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Central Excise - Case Laws
Showing 181 to 200 of 1430 Records
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2023 (11) TMI 718
Classification of goods - Salmonella Antigens - classifiable under Central Excise Tariff 3822 or 3002? - HELD THAT:- The classification of product ‘WIDAL-SALMONELLA ANIGENS KIT’would be correct by classified under Chapter heading 30.02, as claimed by the assessee.
In view of the above decision of this Tribunal which is based on this Tribunal’s earlier order dated in the appellant’s own case M/S. RECKON DIAGNOSTICS VERSUS COMMISSIONER OF CENTRAL EXCISE, VADODARA [2011 (10) TMI 93 - CESTAT, AHMEDABAD], the issue is no longer res-integra.
The impugned order is set aside - Appeals are allowed.
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2023 (11) TMI 680
Maintainability of appeal - monetary limit involved in the appeal - HELD THAT:- In view of the low tax effect, the Appeals are disposed of, keeping open the questions of law, which arise in these appeals from the side of the appellant/Department as well as from the side of the respondent, to be agitated in any other appropriate case.
Application disposed off.
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2023 (11) TMI 679
Validity of order of Tribunal - Revenue appeal - Low Tax Effect - Waiver of interest and penalty - Tribunal has decided in favor of assessee subject to the condition that amount deposited under Protest shall not be claimed as Refund - HELD THAT:- Having regard to the disputed period being July 2000 to December 2001 under consideration, in respect of which, the outstanding demands made under the five impugned Show Cause Notices have been complied with inasmuch as the amount has been paid and in view of the categorical submissions made by learned senior counsel to the fact that the assessee would not claim refund of the said amount, we find that the Revenue would not in any way be prejudiced if the submission of assessee is accepted, the appeals would not call for further consideration at the hands of this Court.
Secondly, insofar as the demand of Rs. 14,27,384/- is concerned, which is towards facility charges, without going into the details of the said demand, it can be stated that on account of the low tax effect, it would not be necessary to consider the said aspect of the matter on merits in these appeals.
These appeals are disposed of having regard to the submissions noted above, leaving all substantial questions of law, if any, which arise in these appeals to be agitated in any other case and not to be re-agitated insofar as these appeals are concerned.
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2023 (11) TMI 678
Seeking grant of anticipatory bail - appearance before the trial Court to face the trial in pursuance of summoning order - HELD THAT:- It is apparent from the record that after presentation of the complaint by the respondent, the present petitioner alongwith other accused have been ordered to be summoned by the trial Court. All the documentary evidence has already been collected by the respondent and the custody of the petitioner will not serve any meaningful purpose, at this stage.
Without commenting any further on the merits of the case, the petitioner is directed to surrender before the trial Court, within a period of two weeks from today and on his appearance, he shall be admitted to bail subject to furnishing surety bonds/bail bonds to the satisfaction of the learned trial Court/Illaqa Magistrate - Petition disposed off.
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2023 (11) TMI 677
Clandestine removal of undeclared manufactured sponge iron - lower declaration of the produced sponge iron to the extent of 11089.730 MT, during the period July 2006 to November 2009 - quantification of the alleged clandestine manufacture has been arrived at “estimated production basis” - admissibility of oral evidence - time limitation - HELD THAT:- In the entire investigation, the Department has not brought out any evidence towards excess procurement of coal and dolomites. Since the coal is bought from the coal mine, proper records were kept both by the vendor as well as by the receiver. Such huge quantity of coal could not have been bought by way of cash. There is also no evidence towards deployment and movement of hundreds of vehicles to transport such huge quantity of coal and dolomite. Further, it is seen that no investigation has been taken up towards alleged sale of the huge quantity of Sponge Iron. No statements have recorded from any of the alleged purchasers of the finished goods. There is no allegation about recovery of any private records towards cash receipt/cash payment for the alleged clandestine transactions. In case of allegations of clandestine manufacture/sales, it is essential for the Department to bring in as much corroborative evidence as possible.
