|
Advanced Search Options
Central Excise - Case Laws
Showing 21 to 40 of 94 Records
-
2023 (3) TMI 1124
EOU - Clandestine Removal - evasion of huge excise duty on the clearance of goods clandestinely from the EOUs - fraudulent advance license could not have been issued - malafide intent or not - penalty under Rule 26 of CER - HELD THAT:- The appellant have admittedly issued false performance certificate to fraudulent parties who, on the basis of the said certificates obtained the advance license and such advance licenses were used for evasion of huge excise duty on the clearance of goods clandestinely from the EOUs. Without the performance certificate, the fraudulent advance license could not have been issued and huge revenue loss could not have occurred to the government exchequer. Therefore, for the entire offence the appellant’s role is key role. The appellant has also not verified any credentials of their so-called clients. It is also a fact on record that the appellant have categorically admitted in his statement that if he would have known that so huge revenue involvement is there, he could have charged heavy amount of fees as compared to Rs.1500 per certificate. With this statement, the mala fide of the appellant is clearly established.
This tribunal dealing with the similar fact maintained the penalty imposed on the Chartered Accountant for issue of Solvency/Export performance certificate in the case of MAHESH P. PATEL SUDESH D. NANAWARE VERSUS COMMISSIONER OF CUSTOMS (EP) , MUMBAI AND COMMISSIONER OF CUSTOMS (EP) , MUMBAI VERSUS SPECTRUM FABRICS [2018 (6) TMI 17 - CESTAT MUMBAI] where it was held that it can be seen that the appellant Shri Sudesh Nanaware, being a consultant, has admitted the pre-decided plan for committing the fraud. Therefore, he was rightly imposed the penalty under Section 112(a).
The appellant has been rightly imposed with a penalty under Rule 26 of Central Excise Rules - there are no infirmity in the impugned order to the extent of penalty of Rs. 5 lacs was imposed upon appellant under Rule 26 - the penalty is upheld - appeal dismissed.
-
2023 (3) TMI 1123
Levy of personal penalty under Rule 15(1) of Cenvat Credit Rules, 2004 - wrong availment of CENVAT Credit by the company - appellant submits that appellant is a technocrat and employed as Director operations and looking after production activities of the Company - SCN barred by time limitation or not - HELD THAT:- The appellant is an employee Director in the Company M/s. Diamond Power Transformers Limited who was alleged to be indulged in fraudulent availment of Cenvat credit. Penalty in the present case was imposed under Section 15(1) of Cenvat Credit Rules, 2004 on the appellant on the ground that he was overall in-charge and involved in the fraudulent availment of Cenvat credit.
From the plain reading of Rule 15(1), it is found that a person shall be liable to penalty who takes or utilize Cenvat credit in respect of input or capital goods or input services wrongly or in contravention of any of the provisions of these Rules - In the facts of the present case, it is M/s. Diamond Power Transformers Limited who has availed fraudulent Cenvat credit, the appellant being employee Director has not availed Cenvat credit for himself therefore, Rule 15(1) is not applicable on the person who has neither availed Cenvat credit nor is the beneficiary of Cenvat credit. Accordingly, penalty under Rule 15(1) was wrongly imposed on the appellant.
This issue has been considered by this Tribunal in the case of SHRI MUKESH DANI, SHRI DH WADHWANI VERSUS C.C.E. & S.T. -SURAT [2017 (3) TMI 1145 - CESTAT AHMEDABAD] wherein it was held that personal penalty has been proposed to be imposed on the appellants under Rule 15 of CCR, 2004, and the authority below has nowhere observed that the correct Rule is other than Rule 15 of CCR, 2004, hence, the plea raised by the ld. AR for the Revenue cannot be accepted at this stage.
The penalty under Rule 15(1) on the present appellant, who is merely an employee of the Company, is not sustainable - appeal allowed - decided in favour of appellant.
-
2023 (3) TMI 1122
Refund of service tax paid on input services - rejection on the ground of time limitation - whether the claim for refund of service tax paid on input services has been filed within the time limit in terms of para 3 (III) (e) of the Notification No 12/2013-ST dated 01.07.2013 and if the same is hit by latches, is the appellant entitle to condonation of delay?
HELD THAT:- The Special Economic Zone Act, 2005 is a special statute basically enacted for the establishment of SEZ providing special benefits by way of exemptions with a view to promote the Exports. Section 26 of the SEZ Act read with Rule 31 of SEZ Rules, 2006 provides wholesale exemption from payment of duties under the Central Excise Act, Customs Act and from Service Tax under the Finance Act, 1994 on taxable services provided to SEZ units / developers for carrying on authorised operations in a Special Economic Zone - The intention of the Legislature in granting exemption from levy of duties and taxes was to ensure that the SEZ units function burden free. The whole object is to boost the SEZ units.
The High Court of Andhra Pradesh in GMR AEROSPACE ENGINEERING LIMITED AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [2019 (8) TMI 748 - TELANGANA AND ANDHRA PRADESH HIGH COURT] after analysing the provisions of the SEZ Act, 2005 and the provisions of the Finance Act, 1994 concluded that the notification issued under section 93 of the Finance Act, 1994 cannot be pressed into service for finding out whether a unit in SEZ qualifies for exemption or not.
