NEW DELHI], the percentage use of raw material was Asbestos fibre 5% to 9%; Pulp 1.5% to 2%, Cement 50% to 55%, Fly ash 35 to 36%; H.G. waste 1.5% to 2%. The tribunal held that the weight of goods with respect to which the percentage has to be arrived at should be determined as if no water is contained in these goods - In the present case the raw material for use in production i.e fly ash, cement, pulp and asbestos fibre are bone dry. The water used in process has to be ignored for computing the ash percentage and weight of finished goods. Since the fly ash used in production is more than 25% as is apparent from the wet mixture content report, therefore it has to be considered that the goods fulfil the condition of the Exemption notification.
The fly ash content in sheet is more than 25% and the Appellant are eligible for the exemption on Asbestos Sheet. However in respect of some quantity of Asbestos Sheet it was admitted by the appellant that fly ash quantity is less than 25% on which duty liability comes to ₹ 2,80,000/- which is liable to be upheld - Accordingly duty demand of ₹ 21,31,29,778/- in respect of Asbestos Cement Sheet and corresponding, Interest and penalty are set aside.
Asbestos pipes - HELD THAT:- The Appellant could not establish that the contents of fly ash in asbestos pipe are more than 25%. Unlike in sheet, the use of fly ash in pipe is much lower than 25% even after excluding the water content. The appellant also not pressed much upon the issue related to pipe - the duty demand on the Asbestos Pipe shall be re-quantified after allowing the benefit of cum duty price and modvat credit.
Confiscation of Asbestos Cement pipe and sheets - HELD THAT:- The appellant in the various correspondences informed the department regarding the stage of making entries in RG-1. It is also observed that the appellant, apart from RG-1 register have been maintaining various other records such as Wet Mixture Reports, Daily Production Reports/Register, Physical Lab Register, General shift furnishing report, Stock register,RG-1 register. Maintenance of these records were not in dispute, as some of these records were relied upon in show cause notice raising the demand, therefore, it cannot be said the stock of goods not entered in RG-1 register is with intent to clear the goods without payment of duty - the adjudicating authority has erred in confiscating the goods on the pretext of non accountal of the same in RG-1 register - Confiscation alongwith redemption fine set aside.
Personal penalty imposed upon various persons related to the appellant company - HELD THAT:- The penalty was imposed commensurate to the quantum of total duty and in view of gravity of offence. The duty demand has been reduced substantially and the issue involved is of interpretation of notification, therefore the personal penalty also need to be reduced - quantum of penalty reduced.
Appeal allowed in part.
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2020 (2) TMI 1251 - CESTAT MUMBAI
CENVAT Credit - input/capital goods - M.S. Angles, M.S. Beams, M.S. Plate, M.S. Round Bar, H.R. Sheet, S.S. Plate (Cut Plate), Forged Sheet Bar, M.S. Channels used for repair/maintenance of foundation frame of Return Bagasse Carrier (RBC) - HELD THAT:- It is clear from the case records that the steel items in dispute were consumed by the appellants only for repair/maintenance of foundation frame i.e. the component of the RBC and not for laying down the foundation for RBC. They were used only for the repairing of the frame of RBC. The frame is essential part of the machine and no machinery can be installed without its frame. They can also be said to be essential accessory in a plant/factory. The repair of the said frame is also equally important alongwith the machine.
In COMMISSIONER OF CENTRAL EXCISE, RAIPUR VERSUS M/S JINDAL STEELS AND POWER LTD. [2016 (1) TMI 59 - CESTAT NEW DELHI] it has been held that the definition of ‘Capital Goods’ includes components, spares and accessories of such capital goods and applying the ‘User Test’, the structural items used in the fabrication of support structures would fall within the ambit of ‘Capital Goods’ as contemplated under Rule 2(a) hence will be entitled to the Cenvat Credit. The eligibility of various iron and steel items for Cenvat credit, when used in the fabrication of capital goods, technological structures associated with capital goods, have been subject matter of various decisions by the Tribunal. “User Test” is found to be the appropriate test to see whether the items used in the repair/fabrication of support structures would fall within the ambit of ‘Capital Goods’ as contemplated under Rule 2(a) ibid.
