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Central Excise - Case Laws
Showing 61 to 80 of 94 Records
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2023 (3) TMI 637
CENVAT Credit - forged documents - it is alleged that the imported inputs/ raw materials in respect of which Respondent availed the Cenvat Credit of CVD during the period January 2003 to March 2007, was transported from Nhava Sheva Ports to the Respondent’s Godowns at Navi Mumbai and was sold in cash at Navi Mumbai and was not transported to its factory at Daman - revenue failed to discharge onus to prove - reliance placed on the third party evidences - Reliance placed on the RTO reports by the revenue - HELD THAT:- In the entire investigation the evidences which were brought on records are transporters’ statements and their records i.e Daily Loading Reports (DLR) and Monthly Loading Reports (MLR) and RTO reports according to which the vehicles mentioned in the Challans/records of respondents have not entered into Gujarat via Bhilad Check Post. It is found that contrary to this evidences the fact that the respondent have recorded the receipt of the goods in their Raw materials account i.e. RG-23 Part –I and RG-23 Part-II, the purchase of the imported goods under the Bills of Entry in question were booked in books of account. The Respondent has also shown the use of disputed inputs in their factory premises for manufacture of finished goods, even the payment of transportation was also made by cheque. The Revenue could not bring any evidence that the goods covered under the Bills of Entry were diverted to any other place.
There is absolutely no evidence to show the substitution of raw material which in our view would cut the root of the allegation as the statutory records show that goods were manufactured. No shortage of raw material was detected during search of factory. No single buyer of diverted raw material was found by the revenue. In the present case no such inculpatory statement of alleged diverted imported inputs buyer is available, there was no shortage found in the stock if had the respondent availed the credit without receipt of inputs, there must be shortage of inputs which is not the case here. Thus, the Revenue has failed to discharge the onus as regards the source of receipt of raw materials from any other alternative source rather have made a bald allegation on the manufacturers that they have diverted the imported raw materials on payment in cash in market.
The facts are established that the respondent have received the inputs in their factory used in the manufacture of final product and same was cleared on payment of duty. Further, the investigation is silent as to how the respondent-manufacturers, manufactured finished material without receiving the inputs. The law is settled that as long as duty payment is accepted on outputs, the benefit of credit available cannot be denied. Therefore, there are no substantial evidences which result the disallowance of credit. In this circumstance, there are no infirmity in the impugned order.
Reliance on third party evidence - HELD THAT:- In the present case the department for denying the Cenvat Credit placed reliance on third party evidence i.e. transporters documents /statements and RTO records. It is necessary to check the evidentiary value of the third party evidence as held in the judgments in the case of BAJRANGBALI INGOTS & STEEL PVT. LTD., SURESH AGARWAL VERSUS CCE, RAIPUR [2019 (1) TMI 966 - CESTAT NEW DELHI] held that the findings of clandestine removal cannot be upheld based upon the third party documents, unless there is clinching evidence of clandestine manufacture and removal of the goods - Thus, it has been consistently held that demands of whatever nature cannot be confirmed solely on the basis of third party’s evidence/records.
Reliance placed on the RTO reports by the revenue - HELD THAT:- It is common that truck drivers in order not to pay local tax or/ toll tax for some other reasons, take their vehicle through alternate routes. In such case, only on the basis of check-post report, it cannot be concluded that the truck did not transport the goods to the respondent’s factory. Further the said report appears to be of no evidentiary value as observed that it does not give true and correct details of the inward or outward details of vehicles. The said report is erroneous because if the vehicle has made an inward entry it must have an outward entry before making an inward entry and vice versa - the Revenue has not concluded the proper investigation to ascertain the truth, moreover, have relied upon third party documents/evidence which cannot be an evidence to deny credit - the respondent has correctly taken the credit.
Once it is clear that the respondent were sought to be issued show cause notice without furnishing copies of relied upon documents and even the efforts were made on the part of the respondents to get the same did not yield any fruitful result and even today the copies of the documents are not made available to the respondents - the finding of the adjudicating authority on the point of non availability of relied upon documents can not be found faulted which does not warrant interference in the impugned order.
There are no infirmity in the impugned order, hence the appeals of the revenue are not tenable - appeal of Revenue dismissed.
