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Central Excise - Case Laws
Showing 21 to 40 of 88 Records
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2022 (8) TMI 1100 - SIKKIM HIGH COURT
Lack of jurisdiction of Shri C.M. Mehra, to pass the original order of adjudication in his capacity as the Commissioner of Central Excise & Service Tax, Siliguri - Admission of additional grounds before the Tribunal - HELD THAT:- The learned Tribunal has not considered the issue which was specifically raised by the respondent, M/s Perfect Technologies, in its application seeking inclusion of additional grounds in the appeal regarding the lack of jurisdiction of Shri C.M. Mehra - who at the material point of time was the Commissioner of Central Excise and Service Tax, Siliguri - to pass the original order of adjudication.
This issue is required to be answered by the learned Customs, Excise and Service Tax Appellate Tribunal, East Regional Bench, Kolkata, specifically, since it is relevant for the purpose of deciding the appeal which is pending before this Court - The cross-objection filed by the respondent, M/s Perfect Technologies is disposed off with a direction upon the learned Customs, Excise and Service Tax Appellate Tribunal, East Regional Bench, Kolkata, to decide on this issue after giving adequate opportunity of hearing to both parties.
Application disposed off - List the Tax Appeal No. 01 of 2019, under an appropriate heading immediately after the expiry of the period mentioned.
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2022 (8) TMI 1099 - CESTAT MUMBAI
Refund allowed but directed to be deposited in the Consumer Welfare Fund of India - failure to cross the bar of unjust-enrichment - HELD THAT:- It is noticed that the ground of rejection of payment to the Appellant’s account, as noted by the Commissioner (Appeals), is that Appellant had not produced any evidence, to show that the amount was shown in its Balance Sheet as ‘receivable from government’ or anything similar to it despite the fact that he himself had reproduced paragraph 10 of the order passed by this Tribunal in the case of COMMR. OF CUS., BANGALORE VERSUS MOTOROLA INDIA PVT. LTD. [2006 (4) TMI 390 - CESTAT, BANGALORE] wherein it was held that bar of unjust enrichment would not be applicable to the amount deposited during investigation, basing on which he had set aside the order of Adjudicating Authority that the limitation period prescribed for seeking of refund of tax will not be made applicable to the Appellant’s case as it was an amount deposited and not discharged against tax liability.
The findings of the Commissioner (Appeals) that unless the deposited amount is shown in the Profit & Loss Account of the Appellant as amount receivable, doctrine of unjust enrichment would be established, is erroneous.
The order passed by the Commissioner of Central Tax (Appeals-I), Pune is hereby modified to the extent that the refund amount sanctioned and directed to be deposited in the Consumer Welfare fund of India is to be refunded to the Appellant and not to the Welfare Fund - Appeal allowed.
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2022 (8) TMI 1098 - CESTAT CHANDIGARH
Area Based Exemption - new products which were manufactured/added by the appellant after the cut-off date i.e. 31.03.2010 - benefit of N/N. 50/2003-CE dated 10.06.2003 - fulfilment of conditions of the Exemption Notification or not - HELD THAT:- It would be seen from the Circular dated 22.12.2010 regarding the scope of Notification dated 10.06.2003 that the provisions of the Notification dated 10.06.2003 do not place a bar or restriction on any addition/modification in the plant or machinery or on the production of new products by an eligible Unit after the cut-off date and during the exemption period of ten years. In all such cases, the benefit of the excise duty exemption under the Exemption Notification would continue to be available to an eligible industrial Unit, though, the period of exemption would remain to be ten years.
In the present case, the appellant had set up new plant and machinery for manufacture of new products and, therefore, the appellant was eligible to avail the exemption for the residual period on the new products also.
The appellant had not set up a new Unit and there was only a diversification of production capacity by adding new machines. The old products were continued to be manufactured, in addition to the new products. The fact that the investment for the new products was very large and the percentage of production of the new product was also very large cannot be made a ground to deny the benefit of the Exemption Notification dated 10.06.2003 to the appellant - In the present case, neither there was a charge in the show cause notice nor there is a finding in the impugned order that the old products and the new products had separate manpower or finances. It has, therefore, to be considered as a single Unit.
Appeal allowed - decided in favor of appellant.
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2022 (8) TMI 1090 - BOMBAY HIGH COURT
Inordinate delay on the part of respondents in adjudicating 16 Show Cause Notices - breach of principles of natural justice - classification of goods - electrical grade insulating papers - to be classified under Chapter heading 48.11 or Chapter heading 85.46 of the Central Excise Tariff Act - applicability of N/N. 64/88 dated 1st March 1988 as amended by N/N. 54/89 dated 1st March 1989 - HELD THAT:- After 31 years, petitioner having approached this Court impugning the show cause notice, cannot be made to suffer an order to facilitate conclusion of the proceedings which, because of the inordinate delay in its conclusion, is most likely to work out prejudicial to them.
It would only be reasonable for petitioner to proceed on the basis that department was not interested in prosecuting the show cause notices and had abandoned it. If respondents wanted to keep the show cause notices alive, they should have strictly followed the instructions given in the CBE & C circular dated 10th March 2017 referred to in paragraph 10 of RAYMOND LIMITED VERSUS THE UNION OF INDIA THROUGH THE MINISTRY OF FINANCE AND ANR. [2019 (8) TMI 962 - BOMBAY HIGH COURT], where CBE & C has directed the officers of the department to formally communicate to the party that the notices which have been issued to them, are being transferred to the call book. This circular only states the obvious because one would have expected the state even in the absence of such a circular, to formally issue such communication to a party.