The steel material in question is not used for laying down the foundation of RBC but is used for the repair of its foundation frame, which by any stretch of imagination cannot be said to be part of that foundation which has been excluded from the purview of the definition of input in Rule 2(k). The appellants are therefore eligible for Cenvat Credits on those items which were rejected by the learned Commissioner.
Appeal allowed - decided in favor of appellant.
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2020 (2) TMI 1200 - MADHYA PRADESH HIGH COURT
Process amounting to manufacture or not - repacking of various excisable goods - goods were received in bulk and they were packed in individual bottles with hologram and barcodes - value addition taking place or not - HELD THAT:- Facts of the case makes it very clear that the assessee / respondent before this Court were engaged in trading and telemarketing of various goods and also in selling medicines manufactured by M/s. Davo Laboratories and Balchem Laboratories through VPP. They were also giving advertisement on television and other media. The most important aspect of the case is that the assessee/ respondent before this Court received the medicines duly duty paid from the manufacturers in a packed form mentioning therein the retail price. The undisputed facts also reveal that after receiving bottles of medicines in the packets, the assessee has just fixed the hologram and the barcode to avoid duplicity and an outercover was placed to ensure safe transportation. It certainly does not amount to the process of manufacture. It is the process which is being carried out by the Companies like Flipkart, Amazon, etc,.
The circular issued by the Board which has been referred by the Appellate Tribunal dated 08/12/2011 is very much applicable in the present case - Keeping in view the circular, there is admittedly no value addition. The goods are sold at the same MRP to the consumer. It is nobody’s case that the goods are sold above the MRP to the consumer. The goods received by the vendor are already in a prepacked form and bears necessary declaration including MRP as prescribed under the statutory provisions and they have already been subjected to Excise Duty earlier.
In the present case the respondent assessee, neither replaces nor alters the retail packet or the declaration affixed therein and, therefore, the Tribunal was justified in allowing the appeal preferred by the assessee - Decided in favor of assessee.
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2020 (2) TMI 1199 - CESTAT AHMEDABAD
Imposition of penalty u/r 15 of Cenvat Credit Rules, 2004 and Rule 26 of Central Excise Rules, 2002 - CENVAT credit - bogus invoices - case of the department is that the appellant has issued bogus invoice and no goods were sold under those invoices to M/s Kothi Steel Ltd. - HELD THAT:- The penalty under Rule 15 can be imposed only on that person who takes or utilizes the Cenvat credit. If in any case, any manufacturer who is liable to pay duty on final product wrongly avails and utilizes the credit in respect of inputs, he is liable for penalty under Rule 15 - In the present case, the appellant has neither taken the credit, nor utilized the credit, whereas he has only issued a Cenvatable invoice to some other company M/s Kothi Steel Ltd. Therefore, the Rule 15 is not applicable in the present case. Hence, penalty imposed under Rule 15 of Cenvat Credit Rule, 2004 by the lower authorities is illegal and incorrect.
Penalty imposed under Rule 26 of Central Excise Rules, 2002 - HELD THAT:- The same issue has been considered by the Hon’ble High Court of Punjab & Haryana in the case of M/S VEE KAY ENTERPRISES, FARIDABAD VERSUS COMMISSIONER OF CENTRAL EXCISE [2011 (3) TMI 133 - PUNJAB AND HARYANA HIGH COURT] which was followed by this Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE AHMEDABAD VERSUS SHRI NAVNEET AGARWAL [2011 (8) TMI 250 - CESTAT, AHMEDABAD] wherein it was held that penalty under Rule 26 (2) is imposable on the person who has issued the invoices without supply of goods.
The penalty under Rule 26 was rightly imposed on the appellant. Hence, the same is upheld - Penalty u/r 15 set aside - appeal allowed in part.
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2020 (2) TMI 1198 - CESTAT MUMBAI
Imposition of penalty u/r 26 of the Central Excise Rules, 2002 - no opportunity was given to cross-examine Riyaz Siddiqui despite the fact that mainly by relying upon his statement only, show cause notice was issued to them - principles of natural justice - HELD THAT:- The learned Commissioner has not recorded any finding that either of the Appellants had the knowledge or had a reason to believe that the goods were liable to be confiscated which is sine qua non for imposing penalty under Rule 26. Rule 26 pre-supposes the existence of knowledge or reason to believe that the goods are liable to be confiscated under the Central Excise Act or the Rules therein. As there is no finding in the impugned order to that effect, hence the imposition of penalty on the Appellants under Rule 26 is illegal and improper. Therefore, the impugned order did not bring out the existence of required ingredients attracting the provisions of the said rule.
