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Central Excise - Case Laws
Showing 221 to 240 of 1430 Records
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2023 (11) TMI 369
Recovery/reversal of credit - Export of Goods - Credit was availed under Rule 16 on returned Goods - credit not reversed by the appellants when the chassis were exported and cleared under N/N. 108/1995-C.E. along with interest and for imposing penalties.
The main allegation raised by the Department is that as the credit is availed by the appellants under Rule 16 of the Central Excise Rules, 2002, they cannot remove the goods for export or clear the same under exemption Notification No. 108/1995-C.E. without reversing the credit.
HELD THAT:- Rule 16 makes it amply clear that the credit is availed in terms of the CENVAT Credit Rules, 2004. There is no embargo envisaged under Rule 16 for export of the goods or for clearance under the exemption Notification.
The view taken by the authorities below is that reversal of the credit availed under Rule 16 is a pre-condition for removal of the said goods and therefore, the appellant has to reverse the credit. It is also alleged that when the goods were not originally meant for export, it cannot be later exported when the goods are brought back to the factory under Rule 16 - the said view of the Commissioner (Appeals) cannot be endorsed upon.
The demand cannot sustain. The impugned order is therefore set aside - Appeal allowed.
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2023 (11) TMI 368
CENVAT Credit - capital goods - under erstwhile Rule 57Q/57AA of Central Excise Rules, 1944 - period March and April 2001 - HELD THAT:- There is no dispute of the fact that the capital goods have been received in the premises of the appellants during the period 1997 to 2000 and installed. Their final products are dutiable all along. They had availed 50% of the total credit in March 2001 i.e. Financial year 2000-01 and balance 50% in April 2001 i.e Financial year 2001-02 as per the procedure prescribed under the relevant Rule of Central Excise Rules,1944.
Out of the total credit disallowed an amount of Rs.61,85,230/- at Sl. No. 10 items used in construction of the ‘storage tanks’, specifically covered under the aforesaid definition of capital goods. Also, the issue of admissibility of Cenvat credit on the items used in fabrication has been settled in favour of the assessee by Karnataka High Court in SLR Steel Ltd.’s case [2012 (9) TMI 169 - KARNATAKA HIGH COURT]. The said judgment has been followed by this Tribunal in the Appellant’s own case vide Final Order No. 20701/2023 dated 06.07.2023 [2023 (8) TMI 696 - CESTAT BANGALORE].
The scope of the definition of ‘capital goods’ under erstwhile Rule 57Q has been examined by the Hon’ble Supreme Court in Rajasthan Spinning & Weaving Mills Ltd’ s case [2010 (7) TMI 12 - SUPREME COURT]. The issue involved in the said case was regarding admissibility of Modvat credit in respect of steel plates and MS channels used in the fabrication of chimney installed in the factory premises. It was argued by the Revenue that steel plates and MS channels classifiable under Chapter 7208.11 and 7216.10 of CETA,1985 cannot be considered as capital goods, hence, credit is inadmissible on the said items - The Hon’ble Supreme Court analysing Rule 57Q and following the ‘user test’ laid down in Jawahar Mills’s case [2001 (7) TMI 118 - SUPREME COURT], held that MS channels, steel plates and angles used in fabrication of chimney would fall within the definition of capital goods.
Also, a major amount of Cenvat Credit denied to the appellants are on fire extinguisher and inputs/parts mentioned at Sl. Nos. 2, 3, 4, 51, 52, and 66 amounting to Rs.4,20,109/- - the Fire extinguishers and its parts are classified under Chapter 84 of CETA,1985 and hence fall under the scope of the definition of capital goods as defined under amended Rule 57AA of the Central Excise Rules, 1944. The consumables used in the fire extinguishers are also admissible to credit as inputs. Further, this Tribunal in the case of Mylan Laboratories Ltd vs. CCE [2017 (6) TMI 669 - CESTAT HYDERABAD] held that Cenvat Credit on fire extinguishers and parts thereof are admissible.
All the items, which have been disallowed as discussed are admissible to Cenvat credit. Accordingly, the impugned orders are modified to the extent of setting aside the orders disallowing Cenvat credit of Rs. 80,02,643/- in each of the appeals - Appeal disposed off.