Sub-section (1) of Section 9D sets out the circumstances in which a statement, made and signed before a Gazetted Central Excise Officer, shall be relevant for the purpose of proving the truth of the facts contained therein. If these circumstances are absent, the statement, which has been made during inquiry/investigation, before a Gazetted Central Excise Officer, cannot be treated as relevant for the purpose of proving the facts contained therein - the evidentiary value of the statement, insofar as proving the truth of the contents thereof is concerned, is, therefore, completely lost, unless and until the case falls within the parameters of Section 9D(1).
There is no justification for jettisoning this procedure, statutorily prescribed by plenary parliamentary legislation for admitting, into evidence, a statement recorded before the Gazetted Central Excise officer, which does not suffer from the handicaps contemplated by clause (a) of Section 9D(1) of the Act. The use of the word “shall” in Section 9D(1), makes it clear that, the provisions contemplated in the sub-section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory.
In the absence of the corroborative evidence, particularly taking into account that the entire estimated production has been arrived at based on certain formula with no statutory backing, there are no merits in the OIO passed by the Adjudicating Authority. Accordingly, the impugned order set aside on merits.
Time Limitation - HELD THAT:- There are force in the arguments of the Appellant that the Show Cause Notice has been issued after 1 years 4 months from the date of receipt of the officials to the Appellant’s factory. There is no documentary evidence placed that such delay was caused by any non-cooperative attitude of the Appellant. Therefore, the confirmed demand is required to be set aside even on account of limitation also.
The Appeal is allowed both on merits as well as on account of limitation.
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2023 (11) TMI 676
100% EOU - Sanction of refund by cash - It is alleged that the appellant is not eligible for the credit availed on the raw materials used for manufacture of finished goods, which were subsequently exported - HELD THAT:- The very same issue has been considered by the Department in the Order-in-Original where it was held that the credit of duty paid on the inputs under Notification No.22/2023 CE dated 52/2003 CUS (to the extent of CVD) indigenously procured and imported respectively lying in stock at the time of de-bonding, availed by M/s.Kadri Wovens amounting to Rs.55,64,436/- is allowable under Rule 3 (1) (i), (vii) and (via) of CCR.
The appellant is eligible for the credit - since the notice proposing to recover the erroneously sanctioned refund has been dropped by the department nothing survives. The appellant is therefore eligible for the refund claim - Appeal allowed.
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2023 (11) TMI 675
Denial of exemption of Notification No. 01/2011-CE dated 01.03.2011 - manufacture of allopathic generic medicaments - Whether the allopathic medicaments are eligible for the exemption of central excise duty but for at the rate of 2% in terms of Notification No. 01/2011 dated 01.03.2011? - invocation of extended period of limitation.
HELD THAT:- In the notification column (3) of Entry No. 37 in use of word ‘including’ in context of the content of column (3) of Entry No. 37 of the notification. But we are of the opinion that Tribunal ought not to have traversed beyond interpreting the provision as per the language employed in the statute itself. It is the settled proposition of law that while interpreting the taxing statutes the authorities cannot import which is not expressed in the provision itself - reliance placed upon the decision in the matter of COMMISSIONER OF SALES TAX, UP. VERSUS MODI SUGAR MILLS LTD. [1960 (10) TMI 65 - SUPREME COURT] applying above discussed principles of interpretation and the meaning/purpose of word “include”. On reading column (3) of the impugned notification (Entry No. 37), it is observed that it talks about the medicaments manufactured exclusively in accordance with the formulae described in the authoritative books specified in the First Schedule to the Drugs and Cosmetic Act, 1940 or Homeopathic Pharmacopoeia of India or the United States of America or the United Kingdom or the German Homeopathic Pharmacopoeia, as the case may be, and sold under the name as specified in such books or pharmacopeia.
The books mentioned in First Schedule are with respect to the Ayurvedic, Unani, Siddha Formulae. Hence, there is no ambiguity created by the legislature by using the word “includes” with the medicaments when medicaments prepared in accordance of books about Ayurvedic, Unani, Siddha are being discussed. From no stretch of imagination such medicaments can mean to include allopathic medicaments within their scope by the mere use of word “include”. More so, for the reason that there is no possibility of description of any formula for allopathic medicament in the books meant for medicaments manufactured under Ayurveda and Siddha systems - the arguments submitted by the appellant are not at all acceptable to set aside the order confirming the demand against them nor for doing away with the penalties. The said findings are therefore upheld.
