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Central Excise - Case Laws
Showing 121 to 140 of 1430 Records
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2023 (12) TMI 167
Quantum of cash refund - Refund of wrongly paid Central Excise duty on the goods supplied - how much cash refund is to be given to the appellant? - HELD THAT:- Since different amounts have been shown Central Excise duty paid in cash both by the department as well as by the appellant - it will be appropriate to remand the matter back to the Adjudicating Authority to re-determine the amount of cash after taking into consideration the submissions which have been made by the appellant with regard to claim of cash payment of Central Excise duty amounting to Rs. 76,57,238/- and decide the matter after due verification of facts of cash payment of Central Excise duty and accordingly decide the refund claim again after taking into consideration the claim of the appellant.
Appeal allowed by way of remand.
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2023 (12) TMI 120
SSI exemption - clearance of goods under the brand name of another person or not - HELD THAT:- In the absence of the Appellant’s providing any evidence that they were the brand name owners, irrespective of the fact that whether it was registered in their name or not and the market’s perception that brand name belonged to somebody else, it is not possible to consider that it did not belong to others. In fact, in this case, sufficient evidence is on record by way of statements and other relied upon documents to the effect that these brand names/trade names were belonging to SRCPL and Farmax.
The Appellants reliance on the case law cited is not relevant. In the case of COMMNR. OF CENTRAL EXCISE, HYDERABAD IV VERSUS M/S. STANGEN IMMUNO DIAGNOSTICS [2015 (6) TMI 155 - SUPREME COURT], the issue in the said case was whether two different parties were using the same trademark and logo simultaneously in their own rights, which is not the case here as it is clearly the case where the Appellant has failed to prove that they were the owners of the brand name/trade name of “STOP” and “TODAY”. The Hon’ble Supreme Court observed that the Assessee, in this case, is using brand name as the owner thereof itself, and was not using brand name as belonging to some other person - The Hon’ble Supreme Court further observed that the central idea contained in the aforesaid definition is that the mark is used with the purpose to show connection of the goods with some person who is using the name or mark and therefore, in order to qualify as ‘brand name’ or ‘trade name’, it has to be established that such mark, symbol, design or name, etc., has acquired the reputation of the nature that one is able to associate the said mark with the manufacturer.
In this case, as rightly observed by the Commissioner (Appeals), there is sufficient evidence to clearly establish that brand name or trade name belonged to other persons viz., SRCPL/Farmax and not to the Appellant. Further, there is nothing on record to establish that the Appellants were perceived to be the brand name owner for “STOP” and “TODAY” in the market.
The Order of Commissioner (Appeals) is based on correct appreciation of facts and legal provisions and therefore, the same need not be interfered with - Appeal filed by appellant dismissed.
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2023 (12) TMI 119
CENVAT Credit - time limitation - credit was taken on the input service after long span of 1 to 4 years - credit of security service was denied as the same was used for the unit as well as the residential premises of the director and branch office - denial on the ground that the invoices do not pertain to the appellant - denial on the ground that the invoices do not contain the service tax registration No. of the supplier of input services.
Denial on the ground that credit was taken on the input service after long span of 1 to 4 years - HELD THAT:- The reason given for denial of cenvat credit of Rs.77,74,439/- by the Adjudicating Authority that since one year period is provided under Section 11A for demanding of duty the same shall apply for availment of Cenvat credit also. This reason given by the Adjudicating Authority, in our considered view is absolutely absurd and not relevant. The Cenvat Credit Rules, 2004 is independent in itself and in dealing with the Cenvat credit matters, finding given is irrelevant and cannot be imported from the other Rules or Act. Section 11A is strictly for the purpose of issuing show cause notice for demanding of duty even for demanding wrongly availed Cenvat credit, but for the purpose of availment of Cenvat credit, Cenvat Credit Rules, 2004 is applicable - the import of Section 11A to say that 1 year period provided in Section 11A shall apply in the case of availment of Cenvat credit is absolutely illegal, incorrect and imaginary.
The Hon’ble Delhi High Court in the case of Global Ceramic Pvt Ltd [2019 (5) TMI 1432 - DELHI HIGH COURT] clearly held that the time limit shall not apply for the period prior to 11.07.2014 when the amendment of 1 year time limit was prescribed.
Thus, the period of 1 year is not applicable during the period when there was no time limit prescribed for availment of Cenvat credit. Therefore, the appellant are eligible for Cenvat credit of Rs. 77,74,439/-.