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2023 (11) TMI 367
Valuation of Excise Duty - adoption of maximum of the different ‘retail selling price (RSP)’ for chargeability to duty under Central Excise Act, 1944 - HELD THAT:- The entire proceedings has been premised on a clear lack of appreciation of objectives of Standards of Weights and Measures Act, 1976, or its successor Legal Metrology Act, 2009, and its relationship with Central Excise Act, 1944. Mandating the affixing of ‘retail selling price (RSP)’, on goods specified under these statutes was intended to protect customers from being overcharged at the retail stage on pain of penalties and detriments prescribed. Neither that law nor Central Excise Act, 1944 affords a mandate to customs officials, at the time of clearance of import, or central excise officials, at the time of clearance from factory, to determine the price at which the goods are sold - exclusively a decision of the manufacturer/importer.
The goods imported by the appellant are ‘repacked’ after clearance from customs control and such activity being manufacture erases the ‘import’ that had taken place earlier to be superimposed with production of excisable goods in the hands of the manufacturer and subject to valuation under section 4A of Central Excise Act, 1944 for assessment to duties of central excise. The affixing of ‘retail selling price (RSP)’ thereupon becomes the first, and final, declaration of price for assessment under Central Excise Act, 1944. There are, thus, no two prices and, therefore, the Explanation 2(a) below section 4A of Central Excise Act, 1944 would not come into play. In the case of the appellant for the earlier period, the issue has been decided by the Tribunal in their favour.
Nothing remains in the demand confirmed in the impugned order which is set aside along with charging of interest and imposition of penalty to allow the appeal.
Appeal allowed.
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2023 (11) TMI 366
CENVAT Credit - ineligibility of certain goods procured by them that were claimed to conform to ‘inputs’ in rule 2(k) of CENVAT Credit Rules, 2004 - claim of the appellant is that these goods were used in the setting up of ‘lube oil upgradation plant’, ‘diesel hydro treatment plant’ and similar projects which are of capital nature and, therefore, entitled to availment under CENVAT Credit Rules, 2004, of credit of duties paid on procurement.
HELD THAT:- It appears from the records that there has been a summary finding by the adjudicating authority on the deployment of the impugned materials. For determining eligibility for availment of credit, it is important to note in context that these projects are ‘turn-key projects’ and that the utilization of such materials in the process of setting up such facilities on site would be intrinsic to the manufacture of capital goods. There was no evidence adduced to establish that these materials were used only for providing such structures for support of capital goods. It is also on record that the adjudicating authority was less than satisfied about the documents furnished in support of the claim of the appellants that these were used in the creation of capital goods on which appellant was not placed on the notice.
In view of this deficiency in finding, it would be inappropriate to take a decision on the eligibility of each of the goods claimed to be so. It was for the adjudicating authority to examine the claim of the appellant in detail and, to the extent of inapplicability, give a clear finding on the actual usage owing to which it was not entitled - the impugned order is set aside - matter remanded back to the original authority for a fresh decision after affording an opportunity to the appellants herein to present their claim on factual as well as legal submissions.
Appeal allowed by way of remand.
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2023 (11) TMI 365
Recovery of CENVAT Credit - availment of credit on duty discharged by the supplier of ‘copper’ to them which was dropped by the adjudicating authority - competent reviewing authority has concluded that the respondent was not eligible for availing CENVAT credit as the procurement of such goods on payment of duty is not in concord with scheme of ‘advance licence’ in the Foreign Trade Policy (FTP) - HELD THAT:- The factum of payment of duty by the appellant on procurement of copper is not in dispute. In terms of rule 3 of CENVAT Credit Rules, 2004, with duty liability having been discharged and the procured goods conforming to definition of ‘inputs’ in rule 2(k) of CENVAT Credit Rules, 2004, there is no ground for disallowance of the said credit.
Furthermore, the goods cannot be said to be exempt inasmuch as the notification relied upon in the appeal of Revenue is a non-tariff notification which does not have the effect of section 5A of Central Excise Act, 1944 and is merely procedural and conditional - It is also settled law that it is not open to the central excise authorities having jurisdiction over the buyer to determine leviability to duty of a seller in another jurisdiction.