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2023 (3) TMI 636
Wrongful availment of CENVAT Credit - seeking recovery alongwith penalty - SCN alleged that Respondent has wrongly availed cenvat credit of the CVD paid on Bunkers viz. Fuel Oil, Marine Gas Oil, Lube Oil etc. in violation of provisions of Rule 3 read with Rule 2 (k) and Explanation III to sub-rule (3) of Rule 6 of the Cenvat Credit Rules, 2004 as the same were not their “input” used in or in relation to manufacture of their final products - HELD THAT:- Section XV covers all goods and materials falling under section 72 to 83 of the Schedule 1 appended to the Central Excise Tariff Act, 1985. Thus, all such goods and materials obtained by such process are considered as ‘excisable goods being subject to levy of duties of excise as per section 2 (d) of the Central Excise Act, 1944. As a corollary the goods and materials, except those covered under section XV (Chapter 72 to 83) are considered as non-excisable irrespective of the fact that they are obtained by breaking up of ships. Thus, Fuels and Oils are non-excisable. It is in this context the cenvat credit of CVD paid on fuel and oils was denied to the Respondent by the adjudicating authority.
It is clear that Fuel and Oils are by-product that are inevitably required to be removed from the ship in the course of commencing the activity of breaking the ship and if that be so, there is no reason for denial of cenvat credit of CVD paid on any part of the Ship including its stores viz. fuel and oil on the ground that they do not form part and parcel of the ship or that they are removed at a stage before commencing the activity of breaking ship or that their classification is under different heading. It is settled law that in the course of manufacturing activity any by-product emerges; cenvat credit on that part which pertains to by-product cannot be denied on the ground that such by-products are non-excisable goods or that they are not used in or in relation to manufacturing activity of manufacturer of excisable goods.
There can be no doubt that for the purpose of carrying out the manufacturing activity as envisaged under note 9 to section xv viz. obtaining goods and material by breaking of ship, the entire ship as imported is the “input” for a ship breaker. Ordinarily, ship when imported for breaking purpose would contain fuel and oil whether in the engine, machinery or in the bunker/tanks. There is no reason to treat the same not part of the ship imported for breaking purpose. It has been rightly held by Learned Commissioner (Appeals) that removal of fuel and oil is the initiation of ship breaking activity and cannot be said as separate activity.
The impugned order is required to be upheld and appeal of department is liable to be dismissed.
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2023 (3) TMI 635
Recovery of CENVAT Credit - Inputs - cement - welding electrode - MS plate - MS angle - channel - penalty in terms of Rule 15(2) of CENVAT Credit Rules, 2004 read with Secion 11AC of the Central Excise Act, 1944 - HELD THAT:- The issue is no more res integra since the period of dispute is 2007-08 and 2008-09 and the amendment to the definition of ‘input’ was made on 07.07.2009 and which was made to be not retrospective. It is the case of the Appellant that the disputed items of iron and steel, cement, welding electrodes etc. were used in the factory in the manufacture of storage tank and also for pollution control system and thus are eligible as inputs and are squarely covered by the definition of ‘input’.
Reliance has been made on the decision of the Tribunal in the case of M/S. SINGHAL ENTERPRISES PRIVATE LIMITED VERSUS THE COMMISSIONER CUSTOMS & CENTRAL EXCISE, RAIPUR [2016 (9) TMI 682 - CESTAT NEW DELHI] where it was held that applying the “User Test” to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of ‘Capital Goods’ as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat credit.
The impugned orders cannot be sustained and are therefore set aside - Appeal allowed - decided in favor of apellant.
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2023 (3) TMI 634
Denial of CENVAT Credit - Input Service distribution - input services has been distributed only to Parryware situated at Ranipet, though there were other three manufacturing units at Perundurai in Tamilnadu, Alwar in Rajasthan and Dewas in Madhya Pradesh - non-maintenance of separate records - common input services proportionate to trading activity - HELD THAT:- One of the contentions raised by the Department is that the input service credit availed under the category of business auxiliary services which is accounted in nature of reimbursement of freight charges, manager salary, etc., is not eligible for credit. The category of service is not disputed. During the relevant period the definition of input services had a wide ambit as it included the words ‘activity relating to business’. For this reason the view taken by the Commissioner (Appeals) that the credit on the impugned services is eligible is legal and proper.