Invocation of Extended period of Limitation - HELD THAT:- Section 11A does not provide for extended period of limitation because someone is in that line of business for any length of time. While the appellant was in this line of business, the department was in the business of issuing exemption notifications, applying them and scrutinising tax returns for a much longer period. In this case, even as per the SCN, the nature of the goods manufactured by the appellant was explicitly stated not only on the packets but also in the ER 8 Returns filed by the appellant. The irresistible conclusion is that the officer had not either scrutinised the returns or having scrutinised, did not issue the demand within time.
Another reason for invoking extended period of limitation in the SCN was that the appellant was operating under self-assessment and in an era of self-assessment and self-removal, it was required to correctly self-assess duty and pay it and the appellant did not do so by claiming the benefit of an ineligible exemption notification. In the context of demand of service tax under section 73 of the Finance Act, 1994 which is similar to section 11A of the Central Excise Act.
The facts that the appellant was operating under self-assessment and that it was in the business of manufacturing pharmaceuticals are both not relevant to invoking extended period of limitation. The appellant was under no obligation to seek any clarification from the department during self-assessment as has been held by the Delhi High Court in Mahanagar Telephone Nigam Ltd. There is no mis-statement as all the facts have been correctly indicated in the ER-8 Returns filed by the appellant and also on the aluminium foils and packing of the goods even as per the SCN. The appellant had also not violated Rules 4,6,8 and 12 of Central Excise Rules 2002 as the appellant had self-assessed and paid duty and filed returns as per its understanding.
The demand for extended period of limitation cannot be sustained. Consequently, the penalty under section 11AC imposed on the appellant also needs to be set aside
Appeal allowed partly.
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2023 (11) TMI 674
CENVAT Credit - capital goods/inputs - Angles, Channels, Beams, Joists, Sheets, Plate, Coils etc - HELD THAT:- The issue is no longer res integra. The said issue has been settled by the Hon’ble Chhattisgarh High Court in the case of M/S VANDANA GLOBAL LIMITED AND OTHERS VERSUS COMMISSIONER, CENTRAL EXCISE AND CUSTOMS, CENTRAL EXCISE [2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT], wherein it has been held that any steel item which has been used for fabrication of capital goods or inputs is entitled for cenvat credit in terms of Rule 2(l)/2(k) of the Cenvat Credit Rules, 2004.
Thus, the Angles, Channels, Beams, Joists, Sheets, Plate, Coils etc used in the manufacture of furnace equipment and furnace structure, raw material handling system and pollution control equipment, are eligible for credit as inputs - the demand confirmed in the impugned order is not sustainable. As the demand itself is not sustainable, the question of demanding duty or imposing penalty does not arise.
Appeal allowed.
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2023 (11) TMI 620
Time Limitation - Cenvat entries were properly reflected in the ER-1 Returns and Stocks and Cenvat details were properly recorded in the RG 23 A Part 1 and Part II Records or not - suppression of facts or not - reversal of CENVAT Credit in respect of five Bills of Entry - demand alongwith interest and penalty - HELD THAT:- Admittedly the Range Officials of Pansukra Unit have certified on 20/05/2010 and on 10/06/2011 that no input materials under the Bills of Entry in question were received by that unit nor any Cenvat Credit was taken by them. This combined with the fact that the Appellant unit at B. T. Road has mainlined full records towards receipt and issue of the materials would clarify that the Appellants had received the imported goods at their B. T. Road unit and were correct in taking the Cenvat Credit based on the Bills of Entry. The endorsement behind the Bills of Entry can be ignored as a unintended clerical error.
Further it is seen that the Show Cause Notice has been issued after more than 3 years of Cenvat being taken by the Appellant. When Cenvat taken has been reflected in the ER 1 Return and non-taking of Cenvat at Pansukra unit has been verified and certified by the Range Superintendent, the Department cannot allege any suppression on the part of the Appellant. Therefore, the impugned order is not sustainable even on account of limitation.
Appeal filed by the Appellant allowed both on merits as well as on account of limitation.