Credit on security service - Denial on the ground that the security service was used for the residential premises of the Director and branch office - HELD THAT:- A very small portion of the service was used in respect of the residential premises of the Director. However, remaining majority of portion of service was used in relation to the business activity by the appellant. Therefore, only the Cenvat credit attributed to the input security service related to the residential premises of Director shall not be available. However, the appellant have reversed the Cenvat credit of Rs. 8189/-. In respect of security service related residential premises of the Director the said reversal is upheld and maintained. However, the remaining amount of Cenvat credit of security service is admissible to the appellant.
Credit denied on the allegation that the invoices do not pertain to the appellant - HELD THAT:- Though the invoices copy is not available, however, there is no case of the department that the input service related to this credit was not received by the appellant and used for their overall business operation. It is the submission of the appellant that the invoices were accounted for in the books of account. Therefore, the receipt of service and use thereof is not in dispute, merely because name of the appellant is not mentioned or incorrectly mentioned the credit cannot be denied for this clerical error. Accordingly, the appellant is eligible for Cenvat credit of Rs. 75,752/- also.
Credit denied on the ground that invoices do not contain the service tax registration of the supplier of input services - HELD THAT:- Except this small lapse there is no dispute that the appellant have received the invoices, services and the payment of such invoices to the supplier of input service. Therefore, merely because registration no. is not mentioned credit cannot be denied - it is settled that merely because service tax registration was not mentioned on the invoices credit cannot be denied - appellant are eligible for Cenvat credit on the invoices which are not bearing the registration number.
The appellant are eligible for Cenvat credit, on all the counts - appeal allowed.
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2023 (12) TMI 118
Valuation - cost + 15% for arriving at the assessable value - inclusion of certain elements of cost in the computation of the total cost or not - revenue neutrality - Show Cause Notice for the period April 2000 to March 2001 was issued on 29.07.2005 - time limitation - HELD THAT:- The issue is squarely covered by the decisions of this Tribunal in M/S. JAI BALAJI INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, BOLPUR [2023 (6) TMI 1102 - CESTAT KOLKATA] and M/S. HINDALCO INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, BHUBANESWAR-II [2023 (5) TMI 720 - CESTAT KOLKATA], wherein it has been held that when the duty paid by the parent unit is eligible as Cenvat Credit to the receiving unit, the entire proceeding becomes revenue neutral.
There are also force in the Appellant’s submissions that the Department has issued the Show Cause Notice in a belated way though all the details were available with the Department in view of their Monthly Returns being filed. Since the issue is that of revenue neutrality, in such a case, it has been held that the question of suppression would not arise.
Tforce in the Appellant’s submissions that the Department has issued the Show Cause Notice in a belated way though all the details were available with the Department in view of their Monthly Returns being filed. Since the issue is that of revenue neutrality, in such a case, it has been held that the question of suppression would not arise.
The appeals allowed both on merits as well as on limitation.
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2023 (12) TMI 117
CENVAT Credit - Business Support Services - Mining Services - nexus with output services.
Whether the Appellant is eligible to avail CENVAT Credit of Business Support Services received by them from ABMCPL (group company) for the period from April 2006 to March 2016? - HELD THAT:- The issue is no longer res integra as the same issue has been decided by this Tribunal in Appellant's own case, M/S. HINDALCO INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II [2023 (6) TMI 457 - CESTAT KOLKATA] where it was held that Appellant is entitled to avail the CENVAT Credit of service tax paid on BSS since they have a nexus with the overall business activity of manufacturing final goods and are essential for the day-to-day operations of the Appellant.
In the present case, the department has not challenged the assessment made by ABMCPL in the returns and accepted it. Without challenging the assessment, the department cannot question the Cenvat credit passed on by ABMCPL to the Appellant - the demands confirmed in the impugned orders along with interest and penalty on this count are not sustainable and accordingly, the same is set aside.
Whether the Appellant is eligible to avail CENVAT Credit on Mining Services received from Avian Overseas Pvt. Ltd. for the period from April 2006 to June 2011? - HELD THAT:- It is observed that the services ancillary to mining of coal in the Appellant’s mine was used for generation of electricity at their Captive Power Plant located in their factory at Hirakud, Sambalpur, Orissa. The said electricity is supplied to their manufacturing unit for use in manufacture of dutiable goods. Thus, the services have intricate nexus with manufacturing of dutiable goods.
In the case of India Cements Ltd. v. CCE, Guntur [2016 (8) TMI 846 - CESTAT HYDERABAD], the tribunal has held that the input services used in captive mines are available as credit - In the case of Vikram Cement v. CCE, Indore [2006 (2) TMI 1 - SUPREME COURT], the Hon'ble Supreme Court has held that capital goods and inputs used in captive mines available as credit to the manufacturing unit.