Credit has been distributed only to single unit by the Head Office - HELD THAT:- Even if the services are availed at the Head Office the same is available for credit since it is not necessary that the input services should be consumed in the factory itself. Another ground raised by the Department is that the credit has been distributed to one unit only. Prior to the amendment in 2012, Rule 7 did not provide any manner of distribution of input service credit. An assessee had an option to decide the distribution of the credit.
Reversal of Credit relating to Trading Activity - HELD THAT:- The Commissioner (Appeals) has directed to reverse the credit which is attributable to trading activity. Though Rule 6 (3A) was introduced with effect from 01.04.2008, the Commissioner (Appeals) has correctly noted that the respondent is not eligible for the credit availed on common input services used for trading activity. Prior to 01.04.2008 the law did not provide a method for calculation of reversing the credit attributable to trading activity - when the formula has been put in effect as per the Rule 6(3A) from 01.04.2008, adoption of the said formula to resolve situation where the credit has been availed on trading activity does not require interference. The Commissioner (Appeals) has given direction to the respondents to furnish before the Department work sheets of the proportionate credit relating to trading activity within a period of one month from the date of order. It is also directed to furnish Chartered Accountant Certificate to support the veracity of the figures.
Department appeal is dismissed.
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2023 (3) TMI 633
Valuation - free materials used in connection with the manufacture of the final product ‘Tiltable Tile Cab Assembly’ which was cleared back to ALL on payment of duty without following the procedure laid down in notification no 214/86 CE dated 23/05/86 as amended - deviation from the provisions of Rule 4 (5) (a) of Cenvat Credit Rules, 2004 (CCR) or not - HELD THAT:- Tribunal had occasions to go through a similar issue in its judgment in the case of SRF LTD. VERSUS COMMISSIONER OF C. EX., CHENNAI-I [2007 (3) TMI 613 - CESTAT, CHENNAI] wherein it had set aside the order of the lower authority wherein the issue regarding the manufacture of goods involving free receipt of inputs by the appellant at the intermediate stage of manufacture was involved.
The Hon’ble Tribunal relied upon the Hon’ble Apex Court’s judgment in INTERNATIONAL AUTO LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, BIHAR [2005 (3) TMI 132 - SUPREME COURT], where in it was held that in a case where a manufacturer supplied inputs free of cost to the manufacturer of intermediate products, it was not necessary to include the cost of such material in the assessable value of the intermediary products as the manufacturer of the final product was eligible for the credit of duty paid on all inputs and the intermediary product for clearance of the final product. Operation of the MODVAT scheme on the manufacturer of final product has rendered the valuation dispute of the intermediary product in question of no consequence.
Appeal allowed.
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2023 (3) TMI 573
Clandestine Removal - demand based on certain documents recovered from the appellant and certain statements recorded by Revenue - HELD THAT:- The appellants have heavily contested the fact that no cross-examination of the buyers was allowed and therefore no reliance on statements can be made. It is noted that the matter has travelled between commissioner and Tribunal number of times and on earlier occasion the directions of Tribunal were not followed. The direction of Tribunal made in para 3 of its order dated 26.11.2007, has been followed and relief has been granted by the Commissioner to that extent for the period 1999-2000.
The Commissioner has clearly ignored this findings and come to a difference conclusion. While doing so he is relied on the confessional statements of buyers. There are no opportunity of cross-examination has been given and the test of Section 9D of the Central Excise Act has not been passed in respect of this statements. In absence of cross-examination no reliance can be placed on these statements.
The Commissioner has quantified the amount of duty payable for the year 1999-2000 has Rs. 1,11,113/- in para 3.09 of the impugned order. The amount of duty for financial year 2000-01 has been confirmed in total ignoring the directions given by the Tribunal in the order dated 26.11.2007. The impugned order is therefore set aside, and the matter is remanded to the Commissioner for determination of the duty liability for the Financial year 2000-01 in terms of para 4 of the Tribunal order dated 26.11.2007.
Appeal allowed by way of remand.
