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Central Excise - Case Laws
Showing 201 to 220 of 1430 Records
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2023 (11) TMI 520
Activity amounting to manufacture or not - activity of packing of rechargeable batteries along with chargers and labelling the same is a process incidental or ancillary to the completion of a manufactured product - whether the activity undertaken by the Appellants would amount to 'manufacture' or not as defined under Section 2(f) of the CEA, 1944? - HELD THAT:- In the present case, it is observed that after undertaking the activity of packing the chargers with the batteries and labelling them no different commercial commodity comes into existence. The goods viz. the charger and batteries remain exactly the same even after they are put together in a blister pack - In light of the decision of the Hon'ble supreme Court in M/S. SERVO-MED INDUSTRIES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI [2015 (5) TMI 292 - SUPREME COURT], it is held that the activity of mere packing of rechargeable batteries along with battery chargers and labelling the same as “Eveready Rechargeable/Ultima” and “Uniross/Power Bank” does not amounts to manufacture.
Section 2(f)(ii) of the CEA, 1944 deems certain processes as amounting to manufacture, if there is a Section Note or a Chapter Note deeming the processes as amounting to manufacture. In the present case, neither under Section XVI nor under Chapter 85 there are any notes deeming activity of packing or repacking as amounting to manufacture. Further, in terms of Section 2(f)(iii) of the CEA, 1944 goods specified in 3rd schedule to the CEA, various processes like packing or repacking, labelling or relabelling is deemed to be the manufacturing process - the demand confirmed in the impugned order dated 02.12.2009 is not sustainable. Since the demand is not sustainable, the question of demanding interest and imposing penalty does not arise.
The activity undertaken by the Appellant would not amount to manufacture as defined under Section 2(f) of Central Excise Act, 1944.The same discussion holds good for the Appellant also, since they are the job workers who have undertaken the activity of packing and labelling. Thus, the demand of central excise duty from the Appellant M/s New Engineering Company is not sustainable, as the activity undertaken by them does not amount to 'manufacture' as defined under Section 2(f) of CEA, 1944. Since, the demand itself is not sustainable, the question of demanding interest and imposing penalty on the Appellant does not arise.
Appeal allowed.
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2023 (11) TMI 470
Clandestine manufacture and clearance - SSI Exemption - threshold limit of goods cleared - appellant have disputed that except the documents retrieved from Shri Bharat Yadav who joined in July 2006, there is no tangible, corroborative and independent evidence pointing out manufacture and clearance of the finished goods - HELD THAT:- The department on the basis of two pages notebook retrieved from the personal possession of Shri Bharat Yadav containing alleged details of purchase of raw materials during June & July 2006, as authentic, even though the same was later disputed by the partner of the appellant Shri Jeeva Prakash. The said notebook is enclosed at pages 127 to 130 of the appeal paper book. On going through the same we find that except some entries in a tabular form, there is no indication about description of the material and any other particulars indicating that the entries were inputs/raw materials received and used in the manufacture of finished goods.
On going through the statement, it is found that though he accepted that the said two pages recovered from his possession but the entries therein were not written by them but by one Shri Anand. No further investigation was carried out by confirming the said facts from Shri Anand nor any attempt was made in this regard by issuing summons to Shri Anand. Also reading the statement of the partner Shri Jeeva Prakash dt. 19.9.2006, we find that he has categorically denied the authenticity of the said documents and also the veracity statement of Shri Bharat Yadav relating to the entries for period for the period prior to his joining the Unit in July 2006. Under these circumstance, the very basis on which the case of clandestine removal has been alleged by the Revenue against the appellant seems to rest not on any credible piece of evidence.
The basis of consumption of electricity adopted unilaterally in calculating the manufacture and clearance of finished goods without verification of the same during investigation from the supervisor or the partner, or through any corroborative evidence, cannot be considered as basis for demanding duty on alleged clandestine removal of the goods. The appellants on the contrary placed the audited balance sheet for the year 2006-07 duly certified by the Chartered Accountant establishing the total turnover during the period which did not exceed Rs.100 lakhs. No contrary evidence has been produced by Revenue.
There are no merit in the impugned order - the impugned orders are set aside - appeal allowed.
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2023 (11) TMI 469
CENVAT Credit - CHA Service and GTA service for outward transportation in respect of export goods, upto port of export - HELD THAT:- In case of KUNTAL GRANITES LTD. VERSUS COMMISSIONER OF C. EX., BANGALORE [2007 (3) TMI 540 - CESTAT, BANGALORE], Hon’ble Tribunal has held that place of removal for export goods is place where export document was presented to Custom office i.e. port of export. Though the said judgment is in respect of remission of duty, the ratio of judgment is applicable to present case also.
