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Central Excise - Case Laws
Showing 1 to 20 of 668 Records
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2021 (12) TMI 1495 - CESTAT AHMEDABAD
CENVAT Credit - by-product - Ammonium Sulphate arising during the course of manufacture of final product, namely, Potassium Cyanides, Sodium Cyanides - Applicability of Rule 6(3) of Cenvat Credit Rules - HELD THAT:- The issue is that whether Ammonium Sulphate is a by-product and whether Rule 6(3) is applicable in respect of clearance of such by-product. This issue has been considered by this Tribunal in the appellant’s own case of M/s Hindustan Chemical Company, wherein the Tribunal has held that The appellant through technical certificates/opinions has fairly established that during the course of manufacture of finished goods, what emerges is Ammonium Sulphate as a by-product and no contrary opinion/evidence adduced by Revenue.
In view of the above decision of this Tribunal since the issue has been settled that Ammonium Sulphate being a by-product arising in the course of manufacture of final product, the demand under Rule 6(3) is not applicable.
The impugned order is set aside - appeal is allowed.
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2021 (12) TMI 1402 - CESTAT AHMEDABAD
Levy of penalty under Rule 26 of Central Excise Rules, 2002 - Levy of personal penalty on Director - fraudulent availment of cenvat credit without receipt of the inputs - HELD THAT:- it is clear that since the appellant company has fraudulently availed the credit without receipt of the goods, it is not possible without the knowledge of the Director, therefore, the Director is directly involved in the fraudulent availment of credit by his company. Therefore, he is correctly liable for penalty under Rule 26.
However, the penalty from Rupees Two Lakh to Rupees One Lakh.
Decided partly in favor of appellant.
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2021 (12) TMI 1314 - CALCUTTA HIGH COURT
Retention of documents seized in course of search and seizure proceedings - whether the respondents concerned are entitled to retain the documents, if the same are not relied upon documents in view of Rule 24A of the Central Excise Rule, 2002 - HELD THAT:- Petition are are disposed of by directing the Respondent No.2/Adjudicating Authority to consider the case of the petitioner for return of the documents, which the Adjudicating Authority does not want to rely upon and return the same to the petitioner as per Rule 24A of the Central Excise Rules, 2002 after giving opportunity of hearing to the petitioner and considering its submission, the Respondent No.2/ Adjudicating Authority, if comes to a conclusion that the documents, which the petitioner are asking for return are not to be relied upon in adjudication proceedings in question.
The whole exercise must be completed by the Respondent No.2/ Adjudicating Authority concerned within four weeks from the date of communication of this order.
Petition disposed off.
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2021 (12) TMI 1302 - CESTAT AHMEDABAD
Refund claim of excise duty - rejection on the ground of time limitation as the same was filed after stipulated time period of one year from the relevant date - goods were eligible for exemption Notification No. 108/95-CE dated 28.08.1995 - HELD THAT:- The stand of the appellant is that the duty which was paid not actually payable in terms of N/N. 108/95-CE therefore, the amount paid is not duty but deposit accordingly, the time limit as provided under Section 11B would not apply.
There is no dispute that at the time of clearance of the goods, the appellant have paid the excise duty subsequently, they realize that duty was not payable in terms of N/N. 108/05-CE however, the nature of duty so paid would not change, it is the duty only which was paid by the appellant and when it is so then the limitation provided under Section 11B would clearly apply. As the fact reveals that the refund claim was filed beyond one year from the relevant date, the same is time bar.
This Tribunal being creature under the statute is governed by the same statute wherein statutory time limit has been provided under Section 11(B), therefore, the statutory time limit provided by the act cannot be ignored. Their Lordships in the various High Courts have inherent power to relax the time limit but this Tribunal has no power to do the same - the refund being clearly time bar, was rightly rejected by the lower authorities.
Appeal is dismissed.
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2021 (12) TMI 1231 - CESTAT NEW DELHI
Principles of natural justice - Clandestine removal - want of corroborative evidence - non-compliance of Section 9D of Central Excise Act - main contention of the appellant is the denial of opportunity of hearing and denial to cross examine Shri Brajesh Singh - HELD THAT:- Pursuant to the directions of remand vide Final Order No. 57092/2017 dated 12.9.2017, the original adjudicating authority had given the opportunity to cross examine Shri Brajesh Singh. The notice was served to the parties on three different occasions. It was served on available address but were returned by the postal authorities as undelivered. The appellant himself at the time of personal hearing on December 13 had acknowledged that said Shri Brajesh Singh was untraceable. The said Brajesh Singh was the appellants’ ex-employee but got untraceable due to which the appellant were neither able to contact him nor were in position to provide his alternative address. The department also reflected its inability to trace said Brajesh Singh. It is under said circumstances that the Original Adjudicating Authority proceeded to decide the matter on merits, in compliance of the directions of remand.