Subsequently, the Tribunal in M/S. SRF LIMITED VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, LTU NEW DELHI AND COMMISSIONER OF CGST, AND CENTRAL EXCISE, INDORE [2022 (4) TMI 989 - CESTAT NEW DELHI] dealt with the issue of entitlement of refund of service tax where some of the services were directly provided to and paid for by the SEZ unit while certain other services were provided to the head office which was registered as an Input Service Distributor (ISD) and on examining the various provisions of the SEZ Act, observed that there is duplication as the Act itself provides for exemption of central excise duty, customs duty and the service tax, however there are exemption notifications issued under the respective laws subject to certain conditions.
Time limitation of one year for filing the refund claim - HELD THAT:- Tribunal in the case of C.C.E. & S.T., - RAJKOT VERSUS M/S RELIANCE INDUSTRIES LTD [2019 (3) TMI 877 - CESTAT AHMEDABAD], whereby it has been clarified that the condition under para 3 (III) (e) of the Notification for filing the refund claim within one year is applicable only in respect of refund claimed under Table I of Form A-4. For Table II, the refund claim can be filed when the SEZ unit receives the ISD invoices as the format in Table II particularly the specifications in column 9,10 and 11, required that refund cannot be filed without the ISD invoices. Further, it was held that no time limit has been prescribed for issuing ISD invoices under Rule 7 of Cenvat Credit Rules, 2004 for distributing credit under ISD invoices. It was then concluded that for a minor procedural lapse, if the SEZ unit is burdened with duties or taxes the whole objective of SEZ scheme will stand defeated.
It is evident that the appellant fulfilled the criterias of eligibility to claim refund of the service tax paid on input services in terms of the Notification No 12/2013-ST. Infact it is not the case of the revenue that the appellant is not eligible to make such claims. Their only objection is to the claim being filed beyond the period of one year as per the notification - Considering the beneficial object of establishing the SEZ tax free, without any burden of duties, the procedural lapse, if any, cannot be the basis to deny the refund to the appellant. The exemption is intended to be absolute is further evident from para 3 (II) of the Notification which provides for ab-initio exemption.
From what has been observed by the adjudicating authority is that for the period January to March 2017, service tax was paid prior to 01.10.2016 and the refund claim was filed on 10.10.2017 and therefore it is beyond the period of one year. Even, if one calculates the actual delay the same appears to be somewhere around 10 days or so. Similarly, for the period April to June, 2016 service tax was paid prior to 01.03.2017 and refund claim was filed on 28.03.2018. In both the cases, the delay is neither exorbitant nor unreasonable which on the face of it cannot be condoned - It is the well established principle that the eligibility criteria laid down in an exemption notification are required to be construed strictly, however once it is found that the applicant satisfies the same, the exemption notification should be construed liberally.
Refund claim allowed - appeal allowed.
-
2023 (3) TMI 1121
Benefit of Exemption - condition of manufacture without the use of electricity power - Eligibility for benefit under N/N. 6/2002-CE dated 1.3.2002 as amended - dipped match splints procured by the respondents were actually manufactured using electricity - invocation of extended period of limitation - HELD THAT:- The department has come on appeal aggrieved by the very same order which set aside the demand on the ground that the Show Cause Notice is time-barred. The learned AR has been at pains to argue that the respondents knew that they are purchasing dipped match splints which have been manufactured using electricity and in such circumstances they ought to have obtained registration and paid excise duty. That therefore the respondents have suppressed facts - there are no substance in the argument put forward by the learned AR or in the grounds put forward in the appeals filed by the department.
Interpretation of the notification - HELD THAT:- There were decisions in favour of the assessee as well as the Revenue. The Commissioner (Appeals), Tirunelveli vide Order-in-Appeal dated 28.4.2005 has referred to Board Notification NO. 1/93-CX-4 dated 2.12.1993 wherein Board clarified that In the present case parts are manufactured by a manufacturer with the aid of power. Such parts manufactured with the aid of power are purchased by another manufacturer of footwear who used such parts for manufacture of foot wear without the aid of power. So long as the second manufacturer does not use any power, in or in relation to manufacture of foot wear either in his factory or in the factory of his job workers, it cannot be construed that power has been used in the manufacture of foot wear only because the raw materials bought and used by him had been manufactured with the aid of power. This case is squarely governed by Circular No.4/87 C.E. dated 19.6.87.
It is discussed by the Commissioner (Appeals) that the said Circular would apply for interpretation of the notification 6/2002 and that the assessee is eligible for benefit of notification.
In the present case, there are no new materials / evidence unearthed by the department which has formed the basis for determination of the duty. All the figures were available to the department as per the invoices submitted by the respondents - the invocation of extended period cannot be justified.
The appeals filed by the department are dismissed.
-
2023 (3) TMI 1120
Valuation - inclusion of subsidy - Third Member Decision - Difference of opinion - capital/wage subsidy in question reduces the selling price of goods or not - amount of subsidy under dispute is not an independent amount received by the appellant - facts in this appeal are similar to the facts in the case of Super Synotex India Ltd. [2014 (3) TMI 42 - SUPREME COURT] or not - appellant have received VAT subsidy (directly affecting the selling price of the goods) - provisions of Section 9 of Rajasthan VAT Act has not been considered in the case of Shree Cement Ltd. [2018 (1) TMI 915 - CESTAT NEW DELHI] leading to erroneous judgment in the said case.