In this case, the show cause notices were kept in the call book not at the instance of petitioner, but by the revenue of its own accord. After having kept it in the call book, no intimation / communication was sent by respondent no.2 pointing out that the show cause notices had been kept in the call book. If only had been so communicated, petitioner would have been put to notice that the show cause notices are still alive and would be subject to adjudication after the show cause notices are retrieved from the call book on the dispute which led to keeping it in the call book, being resolved. Admittedly, this has not been done.
Petition disposed off.
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2022 (8) TMI 1089 - CESTAT CHENNAI
CENVAT Credit - capital goods - clearance of goods both for home consumption as well as for export without payment of duty - exempt goods or not - allegation of the department is that the credit availed on capital goods is not eligible prior to 10.6.2010 for the reason that the appellant has been clearing the goods both for home consumption as well as for export without payment of duty in terms of Notification No.30/2004-CE dated 9.7.2004.
HELD THAT:- N/N. 30/2004-CE dated 9.7.2004 exempts payment of duty when the goods are cleared domestically. The Corrigendum issued to the notification makes it clear that the exemption is available even if credit is availed on capital goods. In other words, this notification bars availment of credit on inputs only.
Rule 6(4) prohibits the availment of credit on capital goods which are exclusively used for the manufacture of exempted goods. The question then arises whether the availment of benefit of Notification 30/2004 would give rise to a situation that the capital goods are used exclusively for manufacture of exempted goods - It is to be noted that a manufacturer is given an option to avail the benefit of Notification 30/2004. It does not make the goods completely exempted from payment of duty. If the manufacturer avails credit on inputs, then he cannot avail the benefit of the exemption provided under Notification No. 30/2004. Rule 6(4) bars the availment of credit on capital goods which are used exclusively in the manufacture of exempted goods. As per Rule 2(d) of CENVAT Credit Rules, 2004 ‘exempted goods’ means “excisable goods which are exempt from the whole of duty of excise leviable thereon, and includes goods which are chargeable to nil rate of duty”. Thus, the goods cleared under Notification No.30/2004 without payment of duty is optional payment without duty and it cannot be said that these fall within the definition of ‘exempted goods’.
Later, the appellant had availed the benefit of Notification No. 29/2004. As per this Notification, the domestic clearances get the benefit of concessional rate of duty. The department has denied the credit availed on capital goods for the period after 10.6.2010 alleging that though the appellant has paid duty on domestic clearance but the capital goods have also been used for manufacture of exported goods. Thus, they have considered the ‘exported goods’ as ‘exempted goods’. This is legally wrong. The definition of exempted goods does not take in goods which are exported.
The issue as to whether the benefit of both the notifications can be availed and the credit on capital goods is eligible was considered by the Tribunal in the case of ST. COTTEX EXPORTS (P) LTD. VERSUS COMMISSIONER OF C. EX., LUDHIANA [2010 (1) TMI 1048 - CESTAT NEW DELHI]. The decision of the Tribunal was upheld by the Hon'ble High Court of Punjab and Haryana in COMMISSIONER OF C. EX., CHANDIGARH VERSUS ST. COTTEX EXPORTS PVT. LTD. [2011 (1) TMI 491 - PUNJAB & HARYANA HIGH COURT] whereby the appeal filed by Revenue was rejected - it was held that Under sub-rule (4) of Rule 6 of Cenvat Credit Rules, 2004, capital goods Cenvat credit is inadmissible only in respect of those capital goods which are exclusively used in the manufacture of exempted goods - in present case it cannot be said that the capital goods in question had been used exclusively for the manufacture of fully exempted finished products.
Jurisdiction - HELD THAT:- The learned AR has submitted that the writ petition filed by the appellant against the order of the Revisionary Authority is pending before the Hon'ble High Court. The said writ petition is against the order of the Revisionary Authority in regard to rebate claims. The Tribunal has no jurisdiction to consider any order passed in regard to rebate claims. However, the jurisdiction for deciding the eligibility of credit as well as application of CENVAT Credit Rules lies within the Tribunal - In the present case, the demand has been issued for recovery of credit wrongly availed on capital goods and is fully within the jurisdiction of this Tribunal.
The disallowance of CENVAT credit on capital goods is without legal or factual basis - Appeal allowed.
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2022 (8) TMI 1051 - CESTAT MUMBAI
Recovery of CENVAT Credit - contravention of rule 4(1) of CENVAT Credit Rules, 2004 by storing otherwise eligible ‘inputs' at unregistered premises and without taking statutory permission mandated under rule 8 of CENVAT Credit Rules, 2004 for the period from 1st May 2010 to 31st January 2011 - HELD THAT:- On the admitted facts, it is seen the disputed credit is attributable to ‘inputs’ stored at premises that, though not included in the registration, was pending for approval of such inclusion. Considering that the approval was granted, and though belatedly, without any objections thereto, it is cause for wonderment that such delay was tolerated by the supervisory authority. It is also no less surprising that the officials engaged in ‘EA 2000 Audit’ did not consider it necessary to ascertain the cause of such ‘unalloyed’ breach of conditions; perhaps the nomenclature, permanently linked to its conception, is responsible for depriving it of the robustness that audit should be imbued with if it is to have continued relevance. The authority concerned would do well to give some thought to this.