Thus, the Appellant is eligible for the Cenvat credit of the input services received and used in the captive mines as the said services were used in mining of coal which was used for generation of electricity at their Captive Power Plant and the electricity was used in the manufacturing unit for manufacture of dutiable goods. Thus, there is a clear nexus between the input services on which Cenvat credit was availed and the manufacturing activity undertaken by the Appellant. Thus, the impugned order demanding reversal of such credit along with interest and penalty is not sustainable.
Regarding the grounds taken by the adjudicating authority to confirm the demands in the impugned order, it is observed that the adjudicating authority has observed that AOPL was providing ‘site formation services’ and not ‘mining services’. Hence, it has no nexus with the manufacturing process of excisable goods - The adjudicating authority has also observed that AOPL issued the invoices on the Appellant’s mines and not the factory address/ registered premise. On these ground the credit availed by the Appellant was denied. It is observed that even if such invoices were addressed to the mines, the Cenvat credit ought not be denied thereon on account of such procedural infirmities, in the absence of any dispute as to usage of such services by the Appellant. Accordingly, the Cenvat credit cannot be denied on this ground.
The umpugned order is set aside - appeal allowed.
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2023 (12) TMI 116
Refund of 100% excise duty paid in cash in respect of final products - benefit of Notification No. 32/1999-CE dated 08.07.1999 availed - applications rejected on the grounds that subject applications are barred by limitation inasmuch as Para 2.1(1) of the Notification No. 32/1999-CE (supra) and Para 3(1) of the Notification No. 20/2007-CE - HELD THAT:- The issue is no longer res integra as an identical issue has been decided by this Tribunal in the case of M/S HINDUSTAN UNILEVER LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, DIBRUGARH [2023 (10) TMI 991 - CESTAT KOLKATA], wherein it has been held that the application filed before the decision of the Hon’ble Supreme Court cannot be construed as time barred.
Thus, the applications filed by the Appellant for fixation of special rates of valuation on 29.09.2010, for the FY 2009-10 for each of the units, is not time barred - the impugned orders set aside - appeal allowed.
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2023 (12) TMI 115
Denial of permission to make assessment provisional for the period from January, 2017 to June, 2017.
The main reason for denial is para 2.2 Chapter 3 Part IV of CBEC Manual which provides “the permission is issue based and party based and therefore permission cannot be granted on general basis for provisional assessment”.
HELD THAT:- Provisional assessment is made for the reason that value are rate of duty could not have been determined finally at the time of clearance. In the present case admittedly the value of the goods cleared is not determined at the time of clearance that the assessments are made provisionally so that the differential duty would be recovered on finalization of the assessment. The definition of relevant date as per Section 11A provides that the relevant date would be date of final adjustment of duty on the finalization of assessments.
In the present case, there are no action being taken by the revenue after having denied the permission to make assessments provisional to demand the duty in respect of the clearances made within the prescribed time limit as per Section 11A. In case the submission of the revenue is agreed to, appellant would without even a notice issued under Section 11A within the prescribed time limit whatsoever payments made by the appellant on finalization of assessment could not have been recovered. Provisional assessment is a facility to the revenue to keep the assessments alive and not to the person claiming for provisional assessment which is on account of the reason that the correct value for rate could not have been determined.
The issue involved in the present case has become inconsequential. The counsel for the appellant submits that they have from the date of clearance in 2017, in all the cases, the case, determined the final value and paid the differential duty along with the interest as has been held by the Hon’ble Apex Court in BHARAT HEAVY ELECTRICALS LTD. VERSUS COMMR. OF CUS. & C. EX., KANPUR [2023 (2) TMI 181 - SUPREME COURT]. On payment of differential duty along with interest on finalization of value subsequent to the clearance of goods, no further action is due against the appellant except in case where the duty has been short paid, for any reason in pursuance of the impugned order which otherwise by the lapse of time has become inconsequential.
The appeal filed by the appellant is in-fructuous but for the statistical purposes the appeal is allowed.
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2023 (12) TMI 114
Clandestine removal - levy of penalty under Rule 209A of the Central Excise Act, 1944 - alleged active participation in removing and dealing with the goods which they know were liable for confiscation - HELD THAT:- This case is, in any case not different from the case where demands have been dropped by the Adjudicating Authority holding the end products as a product of the printing industry. This is the major amount on which in the demand confirmed i.e. total value of the goods as per the table in Para 10.17 is Rs.98,483/-. Nothing has been stated in the impugned order as to why and on what basis invoice value has been changed from Rs 45,501/- to Rs 98,483/- - there are no merit in confirmation of this demand when exact facts in respect of these invoices had not been adduced/adjudicated in the present order. The order in respect of these seven invoices is only made on the basis of surmises and presumptions.