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2023 (3) TMI 535
Levy of excise duty - spent earth arising out of the refined vegetable oil (intermediate goods) - exempt goods or not - HELD THAT:- The very same issue has been considered by this tribunal in the case of M/S PRIYANKA REFINERIES PVT LTD UNIT II VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX – HYDERABAD - II [2019 (7) TMI 249 - CESTAT HYDERABAD] wherein, the tribunal has held that matter has been decided by the Larger Bench of the Tribunal in M/S RICELA HEALTH FOODS LTD., M/S J.V.L. AGRO INDUSTRIAL LTD., M/S KISSAN FATS LIMITED VERSUS CCE, CHANDIGARH, ALLAHABAD [2018 (2) TMI 1395 - CESTAT NEW DELHI] and it has been held that these products are not intentionally manufactured but only arise during the process of refining of crude vegetable oil and therefore should be considered as waste and they are entitled to the benefit of exemption N/N. 89/1995-CE.
The issue is no longer res-integra accordingly, the impugned order is set aside - Appeal allowed.
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2023 (3) TMI 534
Valuation of export goods - method of valuation - Section 4A or Section 4 of Central Excise Act, 1944? - toothbrushes supplied in bulk in the carton to the principal manufacturer for further supply as under promotional scheme/ offer to supply the same free of cost with their toothpaste - HELD THAT:- There is no dispute on the fact of the present case that appellant are manufacturing tooth brush and supplying to their principal manufacturer M/s. Hindusan Unilever Ltd. & Prime Healthcare Products. In some of cases the tooth brush is packed in retail pack and MRP, is affixed on it. On such goods, the appellant is discharging duty under section 4A on MRP based valuation, on which there is no dispute. The other type of supply is the tooth brush are packed in bulk quantity in loose form in a carton and supply to their principle manufacturer. The principle manufacturer use this brush for their promotional scheme and the same is packed in a combo pack of tooth paste and this tooth brush. In this case, the tooth brush is not meant for retail sale but it is for supply under promotional scheme. The appellant is also clearing the said goods in bulk form in a carton. Therefore, as per standards of weights and measure Rules, the appellant are not under legal obligation to affix the retail sale price on this supplies. Therefore, the valuation of tooth brush when supplied in bulk quantity in carton was rightly valued under Section 4 of the Central Excise Act, 1944.
This very issue has been considered by this Tribunal in the case of M/S CONTEMPORARY TARGETT PVT LTD VERSUS C.C.E. & S.T. -VADODARA-I [2019 (5) TMI 871 - CESTAT AHMEDABAD] where it was held that the tooth brushes supplied by the appellant which is not for retail sale but for free supply by the tooth paste manufacturer will not be valued under Section 4A in the hands of the appellant - the value adopted by the appellant under Section 4 is correct and legal which does not need any interference.
The impugned order is not sustainable. Accordingly, the same is set aside - Appeal allowed.
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2023 (3) TMI 496
Valuation - non-inclusion of packing charges in the assessable value - place of removal - duty demand on Post-Manufacturing Expenses - discrepancies in the trial balance as well as the Chartered Accountant certificate produced by the respondents - refund of duty paid on After sales services, Pre-delivery inspection charges and Automobile cess - applicability of doctrine of unjust enrichment - demand of interest.
Whether packing charges has to be included in the assessable value or not? - HELD THAT:- The said issue stands settled by the judgment of Apex Court in the respondent's own case as reported in ROYAL ENFIELD (UNIT OF EICHER LTD.) VERSUS CCE [2011 (8) TMI 40 - SUPREME COURT] where it was held that the packing which is given by the appellant-company to their motorcycles is necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate and, therefore, such cost is liable to be included in the value of the goods and the cost of such packing cannot be excluded - Applying the ratio laid down in the respondent's own case, it is held that packing charges has to be included in the assessable value. However, for the period 01.05.1996 to 31.03.1997 there has been already an order passed in favour of the respondent dropping the proposal to demand duty on packing charges - Thus, when the Order-in-Original has attained finality in earlier round the same cannot be disturbed in the second round of litigation.