There is no allegation of mis-utilization of the input goods or that these were used for manufacture of non-entitled output goods.
It is not found appropriate to uphold the impugned order in the light of the factual circumstances in which inputs were stored ‘inappropriately’ - appeal allowed - decided in favor of appellant.
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2022 (8) TMI 1050 - CESTAT CHANDIGARH
Classification of goods - Zarda - to be classifiable under heading 24039910 as claimed by the Appellants or its Jarda Scented Tobacco classifiable under heading 24039930 as claimed by the revenue? - HELD THAT:- If any odoriferous substance is added to chewing tobacco it cannot change the classification form chewing tobacco to zarda scented tobacco.
Examination of test reports in the light of BIS standards - HELD THAT:- The test for moisture content percentage and Nicotin percentage are very essential to arrive at the conclusion whether the sample is of chewing tobacco or of zarda, but none of these characteristics have been referred to or dealt with by the Chemical Examiner, CRCL in her report although she had referred to the characteristics given in the Table given in BIS specification in her statement - the conclusion arrived at by the Chemical Examiner, CRCL that ‘sample has the characteristics of Jarda Scented Tobacco’ in the twelve reports of the 12 samples drawn on 3.12.2015 which have also been relied upon by the department while demanding higher rate of duty from the appellant, is without any basis.
There is also no indication in the test report as to what is the definition of jarda scented tobacco and chewing tobacco and under which parameter test of sample conducted.
The show cause notice is mainly based upon the test reports, opinion of Chemical Examiners, CRCL and also of the statements which uses the words ‘compound’. Whereas the learned commissioner while changing the classification substantially relied upon the statements of Director/Production Manager/Manager and came to the conclusion that since the appellants uses scent in their product therefore it can only be classified as zarda scented tobacco, which is totally contrary to the description by Indian Standard issued by BIS - In the instant matter neither in the show cause notice nor before the adjudicating authority or before us it is the case that the appellant have used ‘jarda scent’ in their product. Even the statements relied upon by the department nowhere mention that ‘jarda scent’ has been used by the appellant in their product. The learned commissioner mistook the pleasant odour as mentioned in CRCL test report as scent which is totally different from ‘jarda scent’, an essential ingredient for manufacturing jarda scented tobacco.
The learned commissioner has grossly erred in completely ignoring the opinion of Jt. Director, CRCL in re-test of the same samples whose earlier test reports were relied upon by the revenue in changing the classification - The Director, CRCL is the only appellate authority in respect of re-test of samples and as per records no appeal has been made to the Director, CRCL against the opinion given by the Jt. Director, CRCL and therefore the opinion of Jt. Director, CRCL is final and it cannot be brushed aside just because it is not in favour of the department. In our view, the opinion of Jt. Director, CRCL is in line with Indian Standard prescribed by BIS. He did not classify the goods but gave his technical opinion that the sample is of chewing tobacco.
The Revenue has not produced any material evidence on record to support the change of classification by them from ‘Chewing Tobacco’ under heading 24039910 to ‘Jarda Scented Tobacco’ under heading 24039930 - the learned Commissioner has also not applied his independent mind in confirming the change in the classification and rather ignored the re-test report of the Jt. Director, CRCL which is in line with the parameters prescribed by BIS.
Appeal allowed.
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2022 (8) TMI 988 - ALLAHABAD HIGH COURT
Remission of duty - leakage of the tank where molasses were stored - remission rejected on the ground that the application was not filed within the prescribed period of 24 hours as prescribed in Trade Notice No.29/2003 - manufacture of molasses - losses within the prescribed limit or not - HELD THAT:- Section 37B of the Act confers the power upon the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act to issue directions for uniformity in the classification of excisable goods or with respect of levy of excess duties.
It is on record that the petitioner was served with a showcause notice under Section 11A of the Act claiming the payment of duty and interest under Section 11AB of the Act to which a Defense Reply was submitted. It was incumbent upon the Central Excise Authorities to have considered the documents submitted by the petitioner alongwith his defense reply including the fact that the sugar mill of the petitioner was under the control of the State Authorities and of the Central Excise Authorities. There is no denial of the fact that the remission claimed by the petitioner was within the prescribed limit of 2% for remission of duty.
It is well settled that without there being a foundation to invoke a larger period of limitation as provided in the proviso to Section 11A of the Act, no orders can be passed thereupon. Even otherwise in the present case, the fact with regard to the accident was well within the knowledge of State Authorities and there was no reason for the Central Excise Authorities to have denied the benefit of remission of duty as claimed by the petitioner under Rule 21. That being the case coupled with the fact that there was no specific allegation in the show-cause notice that the assessee had not paid the duty, the orders impugned being order dated 14.10.2011 (Annexure – 1), the appellate order as well as the order-in-original are clearly not sustainable and are set aside.
It is well settled that central excise duty is payable on manufacture; although the word ‘goods’ has not been defined under the Act, it is well settled by the Hon’ble Supreme Court that for the article to be considered as ‘goods’, the same must be something which can ordinarily come to the market to be bought and sold. Once the goods are not marketable, they are not liable to duty. In the present case there is no material to allege or establish that the brown sugar was marketable and once there is no foundation to hold that brown sugar, on which the remission was claimed, was marketable goods, no question of payment of duty arises. Even otherwise, no allegation was levelled in the show-cause notice with regard to clandestine removal, which was required to be established while raising a demand under Section 11A of the Act.