Penalty on Suhel Roadlines - Suhel Roadlines has been penalized mainly on the basis of the statement of its proprietor Riyaz Siddiqui - HELD THAT:- Due to the non-cooperation of the said Riyaz Siddiqui the proceedings before the lower authority gets delayed. Before the Tribunal also the conduct of the said Riyaz Siddiqui is not appreciable. Although appeal has been filed on behalf of his proprietorship concern Suhel Roalines but nobody appeared to assist at the time of hearing. The plea of cross-examination of Riyaz Siddiqui, which is available to other Appellants and due to which the matter was earlier remanded by the Tribunal on 13.4.2012, is not available to M/s. Suhel Roadlines as the said Riyaz Siddiqui is its proprietor - thus, no case has been made out by Suhel Roadlines- Appellant.
Appeal allowed - decided in favor of appellant.
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2020 (2) TMI 1197 - CESTAT MUMBAI
CENVAT Credit - common input services for taxable as well as exempt goods - pressmud (a waste) - whether after the amendment to Rule 6(1) of Cenvat Credit Rules, 2004 vide notification dated 1.3.2015, pressmud (a waste) generated during the manufacturing of sugar, falls within the ambit of Rule 6 ibid and any amount is recoverable from the Appellant on clearing the said pressmud for consideration as the Appellant is not maintaining separate accounts?
HELD THAT:- Hon’ble Supreme Court in the matter of UOI vs. D.S.C.L. Sugar Ltd. [2015 (10) TMI 566 - SUPREME COURT] has laid down that that pressmud is agricultural waste of sugarcane and the waste and residue of agricultural product, during the process of manufacture of goods cannot be said to be result of any process. There is no manufacturing process involved in pressmud’s production. “Bagasse, pressmud and composed fertilizer” is not ‘goods’ but merely a waste or byproduct therefore Rule 6 of the Cenvat Rules shall have no application in the present case and they are bound to come into existence during the crushing of the sugarcane and are an unavoidable agricultural waste. The amendment dated 1.3.2015 in Rule 6 CCR has wrongly been relied upon by the authorities below in coming to the conclusion that the assessee is liable to reverse the Cenvat Credit availed by them. As per Rule 6(1) ibid read with Explanation-1, non-excisable goods which are manufactured by the manufacturer in his factory will get covered under Rule 6(1) and those goods which were not manufactured, like pressmud in these appeals, will not be covered under Rule 6 despite being non-excisable goods because pressmud is not being manufactured in the factory but it emerged as agricultural waste or residue. It is seen that Rule 6(1) was amended in order to include the inputs used in relation to the manufacture of exempted goods. As such it can be seen that the same relates to the manufacture and it can safely be concluded that there has to be a manufacturing activity for invoking the aforesaid Rule.
The Hon’ble Supreme Court in the matter of D.S.C.L. Sugar Ltd. has laid down that bagasse being an agricultural waste or residue, there could be no manufacturing activity. If that is so and if pressmud is also not manufactured, the same cannot be held to be excisable, in which case the amendment which has been relied upon by the authorities below as well as by the Revenue, would not apply. In all the decisions of the Tribunal which were cited by the learned counsel, a consistent view has been taken that ‘bagasse/pressmud’ which emerges as a waste/by-product, falls outside the scope of Rule 6 ibid.
Even after amendment to Rule 6 ibid, pressmud which emerges as a waste/ by-product, falls outside the scope of the said Rule - Appeal allowed - decided in favor of appellant.
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2020 (2) TMI 1196 - CESTAT HYDERABAD
Method of Valuation - Transaction Value u/s 4 or MRP based u/s 4A of CEA - manufacture of Butyl rubber inner tubes - Notification No. 2/2006-CE(NT), dated 01.03.2006 - HELD THAT:- The N/N. 2/2006-CE(NT), dated 01.03.2006 was amended by N/N. 11/2006-CE(NT), dated 29.05.2006, by inserting a new entry at S.No. 97, which reads as “parts, components and assemblies of automobiles”.