The Commissioner has not recorded that the goods that are to be confiscated are excisable goods but he has only expressed his doubt and observed that the unaccounted finished goods are subject to multifarious uses and are leviable to Central Excise duty. In the first part he says these may not be excisable or subject to excise duty as per the facts on record and in the next breath without ascertaining the exact fact and nature of the goods he held them liable for confiscation - It is a settled law that while passing an order for confiscation at least the excisable nature of the goods should have been determined. It is the predetermined mindset of the adjudicating authority whereby he has in respect of these goods without deciding the excisability held the goods to be liable for confiscation. Confiscation cannot be made on the basis of such doubts as expressed by the Commissioner.
Thus in the present case the benefit of the doubt which existed in the mind of adjudicating authority should have been extended to the appellant. Order for confiscation and redemption fine needs to be set aside - As demand of duty and order for confiscation are set aside, there are no reason for imposition of penalty under Section 11 AC of the Central Excise Act and these penalties are set aside - As penalties on appellant No.1 is set aside, there are no merit for imposition of penalty on appellant No.2 & 3 accordingly the same are set aside.
Appeal allowed.
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2023 (12) TMI 113
Reversal of CENVAT Credit - Menthol Crystals which was exempted vide notification 4/2008-CE dated 01.03.2008, while DMO remained chargeable to duty - HELD THAT:- The issue is no more res integra and is squarely covered by the judgment of Hon’ble High Court of Himachal Pradesh at Shimla in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS DRISH SHOES LTD. [2010 (5) TMI 334 - HIMACHAL PRADESH HIGH COURT] where it was held that we hold that an assessee, manufacturing goods chargeable to nil duty, is eligible to avail CENVAT credit paid on the inputs under the exception clause to Rule 6(1), as contained in Rule 6(5) of CENVAT Credit Rules, 2002 and Rule 6(6) of CENVAT Credit Rules, 2004, used in the manufacture of such goods, if the goods are exported.
By respectfully following the ratio as laid down by Hon’ble High Court of Himachal Pradesh at Shimla and also observing that the appeal filed by the Revenue against the decision of the Hon’ble High Court has been dismissed by Hon’ble Supreme Court in COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH VERSUS M/S DRISH SHOES LTD. [2016 (7) TMI 1415 - SC ORDER], the impugned order is set aside.
The Appeal filed by the Appellant is allowed.
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2023 (12) TMI 112
Denial of CENVAT Credit - effect of amendment in Explanation 2 vide Notification No.16/2009-C.E. (N.T.), dated 07.07.2009 - retrospective or prospective effect - penalty - HELD THAT:- The show cause notice has been issued mainly based on the decision of VANDANA GLOBAL LTD. VERSUS CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] and the same has been categorically overruled by Hon'ble Chhattisgarh High Court in M/S VANDANA GLOBAL LIMITED AND OTHERS VERSUS COMMISSIONER, CENTRAL EXCISE AND CUSTOMS, CENTRAL EXCISE [2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT]. The Hon'ble High Court has given a specific finding against the finding of retrospective operation of the amendment to the explanation to Rule 2(k) of Cenvat Credit Rules holding that the said amendment will not be retrospectively applicable. Further, the said finding of the learned Adjudicating Authority is in violation of a catena of decisions of several High Courts and Supreme Court allowing the admissibility of credit on inputs used in the fabrication of support structures of capital goods.
Similar issue came up for consideration before Hon’ble Gujarat High Court in the case of MUNDRA PORTS AND SPECIAL ECONOMIC ZONE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & CUSTOMS [2015 (5) TMI 663 - GUJARAT HIGH COURT] and before Hon’ble Madras High Court in the case of M/S. INDIA CEMENTS LTD. VERSUS THE CUSTOM, EXCISE AND SERVICE TAX & THE COMMISSIONER OF CENTRAL EXCISE [2015 (3) TMI 661 - MADRAS HIGH COURT] wherein it was held that the exclusion incorporated in Explanation 2 to Rule 2(k) of the Credit Rules w.e.f. 07.07.2009 cannot be given retrospective effect thereby effectively holding that the finding in Vandana Global is erroneous.