The show-cause notice was served to the petitioner therein calling upon the petitioner to show-cause as to why the application for remission may not be rejected mainly on the ground that no intimation was given to the Range Officer within 24 hours as prescribed in the Trade Notice - the said issue is covered by the judgment of the Tribunal in the case of Ramala Sahkari Chini Mills Ltd. [2007 (2) TMI 59 - CESTAT, NEW DELHI], which issue has attained finality. Even otherwise, the claim of the petitioner was well within the prescribed limit of being less than 2%. Thus, there being no material to allege against the petitioner that there was any evasion of duty, the impugned orders being order dated 28.11.2013 (Annexure - 6), the appellate order dated 07.07.2011 (Annexure - 5) as well as the order-in-original dated 30.12.2009 (Annexure - 4) are not sustainable and are set aside.
Petition allowed.
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2022 (8) TMI 987 - BOMBAY HIGH COURT
Refund of unutilised accumulated CENVAT credit - denial on the ground of limitation - principles of judicial discipline - September 2004 to June 2005 - October 2006 to September 2007 - HELD THAT:- This Court in Karanja Terminal & Logistic Pvt. Ltd. V/s. Principal Commissioner of Income Tax & Ors. [2022 (2) TMI 442 - BOMBAY HIGH COURT] following the judgment of the Apex Court in Union of India and Ors. V/s. Kamlakshi Finance Corporation Ltd. [1991 (9) TMI 72 - SUPREME COURT] has held that it is of utmost importance that in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of CESTAT and the Commissioner (Appeals) is binding on respondent no.3. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority was not acceptable to the department in itself would be an objectionable phrase and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court.
The Apex Court has held that if this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws.
As there is no stay granted to the orders passed by CESTAT in the only appeal filed by petitioner and no appeal has been filed challenging the order dated 5th January 2016 of the Tribunal granting refund of Rs.1,29,60,000/- for September 2004 to June 2005 and no appeal having been filed against the 10 refund orders passed by the Commissioner (Appeals), respondent no.3 is obliged and bound to follow unreservedly the refund orders passed by CESTAT as well as the Commissioner (Appeals).
Respondents are directed to pay interest to petitioner on refund amount for the applicable period in accordance with law. The interest will be payable after the expiry of three months from the date of the original refund claim - Petition disposed off.
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2022 (8) TMI 986 - MADRAS HIGH COURT
Recovery of excise duty leviable on cotton yarn manufactured and removed captively for the manufacture of entire grey cotton fabrics - benefit of duty exemption under Notification No.22/96-CE, dated 23.07.1996 - Rule 49A of the erstwhile Central Excise Rules, 1944 - HELD THAT:- It is seen that this is the second round of litigation. Earlier the petitioner suffered an order in original No.14 of 2002 dated 28.03.2002. Thereafter, the petitioner challenged the same before the CESTAT - the petitioner again participated in adjudicating the proceedings before the Commissioner. In the meanwhile, the jurisdiction Assistant Commissioner finalized the provisional assessment, passed the assessment order dated 24.06.2011. Following the same, he had passed three refund orders. Admittedly, all the four orders never challenged by the department by way of revision. Now, the assessment finalized. The Deputy Commissioner in his letter of the year 2001 cleared the doubt of the department and the difficulty.
Admittedly, the petitioner is a composite mill, wherein, yarn is manufactured consumed captively in manufacture of both grey and process fabrics. The process fabrics are mostly dutiable and further there is exemption from paying duty on the yarn. In view of the same, in the yarn manufacture, the portion of the same is used for export. As regards grey fabric, it is exempted for clearance, hence, duty to the yarn used for this process to be paid. This calculations can be precisely made only at the time of clearance either as grey fabric or process fabric. In the impugned order, there is no discussion about considering the report of the Deputy Commissioner of the year 2001, which is followed and orders passed by the jurisdictional Assistant Commissioner, while passing the assessment order which ought to be considered before finalizing the order in original.
The matter is remitted back to the Commissioner to consider afresh the petitioner's plea from the stage of issuance of show cause notices - petition allowed by way of remand.
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2022 (8) TMI 985 - DELHI HIGH COURT
Interest on refund - relevant date from which the interest on refund will get triggered from the date of deposit or after the expiry of three months from the date when the refund application was filed? - rate at which interest should be paid - section 11BB of the Central Excise Act, 1944 - notification dated 12.09.2003 issued by the Government of India through the Ministry of Finance (Department of Revenue) - threshold limit of amount which was deposited in the course of investigation - HELD THAT:- The principal amount, therefore, which is involved in the present proceedings is Rs 25,00,000/-.
Issue notice - List the matter on 11.11.2022.
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2022 (8) TMI 984 - CESTAT KOLKATA
Process amounting to manufacture - wrongful availment of MODVAT/CENVAT Credit on CRM and Handling Services used for manufacturing CRMB and subsequently utilization of the same for payment of Central Excise duty - HELD THAT:- The Hon’ble Karnataka High Court in the case of THE COMMISSIONER OF CENTRAL EXCISE BANGALORE-V VERSUS M/S. VISHAL PRECISION STEEL TUBES AND STRIPS PVT. LTD. [2017 (3) TMI 1287 - KARNATAKA HIGH COURT] has held that when the Cenvat credit availed on the inputs stand utilized for payment of duty on the final product, there would be no requirement of reversal of the said credit even if the activity undertaken by the assessee does not amount to manufacture.