In the given circumstances, it was the duty of the appellant to make said Shri Brajesh Singh available or at least Shri Abhishek Nandwani and Shri H K Nandwani for their cross examination. But the appellant, apparently had not taken any such step. These circumstances, in my considered opinion, amounts to sufficient compliance of the aforesaid provision on the part of the authorities. The absence of the cross examination of the person from whom the incriminating documents were recorded and those whose statements were recorded cannot diminish the evidentiary value in the given circumstances, thus has to read against the appellant. Evidentiary value of the notebooks recovered at the time of search, these being prepared by Shri Brajesh Singh and Shri H K Nandwani therefore, cannot be denied.
There is no apparent denial for the entries on those private note books to not to have been accounted in the books of accounts of the appellants nor any other such document is produced by the appellants which may prove that the entries of those Notebooks do not pertain to the appellant’s day today business. There is no retraction of the statements by Shri Abhishek Nandwani and Shri H K Nandwani. The statements recorded rather have clear admission that entries in the note books as were seized are with respect to such transactions which were not regularly entered in books of accounts and for which the transactions generally were in cash.
Appeal dismissed.
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2021 (12) TMI 1148 - CESTAT NEW DELHI
Recovery of CENVAT Credit - fraudulent availment of CENVAT Credit on the strength of Cenvatable invoices - reliance placed on statements recorded by the third parties upon the documents recovered from the third party premises - Rule 11 of Central Excise Rules, 2002 - penalty on on Shri Pradeep Kumar Aggarwal whose statement has mainly been relied upon - HELD THAT:- There is no evidence to prove that the appellant have not received material from M/s. Sypher Impex Alloys Pvt. Ltd through the invoices No. 67, 69 and 90 dated 8.6.2012, 10.6.2012 and 2.7.2012 respectively. Irrespective Shri Yogesh Singh Director would have been involved in the practice of issuing fake invoices for permitting the purchasers of raw material to have fraudulent CENVAT Credit but there is no iota of any positive evidence for involvement of the present appellant in the said fraudulent availment. The Department has failed to falsify the statement of Shri O P Sharma and to falsify the documents produced by them for proving the transactions of impugned invoices as genuine.
Resultantly it stands clear that the confirmation of demand against the appellant has been confirmed based on the third party evidence. Since the sole challenge to the order is its reliance upon third party evidence, it is necessary to check the evidentiary value of the third party evidence - It is well settled law that there has to be some concrete evidence which would show clandestine manufacture of goods, as was reiterated by Tribunal, Delhi in the case of C.C.E. & S.T. -RAIPUR VERSUS P.D. INDUSTRIES PVT. LTD. [2015 (11) TMI 455 - CESTAT NEW DELHI].
The document recovered from the appellant premises shows that the appellant had maintained a record about the invoices being received from various companies whereupon the appellant has availed the Cenvat Credit. Merely because the company issuing invoice was found non-existent, the appellant could not be denied the availment of Cenvat Credit thereupon unless and until his involvement in terms of his knowledge about such non-existence and about the invoice to be bogus is not proved on record. Otherwise also there is no denial that the appellant has cleared his final product on payment of duty. In such circumstances and that the invoices were containing all the particulars as are required under Rule 9 of Cenvat Credit Rules and that the appellant was also making the record of all those details. The allegations based on the statements given by other manufacturers, first or second stage dealers or even by the transporters cannot be read against the appellant - Once assessee is found to have acted with all reasonable diligence in its dealings within the meaning of Rule 9 (3) of Cenvat Credit Rules, 2004 will amount to casting an impossible or impractical burden on the assessee and same would be contrary to the rules.
Levy of penalty on Shri Pradeep Kumar Aggarwal - HELD THAT:- The companies involved herein i.e. High Tides Infra Project Pvt. Ltd., RMS Steel Tech Pvt. Ltd., Jetking Trading and Agencies, Singh Materials & Infratech etc. were the companies in the said decision wherein it has been held that when sufficient document is produced by the appellant to prove the physical entry of inputs in the assessee’s premises along with the ledger account and RG-23 A Register maintained by the assessee along with the invoices. the burden is upon the Revenue to prove that it was merely a paper transaction and goods were not received by assessee appellant. It was held by this Tribunal in the said Final Order that Revenue has failed to produce such a record. Per contra, there is apparent compliance of Rule 9, CCR 2004 on part of the appellant. The allegations based on the fact that manufacturers as that of M/s.High Tides Infra Project Pvt. Ltd are found non-existent have been set aside.