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2023 (11) TMI 610
Seeking approval of price list by including the JPC Cess in the assessable value - belated SCN - HELD THAT:- It is seen that the Price List was provisionally assessed on 10/3/1992 and was Finally Approved on 11/12/1992. The Assistant Commissioner has passed an Order allowing deduction of JPC from the assessable value. The Appellant has followed this Order for their clearance during March 1992 to May 1993. In the absence of any Stay or adverse Order against this OIO during the period March 1992 to May 1993, it has to be concluded that the Appellant has followed the finalized price list which was available with them during that period. This being so, the Commissioner (Appeals) has set aside the OIO dated 11/12/1992 vide his OIA dated 19/04/1994. On going through this OIA, it is seen that he has given direction to the Assistant Commissioner to approve the price list after adding the JPC Cess. The Department has not brought out any evidence that this was done by the Assistant Commissioner by passing a suitable order to this effect.
The Show Cause Notice dated 22.02.1996 was issued in belated manner after about 3 years 8 months from the date of initial finalization done by AC on 11/12/1992. If it is taken that the Department had challenged this OIO and the price list approved by the Assistant Commissioner was finalized only after the OIA was passed on 19/04/1994, even from this date of OIA i.e. 19/04/1994, there is delay of more than 22 months in issuing the Show Cause Notice.
After going through the relevant paragraph of the judgment of the Hon’ble Supreme Court, in the case of MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA [1996 (12) TMI 50 - SUPREME COURT], it is seen that the Apex Court has made it clear that what is applicable to the assesse is made equally applicable to the Revenue also. Therefore, the Revenue cannot take the pleading that the provisions of Section 11A are not applicable to them in case of finalization of provisionally assessed RT-12 Returns.
There are force in the Appellant’s arguments that the Show Cause Notice issued on 22/02/1996 has to be assumed as premature if the RT-12 assessment date is taken as the date of final assessment - the impugned OIA is legally not sustainable - appeal allowed.
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2023 (11) TMI 609
Valuation - related person - inter-connected undertakings - seller and alleged buyers of the goods are related persons in terms of Section 4(3)(b) of the Central Excise Act or not - mutuality of interest - HELD THAT:- It is clear that only if the parties are related in terms of Clause (ii), (iii), (iv) of Section 4(3)(b) of Central Excise Act, they would be treated as related persons - In the present matter, it is found that show cause notice alleges that the Respondent and buyers are related in terms of sub-clause (i) and (iv) of Section 4(3)(b) of the Central Excise Act, 1944.
In the present matter it is not disputed by the respondent that the respondent and other buyers are related in terms of sub-clause (i) of Section 4(3)(b) of the Central Excise Act 1944 as interconnect undertaking and impugned show cause notice only rely the clauses (i) and (iv) of the Section 4(3)(b) of the Central Excise Act, 1944, therefore the Ld. Commissioner in impugned order –in-original has correctly examined whether the Respondent and other buyers are related in terms of sub-clause (iv) of Section 4(3)(b). In the present matter it is rightly pointed out by the Ld. counsel that the argument of the revenue that the respondent and other buyers are related in terms of sub-clause (ii) or (iii) of Section 4(3)(b) would be beyond the scope of show cause notice inasmuch as the same is never alleged in the show cause notice. Hence, the same is also not acceptable at this stage - In the facts of the present case, the relationship is based on the fact that when Sub-Clause (ii) and (iii) were not invoked, the facts related thereto were also neither required to be examined nor the Adjudicating Authority has rightly examined. Therefore, by making ground of Sub-Clause (ii) & (iii) holding the appellant and their buyer are related person is completely beyond the SCN as well as the impugned order, which is not permissible.
The Hon’ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, NAGPUR VERSUS M/S BALLARPUR INDUSTRIES LTD [2007 (8) TMI 10 - SUPREME COURT], has held that the SCN is the foundation in the matter of levy and recovery of duty, penalty and interest.