The duty having been discharged by manufacturers of copper who had supplied ‘inputs to the respondent, there is no ground for denial of eligibility for CENVAT credit. Furthermore, the primary contention in the appeal of Revenue is that on identical matter was pending resolution, in their appeal, before the Hon’ble High Court of Bombay in COMMISSIONER VERSUS OLEOFINE ORGANICS (INDIA) PVT. LTD. [2015 (10) TMI 650 - BOMBAY HIGH COURT] - With the disposal of that appeal, discarding the challenge mounted by Revenue against the order of the Tribunal permitting availment of credit, the grounds of appeal itself ceases to exist.
The appeal lacks merit and is, accordingly, dismissed.
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2023 (11) TMI 364
Process amounting to manufacture - process of conversion of metal into Engine Components carried out by the appellant - exemption from payment of duty under the job work Notification No. 214/86-CE dated 25.3.1986 - availment of CENVAT credit on the basis of debit notes which are not the prescribed document under Rule 9 of the CCR, 2004 - revenue neutrality - extended period of limitation.
Whether the process involved in the job work contract with M/s Rockman amounts to manufacture? - HELD THAT:- M/s Rockman in terms of the contract supplied the raw material, i. e., Aluminium Ingots to the appellant, who processed them by using specific moulds and dies supplied by M/s. Rockman, whereby the product Aluminium Die Casting Components were produced - It is a settled principle of law as interpreted in catena of decisions that the definition of the term ‘manufacture’ is an inclusive definition and has to be given wider import, so any person who is engaged in any activity as specified in the clauses of section 2(f) would fall in the category of a manufacturer and would be liable to pay the excise duty unless exempted - it is opined that the activity carried out by the appellant who happens to be a job worker amounts to manufacture, more particularly when it says that the word 'manufacture' shall also include any person, who engages in their production or manufacture on his own account.
From careful reading of Section 66 D(f) of the Finance Act, 1994, there is no ambiguity that the statute does not envisage levy of service tax on any process amounting to manufacture or production of goods - the payment of service tax by the appellant on the job charges collected on Die Casting of Components from Aluminium Metal was totally unwarranted and against the spirit of the law as quoted above. In fact, the appellant was required to pay central excise duty on the said activity which amounts to manufacture and was not required to pay service tax.
The Notification No 214/86 has been the subject matter of interpretation in various decisions of the Tribunal as well as of the Supreme Court. The condition of submitting an undertaking by the principal manufacturer or the supplier of the raw material as provided in the notification has been held to be a substantive condition and not merely a procedural one for the reason that it shifts the burden of the tax liability from the job worker to the supplier of raw materials or semi-finished goods. It has also been held that the above procedure set out in the notification is a pre-requisite and it being the mandate of law that unless such an undertaking is given, the benefit of exemption notification shall not be attracted and the job worker only is liable to discharge the duty liability at the time of clearance of the said goods from the premises of the job worker - There is no dispute that the principal manufacturer had neither given any such undertaking nor paid the excise duty. Consequently, the appellant cannot escape the liability to pay the excise duty on the goods manufactured by them on job work basis.
Levy of interest and the penalty - HELD THAT:- The appellant has deliberately indulged in evading the duty liability in as much as he has been paying the excise duty in respect of the supply of the same goods to other customers, which shows that the appellant is aware of the duty liability - The appellant cannot be allowed to pick and choose what is beneficial to him and discard the conditions specified. That the ingredients of willful suppression of facts so as to avoid the payment of central excise duty exists. The Authorities below are justified in imposing penalty under the provisions of Section 11 AC of the Act, relying on the decision of the Apex Court in the case of SEBI VERSUS SHRIRAM MUTUAL FUND [2006 (5) TMI 191 - SUPREME COURT] that mens rea is not an essential element for imposing penalty - the Adjudicating Authority has rightly imposed the penalty equal to the duty amount - Similarly, interest under Section 11AA has also been rightly imposed as the appellant knowingly and deliberately evaded payment of excise duty.