The Hon’ble Gujarat High Court in the case of CENTRAL EXCISE VERSUS INDUCTOTHERM INDIA P LTD [2014 (3) TMI 921 - GUJARAT HIGH COURT] has held that in case of export of Cargo Handling Service, the Service Tax paid thereon is available as input services, as in such case, the place of removal is Port.Further, the judgment relied upon by the appellant has also allowed the credit of service tax paid on services received at the port.
Board’s Circular No. 97/8/2007-S.T. dated 23-8-2007 also recognizes the situation where the place of removal can be different from the normal place of removal and in such case, the credit of service tax paid on GTA services used for transportation of goods upto place of removal is admissible. As per Section 4(3)(c)(iii) of the Central Excise Act, 1944, place of removal’ includes any other place or premises from where the excisable goods are to be sold after their clearance from the factory. As per definition of sale, a transaction is recognized as ‘sale’ only when a seller has realized or has a high chance of realizing payment against delivery of goods - In case of export goods, therefore, the place of removal has been held to be port of export and hence, credit of service tax paid on CHA service and GTA service used for transportation upto port of export is admissible.
The Cenvat credit on the outward GTA and CHA is admissible - impugned order set aside - appeal allowed.
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2023 (11) TMI 468
Recovery of wrongly availed CENVAT Credit - Scientific and Technical Consultancy Services - manufacture of drug - time limitation - HELD THAT:- The Respondent is registered with the Central Excise Department and has taken cenvat credit on capital goods as well as inputs - it is found that though the Revenue has alleged that the Respondent does not have the facility of manufacturing of Pharmaceutical Products and is only doing research and development activity for which cenvat credit on input and capital goods is not permissible under Rule 3 of Cenvat Credit Rules, 2004; Revenue in order to deny the cenvat credit has only relied upon the statement of one Senior Scientist of the Respondent but the said statement of the respondent has not been brought on record and the copy of which has not been given to the respondent even on asking by the respondent.
It is also found that in the pharmaceutical industry before a drug is manufactured and supplied in the market, a lot of research has to be undergone and a number of tests are to be conducted before releasing in the market. In view of these facts, the respondent is engaged in the manufacturing of drug also - Besides this, the Ld. Commissioner has also come to the conclusion that even for conducting research and development, the respondent is registered under the service tax and is paying service tax and therefore the respondent is entitled to cenvat credit - the cenvat credit on inputs and capital goods have been rightly availed by the respondent.
Time Limitation - HELD THAT:- The Ld. Commissioner has considered this issue in detail and has come to the conclusion that the entire demand is barred by limitation.
There is no infirmity in the impugned order - Appeal of Revenue dismissed.
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2023 (11) TMI 467
Interest on irregular CENVAT Credit availed but not utilized - availment of credit twice - availing 100% credit on capital goods in the first year itself - violation of Rule 4(2)(a) of the CENVAT Credit Rules, 2004 - invocation of extended period of time and imposition of penalty under Rule 15(2) of the CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944.
Availment of capital goods credit on ineligible goods - HELD THAT:- The appellant has availed input tax credit on Factory Lighting and Pallets. A perusal of the grounds of appeal indicate that the party has argued for eligibility of the credit on these goods which were utilized in the factory either as capital goods or as inputs. The Ld. adjudicating authority has dropped the demand of CENVAT Credit availed on these goods to an extent of Rs.7,82,900/- and also held that payment of interest on this demand would not arise. As such there is no need to give any finding on this demand.
Whether interest is demandable on irregular CENVAT Credit availed but not utilized? - HELD THAT:- The facts indicate that the appellant has reversed the irregularly availed CENVAT Credit. He has also reversed the interest amount on such irregularly or wrongly taken CENVAT Credit. The lower adjudicating authority has strictly and literally interpreted Rule 14 of the CENVAT Credit Rules, 2004. The words used in that Rule are ‘taken or utilized wrongly’. The Rule provides for recovery of irregularly or wrongly taken credit along with interest. However, regarding demand of interest for merely taking CENVAT Credit but not utilizing the same was considered and decided in favour of the appellant in many case laws.
Reliance can be placed in COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX LARGE TAXPAYER UNIT, BANGALORE VERSUS M/S BILL FORGE PVT LTD, BANGALORE [2011 (4) TMI 969 - KARNATAKA HIGH COURT] where it was held that The liability to pay interest would arise only when the duty is not paid on the due date. If duty is not payable, the liability to pay interest would not arise - In the case of J.K. TYRE & INDUSTRIES LTD. VERSUS ASST. COMMR. OF C. EX., MYSORE [2016 (11) TMI 911 - CESTAT BANGALORE], Tribunal Large Bench has come to the conclusion that interest liability would not arise when the assessee had merely availed credit and had reversed the same before utilizing the availed credit for remittance of duty.