HELD THAT:- Section 4 of the Excise Act, which deals with valuation of excisable goods for the purposes of charging of duty of excise, provides that where the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods such value shall, in a case where the goods are sold by the assessee, be the transaction value provided the assessee and the buyer of the goods are not related and the price is the sole consideration. Transaction Value, in terms of section 4 (3) (d) of the Excise Act, means the price actually paid or payable for the goods when sold but does not include the amount of duty of excise, sales tax and other taxes, if any actually paid or actually payable on such goods.
The Scheme that came for consideration before the Supreme Court in Super Synotex was “Sales Tax New Incentive Scheme for Industry, 1989 (Sales Tax Incentive Scheme)”. Under the said Scheme, an assessee was entitled to retain 75% of the sales tax collected from the customers and was required to deposit only 25% with the Government. The Commissioner held that the assessee was availing partial sales tax exemption under the Sales Tax Incentive Scheme upto 75% of the tax liability and was paying only 25% of the sales tax, despite collecting the entire consideration from the customers and, therefore, the additional amount collected under the camouflage of incentive tax would form part of the value for levy of excise duty - it was held by Supreme Court that since 25% of the amount collected as sales tax from the customers was paid by the assessee and the remaining 75% of the amount collected was retained, it became profit or the effective cost paid to the assessee by the purchaser and this 75% was, therefore, to be treated as the price of the goods. The Supreme Court emphasised that the amount paid as sales tax was only 25%.
Under the promotion policy involved in these appeals, the subsidy does not reduce the sales tax that is required to be paid by the assessee. The entire amount of sales tax collected by the assessee from the customers is required to be paid. A portion is deposited through VAT 37B challan issued to the assessee by the State Government as subsidy under the promotion policy and the balance amount is deposited by the assessee in cash through VAT 37A challan. What has been retained by the appellant is basically the subsidy amount and it is not the case of the Department that subsidy amount has to be included in the transaction value.
In COMMISSIONER OF CENTRAL EXCISE, MUMBAI-I VERSUS M/S WELSPUN CORPORATION LTD. [2017 (5) TMI 177 - CESTAT MUMBAI], the Scheme that was under consideration was the “Incentive Scheme 2001” under the Economic Development of Kutch. The assessee was allowed to recover the sales tax amount/VAT amount but it could be retained as an incentive amount. The Tribunal held that the liability to pay sales tax/VAT was not extinguished at the time of removal of goods since it is not exempted from payment of sales tax/VAT and it was clear from the Scheme as well as the eligibility certificate that the amount of sales tax allowed to be remitted to the respondent was towards capital subsidy. Thus, it was not a case where sales tax was not payable but was a case where it stood actually paid as the remission was an incentive or a capital subsidy which the State Government granted with respect to the investment made in the earthquake ravaged region of Kutch in the State of Gujarat.
The decision of the Supreme Court in Super Synotex India would not be applicable to the facts of the present case as that was a case where 25% of the amount collected as sales tax from the customers was paid by the assessee and the remaining 75% of the amount was retained by the assessee, which amount was treated to be the price of the goods. In the promotion policy involved in the present case, the subsidy does not reduce the sales tax that is required to be paid by the assessee as the entire amount of sales tax collected by the assessee from the customer is paid. The subsidy amount, therefore, cannot be included in the transaction value for the purpose of levy of central excise duty under section 4 of the Excise Act.
The reference is answered in the following manner:
a- Subsidy under the promotion policy does not reduce the selling price;
b- The amount of subsidy under the promotion policy is not an additional consideration;
c- The decision of the Supreme Court in Super Synotex India would not be applicable to the present case;
d- The subsidy amount under the promotion policy does not affect the selling price of the goods;
e- Section 9 of the Rajasthan VAT Act, 2003 would have no application to the facts of the present case; and
f- As regards appropriate case for reference to the ld. Third Member on the questions framed by the ld. Member (Technical), as neither party raised any objection on this issue, the reference has been answered.
The matter shall now placed before the regular bench hearing the excise appeals.
-
2023 (3) TMI 1071
Maintainability of appeal - appeal dismissed on the ground of non-payment of pre-deposit being 7.5% of the disputed demand duty - HELD THAT:- The appeal is a creature of statute. In the present case, the legislature has chosen to grant conditional right of appeal to the assessee. Thus, the assessee could have maintained its appeal only against pre-deposit of 7.5% of disputed demand of duty. In absence of pre-deposit, the Tribunal has not erred in rejecting the appeal of the assessee.
Again, these being statutory proceeding of further appeal, it is not open for this Court to exercise its inherent power that otherwise may arise under Article 226 of the Constitution of India to grant any relief contrary to the statutory law - Further, it may be noted, neither challenge to the validity of law may arise in these proceedings nor that challenge appears pending in any proceeding.
In the interest of justice, to allow the assessee appellant one opportunity to appeal (on facts), indulgence is granted with consent of learned counsel for the revenue such that subject to the assessee making the pre-deposit (@ 7.5%) within a period of two weeks from today.
-
2023 (3) TMI 1070
SSI Exemption - clubbing of clearances - in both the firms, the partners are same with the same sharing of 25% each - applicability of N/N. 8/2003-CE dated 01.03.2003 - whether the value of M/s. Himalaya Engineers and Manufacturers can be clubbed with the value of the present appellant? - HELD THAT:- Even though there is a different name of the firm but both the firms are owned by same partners therefore, there is a common ownership by same partners.