Hon'ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS LTD. [2010 (7) TMI 12 - SUPREME COURT], by applying the user test, held that credit availed on steel items for fabrication of Chimney was admissible.
The availment of credit on PSC poles is covered by the decision of Hon’ble Rajasthan High Court in the case of ADITYA CEMENT VERSUS UNION OF INDIA [2007 (3) TMI 190 - HIGH COURT RAJASTHAN]. It has been held that the railway track material used for transporting of coal and products of cements are eligible for credit as without supply of fuel the plant does not function. Thus, the railway track cannot be kept out of the consideration for availing credit, though, such material was not being used directly in the manufacture of cement.
In such situation, imposition of penalty is also not sustainable on the main as well as the other Appellants.
The impugned order cannot be sustained and is accordingly set aside - appeal allowed.
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2023 (12) TMI 111
Refund claims for interest - denial on the ground that as per the adjudicating authority interest was not a pre-deposit under Section 35 F as amended w.e.f. 06.08.2014 - HELD THAT:- Appellant had deposited an amount of Rs.1,00,00,000/- as directed by the Hon’ble High Court vide order dated 08.07.2014 - Admittedly, in this case the appeal was filed on 27.08.2014 all though it was in respect of the Order-in-Original dated 23.05.2013, no appeal was filed before the appellate authority i.e. CESTAT. The amount was deposited prior to the date of commencement of Finance (No 2) Act, 2014 as per the direction of Hon’ble High Court, this appeal was filed on 27.08.2014, i.e after the date of commencement of Finance Act, 2014. The Tribunal has considered this appeal filed after 27.08.2014 in terms of the amended provisions of Section 35F by treating the amount deposited as per direction of Hon’ble High Court as a pre-deposit as per Section 35F as amended w.e.f. 06.08.2014. From the proviso to the amendment made in Section 35 F, it is quite evident that the date of filing the appeal is the date for determining the applicability of the amended section and not the date of deposit nor the date of order appealed against is having any relevance. Tribunal has in its order dated 12.12.2014, considered the amount deposited by the appellant as per the directions of the Hon’ble High Court, as deposit made under the provisions of amended Section 35F, for purpose of consideration of appeal.
Tribunal has considered the amount deposited as per the direction of Hon’ble High Court after completion of adjudication proceedings to be in compliance of the conditions of mandatory pre-deposit. It is important to note that amount was deposited as per the direction of Hon’ble High Court and was not an deposit made in terms of Section 35 F prior to the commencement of the Finance (No 2) Act, 2014. Accordingly the proviso to Section 35FF would not be applicable in the facts of the present case.
Similar has been stated by the Board in its Circular No 984/08/2014 dated 16.09.2014, where it was held that Since the amount paid during investigation/audit takes the colour of deposit under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962 only when the appeal is filed, the date of filing of appeal shall be deemed to be the date of deposit made in terms of the said sections.
Impugned order holding contrary to the above cannot be sustained and the same is set aside - appeal allowed.
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2023 (12) TMI 43
Wrongful availment of MODVAT/CENVAT Credit on the capital goods - case of the appellant/Revenue is that on the basis of report from the intelligence, on scrutiny of the premises of the assessee, irregularity in availing the MODVAT credit on capital goods was detected - HELD THAT:- Given the fact that the appeal of the appellant/Revenue was primarily touching upon the applicability of the Notification No.214 of 1986 and also use of the term “capital goods as such” mentioned in Rule 57AB of the Central Excise Rules, 1944, it is opined that the judicial precedents referred to in the preceding paragraphs dealing with if not identical in almost similar circumstances lays to rest the question of law being agitated by the Revenue in this case.
There are no substantial merits in the grounds raised by the Revenue in this case and the appeal thus fails and stands decided affirming the order passed by the Tribunal and the same stands decided in favour of the respondent/assessee - questions of law on which the appeal was admitted, stands answered against the appellant/Revenue and in favour of the respondent/assessee.
Appeal dismissed.
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2023 (12) TMI 41
Recovery of CENVAT Credit availed wrongly - Credit for exempted / non-dutiable products - Refund of duty paid under protest - - refund order challenged on the ground that adjudicating authority had not verified whether the refund was clear from principle of unjust enrichment - HELD THAT:- The Tribunal had remanded the matter for the limited purpose of satisfying the Deputy Commissioner on the requirements of Rule 10(3) and as also to quantify the demand after considering the appellant’s payment of an amount @ 6% of the price of PMB. In this context, it is noted that the adjudicating authority has not given the benefit of the duty paid at the time of removal of PMB amounting to Rs.60,89,453/-. There is no dispute that the appellant had paid the duty of Rs.60,89,453/- which has not been objected to by the Department during the relevant time. Therefore, the appellant cannot be denied the adjustment of this duty paid against the amount liable to be reversed - the Commissioner had erred in denying the adjustment of ₹60,89,453/- against the demand for the period September 2012 to November 2012. - After adjusting the amount already reversed, balance of the demand confirmed.