Whether the extended period is invokable and imposition of penalty sustainable? - HELD THAT:- The Show Cause Notice was issued on 17.06.2013 but the credit reversal was done on 31.08.2012 and 15.09.2012 which is much before the issuance of the Show Cause Notice. The availment of double credit or irregular credit was reportedly caused by the mischief of one of the employees of the appellant against whom they have taken disciplinary action by terminating his services. The appellant has contended that wrongly taken credit was never utilized and so no penalty is imposable. It was also submitted that the onus is on the Department to prove the intention to evade payment for invoking extended period under Section 11A(4) or proviso to Section 11A(1) of the Central Excise Act, 1944. As their accounts were audited every year, no discrepancies of excise payment noticed by the Department, as returns were filed and submitted periodically, the penalty cannot be imposed without firm establishing an intent to evade tax.
The appellant though have taken credit irregularly or wrongly in the books it was never utilized. So, it is not justified to attribute any motive to evade tax to the conduct of the appellant. Even irregularly availed CENVAT Credit has been reversed by the appellant on being pointed out much before the issuance of the Show Cause Notice. As such, invoking extended period is not justified in this appeal. Thus, the appellant succeeds on limitation also.
The impugned order is upheld as far as the demand of Rs.1,87,69,233/- being the ineligible credit availed by the appellant and its appropriation. The demand of recovery of interest on such ineligible CENVAT Credit availed but not utilized, along with the penalty imposed, are set aside - Appeal allowed in part.
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2023 (11) TMI 466
Continuation of appeal - Resolution Plan is approved by the Hon’ble NCLT - HELD THAT:- The Mumbai bench of this Tribunal in the case of M/s Alok Industries Ltd’s case [2022 (10) TMI 801 - CESTAT MUMBAI] analysed in detail Rule 22 of CESTAT (Procedure) Rules, 1982 and the case laws on the issue including those cited by the Ld. Advocate for the appellant observed that aforesaid Rule 22 should be applicable the moment the successor interest with sufficient rights is appointed by NCLT to make an application for continuation of the proceeding.
The Tribunal is a creature of the statute; it cannot travel beyond the express powers vested under the Statute or Rules framed under the statute while deciding a statutory Appeal filed before it against the Orders of the prescribed statutory authorities mentioned under the statute. The corollary, any order passed by the Tribunal beyond the vested powers under the statute would be non est in law.
The view consistently expressed by this Tribunal in a series of cases that the appeal abates once the IRP is appointed and/or Resolution plan approved, agreed upon - the appeal abates as per Rule 22 of CESTAT (Procedure) Rules, 1982.
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2023 (11) TMI 465
CENVAT Credit - common input services such as security service, commission, transport of goods by road, cleaning services etc. used for trading and manufacturing activities - Rule 6(3)(i) of Cenvat Credit Rules, 2004 - HELD THAT:- The show cause notice initially states that Rs.51,45,637/- is an amount recoverable under Rule 6(3)(i) of Cenvat Credit Rules, 2004 but when it comes to para 7 of the same show cause notice, Revenue calls upon the appellant to show cause as to why inadmissible cenvat credit availed by the appellant amounting to Rs.51,45,637/- should not be recovered. Further, the original authority has passed the order confirming the demand of cenvat credit availed of the input service credit of Rs.51,45,637/-. It is to be noted here that there was a discrepancy in the show cause notice. Initially the said amount was called as an amount recoverable and subsequently the same amount was called as inadmissible cenvat credit availed. The fact is that the show cause notice does not establish that inadmissible cenvat credit of Rs.51,45,637/- was ever availed.
Hon’ble Telangana High Court in the case of Tiara Advertising [2019 (10) TMI 27 - TELANGANA AND ANDHRA PRADESH HIGH COURT] has held that it is not Revenue which will choose the option to be exercised by the assesse out of the various options provided under Rule 6 of Cenvat Credit Rules, 2004. We also note that the appellant has undertaken to reverse cenvat credit attributable to the credit that has gone into trading.
The matter needs to be remanded to the original authority with the direction to recover that quantum of cenvat credit which is part of the cenvat credit availed on common input services and which is attributable to exempted activity of trading - Appeal allowed by way of remand.