From the para 2 of Notification, it is clear that for the purpose of aggregating value of clearance under notification no. 8/2003-CE, the value of clearance of manufacturer must be taken for the clearance of one or more factories and as per Para 7, the aggregate value of clearance of excisable goods for home consumption by manufacturer from one or more factories should not be exceeded Rs. 300 lakhs in the preceding financial year - In the present case, as it is observed that the ownership of both the units i.e. M/s. Himalaya Equipments and M/s. Himalaya Engineers and Manufactures is with the same partners which is to be considered that the one manufacturer has cleared the excisable goods from their both the factories therefore, for the purpose of exemption limit as well as for the purpose of eligibility limit of Rs.300 lakhs, the value of clearance of both the factories have to be taken together.
In the present case, the appellant have heavily emphasized on the fact that both the factories have separate set up in respect of other aspects therefore, cannot be treated as one. As stated, the findings clearly provides that even two different factories of same manufacturer needs to be combined therefore, in the present case the clubbing is not on the basis of the common facility between both the units but because of the common ownership, being same partners in both the firm. Therefore, the adjudicating authority has rightly clubbed the value of clearance of both the units and demanded excise duty from M/s. Himalaya Equipments.
Appeal dismissed.
-
2023 (3) TMI 1069
Condonation of transit loss - shortage of quantity on account of transit/handling loss - Whether the condonation of loss of 1% on the basis of CBEC circular dated 12.02.1987 would cover the case of the petitioner and if that is not applied to the case of the petitioner whether the demand so raised can be sustained and, as such, the claim of the petitioner can be allowed?
HELD THAT:- The CBEC in its circular dated 29.11.1979 on due consultation with the Ministry of Law on the question of condonation of loss occurring due to natural or human causes in terms of Rule- 13 of the Central Excise Rules instructed that such losses are to be permitted and in each case of loss the claim should be decided on merit allowing remission to the extent the adjudicating officer is satisfied about the genuineness of the losses. The said circular has also taken note of the expression “otherwise accounted for to the satisfaction of the Collector occurring in Rule-13” and while referring to the said expression it is clarified that the language used is of wide amplitude so as to take in all losses occurring whether due to natural or human causes - In the present case there being factual adjudication of occurrence of transit/handling loss after clearance from the factory to the post of export, thereby the order passed by the revisional authority disallowing the transit loss cannot sustain in the eye of law.
On perusal of the order impugned it is seen that though aforementioned judgments cited by the petitioner have been taken note of by the revisional authority in paragraph 3.11 thereof, but the said judgments have not been considered nor discussed in the judgment itself. Without taking into consideration of the same, the revisional authority has observed that no condonation of losses can be allowed - the Government notes that there is no case for imposition of penalty as adjudicating authority has not given any finding on the penal action and straightaway imposed penalty.
In SN. GONDAKAR VERSUS COMMISSIONER OF COMMERCIAL TAXES IN KARNATAKA, BANGALORE AND ANOTHER [1983 (7) TMI 281 - KARNATAKA HIGH COURT] it has been held that consistency in the judicial administration should not ordinarily be sacrificed unless there is compelling reason. The need for consistency in approach and uniformity in the exercise of judicial discretion in respect of similar cases require that all similar matters should receive similar treatment except where the factual difference require a different treatment. Merely stating that the circular of the Commissioner is not applicable to the case can hardly be said to be a reason to be given by a quasi judicial authority.
This Court sets aside the order dated 26.04.2010 passed by the revisional authority under Annexure-10 and the matter remitted back to the very same revisional authority to reconsider the same afresh by taking into consideration all the judgments cited before him and by affording opportunity of hearing to the parties.
The writ petition is allowed.
-
2023 (3) TMI 1068
Levy of penalty u/r 26(1) of Central Excise Rules, 2002 - availment of CENVAT Credit fraudulently - receipt of bills without receipt of finished goods - HELD THAT:- here is no dispute about the fraudulent availment of Cenvat Credit by M/s. Tarun Polymers, Daman, who has wrongly availed the Cenvat Credit of huge amount of 29170642/-. In order to avail this fraudulent Cenvat credit by M/s. Tarun Polymers, Daman, all buyers of the goods purchasing the goods without cover of invoice have clearly facilitated M/s. Tarun Polymers, Daman for wrong availment of CENVAT Credit. In case of M/s. Rajguru Enterprises Pvt Ltd it is clear that though they have received the bills but not received the goods covered therein. Therefore, in the above facts it is a clear case of abatement in evasion of duty on the part of the appellants.
Thus, it is clear that all the appellants were indulged in abating M/s. Tarun Polymers, Daman for fraudulent availment of Cenvat credit therefore, they have made themselves liable for penalty under Rule 26(1) Cenvat credit rules 2002 - there are no infirmity in the impugned order imposing penalty under Rule 26(1) of Central Excise Rules - the impugned order to the extent it imposes penalty on the present appellants is upheld - appeal dismissed.
-
2023 (3) TMI 1067
Invocation of Extended Period of Limitation - case involving interpretation of law or not - department was well aware of the facts of the case since SCN was issued for the previous period on the same issue - Five audits were conducted at the factory every year since 1.1.2008 - no intent to evade - HELD THAT:- There is no dispute regarding the merits of the case and the calculation of duty. Therefore, insofar as the directions of this Tribunal in the Final Order dated 29.7.2019 [2019 (7) TMI 1791 - CESTAT NEW DELHI] are concerned, they have been fully complied with. The only question which remains is the invocation of extended period of limitation which was also required to be examined by the Commissioner.