Duty demand on the amounts of post-manufacturing expenses (PME) - rejection on the ground of discrepancies in the C.A certificate when compared with the trial balance - HELD THAT:- The lower adjudicating authority has summarily dismissed the veracity of the C.A certificate. The Ld. A.R has stressed that as the respondent has failed to produce documents the C.A certificate cannot be accepted. It has to be noted that the respondent has been paying the duty provisionally and they have been filing returns reflecting the duty paid by them along with C.A certificate. The argument put forward by the Ld. A.R that the respondent has not produced necessary documents in the nature of trial balance to verify the veracity of the C.A certificate does not find favour - the Commissioner (Appeals) has correctly proceeded to accept the C.A certificate and modify the demand of duty on post-manufacturing expenses to Rs.12,01,418/-. This issue is found against the Revenue.
Refund of duty paid on After-Sales Services, Pre-Delivery Inspection charges, Automobile Cess - Revenue argued that the claim of refund is hit by the bar of unjust enrichment and therefore Commissioner (Appeals) ought not to have held that the respondent is eligible for refund of duty paid on these charges on finalization of provisional assessment - HELD THAT:- The show cause notice as well as the adjudication has been carried out as finalization of provisional assessment. To deny the refund, the Department cannot now contend that the claim of refund is under Section 11B. The attempt is to deny the refund on the ground of unjust enrichment. Prior to 25.06.1999, the bar of unjust enrichment was not applicable to a refund arising out of finalisation of provisional assessment - In the case of COMMISSIONER OF C. EX., MUMBAI-II VERSUS ALLIED PHOTOGRAPHICS INDIA LTD. [2004 (3) TMI 63 - SUPREME COURT] it was held that unjust enrichment is not applicable to refund consequent upon finalization of provisional assessment under Rule 9B of Central Excise Rules, 1944. Thus, the view taken by the Commissioner (Appeals) that the respondent is eligible for refund does not require any interference.
Demand of Interest - HELD THAT:- From the records, it is seen that Commissioner (Appeals) has erroneously set aside the demand from 30.12.1983 to 31.03.1997 on the basis of OIO 9/97. The period covered by this OIO is actually from 01.05.1996 to 31.03.1996 only. The respondent accepted the impugned order and has not filed any appeal. The department has filed appeal against such order. The Ld. Counsel for respondent has argued that the interest upto the period set aside by the Commissioner (Appeals) may be waived - There is no ground raised in the Cross Objections with regard to the demand of interest. The respondent cannot claim a relief in an appeal filed by the Department. It is made clear that respondent is liable to pay interest on all balance duty demand on packing chares and PME if not paid by them.
Appeal disposed off.
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2023 (3) TMI 495
Transfer of CENVAT Credit to lessee unit - Department denied to transfer the CENVAT Credit lying in the account balance of the appellant-company stating that there is no express stipulation in the agreement to transfer the liabilities of the appellant company - request for transfer of CENVAT Credit can be denied on technical grounds or not - HELD THAT:- The Department has referred to the agreement between the parties to deny the permission to transfer the CENVAT Credit, with the reason that there is no express stipulation for transfer of all liabilities of the appellant-company to the lessee unit. On perusal of the agreement, it is found that there is a clear intention between the parties to transfer the ownership of the machinery belonging to the appellant unit to the lessee unit. Such transfer is done along with transfer of raw materials, components, capital goods etc. which indicates that the lessee unit is put into the shoes of a manufacturer in the place of the appellant-company. The agreement has to be construed as to what is the intention of the parties who have entered into agreement and not by word to word analysis.
On going through the entire agreement, it is clear that there is consensus ad idem to transfer the ownership along with assets and liabilities to the lessee unit.
Thus, the rejection of the request to transfer CENVAT Credit balance as per Rule 10 of CCR 2004 is without any legal or factual basis. The Department is directed to issue permission to the appellant unit to transfer credit to the lessee unit - appeal allowed.
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2023 (3) TMI 494
Seeking grant of refund - rejection of part refund claim on the ground that the conditions with regard to 129 AR3As not fulfilled - HELD THAT:- From the refund application, it is clear that the appellant had submitted all the 144 AR3As. Therefore, there seems to be no reason on the partly refund is denied out of the total AR3As. Moreover, the appellant much before the passing of the adjudication order vide their letter dated 20.04.2011, brought to the knowledge of the commissioner referring their refund application that they had submitted all 144 AR3As along with the refund application.