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2023 (11) TMI 464
Bar in utilisation of CENVAT Credit for payment of Central Excise Duty - default in making monthly payment of duty under Rule 8 of Central Excise Rules, 2002 - Constitutional validity of Rule 8 of CER - HELD THAT:- The said Rule has been struck down by the Hon’ble Gujarat High Court, Bombay High Court and P & H High Court. Following the implications of the said judgment, this Tribunal in INDUS TROPICS LTD VERSUS C.C.E. & S.T. -RAJKOT [2023 (3) TMI 950 - CESTAT AHMEDABAD] held It was held in ANDHRA CYLINDERS PVT LTD, NALIN KHARA, MANAGING DIRECTOR VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, HYDERABAD – I [2020 (1) TMI 189 - CESTAT HYDERABAD] that What needs to be decided in this factual matrix is where there are judgments by four different High Courts holding Rule 8(3A) as ultra vires and there is no judgment of any High Court upholding it and where the appeals against these judgments have been admitted and are under consideration of the Hon'ble Apex Court, whether the ratio of these judgments bind this tribunal or otherwise. We find that the last in the series of judgments was passed by the Hon'ble High Court of Bombay in the case of THE COMMISSIONER OF CENTRAL EXCISE & CUSTOMS NASHIK – II COMMISSIONERATE VERSUS M/S. NASHIK FORGE PVT. LTD. [2018 (9) TMI 1582 - BOMBAY HIGH COURT] holding that the ratio of the judgment of the Hon'ble High Court of Madras, Gujarat and Punjab & Haryana apply.
The impugned order is set aside and the appeal is allowed.
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2023 (11) TMI 463
Refund claim - whether the Notification No.17/2009 indicates that the refund claims have to be filed shipping bill-wise and in case, the refund claimed in a particular shipping bill is less than Rs.500/-, the subject refund is liable to be rejected? - HELD THAT:- A harmonious reading of the Notification makes it very clear that there is no restriction that a refund claim must be filed for each shipping bill and that one refund claim can be filed for more than one shipping bill. For this reason, only, necessity of giving details of each shipping bill is stressed upon in the Notification. Moreover, the table in Form A-1 provides Column for details of shipping bill/ bill of export etc. and understandably, the same needs to be given for each of the shipping bills. If the Revenue’s contention was correct, there was no need to mention that the details of the refund claim should be given separately for each shipping bill. Therefore, a conjoint reading of the Notification and the Form A-1 appended to the Notification, gives an unambiguous and the only understanding that there is no restriction on the number of shipping bills in a refund claim. The only condition mentioned at 2(h) being that no refund claim shall be allowed if the same is for an amount less than Rs.500/-. Therefore, the reasoning given in the impugned order is not in tune with the wordings of the Notification.
There is no prescription in the Notification that the refund claims should be filed shipping bill-wise and that the Condition No. 2(h) should be read to mean per shipping bill.
Appeal allowed.
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2023 (11) TMI 417
Continuation/abatement of appeal - continuation after initiation of Corporate Insolvency Resolution Process (CIRP) and Order approving the Resolution plan passed/approved by the Learned NCLT under Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Undisputedly, during the pendency of the said Appeals, pursuant to the petition filed by one M/s Bharat Steel Industries, Hyderabad, proceeding has been initiated under IBC, 2016. The Hon’ble NCLT vide Order dated 19.07.2017 admitting the petition appointed the Interim Resolution Professional (IRP) in the case. The Resolution Plan has been approved by the Hon’ble NCLT vide Order dated 13.04.2018. Consequent to the said Order approving the Resolution Plan, the appellant is now before this Forum.
The Mumbai bench of this Tribunal in the case of M/S. ALOK INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, BELAPUR AND COMMISSIONER OF CEN. EXCISE, MUMBAI CENTRAL [2022 (10) TMI 801 - CESTAT MUMBAI]) analysed in detail Rule 22 of CESTAT (Procedure) Rules, 1982 and the case laws on the issue including those cited by the Ld. Advocate for the appellant observed that aforesaid Rule 22 should be applicable the moment the successor interest with sufficient rights is appointed by NCLT to make an application for continuation of the proceeding.
Thus, as observed by the Hon’ble Supreme Court and High Courts in a catena of cases that the Tribunal is a creature of the statute; it cannot travel beyond the express powers vested under the Statute or Rules framed under the statute, while deciding a statutory Appeal filed before it against the Orders of the prescribed statutory authorities mentioned under the statute. The corollary, any order passed by the Tribunal beyond the vested powers under the statute would be non est in law.
The view consistently expressed by this Tribunal in a series of cases that the appeal abates once the IRP is appointed and/or Resolution plan approved - the appeals abate as per Rule 22 of CESTAT (Procedure) Rules, 1982.
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2023 (11) TMI 416
Abatement of appeal on appointment of IRP - continuation of proceedings under Rule 22 of CESTAT (Procedure) Rules, 1982 - HELD THAT:- The Mumbai bench of this Tribunal in the case of M/s Alok Industries Ltd’s case [2022 (10) TMI 801 - CESTAT MUMBAI] analysed in detail Rule 22 of CESTAT (Procedure) Rules, 1982 and observed that Rule 22 should be applicable the moment the successor interest with sufficient rights is appointed by NCLT to make an application for continuation of the proceeding.