The officer is mandated under the Rules to do what the audit may do much later. If the officer, who is an expert in taxation scrutinises the returns as he is mandated to do and calls for any records as he is authorised to call for, any mistakes which may be pointed out by the audit would come to light and an SCN could have been issued under section 11A within the normal period of limitation. Therefore, even if no audit is conducted during the relevant period and some duty escapes assessment, extended period of limitation cannot be invoked for that reason. The check against incorrect self assessment is the scrutiny of the return by the officer and audit is only the second check. Therefore, while the fact that audit checks only some selected documents and not every document as held in the impugned order is correct, this cannot be a ground to invoke extended period of limitation. Unlike audit, the officer receiving the ER-1 returns is required to scrutinise the returns and is empowered to call for any information.
While the assessee was required to self– assess duty and file ER-1 return, a check against such self- assessment was the scrutiny which the officers were mandated to do by Rules. Audit is the next level of check against the scrutiny. If the audit points out some wrong assessment which was not pointed out by the officer scrutinising the ER-1 return, the fault lies at the doorstep of the officer. It does not, by itself, establish that the assessee had suppressed any facts. In this case, not only one but several rounds of audit were conducted. Show Cause Notice was issued for the previous period on the same issue by the Revenue. Thus, the department was fully aware of the issue in question, the general marketing pattern of the appellant and it was for the officer scrutinising the returns to have checked the returns and issued SCN within time.
The impugned order cannot be sustained as the entire demand is time barred - Appeal allowed.
-
2023 (3) TMI 1010
Valuation - related party transaction - price at which the appellant M/s Bilag Industries Ltd., Vapi (BIL) sold its products to the buyer, should be treated as a transaction with a related person under Section 4(4)(c) of the Central Excise Act, 1944, or not?
HELD THAT:- The decision in COMMISSIONER OF CENTRAL EXCISE, AURANGABAD VERSUS M/S. GOODYEAR SOUTH ASIA TYRES P.L. & OTHERS [2015 (8) TMI 61 - SUPREME COURT] is instructive. The assessee, a JV entity of Goodyear and CEAT (both of whom had equal share in it), had borrowed substantial sums of money from both Goodyear and CEAT. Later, CEAT transferred its entire shareholding to Goodyear. The revenue alleged that the assessee and Goodyear were related persons, which was negatived by this court holding that the order of the Member Judicial that only on the ground that the two companies had given a loan of Rs. 85.66 crores to the Assessee company, was treated as sufficient to establish the relationship between the Assessee and the buyers. That only shows one way traffic whereas requirement is that of two way traffic. The other Member, in our opinion, aptly held that this cannot be the factor which would show the mutuality of interest.
In the present case, undoubtedly AgrEvo SA/ Aventis CropScience SA holds the entire shareholding in Aventis CropScience (India) Ltd. (the buyer). It also is a shareholder in BIL. All of the latter’s products are sold to Aventis CropScience (India) Ltd. However, this does not show that BIL has any business interest or interest in the affairs of Aventis CropScience (India) Ltd., nor, conversely, that Aventis CropScience (India) Ltd has any such interest, direct or indirectly in BIL. The revenue’s concern in examining whether the parties were related might be justified; however, it could not have concluded that such relationship, as is contemplated by Section 4(4)(c) could have been inferred, without applying the proper test. Additionally, the revenue had the materials before it, in the form of documents which indicated the mark up towards profit margin, and other objective evidence to compare, if indeed, the cost of the goods sold, were depressed, or were comparable to the market price of the same or similar goods. There is no finding that the price of the goods was lower than what was the price of those goods, in the market.
Thus, it has to be concluded that the revenue’s decision in rejecting the value at which the goods were sold, by treating the assessee as a related person, was erroneous - appeal allowed.
-
2023 (3) TMI 1009
Classification of imported goods - Cutter Suction Dredger along with other accessories and equipments including Pipes, Anchor Boats, Multicats, Dredging pumping units, Engines and other spares and accessories - to be classified under the Chapter Heading 8905 10 00 of the Customs Tariff Act, 1975 or not - Applicability for benefit of Nil rate of duty, in terms of Notification No. 21/2002- CUS dated 01.03.2002 - Assistant Commissioner was of the opinion that the multicats, M.S. pipes, imported dredging pumping units and other goods were classifiable under different tariff headings and were not entitled to exemption under the notification as “DREDGERS”.
HELD THAT:- This Court after relying upon SARASWATI SUGAR MILLS VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-III [2011 (8) TMI 4 - SUPREME COURT] and taking aid from the dictionaries held that the Guide Car could not be said to be a component of the Coke Oven Battery. It was submitted that by the same analogy, the pumping units, air compressors, pumps, pipes, wire mesh, steel angle plates and outward engine boat, all of which were granted the benefit of exemption notification, cannot be considered ‘components’. It was besides urged that the Appellate Commissioner had disregarded Note 2 to Section XVII of the Act which had clearly excluded the articles in question; they had to be classified separately under the relevant heads.