Whether the appellant is entitled to take cenvat credit on the strength of debit notes, which is not the document prescribed under Rule 9(1) of the CCR, 2004 to avail the cenvat credit? - HELD THAT:- The issue is no longer res-integra and has been decided by the High Court of Rajasthan in the case of COMMISSIONER OF CENTRAL EXCISE JAIPUR-1, JAIPUR VERSUS BHARTI HEXACOM LTD. [2018 (6) TMI 435 - RAJASTHAN HIGH COURT]. The Division Bench decided the issue after considering the long line of decisions, where same issue was considered and decided infavour of the party and against the Revenue.
The learned Counsel for the appellant had filed the supplementary paper book on 3rd June 2022, where at Serial No.4, he has annexed the copies of the debit notes along with the chart showing the details of the debit notes. On perusal of the debit notes, it is found that they contain all the particulars and details, as are required to be mentioned in the invoice to avail the cenvat credit. Consequently, the appellant is entitled to claim the cenvat credit and the Authorities below have erred in denying the same. Both the Adjudicating Authority as well as the Appellate Authority have rejected the claim for cenvat credit on the ground that the debit notes were not a proper document as prescribed under Rule 9 of CCR, 2004 for availing cenvat credit and, therefore, did not examine the particulars given therein in terms of Rule 4A of Service Tax Rules.
Matter remanded to the Adjudicating Authority, however, in the facts of the present case, when the Department has not raised any objection to the debit notes in any respect, it would be a futile exercise. The documents, i.e., debit notes produced are self-explanatory as to the details, which are required under Rule 4A of the ST Rules and, therefore, unnecessarily dragging the party all the way again to the litigation is not justifiable, moreso when the departmental authorities had adopted a very callous attitude in not considering even the contents of the documents in the light of the decisions of the Tribunal. Hence the demand of Rs 6,75,737/- along with interest and penalty is not sustainable.
Revenue Neutrality - HELD THAT:- Reference placed to a latest decision of this Tribunal in M/s Parvatiya Plywood Pvt. Ltd. Vs. Commissioner of Customs, Central Excise and Service Tax, Meerut-II [2022 (12) TMI 451 - CESTAT NEW DELHI], where the explanation added in section 4(1) after clause (b) of the Act (w.e.f.) 14.05.2003 was considered to say that where excise duty have not been collected separately by the manufacturerseller, the price charged shall be treated as cum-duty, excluding the sales tax and other taxes, if any actually paid - matter remanded to the Adjudicating Authority to re-compute the duty liability in terms thereof and determine the actual duty liability of the appellant.
Extended period of limitation - HELD THAT:- The period in dispute is from February 2015 to March 2016. Since the show Cause Notice has been issued on 28.4.2017, the delay as pointed out by the Department is of merely two months, i.e. February and March, which also, in the facts of the case, are covered by virtue of the extended period of limitation.
The appellant is liable to pay the excise duty as determined along with interest and penalty. On the other issue, the appellant is entitled to claim the cenvat credit on the basis of debit notes and, therefore, the interest under section 11 AA of Central Excise Act and penalty under Rule 15 (3) CCR, 2004 read with section 11 AC of the Act are not leviable thereon - the matter is remanded to the Adjudicating Authority for the purpose of recomputation only.
Appeal allowed in part.
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2023 (11) TMI 363
Recovery of Central Excise Act with penalty - definition of ‘transaction value’ in section 4(3)(d) of Central Excise Act, 1944 requires that any additional consideration would have to be added for the purpose of determination of duty liability or not - HELD THAT:- It is clear from the facts and circumstances of the proceedings that the scheme did not involve retention of any amount on the part of the assessee. On the other hand, it entailed premature payment restricted to the present value, net discounting term for measuring the time value of the money. In effect, what was foregone by the State Government was merely the cost incurred by the assessee for not awaiting the appropriate date of payment for discharge of tax liability.
A similar dispute had came up before the Tribunal in Uttam Galva Steels Ltd [2015 (10) TMI 1727 - CESTAT MUMBAI] and it was held that When the goods are being cleared (i.e. time of removal) actual sales tax paid is nil but sales tax actually payable is the normal sales tax or what has been collected by the assessee from its customers. Among the terms actually paid or actually payable used in transaction value, actually paid is not relevant in the present set of appeals. What is relevant is actually payable.