There is no dispute that the appellant had submitted all 144 AR3As. Therefore, there are no lapse on part of the appellant. It appears from the order that the cognizance of letter dated 20.04.2011 was not taken by the Adjudicating Authority. Therefore, the matter needs to be re considered taking into consideration that the appellant have submitted all the 144 AR3As.
The appeal is allowed by way of remand to the adjudicating authority.
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2023 (3) TMI 437
Valuation of Specially Denatured Spirits (SDS) - Rejection of the highest rate - respondent-assessee, contended that upon a proper valuation in terms of Rule 6(p)(ii) of the Central Excise Rule, 1994, the value of SDS was determinable on the basis of its in-house production at Kaptanganj - extended period of limitation - penalty - HELD THAT:- This Court is of the opinion that the impugned order cannot be faulted. This Court in its judgment reported as AK ROY AND ANOTHER VERSUS VOLTAS LIMITED [1972 (12) TMI 37 - SUPREME COURT] held that No data was placed before the High Court by the appellant to show that the 22 per cent discount did not represent 'trade discount' is a percentage deduction from the regular list or catalogue price of goods. As there was no case for the appellants that there was any secret arrangements between the wholesale dealers and the respondent in respect of the sales to them or that the price of the articles was understated in the agreements or that any extra-commercial advantages to the dealers were taken into account in fixing the price we do not think that we should go into the question whether the discount allowed to the wholesale dealers was 'trade discount' or not for the purpose of the explanation.
In view of the clear principle enunciated by this Court which is that the most conservative price is to be taken into account while determining the value of goods, CESTAT approach and conclusions, in the opinion of this Court cannot be faulted. The impugned order of the CESTAT is accordingly affirmed.
Appeal dismissed.
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2023 (3) TMI 436
Application filed under the Sabka Viswas (Legacy Dispute Resolution) Scheme, 2019 dismissed - applicants have submitted that they have reversed the CENVAT credit involved in the inputs used in manufacture of WIP goods alleged to have been destroyed in the fire - HELD THAT:- This order was passed on 14.11.2018 and the petitioner has reversed the CENVAT credit as is evident from the letter dated 06.01.2018 (Annexure P-8). Even though in the order dated 14.11.2018 (Annexure P-9) it has been observed that they have not disputed that the CENVAT credit has been reversed by the petitioner and even while passing this order, they are not disputing this fact. Since this fact was in the knowledge of the respondent while rejecting his application for remission and while passing order 14.11.2018 (Annexure P-9), even then in this order, it has been observed that the applicant did not give any detail of credit taken reversed and inputs used in the material with respect to which they have sought remission.
The letter (Annexure P-8) was in the knowledge of the Department and reversal was made in the November-December 2016. There has been miscommunication and lack of knowledge since this reversal order was made in the year 2016 and information was sent in the year 2018 vide letter dated 06.01.2018 (Annexure P-8) by way of an application under the Scheme, but the Designated Committee has not considered this aspect while rejecting the application of the petitioner under the Scheme by taking into account that the CENVAT credit has been reversed and information has been sent to the Authorities vide Annexure P-8.
The petition is allowed and order of the Designated Committee dt.11.04.2017 is being set aside and matter is remanded back to the Designated Committee to pass afresh order after examining the information that CENVAT credit has been reversed by the petitioner as is evident from letter dated 06.01.2018(Annexure P-8) and in this letter it was clearly mentioned that CENVAT credit was reversed in the year 2016.
Petition allowed by way of remand.
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2023 (3) TMI 435
Under-valuation - non-inclusion of cost of free supply materials in the assessable value for payment of excise duty on wooden crates cleared - HELD THAT:- The issue is whether value of free supplies have to be included in the assessable value for payment of central excise duty on the wooden crates cleared by the appellant M/s.Saint Gobain Glass India Pvt. Ltd. The Tribunal in the case of M/S. MAKWUDS INDIA P. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI - IV [2018 (6) TMI 707 - CESTAT CHENNAI] had occasion to consider a similar issue where it was held that while clearing the goods to their principal, the cost of free issue need not be included in the assessable value.