The Appellate Commissioner considered the previous order in Boskalis Dredging India Pvt. Ltd. [1999 (2) TMI 700 - SC ORDER] and dealt with each item separately. It was noticed that the dredger pumping units are essential for the cutter suction dredgers unlike in the case of hopper dredgers. Furthermore, the use of air compressors is also necessary to ensure a continuous supply of air to the booster pumps. The Appellate Commissioner took care to exclude some of the claims made by the appellant towards generators, consumables lathe etc. Likewise, the Appellate Commissioner allowed the claim for exemption in respect of steel angle plates, pipes, and wire mesh which was held to be useful for the erection of booster pump stations.
A plain reading of the Note 2 of the Section XVII shows that parts and parts of accessories cannot apply to specified articles, including items classifiable under 8401-79, 8481-82, and to some extent, 8483. In the present case, in this Court’s view, the error committed by the CESTAT is that each of the excluded items has been treated as a separate part and not integral to the functioning of a Cutter Dredger. Without the compressors and the pipes necessary to pump the dredged material, the cutter dredger would cease to function as such. The other items, likewise, are integral parts of the Cutter Dredger, even though they might independently be utilized, for other purposes. The test is not whether multiple uses are possible but whether these parts are essential for the purpose of dredging in a Cutter Dredger.
As far as the exclusion of generators is concerned, this Court notices that concurrently the order in appeal, as well as the order of the CESTAT, have excluded it from the benefit of the exemption notification. The Court finds no reason to interfere with those findings.
Decision in the case of M/S STEEL AUTHORITY OF INDIA LIMITED VERSUS COMMISSIONER, CENTRAL EXCISE & CUSTOMS [2022 (9) TMI 740 - SUPREME COURT] distinguished.
The impugned order is hereby set aside. The order of the Appellate Commissioner is accordingly restored - Appeal allowed.
-
2023 (3) TMI 1008
Maintainability of petition - availability of alternative remedy by way of a statutory appeal - denial of Input Tax Credit (ITC) in respect of the removal of goods on stock transfer basis to their own Units at Jamshedpur and Uttarakhand - ITC on outward transfer for removal of goods from the appellant's factory to the customer premises - grant of personal hearing was not acceded to on the premise that the very same issue was pending consideration before this Court - violation of principles of natural justice.
ITC on stock transfer basis to the appellant's factory - HELD THAT:- The issue now stands resolved by a decision of a Division Bench of this Court in M/S. ALKRAFT THERMOTECHNOLOGIES (PVT.) LTD. VERSUS COMMISSIONER OF CENTRAL GST AND CENTRAL EXCISE [2019 (9) TMI 328 - MADRAS HIGH COURT], wherein in respect of the very same appellant herein (i.e. M/s.Alkraft Thermotechnologies (Pvt). Ltd.), it was found by the Division Bench of this Court that service tax paid by the appellant-assessee on transport of its goods by way of stock transfer from Chennai to Jamshedpur would be eligible for CENVAT Credit - Insofar as the GTA (Goods Transport Agency) service tax from the appellant-assessee's factory to its Units by way of stock transfer, is concerned, it is found that the order-in-original is unsustainable, insofar as it rejects the assessee's claim for ITC, inasmuch as it is contrary to the decision of the Division Bench of this Court in the assessee's own case - credit allowed.
ITC on outward transfer for removal of goods from the appellant's factory to the customer premises - HELD THAT:- It is submitted that the above judgment of the Division Bench of this Court may have a bearing. The relevance of the above said Division Bench judgment insofar as the claim of ITC on GTA also needs to be considered, which the respondent failed to examine, thereby resulting in non-application of mind to relevant factors it appears appropriate that the appellant-assessee's claim of CENVAT credit in respect of the GTA service both in respect of stock transfer as well as upto the customer's premises, may have to be re-examined keeping in mind the above said judgment of the Division Bench of this Court in M/S. ALKRAFT THERMOTECHNOLOGIES - matter on remand.
Non-compliance with the request of personal hearing - HELD THAT:- There seems to be some merit in the submission of the learned counsel for the appellant-Company (writ petitioner-assessee) that their request for personal hearing was not dealt with appropriately, from a perusal of the order dated 08.01.2019 passed by the respondent - the order of the respondent, dated 08.01.2019, warrants interference by this Court.
Appeal allowed in part and part matter on remand.
-
2023 (3) TMI 1007
Levy of penalty on partnership firm as well as on partner - Clandestine clearance - stocks verified at the premises of the Appellant did not tally with their DSA records and excess stock was found in the factory premises - HELD THAT:- The Appellant has been able to demonstrate that the seized goods which were provisionally released were cleared on payment of proper Excise Duty as it is evident from the documents produced like DSA, ER- 1 Returns, etc. Therefore, once the duty of Rs.2,09,704/- has already been paid in the normal course, the Department cannot be once again recover this amount from the Appellant. The confirmation of Rs.2,09,704/- as Excise Duty to be paid as held by the Adjudicating Authority is infructuous and is set aside.
From the order portion of the OIO, it is seen that the Adjudicating Authority has not given the option of payment of penalty @ 25% which he was required to do. The Tribunal Ahmedabad in the case of COMMR. OF C. EX., AHMEDABAD VERSUS KALPESH FOUNDERS & ENGINEERS [2009 (7) TMI 1024 - CESTAT AHMEDABAD] held that it was observed that when the Adjudicating Authority as also Commissioner (Appeals) acted illegally and contrary to the first Proviso to Section 11AC of the Act, and no option to pay penalty of 25% within 30 days was given to the assessee the fault lies with the authorities and not with the assessee - Therefore, relying on this case law, option given to the Appellant to pay 25% of Rs.2,09,704/- as penalty. The Appellant should pay the same within the 30 days from the date of communication of this order.