Penalty on appellant - HELD THAT:- The appellant were regularly availing credit and paying duty on the final product, even after it was held that the said process did not amount to manufacture. The department did not raise any dispute or the fact that the appellant was choosing to pay the duty on a product, not exigible to excise duty. In such a scenario, it is not established that there was any intention of the appellant to evade duty or avail inadmissible credit. Therefore, no case has been made out by the adjudicating authority for levying penalty on the appellant, the same is set aside.
Unjust enrichment - HELD THAT:- The appellant vide their letter dated 31.07.2013 had clearly indicated that the said amount had been paid after utilising CENVAT credit under protest. It is also brought to our notice that the amount so deposited is recorded under the head “other current asset” in Schedule 14 of the Balance Sheet. This substantiates the contention of the appellant that they had not recovered this amount from the buyer of the product or any other person. It is found that in several decisions, it has been held that the principal unjust enrichment does not apply to cases where duty has been paid to protest - unjust enrichment does not apply to the refund claim in the impugned appeal. On this basis alone the impugned order is set aside. - Refund allowed.
Appeal allowed in part.
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2023 (12) TMI 40
Reduction in demand - receipt of defective goods from their suppliers and non-issuance of invoices at the time of sending the goods for replacement - HELD THAT:- The Commissioner (appeals) has already considered all the disparities pointed out by the Appellant and reduced the demand from Rs. 2,39,986/- to Rs.108,182. The valuation aspect raised by the Appellant has been dealt with by the Commissioner (Appeals) and the Appellant submits that there is no dispute of valuation now. Thus, it is observed that the Ld. Commissioner (Appeals) has already dealt with all the issues in the impugned order and there is no infirmity in the impugned order for interference. Accordingly, the demand of duty confirmed in the impugned order is upheld.
Penalty - HELD THAT:- The Appellant is entitled for the reduced penalty of 25% of the duty confirmed. Accordingly, if the Appellant pays the demand of duty confirmed in the impugned order along with interest on or before 31.12.2023, they are entitled for the reduced penalty of 25% of the demand confirmed. If they do not comply with the payment, the penalty of Rs.1,08,182/- will stand.
Appeal disposed off.
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2023 (12) TMI 39
Reversal of proportionate CENVAT Credit - manufacture of both dutiable goodsas well as exempted goods - non-maintenance of separate records of inputs - HELD THAT:- It is not relevant as to how the separate records are maintained rather it is important that the records are maintained in such a way that no credit on constituent inputs is taken which is used in manufacture of exempted goods either by sole use are by common use. There is no such allegation in the show cause notice against the respondent for taking credit on any input which is solely used in exempted goods or used as common input.
The notice alleged that though the party maintains separate records but not as required under Rule 6 (2) of the CCR, 2004. This view is not supported by any evidence and there is no prescribed manner in Rule 6 (2) for maintaining separate records.It is also found that the only requirement is that the credit should not be taken on inputs used in exempted goods. If the inventory of exempted goods are separately maintained and no credit is availed on the inputs used therein, this will serve the purpose. The demand of 10% amount under sub-rule 3 of Rule 6 of the CCR, 2004 on the export clearances as detailed in Annexure-A to the notice is contrary to the provisions of sub-rule 6 of Rule 6 of the Cenvat Credit Rules, 2004 as the export clearances are one of the clearances among others to which the provisions under sub- rules (1), (2), (3) & (4) of Rule 6 shall not be applicable.
The demand of an amount on export clearances is not sustainable in the light of the provisions of sub rule 6 of Rule 6 of the CCR 2004 - There are no infirmity in the impugned order and accordingly, the same is sustained - appeal dismissed.