In view of the decisions of the Tribunal, relating to the peculiarity of the scheme which was prevailed insofar as the impugned order is concerned, the demand is set aside - appeal allowed.
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2023 (11) TMI 305
Exemption from payment of National Calamity Contingent Duty (NCCD) as per notification 67/95-CE dt. 16.03.1995 - Manufacture of Dumper trucks and Dumper trucks without body (Chassis with Cabin) - Captive consumption/intermediate product - Classification of the impugned chassis.
The Dumper Truck was manufactured by fixing the load body on the chassis with cabin - exemption from NCCD denied on the ground that the chassis is thus captively consumed in the production of final product, viz., Dumper Truck.
Whether the appellant is liable to pay NCCD on Dumper chassis as an intermediate product?
HELD THAT:- The Dumper without the body cannot be treated as a chassis of a dumper, for the reason that it appears to have all the essential features of a dumper, except for that it is not fitted with the body. As per Note (2) of the Interpretative Rules to the Central Excise Tariff Act, 1985 which has been already noticed in para 6.1 of this order, when the incomplete or unfinished article has the essential character of the complete or finished article, such unfinished article merits classification under the heading of the complete or finished article. The Ld. Counsel for the appellant has emphasized that there is no practice in the market to sell a chassis of a Dumper.
The reason in the impugned order to hold that an intermediate marketable product emerges is not based on the process/ stages of manufacture. The reason is that the appellant while making some exports had described the product as “chassis with cabin assembly” in the export documents. The exigibility to duty of a product cannot merely be based on how the assessee described the product in a document. In case of dispute, the department has to clearly state in the SHOW CAUSE NOTICE the nature, classification and dutiability of the product - The Tribunal in the case of COMMISSIONER OF C. EX., MYSORE VERSUS BHARAT EARTH MOVERS LTD. [2009 (10) TMI 748 - CESTAT BANGALORE] has categorically held that the demand of NCCD cannot sustain as there is no intermediate, identifiable and marketable product viz. Dumper chassis emerging in the process of manufacture of dumpers. The issue as to whether NCCD is payable on dumper chassis was also held in favour of assessee by the Tribunal.
In the case of BAJAJ AUTO LIMITED VERSUS UNION OF INDIA & OTHERS [2019 (3) TMI 1427 - SUPREME COURT] the Hon’ble Apex Court was considering the issue as to whether the area-based exemption notification no.50/2003-CE dated 10.06.2003 issued under Section 5A of CE Act, 1944, would be applicable to NCCD also. The Hon’ble Apex Court held the issue in favour of assessee and that the appellant would not be liable to pay the NCCD.
Thus, the issue as to whether the exemption under notification 67/95 is available to NCCD is to be answered in the affirmative and in favour of the assessee. The demand of NCCD therefore cannot sustain and requires to be set aside.
Classification of the impugned chassis, the alleged intermediate product - HELD THAT:- As the issue is decided on merits as to whether the exemption under notification 67/95 is available to NCCD in favour of assessee, it is not necessary to delve into these arguments on classification. It is clarified that no decision rendered on the classification of the impugned goods the findings are confined as to whether the demand of NCCD is sustainable or not.
The impugned order is set aside - The appeal is allowed.
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2023 (11) TMI 304
CENVAT Credit - input services - Renting of immovable property - Business support services and Business Auxiliary service - Election & Commissioning Service - Sponsorship services - Warehouse services - General insurance services - Courier services - Telephone services - Air Travel Agency - Pandal and Shamiyana Services - Credit denied mainly on the ground that since all the subject services are not mentioned in the inclusive part of the definition, the same do not qualify as input service - period August 2012 to November 2012 - HELD THAT:- Since a manufacturing unit when manufacture goods there are various activities of the services which are used directly or indirectly exclusively in relation to the manufacture of the goods. it is not a case of the department that the appellant is carrying out any other activity other than the manufacture - only on the ground that the input services are not mentioned in the inclusive part of the definition cannot be a reason for denial of Cenvat Credit.