It is an undisputed position that the final product is treated as dutiable and duty is paid by the assessee. When once duty is paid by the assessee treating the activity as manufacturing activity by the Department, Cenvat credit is available and there is no question of denial of Cenvat credit.
The impugned order is not sustainable and is liable to be set aside - Appeal allowed - decided in favor of appellant.
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2022 (8) TMI 983 - CESTAT NEW DELHI
Area Based Exemption - whether the gold and silver unit which was purchased by the respondent/assessee was availing the area based exemption or not? - HELD THAT:- The tribunal in CCE & ST, DEHRADUN VERSUS M/S. PARAJ EXIM [2018 (1) TMI 1689 - CESTAT DELHI], observed that “the whole issue is whether the gold unit which was purchased by the respondent was availing the area based exemption or not” and remanded the matter to the adjudicating authority for this limited purpose. It is clear from paragraph 4 of the final order that the tribunal was aware that the respondent had purchased only the silver and gold unit from OSMI on 15 October 2015 and it is evident from paragraph 3 that this tribunal was aware that this unit was established by OSMI in October 2015 and due intimation was given to the Department.
The submission of the learned Authorized Representative is agreed upon that the tribunal had an incorrect impression that the entire unit of OSMI was transferred to the respondent and accordingly passed the final order. The final order passed by this tribunal attained finality and the matter was remanded for the limited purpose of verification of the fact as to whether the gold unit was availing the benefit of area based exemption notification or not.
Appeal dismissed - decided against Revenue.
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2022 (8) TMI 982 - CESTAT AHMEDABAD
Reversal of CENVAT Credit - empty drums and barrels - reversal of credit in terms of Rule 6 of Cenvat Credit Rules, 2004 - HELD THAT:- The issue is settled by the decision of tribunal in the case of CADILA HEALTHCARE LTD. [2022 (6) TMI 1177 - CESTAT AHMEDABAD], where it was held that In the present case, the packaging material since not arising out of any manufacturing process the same will not fall either under Sub-clause (d) or sub-clause (h) of Rule 2 of Cenvat Credit Rules, 2004. As regard explanation (2), it is only for the purpose of value of the non-excisable goods to calculate the payable amount under Rule 6(3). Since the goods does not fall under the explanation (1), explanation (2) will obviously not be applicable therefore, the charges made in the Show Cause Notice are not tenable.
The appeal is allowed.
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2022 (8) TMI 981 - CESTAT AHMEDABAD
SSI Exemption - clubbing of clearances - value of clearance of M/s. Impex Transformers, M/s. Index Marketing, M/s. Jay Power Protection Pvt. Ltd., M/s. Pruthivi Controls and M/s. Parth Electronics are includable with the value clearance of M/s. XPSPL or not - calculation of exemption limit under Notification No.8/2002-CE dated 1.3.2002 (erstwhile) and notification no.8/2003 dated 1.3.2003 for the period from 1.4.2002 to 16.5.2005 - batteries were stored in the factory premises of M/s. Xsis Power System Pvt. Ltd. and were cleared from the said factory along with UPS/Inverter/Constant Voltage Transformer or not - inclusion of value of batteries in the value of UPS/Inverter/Constant Voltage Transformer for determining the transaction value of the UPS/Inverter/Constant Voltage Transformer under Section 4 of the Central Excise Act, 1944.
Whether the value of clearance of M/s. Impex Transformers, M/s. Index Marketing, M/s. Jay Power Protection Pvt. Ltd., M/s. Pruthivi Controls and M/s. Parth Electronics are includable with the value clearance of M/s. XPSPL for calculating the exemption limit under Notification No.8/2002-CE dated 1.3.2002 (erstwhile) and notification no.8/2003 dated 1.3.2003 for the period from 1.4.2002 to 16.5.2005? - HELD THAT:- It can be seen that out of four units and the main unit M/s. XPSPL were situated in the Ramju Ice Factory Compound but each and every company/firm had a separate and independent premises with entry door. Merely because all the four units were located in one campus, this cannot be the reason for holding that all are working in one premises accordingly, all the five manufacturers had separate factories and manufacturing units. The goods manufactured by the five manufacturers were also separate, the transactions of purchase and sale among these five manufacturers were purely on a principal to principal and commercial basis. All the five manufacturers had purchased required raw material, inputs, etc. on their own. These five manufacturers had their own equipments and infrastructures as well as separate workers and employees also - The allegation of the department that Shri Zahir I Laliwala was looking after the affairs of all the units is contrary to the fact that Shri Zahir I Laliwala was not looking after any activity during the relevant period.
The most important test involving clubbing of clearance is the financial flow back and this test has to be satisfied to hold that all the company/firm are clubbable - it is found that all the five manufacturers are totally different and none of them had any financial dependence of any nature or whatsoever on the other (or with M/s.Xsis). The learned Commissioner could not adduce evidence either by showing any financial records or in the books of account that there is any financial flow back among these five companies/firms. Only because the proprietors/directors of five manufacturing firms belongs to one family or that they were related to one another, the test of mutuality of interest has not been satisfied.