As per Rule 9 and 10 of Central Excise Valuation Rules, 2000 it is clear that Rules shall apply only when the goods are sold through person who are related in terms of sub-clause (ii), (iii) or (iv) of clause (b) of Section 4 (3) of the Act. Further the provisions of Rules also suggest that merely because buyer is interconnected undertaking that alone is not sufficient for holding as related person - the show cause notice and revenue have not brought any material to establish that the relationship between respondent and buyers company are one of the relationship as prescribed under sub-clause (ii), (iii) or (iv) of Section 4(3)(b) of Central Excise Act therefore, even if it is accepted that the buyers company are interconnected undertaking of the respondent company it cannot be treated as related person in terms of Section 4(3)(b) in absence of relationship as specified under sub-clause (ii), (iii) or (iv) of Section 4(3)(b).
The respondents and the buyers are also not covered by Sub-Clause (iii) of Section 4 (3)(b) of Central Excise Act 1944. In terms of Sub-Clause (iii) of Section 4(3)(b) a person shall be deemed to be related if amongst them the buyer is a relative and distributor of the assessee or distributor of such distributor - only natural person can be treated as relatives since the first condition itself of Sub Clause (iii) is not satisfied, the 4 buyers and the respondent cannot be considered as related under Sub-Clause (iii) of Section 4 (3)(b). In any case, the respondent and the 4 buyers are not holding or subsidiaries Companies of each other, therefore the second condition of Sub-Clause (iii) is also not fulfilled in the present case.
This issue has been considered time and again in various judgments. The Hon’ble Supreme Court has considered the issue similar in the present case in UNION OF INDIA & OTHERS VERSUS ATIC INDUSTRIES LTD. [1984 (6) TMI 51 - SUPREME COURT]. In this case, M/s Atik Industries was manufacturing dyes. The entire production was sold to two companies namely, Atul products Ltd and ICI India Ltd. Atul products was holding 50% of share capital in M/s. Atik Industries Ltd ICI, UK was holding balance 50% share capital of Atik Industries. ICI India ltd was a wholly owned subsidiary of ICI, UK since 1978, shareholding of ICI, UK in ICI India was reduced to 40 % (shareholding of iCi, UK in Atik Industries continued to be 50%).
There is no mutuality of interest in the present case between the respondent an the 4 buyers and the relationship is not covered by Sub-Clause (iv) of Section 4(3)(b) of Central Excise Act 1944S but only Sub-Clause (i) of Section 4(3)(b) of Central Excise Act 1944.
The transaction value of the goods between respondent and the so-called interconnected undertaking is correct valuation and the same cannot be disturbed, therefore, there are no merits in the appeal of revenue.
The impugned order passed by the Adjudicating Authority is correct, legal and the same has no infirmity - appeal of Revenue dismissed.
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2023 (11) TMI 608
Denial of CENVAT Credit - paper transaction - issuing invoices without supplying any goods - who paid the transportation charges? - HELD THAT:- On the basis of evidences placed by the Revenue on record, it is held that the appellant assessee was involved only in paper transactions by taking invoices without any receipt of the goods in their premises and thereafter, enabling the recipient of the appellant assessee to take cenvat credit without proper receipt of the goods.
The Revenue has made out a case for denial of cenvat credit to the appellant assessee - there are no infirmity in the impugned order and the same is upheld - the appeal filed by the appellant assessee is dismissed.
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2023 (11) TMI 560
Non-payment of Interest and penalty - by an interim order, while issuing notice in the appeal, this Court had granted an order of stay with regard to payment of penalty - HELD THAT:- This Court by interim order dated 26.03.2010 had granted stay of payment of penalty and also the fact that the issues which arise in this appeal were a subject matter of controversy up to this Court and thereafter settled in the case of COMMISSIONER OF CENTRAL EXCISE, INDORE VERSUS M/S GRASIM INDUSTRIES LTD. THROUGH ITS SECRETARY [2018 (5) TMI 915 - SUPREME COURT] and also the fact that the sum of Rs.69,650/- only has also been paid by way of duty by the appellant herein and what remains is a sum of Rs.82,955/- being the interest amount to be paid, we set aside the order imposing penalty in the instant case. The appellant is directed to pay the interest calculated up to date of deposit being Rs.82,955/- to the respondent-department.
The said amount shall be paid within a period of three months from the date of this Order. The said time frame has been given having regard to the fact that learned counsel for the appellant submitted that the appellant-company may have been dissolved or in the process of dissolution and therefore, some time may be granted to pay the aforesaid sum.