Since the appellant are exclusively involved in manufacturing operational in both their unit. The corporate office is operated only for the operation of the manufacturing of the final product. Therefore, it cannot be said that the corporate office is not used in or in relation to manufacture of final product.
All the services are admissible input service qualify under the definition of input service provided under Rule 2(l) of the Cenvat Credit Rules, 2004. Therefore, the appellant are clearly entitled for the Cenvat Credit on such services.
The impugned order is set aside, appeal is allowed.
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2023 (11) TMI 303
Maintainability of appeal - Rebate of duty on the finished goods exported - whether appeal is not maintainable in this Tribunal in terms of Section 35 B of Central Excise Act, 1944, in respect of goods exported out of country? - HELD THAT:- From the section 35 B as per the proviso therein clause (b) any order referred in clause (b) if such order relates to rebate of duty of excise on goods exported to any country, no appeal against such order shall lie to this Appellate Tribunal.
Accordingly, as per the clear statute of Section 35 B the present appeal is not maintainable before this Tribunal. Therefore, the revenue appeal is dismissed as non-maintainable.
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2023 (11) TMI 302
Excisability - books used for internal administration and record keeping in the zonal railway that were printed at zonal railway press - HELD THAT:- The issue in dispute is squarely covered by the decision of the Tribunal in re Dy Chief Manager (P&S), Central Railway [2015 (6) TMI 374 - CESTAT MUMBAI] in relation to the same activity undertaken by the Central Railway which held that product in question are not dutiable on both the counts of classification as well as marketability.
The impugned orders lack merit - Appeal allowed.
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2023 (11) TMI 301
Method of Valuation - physician sample to be in accordance with Rule 8 or Rule 4 of the Central Excise (Valuation) Rules, 2000? - HELD THAT:- The Hon’ble Supreme Court in MEDLEY PHARMACEUTICALS LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE [2011 (1) TMI 13 - SUPREME COURT] has held that physician samples have to be valued on pro-rata basis for the relevant period.
The impugned order is upheld and the appeal being devoid of merit, accordingly is dismissed.
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2023 (11) TMI 300
Method of Valuation - related parties - allegation is that the appellant has been clearing the finished products at lesser value to the buyer M/s Gera Enterprises, Faridabad - time limitation - Suppression of facts or not - HELD THAT:- In the present case, the demand has been confirmed by relying upon Rule 8 and 9 of Central Excise Valuation Rules, 2000 whereas it is an admitted fact in the show cause notice that the entire production has not been cleared to a related person M/s Gera Enterprises in this case. In the show cause notice itself it has been stated that the noticee has been clearing the finished goods at lesser (assessable) value to M/s Gera Enterprises as compared to other customers. Once this fact is admitted then applying Rule 9 is not legally sustainable in view of the larger bench decision of the Tribunal in the case ISPAT INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., RAIGAD [2007 (2) TMI 5 - CESTAT, MUMBAI].
Besides, this Tribunal in the case of SUDERSHAN CASTINGS PVT. LTD., SUDERSHAN STEELS PVT. LTD., TRIKUTA STEEL ROLLING MILLS, ROMESH CHANDER GUPTA, SHRI. NARINDER KUMAR GUPTA, MG. DIRECTOR OF SHRI SUDERSHAN KUMAR SHARMA VERSUS CCE, JAMMU. [2017 (5) TMI 1816 - CESTAT CHANDIGARH] held that when the goods are sold to related persons as well as to independent buyers, in that case, Rule 9 will not be applicable.
Time Limitation - HELD THAT:- The appellant has been filing the monthly returns regularly and has not concealed any material fact from the department. Therefore, alleging suppression or fraud to invoke the extended period of limitation is not legally sustainable.
The impugned order is not sustainable in law and the same is set-aside by allowing the appeal of the appellant.
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2023 (11) TMI 299
CENVAT Credit - input services - outward freight paid in respect of transportation of final products up to delivery - Revenue contended that the place of removal for clearance of the finished goods of the assessee is factory gate/depot and not the customers' premises - HELD THAT:- The finding recorded by the Commissioner in the impugned order is that the goods were cleared by the appellant on FOR basis then in view of the circular No 1065/4/2018-CX dated 08.06.2018 the place of removal will be the place of delivery of goods and the CENVAT Credit on services of GTA till that point will be admissible.