Even in worst scenario than the charges made in the present case by the revenue, the various forums have held that clearances of different units cannot be clubbed and consequently, the exemption to SSI Unit cannot be denied - the value of all four units namely M/s. Impact Transformers, M/s. Index Marketing, M/s. Jay Power Protection Pvt. Ltd. and M/s. Pruthvi Controls cannot be clubbed with the value of M/s. XPSPL and consequently, each company/ firm having its clearance value within the exemption limit provided under notification are eligible for SSI exemption Notification No.8/2002-CE and 8/2003-CE.
Whether the batteries were stored in the factory premises of M/s. Xsis Power System Pvt. Ltd. and were cleared from the said factory along with UPS/Inverter/Constant Voltage Transformer? - HELD THAT:- There are force in the submission of the appellant that the batteries which were stored in the factory at the time of panchnama was batteries for Offline UPS which is inbuilt in the UPS, batteries supplied separately is only in respect of online UPS which were received and stored at the godown located at a few kilometres away from the factory at Bagh-E-Firdosh Shopping Centre. This is evident from the invoices of supplier of batteries which were addressed to the godown outside the factory of M/s. XPSPL.
The adjudicating authority has heavily relied upon the seizure of 3768 batteries which were lying in the factory on 16.5.2005 to construe that the appellants were received the batteries in the factory and clearing the same along with UPS. In this regard, it is the submission of the appellant that out of 3768 batteries, 3743 number of batteries were meant for offline UPS as the size of the batteries itself establishes that batteries of 7AH and 9AH power were meant for installing an offline UPS for which there was no dispute whereas, other 25 batteries of higher ampere were kept for testing only because it is on record and accepted by the appellant also that few batteries were kept in the factory for testing of online UPS manufactured therein - even during cross examination of the appellant’s production manager, he has confirmed the above position. With this fact, it is found that the reason for holding that the batteries for online UPS were stored and cleared alongwith UPS by the learned Commissioner is absolutely contrary to the fact hence, the contention is not acceptable.
As regard the batteries supplied with offline UPS there is no dispute as the appellants were including the value of such batteries in the offline UPS. On the appreciation of the above fact supported with various evidences, it is found that the batteries were directly supplied from the godown by the appellant company M/s. XPSPL. For this reason the value of batteries was not includible in the assessable value of UPS system.
Whether the value of batteries can be added in the value of UPS/Inverter/Constant Voltage Transformer for determining the transaction value of the UPS/Inverter/Constant Voltage Transformer under Section 4 of the Central Excise Act, 1944? - HELD THAT:- The batteries were cleared from outside without bringing the same in the factory, the value of the batteries is not includible in the assessable value of UPS/Inverter therefore, the legal issue in this regard need not be dealt with, and the same is left open.
The clubbing of value of four units with M/s. XPSPL and inclusion of value of batteries in the value of UPS, we are of the view that the entire demand is not sustainable. The learned Commissioner has imposed personal penalty on various persons under Rule 26 which are consequential to the confirmation of demand against M/s. XPSPL. Since the entire demand is not sustained, the consequential penalties on the persons shall also not sustain.
Appeal allowed.
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2022 (8) TMI 980 - CESTAT AHMEDABAD
CENVAT Credit - duty paying documents - credit on services has been denied as the appellant failed to produce original invoices or original bills of entry - photocopies of documents produced - admissible evidences or not - invocation of Rule 9 of the Cenvat Credit Rule - HELD THAT:- Rule 9 requires the appellant to maintain records of receipt and use of goods. The Rule also requires the appellant to produce the original invoice/ bill of entry. The appellant has failed to produce the bill of entry and invoices. The failure to produce original invoice or bill of entry is a procedural lapse if the appellant is able to establish that the goods are actual received and used in the factory for the purpose of manufacture of finished goods - the demand on this count is set aside and matter is remanded to original adjudicating authority to decide afresh after examining the records produced by the appellant to establish that the goods were actually received and used in the factory for the manufacture of finished goods.
CENVAT Credit - furniture procured form the quality control laboratory in the factory premises - Circular No. 943/04/2011-CX dated 29.04.2011 - HELD THAT:- The quality control is an integral part of the manufacture of goods and the furniture used in quality control lab is just like any other furniture used in factory premises and credit on same cannot be denied. The CBEC Circular cited by the appellant also supports this view - the credit under this head is allowed and demand under this head is set aside.
CENVAT Credit - GTA Services - appellant availed the GTA Services for transport of goods from factory premises to the premises of buyers - HELD THAT:- The learned counsel showed some invoices, however, from the same it was not apparent if the sale value includes the cost of transportation and if sale are FOR destination. To verify this claim of the appellant that the sales made by them are FOR destination and the GTA credit pertains to the outward transportation of their sales, the matter is remanded to the original adjudicating authority.
Service tax credit - outdoor catering service availed by the appellant - HELD THAT:- The said service is clearly an admissible service and therefore, credit on same has to be allowed - reliance placed in the case of M/S HINDUSTAN COCACOLA BEVERAGES PVT. LTD. VERSUS COMMISSIONER OF CGST & CENTRAL EXCISE, BBSR [2019 (9) TMI 747 - CESTAT KOLKATA], where it was held that The appellant is entitled to avail Cenvat credit on outdoor catering.