The view consistently expressed by this Tribunal in a series of cases that the appeal abates once the IRP is appointed, is agreed upon - the appeal abates as per Rule 22 of CESTAT (Procedure) Rules, 1982.
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2023 (11) TMI 415
Imposition of penalty under Rule 209A of CER, 2002 - procurement of unaccounted raw material i.e. MS Scrap and using the same in the clandestine manufacture of MS Ingots - HELD THAT:- There are no evidence as to the manufacture of MS Ingots using the alleged unaccounted raw material. There is no investigation or enquiry conducted as to whom M/s Jaibhavani has sold/supplied the MS Ingots clandestinely. The investigation carried out, statements recorded and documents relied upon are all in regard to the alleged procurement of raw materials from M/s Sujana.
Even though search was conducted in the premises of M/s Shree Ganesh Steel Rolling Ltd, no documents are alleged to be recovered for clandestine clearance of M.S Ingots. It is clearly stated by M/s Anantha Subramanian that they receive the MS Ingots from M/s Jaibhavani under delivery challans - It is found that the entire Show Cause Notice and impugned order has only emphasized on the alleged unaccounted scrap cleared by M/s Sujana to M/s Jaibhavani.
After appreciating the facts we find that the Department has miserably failed to establish clandestine manufacture and clearance of finished products by M/s Jaibhavani during the disputed period, which is the basis for demand of duty, interest and penalties.
The adjudicated authority has imposed penalty of Rs.5,50,000/- on the appellant. From the facts and evidences placed, there are no hesitation to conclude that the penalty imposed on the appellant is not justified and requires to be set aside.
The impugned order is modified to the extent of setting aside the penalty imposed on the appellant - Appeal allowed.
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2023 (11) TMI 414
Reversal of CENVAT Credit under protest - inputs deployed for repairs - deployment of the impugned goods not for manufacture but for repair and which was neither within the ambit of rule 2(k) of CENVAT Credit Rules, 2004 nor cleared ‘as such’ within flexibility afforded by rule 4 of CENVAT Credit Rules, 200 - HELD THAT:- Nonetheless, the repair executed by the appellant, even if not manufactured, would be tantamount to service and to the extent that the impugned goods had been deployed in rendering of ‘taxable service’ or service that had exported, eligibility for availment of CENVAT credit cannot be denied. Accordingly, there is no merit in the appeal of Revenue which is dismissed.
In view of the finding that the impugned goods constitute ‘inputs’ in terms of rule 2(k) of CENVAT Credit Rules, 2004, rejection of claim for restoration of credit is not tenable. Accordingly, the applications are restored to the original authority for disposal in terms of section 11B of Central Excise Act, 1944
Appeal disposed off.
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2023 (11) TMI 413
Classification of goods - Tata-207 Vajra Vahan - merits classification as a specially designed vehicle falling under CETH 8705 or a vehicle principally designed for transport of passengers falling under CETH 8703? - change in classification - HELD THAT:- The Department argues on the point that the impugned vehicle does not fall under the above group going by the principles of ejusdem generis and for these reasons, the impugned vehicle should be categorized along with vehicles falling under CETH 8703 3392 along with vehicles like ambulances, prison vans etc. Interestingly, learned Commissioner in the impugned order relies on the same principle to classify the goods under CETH 8705.
It is to see whether the vehicle is a special purpose vehicle or meant for transportation of persons though with some additional features. From the material available on record, it is found that the vehicle is specially adopted, equipped and designed for riot control. It is not the case of the Revenue that the vehicle is utilized for transportation of police personnel alone. A distinction has to be made between the basic manufacture of the vehicle and the body build upon it. An undisputed fact in the case is that the chassis supplied by M/s Tata Motors is similar to all the vehicles in the series 207 or others. It is the body-builders like the appellants give shape to the vehicle depending on the requirement. The design of the impugned vehicle has been conceptualized by VRDE and DRDO to suit special requirements. Understandably, in the impugned case, the vehicle is made to have so many features that help the police personnel in controlling riots. It could be that the vehicle may be helpful to carry the police personnel to a place where the riots are taking place. However, for that reason, the vehicle does not cease to be special purpose vehicle - Most of the vehicles classifiable under CETH 8705 do also require personnel to man the vehicle and use the equipment provided. Such personnel also need to be transported and for that reason, such vehicles cannot be held to be primarily designed for transportation of personnel.