The issue is no longer res-integra and Mumbai bench has in case of M/S. CEAT LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III [2022 (10) TMI 1213 - CESTAT MUMBAI] decided the issue following the said circular - there are no merits in the impugned order - appeal allowed.
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2023 (11) TMI 255
Area based exemption - new and different marketable article is emerging at the said ESO having distinctive name, classification, character - Department contended that appellants are manufacturing HSRP Blank and multi layer labels stickers in their unit in Himachal Pradesh, however, are transferring the same to the ESOs installed by the appellants in the States / UTs under challan without payment of Central Excise Duty - extended period of limitation.
What is the product in question, when it is cleared from Himachal Pradesh and whether it gets changed when it is sold to the vehicle owner in Rajasthan? - HELD THAT:- The product is the high security registration plate, but blank, when it gets cleared from the factory in Kala Amb, Himachal Pradesh. It is blank for the reason that at that time the appellant is not aware about the registration number of the vehicle which has to be affixed on a particular plate. This registration number gets issued to the vehicle owner by the RTO in State of Rajasthan. While data entry at ESO in Rajasthan this registration number is entered against the specific alpha numeric PIN embossed on the HSRP blank at the manufacturing unit in Kala Amb, Himachal Pradesh. Finally, the said registration number gets embossed on said HSRP in the ESO of appellant established in Rajasthan. Hence what is cleared from Rajasthan is high security registration plate only except with the specific number embossed on it - It is observed from the record that SPV (RMRPL) is duly registered with the Service Tax Department and they are discharging their liability considering embossing to be a service. In addition, they are discharging their VAT liability while selling the individual HSRP to a particular vehicle owner.
What is the meaning of manufacture to understand (as to whether the activity done at ESO in State of Rajasthan can be called as the part of manufacturing process which is otherwise done in State of Himachal Pradesh)? - HELD THAT:- The product manufactured by the appellant is high security registration plate prior as well as post embossing / printing of the registration No. of the vehicle on it. Since no change in the commodity/product happens post performing the activity of embossing, this activity done at ESO in Rajasthan cannot be called as the part of manufacture. Otherwise also the burden of proving the fact of manufacture lies on the Revenue if it claims the same - manufacture of TLP also gets complete at Kala Amb, Himachal Pradesh. Printing on these stickers at ESO in Rajasthan was merely a service being provided by the appellant to the vehicle owner for which appellant is charging service tax and is duly discharging its liability. As already observed above, the said service could be provided by anyone other than the manufacturer subject to being the successful bidder.
Can the demand of excise duty be sustained? - HELD THAT:- Duty is payable on removal of goods from each manufacturing facility. For instance, if a company has its head office in, say Mumbai, where activities which do not amount to manufacture only take place and it has factories manufacturing excisable goods, in Chennai, Indore and Surat, the office in Mumbai need not register, pay duty or file returns but the Chennai, Indore and Surat factories need to do so and each of these is treated as a separate assessee. Duty amount be demanded from Mumbai Office for manufacture in Chennai or Surat. Therefore, the entire show cause notice issued to the appellant’s Himachal Pradesh falls flat if the Revenue’s argument that it is not manufacturing is accepted.
Extended period of limitation - HELD THAT:- Department had no opportunity to detect the non-payment of Central Excise duty from their monthly Service Tax Returns. No ER 1 Return reflecting the sale of HSRP plates has been filed is held as suppression of facts and reasons to invoke the extended period of limitation. However, we do not agree with those findings - In the present case the product manufacturer is known to market as HSRP and it has saleability except that under the statutory mandate the HSRP manufacturer has not to be sold by the manufacturer but by the person who succeeds the bid of State Transport Authority (RTA) to emboss the vehicle registration number allotted by the said RTA on the said HSRP. It is apparent on record that vide letter dated 22.07.2009 all these facts were conveyed to the department. Giving such information was a pre-requisite of the impugned notification.