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2023 (12) TMI 6
Input Tax Credit - commission paid to the foreign agent - challenge to the decision passed by the Division Bench of the High Court of Gujarat in Tax Appeal Nos.353/2010 and 204/2011 [2013 (1) TMI 304 - GUJARAT HIGH COURT] - HELD THAT:- The High Court found that the Tribunal had reversed the findings of the adjudicating authority without giving any reason in support thereof and had merely sought to compare the payments made for services rendered by a foreign agent as analogues to a clearing and forwarding agent who actually effects sales. It was contended that the sales promotion is a terms of art and an agent can be appointed only for that purpose and therefore, the nature of the agreement between the assessee and the agent; the invoices indicating the payments made to the agent would all be relevant factors to be considered while arriving at a finding as to whether the appellant-assessee is entitled to claim input tax credit - there are substance in the contention of learned senior counsel appearing for the appellant particularly having regard to the doubt expressed by the High Court with regard to the manner in which the CESTAT had reversed what had been stated by adjudicating authority.
The High Court ought to have then remanded the matter(s) to CESTAT for a fresh consideration by giving an opportunity to the appellant to place on record the necessary documents including the agreement entered into by the assessee with the concerned agents, the relevant invoices etc. - matters are remanded to CESTAT for a fresh consideration.
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2023 (12) TMI 5
CENVAT Credit availed in respect of CVD and SAD - duty paying documents - non-eligible in terms of provisions of Rule 9(1)(b) of the CENVAT Credit Rules, 2004 - misclassification of goods imported by the appellant with an intention to evade payment of duty - HELD THAT:- On perusal of the Show Cause Notice issued by DRI, it is seen that the main allegation is that of classification of the imported goods. The Show Cause Notice is issued under Section 28(1) and not under 28(4). There is no allegation of fraud, collusion, wilful mis-statement or suppression of facts for the Show Cause Notice issued by DRI. The Ld. counsel for the appellant has also submitted that the said Show Cause Notice has culminated in passing of the adjudication order. The said order dated 22.07.2019 shows that there is no finding with regard to fraud, collusion, wilful mis-statement or suppression of facts. The issue in the DRI Show Cause Notice is purely that of classification of the imported inputs.
The appellant has paid the duty on the inputs under protest. It is brought out from the facts that the appellant has captively consumed the imported goods. The situation of issuing a supplementary invoice would arise only if the manufacturer sells the goods from his factory. In the present case, the appellant has captively consumed the goods. The credit has been availed of the duty paid on the TR-6 Challans - there is no reason to apply Rule 9(1)(b) of the CENVAT Credit Rules, 2004.
The Tribunal Bangalore while analysing the similar issue in respect of the erstwhile Rule 7(1)(b) of the CENVAT Credit Rules, 2004 which is pari materia has held that the bar for availment of credit on supplementary invoices would operate only when the additional amount of duty becomes recoverable from the manufacturer on account of non-levy or short levy by reason of fraud, collusion or wilful mis-statement or suppression of facts, etc.
Thus, the demand cannot sustain. The impugned order is set aside - appeal allowed.
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2023 (12) TMI 4
Recovery of credit taken wrongly and utilized alongwith interest and penalty - capital goods or not - welding electrodes falling under Chapter Sub Heading 831100 - period from October 2006 to February 2007 - HELD THAT:- The use of welding electrodes are integrally connected to capital goods and thereby with the process of manufacture. They are used for the maintenance of capital goods installed in the appellant’s plant. Without the use of welding electrodes, during maintenance of capital goods whenever necessary, the machine may not function and manufacture would be impossible or commercially inexpedient. Welding electrodes which are hence used in relation to the manufacture of final products come under the definition of ‘inputs’ as per Rule 2 of CENVAT Credit Rules, 2004. Therefore, the eligibility of the said inputs for CENVAT credit cannot be denied.
Reliance can be placed in the case of M/S. TAMILNADU NEWSPRINTS & PAPER LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE [2017 (6) TMI 574 - MADRAS HIGH COURT] where it was held that the said issue is covered by the judgment of the Division Bench of this Court in the matter of THE NATIONAL CO-OPERATIVE SUGAR MILLS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [2016 (7) TMI 1073 - MADRAS HIGH COURT], where it was held that Judicial pronouncements makes it abundantly clear that welding electrodes used for repair and maintenance of machineries, in relation to manufacture of the final product, namely sugar, is eligible for CENVAT credit.
The impugned order dated 04/02/2015 passed by the Commissioner of Central Excise (Appeals), Coimbatore is set aside - Appeal allowed.