The demand of duty alleging that cost of free supply material has to be included in the assessable value cannot sustain and requires to be set aside - Appeal allowed.
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2023 (3) TMI 434
SSI Exemption - job worker - removal of the scrap to the job worker was done as per Rule 4 (5) (a) of Cenvat Credit Rules, 2002 - Department was of the view that the appellant ought to have paid duty on scrap while removing them to the job worker - recovery of Central Excise duty on scrap removed to job worker for the period from September 2008 to February 2010 - whether the appellant is liable to pay duty on the scrap that has been sent to the job workers for manufacture of intermediate products such as angles and channels.
HELD THAT:- It is not disputed that removal of the scrap to the job worker was done as per Rule 4 (5) (a) of Cenvat Credit Rules, 2002. So also, it is not disputed that the job worker cleared intermediate goods in the nature of angles and channels to the appellant by paying duty and raising invoices.
The show cause notice dated 14.06.2012 is issued invoking the extended period. It is not disputed that the appellant has accounted the removal of scrap to the job worker as well as the clearance of the intermediate goods (angles and channels) by payment of duty. The Department has vaguely alleged that the appellant has suppressed facts with intention to evade payment of duty. There is no evidence to show that the appellant has done any positive act to deliberately suppress the facts so as to evade payment of duty. The appellant therefore succeeds on the ground of limitation also.
Appeal allowed.
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2023 (3) TMI 433
Clandestine removal - Corroborative evidences - case of the Department is that the stock of raw material and scrap which was earlier not recorded and the same was recorded on the investigation of the Income Tax Department, the said goods may have been used to produce finished goods which may have been cleared clandestinely - HELD THAT:- The demand was raised in the present case on the basis of IT search according to which the appellant had allegedly on account for some quantity of raw material and scrap which was duly accounted for in the excise records of the appellant. Once the unaccounted stock of raw material and scrap was accounted for obviously the same would be cleared on payment of duty. In this fact the department’s case is of no basis that goods might have been cleared clandestinely. Moreover except relying on the IT Search the revenue has not independently investigated the case, no evidence of clandestine manufacture and removal and transportation of the goods was investigated or brought on record. Therefore, merely, on this IT Search demand cannot be confirmed.
The department has demanded duty assuming that goods have been cleared clandestinely is without any basis. Even, the accounting made by the appellant on the instance of IT Search does not show that the goods have been cleared clandestinely. The difference which was pointed out by the income tax department is very negligible i.e. raw material 0.6 % and scrap of 0.21% against the total raw material and scrap dealt by the appellant. For this reason also it cannot be assumed that the goods have been cleared clandestinely. As regard the reliance placed on the IT search, it is settled law that on the basis of Income Tax demand of Central Excise Duty cannot be confirmed without independent investigation and bringing tangible evidence on records.
In absolutely identical facts of the present case in the case of CCE., RAIPUR VERSUS M/S. SAINI INDUSTRIES LTD. [2014 (7) TMI 617 - CESTAT NEW DELHI] this Tribunal has held that even though stock verification received from Income Tax Department but nothing on record that assessee had actually manufactured and removed the goods clandestinely . The stock verification done of Income Tax Authorities cannot be accepted on its face value in view of doubts raised by assessee and in the absence of corroborative evidence, hence, no duty of excise can be confirmed.
The Tribunal has taken a consistence view that merely on the basis of income tax investigation the case of clandestine removal under the Central Excise Act cannot be confirmed without bringing independent tangible evidence on record - the department could not establish the case of clandestine removal. Hence, the impugned order is not sustainable and the same is set aside.
Appeal allowed.
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2023 (3) TMI 432
Valuation - collection of charges from customers in the name of consumable charges through debit notes - case of the department is that the said charges are includible in the assessable value of DG sets - HELD THAT:- The appellant have 2 separate activities one is manufacture and sale of DG sets on which excise duty is paid on transaction value. The other activity is Installation & Commissioning and Repair & Maintenance which is provided through their sub contractor. There is separate contract for such services. In this fact, the activity of manufacture is completed when the DG set is sold by the appellant from their factory on transaction value. The other activities such as supply of spares for Installation & Commissioning and Repair & Maintenance of DG sets is all together different activity which cannot be clubbed with the assessable value of manufactured DG set sold by the appellant. It is also observed that in the show cause notice the department failed to even corelate the consumable charges raised through debit note with a particular DG set manufactured and sold by them. Therefore, the case of the department cannot be sustained.