The certificate, for compliance to the Central Motor Vehicles Rules, issued by VRDE, Ahmednagar has classified the vehicle as special purpose vehicle (multi role riot control vehicle) - accordingly, the Transport Commissioner of Uttar Pradesh has also certified the same - the Larger Bench of the Tribunal in the case of Mahindra & Mahindra [2015 (4) TMI 563 - CESTAT MUMBAI] held that Motor Vehicles Act, 1988 and chapter 87 of Central Excise Tariff Act are pari materia Statutes for the purpose of determining the classification of motor vehicles - the certificates issued by VRDE and the Transport Commissioner cannot be ignored unless the same are proved to be wrong or inconsistent with the provisions of the Statute.
Change in classification - HELD THAT:- The Department also argued that the appellants have classified the impugned vehicles earlier under CETH 8707 and have changed the classification to avail the benefit of notification - It is found that there is no estoppel in revenue matters; no party can be expected to continue the mistake, if any, which occurred in the past and that the appellants have a legal right to change the classification.
Thus, no case has been made by the Revenue so as to interfere with the impugned order as far as the classification of the impugned special purpose vehicle (multi role riot control vehicle) is concerned - the appeal is devoid of any merits and therefore is liable to be dismissed - appeal dismissed.
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2023 (11) TMI 412
Condonation of delay of approximately 6.4 years in filing appeal - Section 37 C (1) of the Central Excise Act, 1944 - HELD THAT:- It can be seen that the order shall be served by tendering the same or sending it by register post with acknowledgment due or by speed post with proof of delivery or by courier approved by the Central Board of Central Excise and Customs constituted under the Central Board of Revenue Act 1963 to the person for whom it is intended or is authorized agent. In the present case it is admitted fact from the report of Jurisdictional Assistant Commissioner dated 22.07.2014 that the order was neither tendered personally to the appellant nor send by registered post or by speed post to the appellant. However, the same was pasted/affixed on the gate of the appellant factory. As per the Clause (b) of Section 37 C(1) it is clear that only if the order cannot be served in the manner provided in clause (a )then only the order should be affixed to some conspicuous part of factory or warehouse or other business etc. as the case may be.
The revenue has admittedly failed to comply with the provision of Clause (a) of Section 37 C (1). Therefore, the service of the order by affixing on the factory gate is absolutely illegal and incorrect and the date of such affixing, cannot be taken as date of service of order. Consequently, the date of receipt of order copy by the appellant from their Dena Bank can only be considered as communication of the order to the appellant. From the date of receipt of order from Dena bank the appellant had filed the appeal before Commissioner (Appeals) well within stipulated time of 60 days. Therefore, there is no delay in filing the appeal. The ld. Commissioner (Appeals) should not have dismissed the appeal on time bar. Therefore, the impugned order is clearly not sustainable. Hence, the same is set aside.
The appeal is allowed by way of remand to the learned Commissioner (Appeals) for deciding the matter on merit.
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2023 (11) TMI 411
CENVAT Credit - credit taken based on Supplementary Invoice raised by the Dankuni unit - extended period of limitation - suppression of facts or not - HELD THAT:- It is observed that the Appellant’s Dankuni Unit was issued several Show Cause Notices during the period July 1998 to June 2001. As per the Table contained at Page 12 of the OIO passed in respect of that unit, 16 such Show Cause Notices were issued. On going through this Table, it is seen that in the case of all the 16 Show Cause Notices, they were issued for the normal period only without invoking the provisions of extended period without reference to suppression, mis-statement, etc. Therefore, when the Show Cause Notices have been issued in the normal course for the normal period and there has been no suppression clause brought in, the provisions of Rule 7(1)(b) of CCR 2004, would not be applicable. Therefore, the confirmed demand is required to be set aside on this account alone.
Further, it has been held in catena of decisions, it has been held that only when any demand stands confirmed on account of fraud, suppression or willful misstatement, etc. only after having attained finality, the Cenvat Credit will not be eligible when such duty element is passed on by way of supplementary invoices.
In the present case, against the proceedings initiated against the Dankuni Plant, the confirmed demands (in fact only for the normal period) are being contested by the Appellant at the Tribunal level. Therefore, the confirmed demand at the lower level cannot be said to have attained finality. Even on this account, the allegations contained in the present proceedings are not found to be legally sustainable. Hence the provisions of Rule 7(1)(b) of the Cenvat Credit Rules are not applicable.
Appeal allowed.
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2023 (11) TMI 410
Area Based Exemption - undertaking substantial expansion for installed capacity by more than 25%.
It is alleged that by clearing their goods without payment of central excise duty, the appellants have attempted to evade the payment of excise duty by mis-declaring the facts about substantial expansion of their units so as to wrongly fit in the requirement of the exemption notification.