The entire case of the Department is on the basis of statements of witnesses who were never allowed to be cross examined by the present appellants. There is no other material with the Revenue to justify its findings against the appellants. Withholding the opportunity to cross examination to the appellants definitely amounts to violation of principles of natural justice and the statutory mandate of section 9D of Central Excise Act, 1944 which becomes another reason for nullifying the impugned order.
Hon’ble Apex Court has also in the case of ANDAMAN TIMBER INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II [2015 (10) TMI 442 - SUPREME COURT] has held that non compliance of the provisions of section 9D and section 33 of Central Excise Act, 1944 nullify the order confirmed in demand.
Appeal allowed - decided in favor of appellant.
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2021 (12) TMI 1147 - CESTAT MUMBAI
CENVAT Credit - eligibility to avail suo moto Cenvat Credit of Central Excise duty, without sanction by the proper department - invocation of extended period of limitation contained in the proviso to Section 11A of the Central Excise Act, 1944 - HELD THAT:- The period in dispute involved in this case is October 2005 and the show cause notice was issued on 09.03.2009 i.e. much after the normal period prescribed under Section 11A ibid. Insofar as invocation of the proviso to Section 11A ibid is concerned, it has been mandated that only in the eventuality of happening of fraud, collusion, wilful mis-statement etc., such proviso clause can be invoked and not otherwise. On perusal of the case records, it is found that the availment of suo moto Cenvat Credit was highly disputed at the material time, which was subsequently settled by the Larger Bench of the Tribunal in the case of BDH INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX. (APPEALS), MUMBAI-I [2008 (7) TMI 78 - CESTAT MUMBAI].
Since, the appellant had entertained the bona fide belief at the time of taking suo moto Cenvat Credit that it is entitled for the same as per the statutory provisions, in my considered view, the charges levelled against them regarding involvement in the activities, concerning fraud, collusion, wilful mis-statement etc., cannot be sustained.
Hon’ble Delhi High Court in the case of COMMISSIONER OF C. EX. VERSUS WONDERAX LABORATORIES, IPL. [2007 (10) TMI 388 - DELHI HIGH COURT] has held that when conflicting views were taken with regard to interpretation of Notification etc., the proviso clause appended to Section 11A ibid cannot be invoked, justifying recovery of the short levied duty etc. beyond the normal period of limitation.
The department in this case has not specifically adduced any evidence to substantiate that the appellant had really indulged into fraudulent activities in wrongly availing the Cenvat Credit - the extended period of limitation invoked in this case for initiation of show cause proceedings cannot stand of judicial scrutiny.
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2021 (12) TMI 1108 - CESTAT NEW DELHI
CENVAT Credit - part of opening balance of Cenvat credit relatable to the receipt of capital goods in the previous year - whether (being made partial amount) disallowance for ₹ 2,83,137/- have been rightly made alongwith imposition of equal penalty? - HELD THAT:- There is no discrepancy and the whole confusion has occurred on account of clerical error in the account/store section of the appellant who initially submitted the figures to the audit, wherein this amount of ₹ 2,83,137/- was left out erroneously. Thus, it is found that the show cause notice is misconceived and there is no merit in the allegation of Revenue.
Appeal allowed - decided in favor of appellant.
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2021 (12) TMI 1047 - BOMBAY HIGH COURT
CENVAT Credit - input service - transportation of employees by a manufacturer from their designated pick up points to their workplace, by Bus - service for personal use or consumption of any of the employees - activity of providing bus transport services to its employees, at the cost of the Manufacturer, to reach factory in time and the expenses incurred by the Manufacturer in providing such service, (which amount is taken into consideration, while determining the final price of the product) - renting of motor vehicle, which is Capital Goods for Service Provider - HELD THAT:- Considering the effect of definition of “input service” after 01.04.2011 it was found that establishment of such canteen was primarily for personal use or consumption of the employees and after such amendment no cenvat credit could be availed. This view has been upheld by the Hon’ble Supreme Court in TOYOTA KIRLOSKAR MOTOR PRIVATE LIMITED VERSUS THE COMMISSIONER OF CENTRAL TAX [2021 (12) TMI 420 - SC ORDER] while dismissing the Special Leave Petition on 18.11.2021 preferred by the said appellant - The facts of the present case also indicate that the facility of transportation provided by the appellant to its employees was merely in the nature of service for personal use or consumption of its employees.