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2023 (12) TMI 3
Refund of Excise Duty - transaction value - amount raised through Debit notes (cost difference) can form part of transaction value under Section 4 of the Central Excise Act or not, so as to make the excise duty paid to be correct in regard to transaction value of the goods cleared? - HELD THAT:- The transaction value means, the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay. This has two parts. Firstly, the price actually paid or payable when the goods are sold. Secondly, it includes in addition to the amount as price, any amount that the buyer is liable to pay. It is an admitted fact that debit notes have been raised after the clearances of the goods i.e. after sale of the goods. Further, the repeated communications by M/s.Mando India shows that they have never accepted to honour the increased price or the cost difference. If M/s.Mando India had agreed to pay the higher revised price it would definitely form part of the transaction value. As per the purchase orders or as per the communications between the parties there is no evidence to show that M/s.Mando India has agreed or is liable to pay the cost difference.
The loan advance to the appellant by M/s.Mando India cannot be considered as an additional consideration or a consideration that has influenced the price agreed between the parties. The loan has been completely repaid by the appellant by adjusting in the invoices while making clearances of the products to M/s.Mando India. Further the debit notes have been raised subsequent to sale. Therefore, the higher revision of price not agreed by the buyer cannot form part of transaction value. The debit notes do not form part of transaction value. The excise duty paid is therefore excess.
In the case of PETROFAB VERSUS COMMISSIONER OF C. EX. & CUS., VADODARA [2007 (11) TMI 118 - CESTAT AHMEDABAD] a similar issue came up for consideration - The Tribunal held in favour of the assesee holding that the supplementary invoices have been issued after the goods have been sold and cannot form part of transaction value.
The Commissioner (Appeals) has relied upon the decision in the case of FIAT India Pvt. Ltd. [2012 (8) TMI 791 - SUPREME COURT]. The facts of the said case do not apply to the situation here for the reason that in the said case the assessee was consciously clearing the goods for a lesser price to make way into the market.
The Commissioner (Appeals) has erred in allowing the appeal filed by the department and in upholding the order of recovery of erroneous refund passed by the adjudicating authority - the appellant is eligible for refund.
The impugned orders passed by Commissioner (Appeals) are set aside - Appeal allowed.
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2023 (12) TMI 2
Principles of judicial discipline - principle of res-judicata - entitlement to interest for the period starting from the date of deposit till its realization - HELD THAT:- Both the parties agreed that in earlier round of litigation, this Tribunal vide order dated 03.01.2019 decided the appellant’s entitlement to interest for the period starting from the date of deposit till its realization. Both the parties are also ad-idem to the fact that the said order dated 03.01.2019 was not challenged further. Once this is so, the said order dated 03.01.2019 attained finality between the parties and the Assistant Commissioner was bound by the said order. The impugned order of the Commissioner (Appeals) taking a contra view on the issue of entitlement and period of interest, is therefore contrary to the principle of judicial discipline as enunciated by the Hon'ble Supreme Court in UUNION OF INDIA VERSUS KAMLAKSHI FINANCE CORPORATION LTD. [1991 (9) TMI 72 - SUPREME COURT] held that It is clear that the observations of the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which, if allowed to become widespread, could result in considerable harassment to the assessee-public without any benefit to the Revenue.
Further, it is a settled law that once an order has not been challenged before the appropriate authority, it cannot be reopened and challenged in collateral proceedings subsequently by the same authority - The finding recorded in the impugned order that the order dated 03.01.2019 was accepted by the revenue purely on monetary grounds, appears to be incorrect, as the quantum of interest i.e. Rs 69,44,200/- is higher than the prevailing monetary limit i.e. Rs 50,00,000/-.
The applicability of sub-section (4) of Section 35R is restricted to the same authority i.e. the Commissioner (Appeals), Appellate Tribunal or the Court, whose order was not challenged by the revenue because of monetary limit and it is the same authority i.e. the Commissioner (Appeals), Appellate Tribunal or the Court, which shall have regard to the circumstances in which such appeal, application, revision or reference was not filed. Any interpretation other than this would result in chaos in administration of justice, as a well-reasoned order of a higher court would not be followed by a lower court, merely because the decision was accepted on monetary grounds. Thus, sub-section (4) of Section 35R can be invoked only by the same authority/court or the superior authority/court and not by the inferior authority/court - when revenue is alleging non-filing of appeal against order dated 03.01.2019 passed by this Tribunal purely on monetary grounds, it is this Tribunal alone, which can consider the circumstances in which the appeal was not filed by the revenue and may take appropriate decision on the issue. However, sub-section (4) of Section 35R cannot be applied by the lower authority i.e. the Commissioner (Appeals) in the present case, to take a view from that taken by this Tribunal.
The impugned order violates principle of judicial discipline and is liable to be set-aside on this ground - the Assistant Commissioner rightly sanctioned the interest by following order dated 03.01.2019 of this Tribunal - Appeal allowed.
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