HELD THAT:- A look at Circular No. 772/5/2004-CX. dated 21.01.2004 makes it clear that emphasis was given to factual increase of 25% capacity by installation of additional plant and machinery. The enhancement post cutoff date is reported to have increased the installed capacity by more than 25%. To put it in other words, while using the word “additional plant and machinery”, in the circular, it has not been insisted that the existing plant and machinery should remain. What has been held out, is that such additional plant and machinery or the parts thereof, irrespective secondhand should be brought in due to which installed capacity of a manufacturing unit stands extended by more than 25%. The circular, makes it abundantly clear that the additional plant and machinery mentioned therein though may not be in addition to existing equipments but it should signify something new brought in the manufacture process, which in turn, increases the installed capacity more than 25%.
Hon’ble High Court of Uttarakhand in the case of COMMISSIONER OF CUS. & C. EX. VERSUS UTTARANCHAL IRON & ISPAT LTD. [2010 (12) TMI 491 - UTTARAKHAND HIGH COURT], wherein it was held that by making the modification of already existing machinery if the installed capacity gets increased by more than 25%, the assessee shall be entitled to the benefits of Notification No.50/2003-CE dated 10.06.2003.
This Tribunal in another decision in the case of ASSAM PETROCHEMICALS LIMITED VERSUS COMMISSIONER OF C. EX., SHILLONG [2004 (2) TMI 191 - CESTAT, KOLKATA], held that in case of existing manufacturing units, the date on which the enhanced capacity of the unit is installed, should be the relevant date.
Reverting to the facts of the present case, it is observed that the department has raised the demand of duty on the premise that since the expansion programme was undertaken by the appellants prior to 07.01.2003, the appellants’ unit is not entitled for the exemption of Notification No. 50/2003. Whereas, the case of appellant is that although the expansion programme was inititated before 07.01.2003 however the installed capacity of more than 25% was got enhanced after 07.01.2003. Hence, the benefit of notification is definitely available to the appellant - There appears no evidence as produced by the department that those parts got installed prior cutoff date or that same contributed to enhancement in the installed capacity by any percentage.
The fact of the present case is that the appellants’ factory never remained shut for the maintenance and enhancement of installed capacity. Also it is the minimum rather negligible apparatus which were procured prior to the relevant date. The installed capacity got enhanced post relevant date i.e. 07.01.2003 to the extent beyond 25% (per cent). Hence it is held that decision of M/S VISHVAKARMA PAPER AND BOARDS LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, [2010 (4) TMI 641 - UTTARAKHAND HIGH COURT] has wrongly been relied upon by the adjudicating authority.
Thus, the benefit of clause 2(b) of Notification No. 50/2003 is wrongly denied to the appellant. The findings in order under challenge are liable to be set aside with respect to this aspect.
Inclusion of area (khasra) of appellant in the notifications - HELD THAT:- The notification extends exemption to such goods as notified in annexure - I thereof and cleared from such units as are located in Industrial Growth Centre or Industrial Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate or the scheme area as the case may be. The unit of appellant exist in Ranipur, Haridwar is admittedly included in annexure - II of the notification. It is also an admitted fact that Rawli, Mehdoodpur, Ranipur is an integrated industrial park - appellants were not eligible for the duty exemption in terms of the said notification. Denying eligibility despite holding appellant’s area to be covered under notification is absolutely a wrong finding. Due to this apparent contradiction also, the order is liable to be set aside.
The findings in order under challenge that benefit of impugned notification could not be extended to the appellants as their unit is not located in an existing industrial area are not sustainable - The order under challenge is hereby set aside - Appeal allowed.
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2023 (11) TMI 409
CENVAT Credit - input services - outdoor catering service - period January, 2016 to June, 2017 - invocation of extended period of limitation - suppression of facts or not - HELD THAT:- The issue is no more res integra in view of the decision of the Larger Bench of the Tribunal in the case of Wipro Ltd. [2018 (4) TMI 149 - CESTAT BANGALORE], wherein it has been held that the definition of ‘input service’ has been amended w.e.f. 01.04.2011 providing the exclusion clause, wherein the definition of input service under Rule 2(l) ibid, specifically excludes ‘outdoor catering services’. It has been concluded in the said order that the outdoor catering service is not eligible for input service credit post amendment dated 01.04.2011 vide Notification No. 3/2011-CE (NT) dated 01.03.2011.
The issue of availing CENVAT Credit on input service on outdoor catering service in respect of the canteen facility in the case of appellants has already been settled by this Tribunal in the assessee-appellant’s own case in [2018 (1) TMI 201 - CESTAT MUMBAI], where it was held that relying on the decision of the Tribunal in case of Ultratech Cement Ltd. [2016 (12) TMI 381 - CESTAT HYDERABAD] and Hindustan Coca Cola Beverages Pvt. Ltd. [2016 (8) TMI 35 - CESTAT HYDERABAD] the appeal is allowed.
Invocation of extended period of limitation - suppression of facts or not - HELD THAT:- The department is not only well aware of the fact that the appellants were taking CENVAT credit on outdoor catering service but were also defending their case. Thus, it cannot be accepted that there exists any ground for suppression on this particular aspect.