CENVAT Credit - rent-a-cab service availed by the appellant for movement of their employees from their residences to the factory premises and for movement of the sales and purchase teams for their official work - denial of credit on the ground of exclusion clause (B) of Rule 2(l) of Cenvat Credit Rules - HELD THAT:- Reliance placed in the case of M/S. MARVEL VINYLS LTD. VERSUS C.C.E. INDORE [2016 (11) TMI 1126 - CESTAT NEW DELHI] where it was held that the appellant would be entitled to the Cenvat Credit on service tax paid on the said services - credit allowed.
Service tax credit - maintenance of cars which were hired by the appellant for the purpose of transportation of their employees - credit sought to be denied relying on exclusion clause (BA) of Rule 2(l) of Cenvat Credit Rules - HELD THAT:- The decision of Tribunal in the case of M/S. MARVEL VINYLS LTD. VERSUS C.C.E. INDORE [2016 (11) TMI 1126 - CESTAT NEW DELHI] is equally applicable to the instant case where it was held that the appellant would be entitled to the Cenvat Credit on service tax paid on the said services, and therefore, credit under this head cannot be denied - The demand on this count is also set aside and appeal on this count is allowed.
CENVAT Credit - Hotel Accommodation Services - HELD THAT:- No specific reason has been given in the impugned order for denial of this credit - the accommodation for visiting employees as well as consultants is a necessary requirement for the purpose of manufacture and sale of goods. In these circumstances, the credit of the hotel accommodation services used for purpose of official movement of consultants, technicians and employees is admissible as input service. The demand on this count is also set aside.
The matter is remanded to original adjudicating authority - appeal allowed in part and part matter on remand.
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2022 (8) TMI 926 - CESTAT NEW DELHI
Allowance of proper interest under Section 35FF of Central Excise Act - HELD THAT:- Division Bench of this Tribunal in Parle Agro Limited [2021 (5) TMI 870 - CESTAT ALLAHABAD], wherein the amount was deposited during the stage of investigation/audit, this Tribunal have held that on being successful in appeal, interest is allowable under Section 35FF from the date of deposit till the date of refund.
Further, following the ruling of the Apex Court in the case Sandvik Asia Ltd. [2006 (1) TMI 55 - SUPREME COURT], it has been held that interest shall be payable @ 12% p.a. Further, Single Member Bench of this Tribunal in the case of Riba Textiles Ltd vs. CCE & S.T., [2020 (2) TMI 602 - CESTAT CHANDIGARH] have also granted interest @ 12% p.a. under Section 35FF.
The impugned order(s) modified to the effect that the appellant shall be entitled to interest under Section 35 FF @ of 12% p.a. from the date of deposit till the date of grant of refund - the Adjudicating Authority is directed to grant the balance amount of interest as modified herein within 45 days of receipt or service of this order.
Appeal allowed.
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2022 (8) TMI 873 - CESTAT ALLAHABAD
Classification of goods - sub-assemblies/parts of CTVS (Colour Television Sets) - to be classified under Heading 85.28 of the Central Excise Tariff, or not - extended period of limitation - penalties - interpretation of Rules 2(a) of the Central Excise Tariff - HELD THAT:- It would also be useful to contrast this Interpretative Rules 2(a) with Interpretative Rules 2(a) of the Customs Tariff, which is identical with the only difference being that instead of “removed”, the expression “presented” appears in the Customs Tariff. In regard to the applicability of rule 2(a) of the Customs Tariff to import of goods, it has been repeatedly held that until all the components of the complete article are presented together for assessment at the same point of time, rule 2(a) cannot be invoked to classify the parts as complete article. It has also been held that consignments removed/presented at different points of time from different factories cannot be clubbed together to classify the parts as complete article.
In the present case, it is not in dispute that not even a single consignment was cleared or removed from the factory of the appellant to the manufacturers containing all the parts of CTVS at the same point of time. All the consignment of sub-assemblies/parts (except for 21” Flatron) the colour picture tubes were not supplied and the colour picture tubes were always purchased by the manufacturers from the picture tubes manufacturers directly - when the consignments cleared by the appellant did not contain all the parts at the same point of time, Interpretative Rule (a) cannot be pressed into service - It is, therefore, not possible to accept the contention of the learned authorized representative appearing for the Department that complete assemblies/sub-assemblies of CTVS were supplied to the original equipment manufacturers.
Even otherwise, rule 2(a) could not have been invoked for the reason that classification of the goods in the present case would be governed by Section Note 2 to Section XVI of the Central Excise Tariff and the Rules of Interpretation would not be applicable at all - in view of Rule 1, sub-assemblies and parts cleared by the appellant are to be classified under Heading 85.29 only. Once the goods are classifiable under a particular Heading by application of the Headings and relevant section and chapter notes, the classification cannot be altered by taking recourse to the Interpretative Rules.
Penalties - HELD THAT:- Once it is held that the duty demanded in the show cause notice cannot be confirmed, penalties cannot be imposed upon S.N. Rai and Atul Tandon.
Other contentions not examined.
Appeal allowed.
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2022 (8) TMI 872 - CESTAT ALLAHABAD
Remission of central excise duty on semi-finished goods destroyed in the fire accident - goods destroyed because of fire - Commissioner observed that the documents did not reveal that the insurance claim filed by the appellant contained the element of excise of duty - Whether the party is eligible for remission of duty? - HELD THAT:- Out of the claim for remission of Rs.40,97,341.00 for both finished and semi-finished goods, the party is entitled for remission of Rs.1,19,232.00 on finished goods. Once it is established that the party is entitled to remission of duty on the goods destroyed in fire accident caused due to reasons beyond the control of the party, the demand of duty on such goods is not sustainable. I, therefore, hold that the demand of duty of Rs.40,97,341.00 on the goods, both semi-finished and finished, which were destroyed completely due to fire accident caused by Short Circuit, is not sustainable.