Penalty imposed on the Partner - HELD THAT:- The Hon’ble Punjab and Haryana High Court in the case of VINOD KUMAR GUPTA VERSUS COMMISSIONER OF CENTRAL EXCISE [2012 (5) TMI 173 - PUNJAB AND HARYANA HIGH COURT] have held that Partnership firm is a firm in mercantile usage, however, penalty imposed on the proprietorship or partnership firms would mean penalty on the proprietor or partners therof, therefore, imposition of penalties one on the proprietorship firm and second on the proprietor would amount to imposition of penalty twice, which cannot be sustained in the eyes of the law - the penalty on the partner Mr. Moinuddin Ansari is set aside.
Appeal allowed in part.
-
2023 (3) TMI 1006
Recovery of Central Excise duty under Section 11A(4) of the Central Excise Act, 1944 along with interest under Section 11AA - levy of penalty under Section 11AC - non-payment of an amount equal to 6% under Rule 6(3) of the CCR, 2004 of the value of exempted goods/ non-excisable goods - SCN is vague and not clear - HELD THAT:- Neither the original authority nor the Commissioner (Appeals) has understood what the demand in the show cause notice was for.
In view of the above, it is found that these are fit cases to be remanded to the Original Authority to decide the matter afresh strictly within the scope of show cause notice. Needless to say, even if demand can be made beyond the show cause notice, the order-in-original cannot go beyond the show cause notice.
Appeals are allowed by way of remand to the Original Authority.
-
2023 (3) TMI 951
Valuation - Transaction value of MRP based value - institutional buyer - Section 4(A) of the Central Excise Act - retail sale of footwear under Rs. 500/- - whether the goods sold by the respondent are eligible to claim tax benefits within the purview of the abovementioned notification under Section 4(A) of the Central Excise Act? - HELD THAT:- In the case of JAYANTI FOOD PROCESSING (P) LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, RAJASTHAN [2007 (8) TMI 3 - SUPREME COURT], this Court, while deciding on a similar issue, held that for goods to be included under the assessment of Section 4(A) of the Central excise Act, it must comply with five factors.
A bare perusal of Section 4(A) of the Act and the abovementioned judgment would show that to attract a MRP based valuation of goods under the Central Excise Act, the goods should be notified under Section 4(A) of the Act and that such goods must come within the purview of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, which has now been repealed and replaced by the legal Metrology (Packaged Commodities) Rules, 2011 - In the present case at hand, the respondent entered into a sale with the paramilitary and military as per the terms of agreement signed. While the goods in the impugned sale were notified under Section 4(A) of the Act by way of an official notification in the gazette, what is most relevant to us is Rule 3(b) of the Legal Metrology (Packaged Commodities) Rules, 2011 which exempts the sale to institutional consumers from its purview.
A consumer, as clarified by the Jayanti Foods Judgment, is the final consumer of the product, and not the intermediary. In the present case at hand however, the purchaser institutions, as discussed above are intermediaries, who after the purchase of the said goods, distribute it further to the final consumer - where the purchaser institution is deemed to not be a consumer, the sale also cannot be held to be a retail sale as per the Act. Further, since the impugned sale is not a retail sale as per the Act, there exists no mandate of law on the Respondent herein to affix an MRP on the goods sold, and hence the said impugned transaction cannot claim benefit under Section 4(A) of the Act.
The CESTAT committed an error in law by passing the impugned order dated 09.01.2019 and the Respondent being under an obligation is directed to pay the differential amount to the relevant tax authority - Appeal allowed.
-
2023 (3) TMI 950
Vires of Rule 8(3A) of the Central Excise Rules, 2002 - Default in payment of amount of central excise duty along with interest - amount stands deposited with a delay of few weeks - Department is of the view that as per the provisions of Rule 8(3A) of Central Excise Rules, 2002, the appellant should have paid the entire delayed payment of Rs. 1,41,36,316/- in cash rather than same being paid by utilizing Cenvat credits.
HELD THAT:- The matter has been decided by this tribunal in the case of PRINCIPAL COMMISSIONER OF C. EX., DELHI-I VERSUS SPACE TELELINK LTD. [2017 (3) TMI 1599 - DELHI HIGH COURT], M/S. SUPERMAX PERSONAL CARE PVT. LTD. VERSUS COMMISSIONER OF CE & ST, LTU, MUMBAI [2022 (7) TMI 920 - CESTAT MUMBAI] and ANDHRA CYLINDERS PVT LTD, NALIN KHARA, MANAGING DIRECTOR VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, HYDERABAD – I [2020 (1) TMI 189 - CESTAT HYDERABAD] - It was held in M/s. ANDHRA CYLINDER that What needs to be decided in this factual matrix is where there are judgments by four different High Courts holding Rule 8(3A) as ultra vires and there is no judgment of any High Court upholding it and where the appeals against these judgments have been admitted and are under consideration of the Hon'ble Apex Court, whether the ratio of these judgments bind this tribunal or otherwise. We find that the last in the series of judgments was passed by the Hon'ble High Court of Bombay in the case of Nashik Forge Pvt Ltd on 17.09.2018 holding that the ratio of the judgment of the Hon'ble High Court of Madras, Gujarat and Punjab & Haryana apply.
Since the given facts of the appeal are identical to the one which has been decided by the above mentioned order, appeal is allowed.