Hon’ble Supreme Court, in the case of PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [1995 (3) TMI 100 - SUPREME COURT] have ruled that when the Revenue authorities were aware of the facts about the assessee’s activities, then issuance of show cause notice should be confined to the normal period.
The demand of CENVAT Credit of Service Tax paid on outdoor catering service for the normal period alone is sustainable. However, the demand of interest for extended period is not sustainable as Department was aware of the issue as evidenced by the order of the Tribunal dated 29.11.2017 and as the issue was agitated in the highest Court by various appellate authorities - the interest and penalty imposed/confirmed in the impugned order by upholding the Order-in- Original dated 27.06.2019 is set aside - matter is remanded back to the original authority to re-quantify the demand for the normal period with regard to impugned outdoor catering service on which CENVAT Credit was taken by the appellants.
Appeal partly allowed by way of remand.
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2023 (11) TMI 408
Seeking restoration of credit availed under CENVAT Credit Rules, 2004 that had been disallowed as ineligible - goods transport agency service’ for outward transportation up to the place of buyer - outdoor catering service - manpower recruitment and supply agency service - place of removal - Availment of credit of tax paid on charges levied by Mumbai International Airport Ltd in connection with the vending machines and kiosks installed in the airport premises - denied on the ground that the goods themselves are exempt from duty of central excise.
HELD THAT:- Considering the lack of detailed examination of the submissions of the appellant herein in relation to the several heads on which CENVAT credit was directed to be recovered, it would be appropriate for the matter to be decided afresh for which purpose, the impugned order set aside and the dispute remanded back to the original authority for fresh determination. Needless to say, appellant herein shall be given an opportunity to present their submissions and the adjudicating authority shall, thereafter, determine the scope and extent of recovery proposed in the show cause notice in terms of settled law and the factual matrix.
Appeal allowed by way of remand.
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2023 (11) TMI 370
Valuation - inclusion of after sale service charges, reimbursed by the appellants to their dealers, in the assessable value - providing free service to the customers during the warranty period and the expenses are reimbursed by the appellants to the dealers - HELD THAT:- Though, the appellants and the Adjudicating Authority have considered the “reimbursed expenses” as the demand on the includability of post-delivery inspection charges and after sale service charges, no clarity as to what the reimbursed expenses constitute is given in the show-cause notice. The Show Cause Notice makes a bland and general averment, in Para 2 of the show-cause notice, that it is a well-known fact in case of motor vehicles manufacturers that After Sales service and pre-delivery inspection (PDI) are services provided free by the dealer on behalf of the assessee, the cost towards this is included in the dealer’s margin (or reimbursed to him). It is also not made clear, in the show-cause notice, as to whether the amounts reimbursed, by the appellants to their dealers, were towards PDI and ASS. Moreover, the show-cause notice seeks to demand duty on the expenses, understandably incurred by the appellants, reimbursed to the dealers.
It is beyond imagination as to how these amounts constitute flow of additional consideration unless it is evidenced either that the appellants are allowing the dealers to collect the margin payable, by the appellant to the dealers, from ultimate customers or that the additional amounts charged by the dealers from ultimate customers is actually flowing back to the appellants. Only under these two conditions the said expenses can be held includable in the assessable value even under the old or amended definition of Section 4 of CEA, 1944 - there is no provision either under Section 4 of the CEA, 1944 or under the Valuation Rules thereof to include an amount which flows out from the manufacturer to their customers. It is not the case of the Department that the appellants, instead of reimbursing the expenses on account of PDI and ASS, allowed the dealers to recover the same from the customers or that the appellants have received some amounts as extra consideration under these Heads.
It is not forthcoming from the show-cause notice or from the records of the case that the amount recovered by the dealers over and above the listed price sanctioned by the appellants is towards the amount reimbursable by the appellants to the dealers. It is also not established that the amount extra collected is towards the PDI and ASS. There is no evidence to prove that the amount charged extra by the dealers is flowing back towards the appellant - the impugned order as well as the arguments of the learned Authorized Representative and to some extent, argument of the Counsel also is beyond the scope of the show-cause notice. No case is made for the inclusion of “after sale expenses reimbursed to the dealers by the Noticee” except for a bland averment in Para 2 of the show-cause notice that it is a well-known fact in case of motor vehicles manufacturers that After Sales service and pre-delivery inspection (PDI) are services provided free by the dealer on behalf of the assessee, the cost towards this is included in the dealer’s margin (or reimbursed to him).
Thus, it is not made clear in the show-cause notice as to whether these expenses reimbursed by the appellants were towards PDI and ASS - the impugned order cannot be sustained - appeal allowed.
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