Whether CENVAT Credit reversed by the party was unwarranted? - HELD THAT:- The Commissioner has observed that the duty reversed by the party amounting to Rs.41,01,620.00 was correct.
Whether the party's settlement of insurance claim with respect to finished goods and semi-finished goods has any bearing on the case from revenue point? - HELD THAT:- The Commissioner clearly exceeded his jurisdiction in deciding this issue by going beyond the terms of the remand order passed by the Tribunal as all that was required to be determined by the Commissioner on remand was to verify whether the element of excise duty involved in the goods destroyed by the fire accident was paid by insurance company or not. This issue has now been decided in favour of the appellant by the Commissioner.
The order passed by the Commissioner holding that the appellant is not entitled to remission of duty on semi-finished goods, therefore, cannot be sustained and is set aside. The appellant is entitled to remission of duty availed on semi-finished goods burnt/damaged to the extent of Rs.35,60,087/- - the order dated 08 April, 2009 passed by Commissioner to the extent it denies remission of duty on semi-finished goods to the extent of Rs.35,60,086/- burnt/damaged in fire is, accordingly, set aside.
Appeal allowed.
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2022 (8) TMI 830 - CESTAT CHENNAI
SSI Exemption - clubbing of clearances - Clandestine Removal - principles of mutuality of interest - evasion of Central Excise duty by clearing the goods in the name of other units - suppression of sales turnover of M/s.VPPL - it is also alleged that M/s.VPPL though raised invoices showing discount being passed on to the customers, have not actually passed on any such discount and have suppressed the value of actual clearances - admissible evidences - HELD THAT:- In an allegation of clubbing of clearances, the main unit would have several other units (as dummy units) and the clearances of main unit would be diverted or accounted as clearances of the dummy units. In the present case, the department does not allege that goods produced by M/s.VPPL were accounted as clearances of the other units. So also, there is no allegation that raw material was purchased and accounted in the name of the small units and thereafter used for manufacture of goods by M/s.VPPL.
The main documentary evidence relied by the department is the computer printouts obtained from Income Tax Department as well as from the hard disc of the CPU seized from the factory premises of VPPL. The Ld. Counsel for appellant has argued that such computer printouts cannot be relied upon as evidence as the required procedure under Section 36B of the Central Excise Act, 1944 has not been complied by the department.
Sub-section (2) of Section 36B provides that the document seized should be accompanied by a certificate which states that the computer printout containing the statement was fed into the computer during the period over which computer was used regularly to store or process information etc. and it should contain a certificate that throughout the said period computer was operating properly. Such procedures have not been complied - The Hon’ble High Court of Delhi in the case of CCE DELHI -1 (NOW PRINCIPAL COMMISSIONER OF GST DELHI NORTH) VERSUS JINDAL NICKEL AND ALLOYS LTD & ORS. [2019 (11) TMI 122 - DELHI HIGH COURT] held that provisions of Section 36B of Central Excise Act, 1944 are mandatory and to be complied with before admitting the said printouts as an evidence.
In the present case, it is found that the department has not complied with Section 36B of the Central Excise Act, 1944 while retrieving the data from the hard disc. The provision does not say that if the documents are sent to Central Forensic Laboratory, Hyderabad, it would become admissible. Further, such documents have been compared with the photocopies of the printouts sent by the Income Tax Department to the Central Excise investigating officers. Such documents cannot be relied for confirmation of duty, when obtained without following the mandate under Section 36B of the Central Excise Act, 1944 - on perusal of records, there is no documentary evidence to show that two sets of invoices have been recovered by the department. The department has relied upon the statement of Accounts Manager Shri Gopinath. In absence of examination/cross examination his recorded statement is of no evidentiary value.
Clubbing of clearances - principles of mutuality - HELD THAT:- For clubbing the clearances, the department has to establish mutuality of interest, flow back of funds between the main unit and the alleged dummy units. For this, the department has to produce evidence that the main unit was purchasing raw material through the dummy units and also removing the finished products manufactured by them through the dummy units. It also has to be established that the dummy units do not have any existence or facilities for manufacture of goods on their own. Such evidences are absolutely absent in the present case - Merely because Shri V.Arumugasamy, his son and family members were partners in the different units cannot be a ground to say that there is mutuality of interest.
Thus, the department has been able to establish sufficient grounds for clubbing the clearances of each unit or for confirming duty against all the 6 units.
Allegation that M/s.VPPL has not passed on the discount to their customers and has thus suppressed their actual sales turnover - HELD THAT:- It is the case of the department that the sales ledgers of the customers show that they have paid to the appellants amounts including the discount. It is not convincing how the department has been able to rely upon the sales ledgers of such customers and totally discard the entries in the sales ledger of the appellants. At the cost of repetition, it has to be stated that comparison is made with the computer printouts which have already been held to be inadmissible in evidence. Thus, the department has failed to establish the allegations for confirming the duty that the appellant has not passed on the discounts to their customers.
The demand cannot sustain - appeal allowed - decided in favor of appellant.
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