This issue is no longer res- integra as the same was decided in the appellant own case reported at M/S. VEENA INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & S.T., VAPI [2016 (1) TMI 161 - CESTAT AHMEDABAD] wherein this Tribunal has held that It is an independent activity of service therefore the cost of diesel which was recovered by the appellant from the customer as reimbursement for the testing of the DG set is not includable in the transaction value towards the sale of DG set. The activity of filling of Diesel in the DG Set at the site Company is at most can be considered as pre-delivery inspection charges.
The impugned order is set aside - Appeal is allowed.
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2023 (3) TMI 331
Seeking waiver of pre-deposit of 7.5% of duty for maintaining an appeal - petitioner claims that the interest of the revenue is fully protected as the petitioner is entitled to the refund of CENVAT credit which has not been processed yet - HELD THAT:- This Court is unable to accept that the petitioner can set off its obligation to make a pre-deposit against its claim for the refund of CENVAT credit. However, we find merit in the contention that the petitioner’s remedy of an appeal would be rendered illusory in the given circumstances where the petitioner does not have the liquid funds to make the said deposit.
After some arguments, learned Counsel appearing for the petitioner states that the petitioner would make a deposit equal 2.5% of the liability instead of 7.5% to maintain the appeal against the order-in-original dated 26.11.2021 - thus, it is considered apposite to direct that if the petitioner deposits an amount equivalent to 2.5% of its liability, the petitioner’s appeal against the order in original would not be rejected solely for want of the requisite pre-deposit.
Petition disposed off.
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2023 (3) TMI 295
Maintainability of appeal - appeal of the petitioner rejected merely on the ground of non-deposit of mandatory pre-deposit of 7.5% of the duty and penalty - HELD THAT:- Admittedly, petitioner is an unregistered dealer. His appeal has been dismissed on the ground of non-payment of mandatory pre-deposit. It does not appear that there was intent on the part of the petitioner to avoid payment of pre-deposit @7.5% as provided under the amended section 35F of Central Excise Act, 1944. Respondents have also adverted to the facility provided under the RBI Instruction for making such pre-deposit by unregistered dealer / registered non-assessees.
In those circumstances, interest of justice would be met if the matter is remanded to the Appellate Authority. Petitioner is required to make predeposit within a period of four weeks from today.
Impugned order set aside - petition allowed by way of remand.
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2023 (3) TMI 294
Levy of penalty u/s 26 of CER - supply of invoices without supply of capital goods - whether, based on the evidence available on record, it can be said that the appellant had not supplied the capital goods to M/s Crest Steel & Power Pvt. Limited in 2012 and only supplied invoices - HELD THAT:- It is undisputed that no investigation whatsoever was conducted at the end of the appellant. The appellant was not even asked if it had supplied the goods or not. If documents indicated that the goods have been sent and the ledgers of M/s Crest Steel & Power Pvt. Limited indicated that it has engaged the transporter, the mere fact that at the time of verification, the goods could not be found, by itself, does not prove that the appellant did not supply the goods. The goods were not found during panchnama but the goods could have been removed by M/s Crest Steel & Power Pvt. Limited, after they were purchased. The investigation was conducted five years after the goods were supplied. Once the goods were supplied by the appellant, they are beyond its control. Inconsistency in the invoices ledger of the transporter also does not carry the case of the Revenue any further because transportation was the responsibility of the buyer and not of the appellant.
There is no evidence that the appellant returned any cash to M/s Crest Steel & Power Pvt. Limited in any form and by any means. If the appellant has not supplied the goods, it should not have received any payment. If there was any fraud and the appellant was only issued invoices and received payment by cheque, naturally M/s Crest Steel & Power Pvt. Limited would want the money to be returned. Neither is there any evidence nor is there any allegation to this effect.
Thus, based on the evidence available on record, the imposition of penalty under Rule 26 of the Central Excise Rules, 2002 upon the appellant cannot be sustained - appeal allowed.
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