The decisions relied upon by the learned counsel for the appellant are clearly distinguishable. In THE PRINCIPAL COMMISSIONER VERSUS M/S. ESSAR OIL LTD. [2015 (12) TMI 1062 - GUJARAT HIGH COURT] there was no dispute by the Department in that case that the services consumed by an assessee were related to various stages of its manufacturing and business activities. The same is not the case herein.
The Tribunal did not commit any error whatsoever in disallowing cenvat credit to the appellant after 01.04.2011 in view of the amended provisions. The service provided was mere in the nature of personal service to its employees which is not permitted to be treated as “input service” - the substantial questions of law as framed are answered against the appellant - Appeal dismissed.
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2021 (12) TMI 1013 - BOMBAY HIGH COURT
Appropriate forum - High Court or Supreme Court - issue of limitation - Decision in rem or in personam - maintainability of appeal before this Court when there is no dispute with regard to the rate of duty and / or valuation as arrived at by the Tribunal (both parties accept the decision of the Tribunal on that issue) and challenge the impugned order only to the extent of the demand being barred by limitation - whether the only issue of limitation which is subject matter of the Central Excise Appeal would lie before this Court under Section 35G or before the Hon’ble Supreme Court under Section 35L of the said Central Excise Act? - HELD THAT:- A comparative reading of Sections 35G and 35L of the said Act would clearly indicate that the order passed by the Appellate Tribunal on the issue of determination of any question in relation to the rate of duty of excise or to the value of goods for the purposes of assessment is maintainable under Section 35-L before the Hon’ble Supreme Court only. Under Section 35L(2), it is expressly clarified that the determination of any question having a relation to the rate of duty shall include the determination of taxability or excisability of goods for the purposes of assessment.
It was also observed in the said case of STEEL AUTHORITY OF INDIA LTD. VERSUS DESIGNATED AUTHORITY, DIRECTORATE GENERAL OF ANTI-DUMPING & ALLIED DUTIES & OTHERS [2017 (4) TMI 881 - SUPREME COURT] that before admitting an appeal under Section 130E(b) of the Customs Act, 1962 (which is pari materia to Section 35L of the Excise Act), the question raised or arising must have a direct and/or proximate nexus to the question of determination of the applicable rate of duty or to the determination of the value of the goods for the purposes of assessment of duty and that this is a sine qua non for the admission of the appeal before this Court and such question must involve a substantial question of law which has not been answered or on which there is a conflict of decisions. It was further held in this case that if the tribunal, on consideration of the material and relevant facts, had arrived at a conclusion, the same must be allowed to rest even if this Court is inclined to take another view of the matter.
Any decision on the issue whether the revenue could have invoked the extended period of limitation for recovery of the excise duty, or would not have any bearing or impact on the rate of duty of excise or to the value of goods for the purposes of assessment. Such determination on the issue of limitation would also have no bearing on the issue of determination of taxability or excisability of goods for the purposes of assessment - the issue of limitation in this case being purely question of fact or atmost mixed question of fact and law disclosed in decision of the Tribunal would thus not be a decision in rem but has to be in personam. No appeal against the order of the Tribunal in this situation would lie before the Hon’ble Supreme Court under Section 35L of the said Act.
Upon careful perusal of the said exclusion to Sections 35G and 35L minutely, it can be noticed that expression ‘determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment’ prescribed under Sections 130 and 130E of the Customs Act is in pari-materia to Sections 35G and 35L of the said Central Excise Act. Interpretation of both these provisions i.e. Sections 130 and 130E of the said Customs Act fell for consideration before the Hon’ble Supreme Court in case of NAVIN CHEMICALS MFG. & TRADING CO. LTD. VERSUS COLLECTOR OF CUSTOMS [1993 (9) TMI 107 - SUPREME COURT] wherein it is held that the phrase ‘relation to’ is ordinarily, of wide import but, in the context of its use in the reading Section 129C, must be read to mean a direct and proximate relationship to the rate of duty and to the value of goods for purposes of assessment. The Hon’ble Supreme Court held that the questions relating to the rate of duty and to the value of goods for purposes of assessment are questions that squarely fall within the meaning of the expression ‘a dispute as to the classification of goods and as to whether or not they are covered by an exemption notification relating directly and proximately to the rate of duty applicable thereto for purposes of assessment’.