-
2023 (3) TMI 949
Seeking recovery of the amount refunded - recovery sought on the ground that the exemption in terms of the said Notification is not available to excisable commodity which is not manufactured in such units - requirement to pay duty on waste and scrap in view of the Notification No.89/95-CE dated 18.05.95 - benefit of Notification No.33/99-CE (as amended) - HELD THAT:- There is no dispute in this case that the Appellant has manufactured cement as well as capital goods in the factory. During the course of manufacture of capital goods waste and scrap was also generated. Whether duty is payable on the waste and scrap is not a question here. However, it is found that the Appellant has chosen to pay duty on the waste and scrap by utilizing the CENVAT Credit. The payment of duty on the scrap has not been questioned by the Department. The Department has only questioned the payment of duty by utilizing the CENVAT Credit availed. It is found that the waste and scrap generated is also a product manufactured within the factory for which duty can be paid by utilizing the CENVAT Credit account. Hence, it is held that the payment of duty for the waste and scrap by utilizing the CENVAT Credit account was in order. For payment of duty for the cement, they have utilized the balance CENVAT Credit and the remaining duty through PLA. The refund claimed was only on the payment of duty through PLA for the cement, which is permissible as per Notification No.33/99-CE dated 08.07.1999.
The payment of duty for the scrap has been correctly paid by utilizing the CENVAT Credit account and the refund of duty paid through PLA on the cement has been correctly claimed by the Appellant as per Notification No.33/99-CE dated 08.07.1999 - Appeal allowed.
-
2023 (3) TMI 948
Denial of benefit of exemption Notification No. 4/2006-CE dated 1.3.2006 at Sl. No. 72 - classification of matches - matches classifiable under Chapter 3605.00.10 or 3605.00.90? - appellants are independent manufactures - appellant purchased ‘machine dipped match splints’ and undertook box filling and packaging without the aid of power and then cleared at nil rate of duty - HELD THAT:- The issue as to whether the benefit of Notification No.4/2006-CE dated 1.3.2006 is available to the appellant has been decided by the decision of the Tribunal in the case of M/S SRI GANAPATHY PACKAGING VERSUS THE COMMISSIONER OF GST & CENTRAL EXCISE [2020 (2) TMI 1114 - CESTAT CHENNAI]. The said order was followed in the case of M/S. PUSHPA MATCH WORKS, M/S. AMSARANI MATCH WORKS, M/S. SELVI PACKAGING, M/S. ESTHAR MATCH WORKS, M/S. JOTHI MATCH WORKS, M/S. SREENIVASAN MATCH WORKS, M/S. SRI RAMAIYA MATCH INDUSTRIES, M/S. SRINIVASA MATCH WORKS, M/S. SOLAIAMMAL MATCH WORKS, M/S. NANDHINISHRI MATCH WORKS, M/S. BALAJI MATCH WORKS VERSUS COMMISSIONER OF GST & CENTRAL EXCISE [2023 (3) TMI 827 - CESTAT CHENNAI] - It was held by the Tribunal that appellants are not eligible for the benefit of exemption notification No.4 ibid.
The appellant is not eligible for the benefit of exemption of the Notification. The impugned order does not require any interference - Appeal dismissed.
-
2023 (3) TMI 947
CENVAT Credit - reverse charge mechanism - case of the department is that since the appellant have paid the service tax on reverse charge mechanism on 13.07.2017, the same was not available as cenvat credit as on 30.06.2017 - levy of penalty - HELD THAT:- There is no dispute in the fact that the appellant have discharged the service tax under reverse charge mechanism in respect of the services received in the month of June, 2017 and payment of service tax was made in 13.07.2017. The appellant have filed the ST-3 return for the period ending on 30.06.2017 on 10.07.2017. The appellant have reflected the cenvat credit of service tax paid on 13.07.2017 of the said return on 30.06.2017. Since the service tax was paid on 13.07.2017 by no stretch of imagination the same could have been mentioned in the ST- 3 return filed on 10.07.2017. Moreover, even the circular issued in this regard is applicable to only those cases where the service tax was paid by 05th /06th of July , 2017 or at the most the same is paid before filing the return. In case of the service tax payment made after filing the return the assessee was supposed to file a revised return incorporating the cenvat credit paid of service tax on RCM which appellant has failed to do.
The appellant cannot get the benefit of the Circular dated 28.09.2017. Accordingly, the payment of duty made by utilizing the cenvat credit in the facts of the present case is not legal and correct. The right course of action for the appellant was either to revise the return and show the adjustment or claim the refund of cenvat credit under section 142 (3) of CGST Act, 2017. Therefore the appellant’s availment of cenvat credit of service tax paid on 13.07.2017 and utilization thereof for payment of excise duty for the month of June, 2017 is not correct. Therefore, the demand of cenvat credit is sustained - the appellant has liberty to opt for alternate i.e. filing a revised return or claiming refund under Section 142 (3) of CGST Act, 2017 if permissible as per law.
Levy of penalty - HELD THAT:- Since there is no intention of the appellant to evade any duty as the appellant have discharged the service tax and utilized the same though incorrectly but it was a revenue neutral situation as the appellant is otherwise entitled for the refund of the same amount. Hence, in absence of any mala fide penalty under section 78 is not imposable. Therefore, the penalty imposed under section 78 is set aside.
Appeal allowed in part.
|