Appeal allowed in part.
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2023 (11) TMI 559
Short payment of duty - division of total value of Modem viz. value of hardware and value of software - it is alleged that such bifurcation of value is with intention to evade payment of duty as the software was invoiced as “software for PC” - HELD THAT:- The learned Commissioner (A) has held held that The above fact of not including the value of software in the assessable value in the impugned two months was kept under wraps till they paid duty for the said clearances only on 20.07.2004. Here the facts to be noted are the appellants had adopted the above practice only for a short period which was discontinued on their own obviously on the premise that the practice is wrong. However, the duty for the impugned period was paid much after.
No contrary evidence has been placed by the appellant to rebut the aforesaid findings of the learned Commissioner (A). Also, there are no merit in the pleading of the learned advocate for the appellant that harbouring a bona fide belief, on the basis of the judgment in the case of PSI DATA SYSTEMS LTD. VERSUS COLLECTOR OF CENTRAL EXCISE [1996 (12) TMI 47 - SUPREME COURT] the appellant had split the value of Modem into Hardware and software. The evidence on record is otherwise. Even though the purchase orders by the customers were for the total value of the Modem, and the software is embedded to the Modem being indispensable, it is the appellant who has knowingly split the value of modem artificially as value of Hardware and value of Software so as to evade payment of duty.
There are no merit in the contention of the learned advocate for the appellant that the Appellant were under a bonafide belief in declaring the value of software separately.
Appeal dismissed.
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2023 (11) TMI 558
Quantum of penalty - it is claimed that penalty equivalent to the duty confirmed under Section 11AC of the Central Excise Act should be imposed - HELD THAT:- The duty has been confirmed against appellant by invoking the proviso to Section 11A (1) of the Central Excise Act,1944 and respondent has been held liable for penalty under Section 11 AC for the duty confirmed at both the premises i.e the registered premises of M/s Harsh Trader, 165, Deep nagar, RDSO, Manak Nagar Lucknow and unregistered premises at Little Care Public School, Behind RDSO, Gurudwara, Surya Nagar, Lucknow. However while imposing the penalty under Section 11 AC penalty has been imposed only in respect of the duty confirmed at the registered premises of M/s Harsh Trader, 165, Deep nagar, RDSO, Manak Nagar Lucknow.
It is a settled law that in a case where demand has been confirmed invoking extended period of limitation penalty equivalent to duty evaded needs to be imposed and there is no discretion to any authority as held by the Hon’ble Supreme Court in the case of UNION OF INDIA VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS AND COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE VERSUS M/S. LANCO INDUSTRIES LTD. [2009 (5) TMI 15 - SUPREME COURT].
The appeal of the Revenue is having merits and needs to be allowed - Appeal filed by the Revenue is allowed.
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2023 (11) TMI 557
Recovery of duty alongwith interest and penalty - correctness of denial of exemption under notification no. 10/1997-CE dated 1st March 1997 (at serial no. 2) on ‘cables’ supplied - HELD THAT:- It would appear that the denial of the exemption was consequent to the finding that the goods supplied by the appellant, viz., ‘cables’ are not ‘scientific or technical instruments’, ‘apparatus’ or ‘accessories’ or ‘parts or consumables’ which alone are eligible. The end-use by institution otherwise eligible as well as the validity of the certification produced for compliance with the said notification, have not been disputed in the impugned order.
The eligibility of ‘cables’ for the benefit of notification has been decided by the Tribunal in Cable Corporation of India Ltd [2020 (2) TMI 3 - CESTAT MUMBAI] holding that the appellants are eligible to avail the notifications 10/97 and 6/2006 in view of the certificates issued by the competent authority. Having held that the appellants are eligible for the exemption claim, on merits we are not going into the other issues like limitations etc.
As the issue stands squarely covered, the impugned order set aside - appeal allowed.
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2023 (11) TMI 555
Levy of Excise Duty - footwear items falling under Chapter 64 from various vendors were sold after affixing their brand name “Fab India” without payment of duty - levy of service tax on the penalty amount.