In the facts of this case, order of Tribunal holding that the revenue could not have invoked the extended period of limitation for recovery of excise duty from the respondent-assessee purely based on the finding of facts inter-se and would not fall within the purview of public importance falling under Section 35L of the said Act. In this case, it is not the case of the respondent-assessee that the issue of limitation decided by the Tribunal would involve the question of any general/public importance - the issue as to whether the revenue could have invoked the extended period of limitation for recovery of excise duty being a question of fact and/or a mixed question of fact and law, only such order cannot be impugned before the Hon’ble Supreme Court under Section 35L of the said Central Excise Act.
The issue of limitation raised in this Central Excise Appeal has no direct or proximate relationship to the rate of duty and the value of goods for purposes of assessment. Only such questions which relate to the rate of duty and the value of goods for purposes of assessment would squarely fall within the meaning of the said expression ‘determination of any question having relationship to the rate of duty and to the value of goods for the purposes of assessment - the adjudication on the said issue of limitation in the Central Excise Appeal filed by the revenue under Section 35G before this Court even remotely, would not determine either the rate of duty of excise or the value of goods for the purposes of assessment. The order, if any passed in appeal under Section 35G would also not determine the taxability or excisability of the goods for the purposes of assessment. The provisions of Sections 130 and 130E of the Customs Act are in pari-materia to Sections 35G and 35L.
A party may seek to challenge only that part of the order of the Tribunal which relates to questions other than those relating to the rate of duty or the value of the goods for the purposes of assessment. In the facts of this case, the revenue could challenge only part of the order having aggrieved on the issue of limitation. The appeal thus filed by the revenue is maintainable under Section 35G of the said Act before this Court. In this case, the issue of recovery of excise duty and issue of rate and classification of dispute decided by the Tribunal against the respondent-assessee has attained finality. It is not the case of the revenue of challenging any portion of the order selectively though aggrieved by the larger part of the order or entire order.
An appeal under Section 35G(1) of the Act would be maintainable before this Court when there is no dispute with regard to the rate of duty and / or valuation as arrived at by the Tribunal (both parties accept the decision of the Tribunal on that issue) and challenge the impugned order only to the extent of the demand being barred by limitation.
Appeal is maintainable against the respondent in this Court - Appeal allowed - decided in favor of appellant.
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2021 (12) TMI 1012 - CESTAT NEW DELHI
Clandestine Removal - three fake invoices - absence of any evidences regarding transport of goods - corroborative evidences produced or not - HELD THAT:- The findings in the order under challenge are held to be nothing but presumptive. There is observed absolute ignorance of the statement in cross-examination of alleged kin-pin Shri Amit Gupta and the transporter Shri Sanjeev Maggu. There is no other relevant evidence to prove the Departments case. Rather there is statement of Shri D.P. Sharma, Senior Manager of M/s. Aggarwal Metals Pvt. Ltd. as was reorded on 24.05.2017 which is relevant w.r.t. the impugned three invoices of M/s. V.K. Enterprises. He specifically deposed that M/s. Agrawal Metals used to purchase copper scrap from V.K. Enterprises against the payments either by RTGS or by Cheques. He has outrighly denied the invoices to be mere cenvatable without delivery of goods. He also denied receiving any cash from M/s.V.K. Enterprises of the amount sent by them through RTGS/Cheque. This deposition clearly falsifies the presumptive alleged modus-operandis.
Law has been settled that mere statements are not sufficient to prove clandestine removal - Admittedly, there is no other evidence on record so as to relate to the clandestine activities of the assessee.
Appeal allowed - decided in favor of appellant.
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2021 (12) TMI 1011 - CESTAT KOLKATA
CENVAT Credit - both manufacture of taxable goods and provision of exempted service - proper procedure of Rule 6 of the CCR, 2004 not followed - Rule 6(3) of the CCR, 2004 - period 2012-13 to 2016-17 - extended period of limitation - HELD THAT:- It is seen that the Range Superintendent vide its report dated 23/07/2019 at page number 395 of the appeal paper book had provided a detailed report as to the compliance of Rule 6 of CCR, 2004 by the Appellant for the period covered in the SCN and it has been held that the Appellant was in compliance with the procedures laid down and that there has been excess reversal in the years 2014-15 to 2016-17 by the Appellant - the SCN was issued by the Audit Commissionerate to verify the contentions of the Appellant and accordingly the ld. Commissioner adjudicating the case should have taken into account the submissions of the Appellant from pre SCN stage and the report dated 23/07/2019.
It is found from the records that the Appellant has complied with all the provisions of Rule 6 of the CCR, 2004 and that there is no further reversal required for the period under dispute. It is also noted that for 2012-13 and 2013-14, the entire Cenvat credit of the Appellant stood reversed and adjudicated vide OIO dated 21/06/2016 which had attained finality as no appeal against the same had been preferred by the Department.