It is an admitted fact on record that the appellant is engaged in the manufacture of Butyl rubber inner tubes and such product by itself is separately identifiable and is a distinct Marketable product. It cannot be said that the product manufactured by the appellant is exclusively meant for the automobile industries for use as parts and components and are not capable for use in other purposes - Since the goods manufactured by the appellant are meant for use by other manufacturers also, such manufactured goods cannot be subjected to levy of central excise duty under Section 4A of the Central Excise Act, 1944.
Reliance can be placed upon the decision of this Tribunal in the case of J.K. TYRE & INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, INDORE [2018 (2) TMI 611 - CESTAT NEW DELHI], to state that no differential duty liability can be fastened on to the appellants in terms of Section 4A of Central Excise Act, 1944.
Thus, the duty liability cannot be fastened under Section 4A of the Act - appeal allowed - decided in favor of appellant.
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2020 (2) TMI 1195 - CESTAT CHENNAI
CENVAT Credit - input services - various insurance policies - Money Insurance, Public Liability Insurance, Product Liability Insurance, Loss of Profit for Unit and Fidelity Guarantee Policy - Group Personal Accident policy - HELD THAT:- The Money Insurance, Public Liability Insurance, Product Liability Insurance, Loss of Profit for Unit and Fidelity Guarantee Policy are availed in or in relation to the manufacturing activity as has been discussed by the various decisions relied by the ld. counsel for the appellant - reliance can be placed in the case of JSW STEEL (SALAV) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIGAD [2017 (2) TMI 318 - CESTAT MUMBAI] and M/S. WHEELS INDIA LTD. VERSUS COMMISSIONER OF GST & CENTRAL TAX, CHENNAI NORTH COMMISSIONERATE [2019 (7) TMI 150 - CESTAT CHENNAI] - the disallowance of credit in respect of these insurance policies is unjustified and requires to be set aside - credit allowed.
Group Personal Accident policy - penalty - HELD THAT:- The appellant has to establish that the personal accident policy is intended only for the employee and that separate premium is not collected for each dependent. Even though the matter was adjourned to this date, directing the appellant to produce copy of the policy or any other evidence to establish that separate premium has not been collected for each dependent, the appellant has failed to do so - Since the appellant has not furnished sufficient evidence, the rejection of credit in respect of Group Personal Accident policy is legal and proper - credit disallowed - taking note of the fact that the issue is interpretational one, the penalty imposed is unwarranted and requires to be set aside.
Appeal allowed in part.
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2020 (2) TMI 1194 - CESTAT MUMBAI
Valuation - inclusion of cost of advertisement incurred by the dealers in assessable value - Circular No. 643/34/2002-CX dated 1.7.2002 and Circular No. 681/72/2002-CX dated 12.12.2002 - HELD THAT:- The learned Commissioner after analyzing the Letter of Intent/dealership agreement came to the conclusion that it does not contain any enforcing provision by which it could be construed that such advertisement cost is includible in the assessable value of the motor vehicles sold to the dealers much earlier in view of the principles laid down by the PHILIPS INDIA LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, PUNE [1997 (2) TMI 120 - SUPREME COURT].
On perusal of the Letter of Intent/agreement placed on record by the respondent it is found that a plain reading of the various clauses of the said agreement does not lead to an inference that the same provides an enforceable right to the respondent in relation to advertisement and sales promotion by the dealers. Further, the Hon'ble Supreme Court in COMMISSIONER OF CENTRAL EXCISE, MYSORE VERSUS M/S TVS MOTORS COMPANY LTD. [2015 (12) TMI 874 - SUPREME COURT] while considering the includibility of pre-delivery inspection charges and after sales service charges interpreting the expression “any amount that buyer is liable to pay to”, “by reason of” or “in connection with the sale” mentioned in the definition of ‘transaction value’, observed that such charges cannot be includible in the transaction value of the goods.
Applying the principles laid down in the aforesaid judgments to the present issue of includibility of the cost of advertisement and sales promotion activity carried out by the dealers, after sale of the motor cars, this Tribunal in FORD INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI-III [2017 (5) TMI 1388 - CESTAT CHENNAI], reached at the conclusion that the cost of the advertisement incurred by the dealers cannot be added to the transaction value - No contrary judgment has been placed by the Revenue.
Appeal dismissed - decided against Revenue.
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