Whether the activity conducted by the assessee was chargeable to Central Excise duty? - HELD THAT:- The law on the issue is well settled that excise duty is on the manufacture of goods and the liability to pay is on the manufacturer. In terms of the definition of 'manufacture' as provided in section 2 (f) of the Act, a person who undertakes any of the activities specified therein is a manufacturer and as interpreted, a job worker engaged in any of the said activities is liable to pay duty on the goods manufactured by him unless exempted. Consequently, by virtue of the Notification No 214/86 dated 15.3.1986, the liability of the job worker to pay excise duty is passed on to the principal manufacturer subject to the condition that the principal manufacturer gives a declaration/ undertaking to pay the duty.
The authorities below have erred in observing that in terms of the definition of manufacture under section 2 (f)(iii) of Central Excise Act, the appellant appears to be involved in 'deemed manufacture' and thereby liable to pay excise duty - reference made to the decision of the Larger Bench of this Tribunal in MAYO INDIA LTD. VERSUS COMMISSIONER OF C. EX., AURANGABAD [1999 (3) TMI 636 - CEGAT NEW DELHI], where the appellant entered into agreement for manufacture of medicine as per their specifications, requirement and bearing their trademark and brand name for which they supplied the raw material.
The learned Counsel for the appellant has alternatively relied on the Notification No. 214/86-CE dated 25.3.1986 to say that incidental activity of manufacture carried out by vendors on behalf of the appellant was as job workers then the liability has to be on the job worker and the appellant cannot be made liable to pay the duty - it is felt that no reliance can be placed on the notification since the raw material supplied by the appellant was not under the provisions of the notification.
Whether the penalties recovered by the assessee from the vendors were chargeable to service tax? - HELD THAT:- A perusal of the contents of the agreement executed by the appellant with their vendors does not show that the agreement is for providing any services for which any consideration has to be paid and as noticed in M/S SOUTH EASTERN COALFIELDS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR [2020 (12) TMI 912 - CESTAT NEW DELHI] the contract may provide for penalty provisions for breach of the terms of the contract but that would not make the same consideration for a contract as has been noted, that there is a mark distinction between ‘condition of a contract’ and ‘consideration for a contract’ - The present case is squarely covered by the aforesaid decisions of the Tribunal and in that view no liability of Service Tax under Section 66E(e) can be fastened on the appellant.
The learned Counsel for the appellant has referred to Circular No. 178/10/2022-GST dated 3.08.2022 whereby it has been clarified that any penalty or compensation received for any loss or damage caused by breach or non performance of the terms of the contract is not by way of consideration for any independent activity rather the same is in the course of performance of the contract, hence not taxable under the GST regime including the erstwhile serves tax regime - The controversy for levy of service tax on the penalty amount received by the appellant gets resolved in favour of the appellant also by virtue of the said Circular.
The impugned order set aside - appeal allowed.
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2023 (11) TMI 523
Conversion to DTA from EOU - Alleged incorrect payment of duty on semi-finished goods and finished goods at the time of de-bonding into a DTA unit - failure to adopt Rule 14 of Customs Act, 1962 - it was held by CESTAT that The duty demand raised on the semi-finished goods and finished goods cannot be sustained for the reason that the goods have already been exported and that too on payment of duty under Section 3(1) of Central Excise Act, 1944.
HELD THAT:- The appeals are dismissed on facts.
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2023 (11) TMI 522
CENVAT Credit - input services - Various services availed prior to commencement of commercial production in the factory - Emergency Medical Services - HELD THAT:- The very same issue as to whether credit on input services is eligible before commencement of production was considered by the Tribunal in the case of PEPSICO INDIA HOLDINGS (PVT.) LTD. VERSUS COMMISSIONER OF CENTRAL TAX, TIRUPATI [2021 (7) TMI 1094 - CESTAT HYDERABAD]. In the said case, the Department had denied the credit alleging that the services are used for setting up of factory and it was held that Although setting up the factory is not manufacture in itself, it is an activity directly in relation to manufacture. Without setting up the factory, there cannot be any manufacture. Services used in setting up the factory are, therefore, unambiguously covered as ‘input services’ under Rule 2(l)(ii) of the Cenvat Credit Rules, 2004 as they stood during the relevant period (post 1-4-2011). The mere fact that it is again not mentioned in the inclusive part of the definition makes no difference. Once it is covered in the main part of the definition of input service, unless it is specifically excluded under the exclusion part of the definition, the appellant is entitled to Cenvat credit on the input services used.