Extended period of limitation - HELD THAT:- Also for the period 2014-15, the department had issued a spot memo for Rule 6 of CCR, 2004 on 29/09/2015 wherein the SCN has been issued on 04/09/2018 much after the expiry of normal period of limitation. There is no ground on which the demand can be raised by invoking extended period of limitation as all the documents were at the disposal of the Department since 2015 itself and hence the entire demand also fails on the ground of limitation.
The demand of Cenvat credit cannot be sustained both on merits and on limitation and is accordingly set aside. Since demand of Cenvat credit is set aside, penalty and interest are also not sustainable - appeal allowed - decided in favor of appellant.
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2021 (12) TMI 1010 - CESTAT KOLKATA
Clandestine removal of the finished excisable goods from the factory - MS bars and rods - MS angles - MS flats - MS rolls - rolling waste - allegation mainly based on the statement of employees - corroborative evidences present or not - wilful misstatement and suppression of facts - period 18.12.2011 to 31.08.2012 and from 01.10.2012 to 23.07.2013 - HELD THAT:- The entire plank of the case rests on the private loose documents/ Papers which were recovered and seized during searches on 24.07.2013 and the statements of Sri Vijay Kumar Sinha, Sri Prabhat Kumar Singh (both being employees of Appellant no.1) and Shri Sudhir Kumar Garg Appellant no. 2. It is an admitted position that the premises of Alok Raj Associates located at 212, Ashiana Tower, Exibition Road, Patna which is being referred to by the department as the “secret office‟ of Appellant no.1, belongs to Shri Alok Chaudhary. Private documents were recovered and seized from this premises, but no statement of Shri Alok Chaudhary was recorded either on 24.07.2013 or at any point of time subsequent to the search - There is nothing on record to suggest or indicate that attempts were made to record the statement of the said Shri Alok Chaudhary who was available.
Although these documents contain verifiable clues, no attempts appear to have been made to make inquiries with the persons whose names appear on them. No inquiries appear to have been made with regards to the vehicle numbers featuring on them. No transporter was called to affirm the quantity and the description of the goods transported by the vehicle numbers found mentioned on those private documents - The appellants requested for cross-examination of all those persons whose statements were recorded as well as the Panchas, which were relied upon by the Revenue. However, none of them could be presented by the Revenue for cross examination by the appellants.
No positive independent tangible evidence have been produced by the Revenue to substantiate the statements recorded during investigation and the entries made in the private documents which are undoubtedly unsigned, bearing no indication in any form that they relate to the appellant No.1 - specific description of the finished excisable goods alleged to have been clandestinely removed are also not found mentioned on the unsigned handwritten loose private records/documents, and as a result of which the amount of duty alleged to have been evaded and confirmed by the impugned order appears to be vague, in the realm of conjecture.
On a careful evaluation of the submissions and arguments put forth by both the sides, it can be held that the Revenue has failed to discharge the burden to prove the case of clandestine removals of finished excisable goods by the appellants beyond doubt by collecting and producing independent corroborative tangible evidences to sustain their claim/findings - appeal allowed - decided in favor of appellant.
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2021 (12) TMI 1009 - CESTAT AHMEDABAD
CENVAT Credit - cap and brush exported - common input service used for clearance of manufactured goods as well as trading goods - pure trading activity or a manufacturing activity in terms of Rule 6(3)? - requirement of reversal of credit under Rule 6(3) of CCR - HELD THAT:- The trading goods, i.e. cap and brush was procured by the appellant duly duty paid and the same was exported. Since the appellant has not taken the cenvat credit, they were neither required to pay the duty nor to execute bond for export, therefore, for export of such trading goods no bond was executed.
This issue has come up before the Hon’ble Bombay High Court that whether to allow the benefit of 6(6)(v) execution of export bond is compulsory or otherwise, the Hon’ble Bombay High Court in case of REPRO INDIA LTD. VERSUS UNION OF INDIA [2007 (12) TMI 209 - BOMBAY HIGH COURT] clearly held that in case of non-dutiable goods or exempted goods, even though export was not made under bond, benefit of Rule 6(6)(v) cannot be denied and consequently, Rule 6(3)(b) is not attracted.
It is settled that even though the goods are exported without bond, the benefit of Rule 6(6)(v) is available to the assessee, and consequently, Rule 6(1), (2), (3) And (4) shall not attract - Appeal allowed - decided in favor of appellant
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2021 (12) TMI 958 - CESTAT KOLKATA
Clandestine removal - rolled products i.e. MS Angles, MS Channels, MS Plates, MS Rods etc. classifiable under Chapter 72 of the Central Excise Tariff Act - issue of ‘question of fact’ - HELD THAT: In the instant case, the entire case of the Revenue is based on the Kaccha Chithas seized from the residence of the Director. The manner in which the said Kaccha Chithas is seized has been strongly agitated by the Appellant. The said Kaccha Chithas/documents should have been seized in the presence of the Director. There is considerable force in the contention of the Appellant that the Kacha Chithas relied upon by the Revenue cannot be a basis to uphold the serious charge of clandestine clearance. It is settled legal position that charge of clandestine clearance is a serious charge and the onus to prove the same is on the Revenue by adducing concrete and cogent evidence. In the absence of corroborative evidence, the issue of fact i.e. in the present case “the charge of clandestine clearance” cannot be leveled against the assessee.
In the entire proceedings, no evidence, much less corroborative evidence, has been adduced to show that input goods hae been procured to manufacture goods for clandestine clearance. No efforts have been made by the investigating agencies to establish the existence of any unaccounted manufacturing activity in the form of unaccounted raw material, shortage of stock, shortage of raw material/finished goods, excess consumption of electricity, unaccounted labour payments, interrogation of buyers/transporters or any incriminating record/document to suggest any flow back of cash etc. The Revenue authorities in this case have failed to discharge the burden of proving the serious charge of clandestine clearance or undervaluation with cogent and clinching evidence. It has been consistently held that no demand of clandestine manufacture and clearance can be confirmed purely on assumptions and presumptions and the same is required to be proved by the Revenue by direct, affirmative and incontrovertible evidence.
The learned Commissioner made a fundamental error by making assumptions only just to confirm the demand on the allegation of clandestine clearance. It is a well settled position of law that serious allegation cannot be made merely on assumptions and presumptions and in the absence of detailed supporting evidence, the charge of clandestine removal cannot be upheld.
Appeal allowed - decided in favor of appellant.
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2021 (12) TMI 957 - CESTAT KOLKATA
Clandestine Removal - excess production in respect of CPC over and above the ER 1/ER 4 return - It is the case of the Appellant that the duty can only be demanded in the present case if the basic allegation of clandestine removal is proved against them, which has not at all been discussed or touched upon by the Ld. Adjudicating Authority - time limitation - HELD THAT:- The Appellant has been able to produce the relevant reconciliations to explain the differences in clearance figures as per ER 1 and as per form 3CD which was on account of inclusion of 7031.42 MT twice by considering the conversion from CPC ROK to CPC Screen and CPC fines in captive consumption details and yield of finished products both in the annexure to the Tax Audit report.
The demand has been raised for the period 2013-14 in 2018 onwards whereas the spot memo was issued by the Department in 2016 itself. No explanation has been furthered by the Department in respect of such gross delay in proceeding with the matter. Therefore, invocation of the extended period of limitation is not justified.
Thus, demand of excise duty only on assumptions and presumptions in quantity of clearance of finished goods figures of Tax Audit form 3CD and ER 1 cannot be sustained both on merits and on limitation and is accordingly set aside - appeal allowed - decided in favor of appellant.
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2021 (12) TMI 956 - CESTAT KOLKATA
CENVAT Credit - Coal - CVD/excise duty at the rate of 1%/2% - Notice proceeds on the basis that if Cenvat credit of Central Excise Duty on coal cleared at the concessional rate of 1% under Notification No. 1/2011-CE dated 1 March 2011 as amended vide Notification No. 12/2011-CE dated 17 March 2012 was not available to the user then the credit of CVD on imported coal cleared at the rate of 1%/2% also should not be available as CVD is only aimed at counter balancing excise duty.
HELD THAT:- There is no restriction in these notifications unlike Sl. No. 67 of Central Excise Notification No. 12/2012 dated 17 March 2012 in so far as the availment of Cenvat credit on coal is concerned. The credit of CVD is available under Rule 3(1)(vii) of the CCR and the proviso to Rule 3(1)(i) restricting credit in case of coal cleared under Excise Notification No. 12/2012 dated 17 March 2012 cannot impliedly be read into when the rate of CVD has not been borrowed from the excise notification but has a generally applied rate on its own. There is considerable merit in the contention of the Appellant that there is no room for any intendment in taxing statutes which deserves a strict interpretation. Even otherwise generally applied rate of CVD (1% upto 28 February 2013 and 2% thereafter under the Customs notification) and the concessional excise duty rate on domestically manufactured goods (1% all throughout without Cenvat under the excise notification) were not uniform and in any event, the expression “equivalent” appearing in Rule 3(1)(vii) of the CCR for quantification of CVD could not be restricted ignoring the tariff rate of excise duty of 6% on domestically manufactured coal.