A similar issue was considered in the case of INDIAN COPPER CORPORATION LTD. VERSUS COMMISSIONER OF COMMERCIAL TAXES, BIHAR AND OTHERS [1964 (10) TMI 41 - SUPREME COURT], which is also a decision passed analysing as to whether the impugned goods therein would get the benefit of Section 8(1) of the Central Sales Tax Act. These decisions do not have any connection with the facts or law considered in the present case - In the present case, there is no dispute that the appellant is a manufacturer of goods and so also, there is no dispute that the process undertaken by the appellant is manufacture. For these reasons, the decision relied by the Ld. Authorized Representative is of no assistance to the Department.
Emergency Medical Services - HELD THAT:- The appellant has availed credit on “Emergency Medical Services” from M/s. Sri Vinayak Hospital to the tune of Rs.31,518/-. It is explained by the Ld. Counsel that being a factory, they have to provide on-site emergency medical services and the unit was set up at the factory in case of any accidents - the said service cannot fall under the ambit of eligible input services as it is not proved that such services are used for personal consumption. For the said reason, the amount of credit availed in respect of Emergency Medical Services is disallowed.
Further, the Ld. Counsel also submitted that the appellant had reversed the credit for September 2013 availed for the services provided by the service provider viz. M/s. Lease Plan India Pvt. Ltd. to the tune of Rs.7664.99/- since there was lack of clarity in respect of the said service and that they are not contesting the same - the disallowance of credit in respect of the above service is upheld, as the same is not contested by the appellant.
Disallowance of credit availed on Emergency Medical Services provided by M/s. Sri Vinayak Hospital to the tune of Rs.31,518/- is upheld - Disallowance of the credit availed, claimed to be reversed for September 2013, for the services rendered by M/s. Lease Plan India Pvt. Ltd. to the tune of Rs.7664.99/- is upheld - Disallowance and recovery of credit in respect of all the remaining services is set aside. The demand, interest and penalties imposed in respect of all other services are set aside.
Appeal allowed in part.
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2023 (11) TMI 521
Refund of accumulated CENVAT Credit - denial of benefit of refund on the ground of limitation provided under Section 11B of the Central Excise Act, 1944 made applicable to the service tax matters under Section 83 of the Finance Act, 1994 - HELD THAT:- In appeal, the learned Commissioner (Appeals) had negated the original order, holding that the relevant date for reckoning the limitation for filing refund application under Section 11B ibid, would be the date of receipt of payment in convertible foreign exchange by the exporter-appellants and in case where payment for the service had been received in advance, then the same would be the date of issue of invoice. Accordingly, he has partly allowed the refund benefit, except for the period January, 2014 to March, 2014, where the entire amount of refund claim was rejected on the ground that no details of Foreign Inward Remittance Certificates (FIRCs) were submitted by the appellants. However, on perusal of the case records, more particularly the refund application filed by the appellants on 23.12.2014, we find that the appellants had specifically stated therein that the consideration for provision of the services exported have been received by them in convertible foreign currency and that proof of such payments were also annexed to such application.
Since, verification of the FIRC etc., has to be done at the original stage, the matter should be remanded back to the original authority for the limited purpose of verification of such documents and for sanction of the refund claim in favour of the appellants, if due, as per law. Therefore, the impugned order rejecting the refund claims filed for the period January, 2014 to March, 2014, is set aside and the appeal is allowed by way of remand to the original authority for verification of the FIRC and other documents and for consideration of the refund benefit thereafter.
The impugned order upholding rejection of refund applications on the ground of non-establishment of nexus cannot stand for judicial scrutiny - appeals allowed in favour of the appellants on the ground that grant of refund benefit is not subjected to compliance of the provisions of Rule 2(l) ibid and denial on the ground of non-establishment of nexus between the input services and the output services under Rule 5 ibid, is not sustainable.
Appeal disposed off.
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