Identical issue decided in the case of JAYPEE SIDHI CEMENT PLANT VERSUS COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX, CUSTOMS AND EXCISE, JABALPUR [2019 (7) TMI 250 - CESTAT NEW DELHI] where it was held that the adjudicating authority has committed a legal error while denying the benefit of reduced CVD on imported coal while placing reliance upon the Excise notification for manufacture of coal.
Appeal allowed - decided in favor of appellant.
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2021 (12) TMI 955 - CESTAT CHANDIGARH
CENVAT Credit - input - paint - erection, commissioning and installation was done by their Delhi office but tower and paints were supplied by the appellant at site - HELD THAT:- It is a fact on record that the paint which has been procured by the appellant have been supplied alongwith tower and the value of the paint has been included in the value of tower on which duty has been paid. In that circumstances, relying on the decision of AJRI ENGINEERING INDUSTRIES PVT LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-II [2014 (3) TMI 833 - CESTAT MUMBAI], where it was held that the appellant is entitled to take cenvat credit on the paint. Further, I hold that the paint is essential for safeguard of tower; therefore, it is an accessory which do qualify as input in terms of Rule 2(k) of Cenvat Credit Rules, 2004.
CENVAT Credit allowed on paints - appeal allowed - decided in favor of appellant.
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2021 (12) TMI 954 - CESTAT AHMEDABAD
Entitlement to reduced penalty - total amount deposited at the time of investigation is much more than the confirmed duty demand, interest thereon and 25% penalty - Department's contention is that since the appellant have not opted for reduced penalty in writing therefore, 100% penalty will remain payable and accordingly the refund was supposed to be reduced by the amount of 100% penalty instead of 25% penalty - HELD THAT:- The Adjudicating authority while sanctioning the refund even though the appellant informed not to deduct the penalty as they are contesting the matter before the appellate authority, sanction the refund from the amount after deducting the confirmed duty, interest and 25% penalty. The amount deducted by the Assistant Commissioner was deposited and retained by the department right from the day it was deposited till the refund was sanctioned. Therefore, at the time of passing the adjudication order on demand case and even up to the 30 days from the date of such order the amount of confirmed duty, interest thereon and 25% penalty stands deposited with the department. Therefore, there is no reason to deny the benefit of a reduced penalty of 25% to the appellant even though the appellant had not opted but the fact remains that the amount remains very much with the department and the appellant’s request of deducting 100% penalty was not exceeded by the department that itself shows that the department has retained the amount of confirmed duty, interest thereon and 25% penalty not only within a period of 30 days from the date of the said order but much before than therefore, the compliance of the Section 11AC(1) (e) stands complied with . Therefore, the appellant was entitled for a 25% reduced penalty.
The Adjudicating authority’s order granting refund after reducing the confirmed demand, interest thereon and 25% penalty out of total deposit of ₹ 2.35 Crores is absolutely correct and legal - appeal allowed - decided in favor of appellant.
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2021 (12) TMI 905 - BOMBAY HIGH COURT
Maintainability of petition - requirement of pre-deposit of 7.5% of the penalty imposed - violation of Rule 10A of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - HELD THAT:- The petitioners were getting the job of manufacturing/ fabrication of steel done on job work basis from MEPL. MEPL would use self-procured items/inputs as well as items/inputs received “free of cost” from the petitioners to manufacture excisable goods. It is alleged that MEPL was manufacturing excisable goods on job work basis for the petitioners and discharging duty liability as per the contracted price between it and the petitioners, however, the petitioners were issuing commercial invoices to their ultimate costumers for the same excisable goods at higher price as compared to the contracted price.
There is nothing on record to indicate that the duty liability of ₹ 45,29,528/- claimed by the petitioners is accepted by the respondents. The petitioners proceed on the footing that the petitioners supplied goods having duty liability as claimed by them and therefore, penalty is excessive. To arrive at the conclusion that the petitioners supplied goods having the duty liability as contended by them obviously necessitates a fact finding exercise.
The requirement for 7.5% pre-deposit of the penalty demanded cannot be said to be exorbitant or onerous, more so when it is well settled that when a statute confers a right of appeal, while granting the right, the legislature can impose conditions for the exercise of such right, so long as the conditions are not so onerous as to amount to unreasonable restrictions.
There are no reason to entertain the present writ petitions in view of the availability of the alternative statutory remedy of appeal - petition dismissed.
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