There is no suppression of facts. Appellant had already intimated the concerned Commissionerate about his option to exercise the said area based exemption with all requisite particular in the said application dated 22.07.2009. In the state of Rajasthan the appellant is discharging the service tax liability qua his activity of embossing registration No. on the HSRP manufactured in Himachal Pradesh. VAT liability is also being discharged by the appellant. Thus the Department has wrongly invoked the extended period. The confirmation of demand is liable to be set aside on this score also.
There appears no evasion of tax liability and that the product of appellant gets manufactured in Himachal Pradesh to which area based exemption is available. Above all the Commissionerate in Himachal Pradesh has no jurisdiction to confirm any duty liability in case the manufacturing of HSRP would have completed in State of Rajasthan - the order by Himachal Pradesh Commissionerate confirming the demand of excise duty is hereby set aside.
Appeal allowed.
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2023 (11) TMI 254
Valuation of excisable goods - sale by assessee to buyer who is not related - price not being consideration for the sale - section 4(1)(a) of Central Excise Act, 1944 - HELD THAT:- None of the mechanisms in Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 that relate to ‘sale’ may be invoked in the present dispute thus ruling out rule 6 as well as rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 leaving only rule 8 and rule 11 among those that may be.
There are no doubt that the decision of the Hon’ble Supreme Court in COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, ROHTAK VERSUS MERINO PANEL PRODUCT LTD. [2022 (12) TMI 453 - SUPREME COURT] has held that exercise of statutory power is not vitiated by any error in citing the source of that power. However, the proposition of Learned Authorized Representative fails to find advancement with the requirement of ‘sale’ appended to the rule urged by him to be invoked. Furthermore, from a perusal of the judgement, it would appear that the privilege of deviating from facts in the notice is not extended even if the provisions may be; ‘principles of natural justice’ dictates that the facts, as detailed in the show cause notice, alone may be utilized for detrimental consequence to assessee even if the provision that applies had not been invoked in the notice. Within that restricted framework, it is permissible, in the light of the decision in re Merino Panel Product Ltd, to examine the applicability of the two remaining rules available.
The appellant has also failed to establish that rule 8 has been conformed to even while contending that formulation in the decision of the Hon’ble Supreme Court, pertaining to a time when these rules did not exist, had been. It is necessary to determine the assessable value for the purpose of discharge of duty liability in accordance with section 4 of Central Excise Act, 1944 and the rules framed thereunder. The appellant must, needless to state, be accorded opportunity to contest facts and inferences that may be to their detriment. To enable such, the impugned order is set aside and matter remanded to the original authority for fresh determination as to the correct duty liability - appeal allowed by way of remand.
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2023 (11) TMI 253
CENVAT Credit - denial on the ground that activity of the Appellant i.e., the process of making electronic capacitor grade metalized dielectric plastic film (MPP film), falling under Chapter 3920 2090 of the CETA, 1985, does not amount of manufacture - HELD THAT:- The issue whether the process of making MPP film amounts to manufacture or not is no longer res integra as amendment to the CETA, wherein, in Chapter Note 16 to Chapter 39, was added - under similar facts and circumstances, the Coordinate Bench of this Tribunal at Mumbai in the case of THE PAPER PRODUCTS LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [2014 (3) TMI 521 - CESTAT MUMBAI] have distinguished the ruling of Hon’ble Supreme Court in the case of METLEX (I) PVT. LTD. VERSUS COMMISSIONER OF C. EX., NEW DELHI [2004 (2) TMI 387 - SUPREME COURT] and have held that under similar facts and circumstances, the process amounts to manufacture.
The Coordinate Bench in Chandigarh in the case of DHRUV INDUSTRIES LTD. VERSUS CCE, DELHI-III (VICE-VERSA) [2018 (4) TMI 1492 - CESTAT CHANDIGARH] have also, under similar facts and circumstances, distinguished the ruling of Metalex (supra) and held that a new product comes into existence by use of the various raw materials viz., Poly Propylene, Polyester Films of Aluminium & Zinc, which is coated and further the process required use of capital goods/ machinery involving substantial cost and such process of manufacture takes about 36 hours. It was held that a new product comes into existence.
The process of making MPP Films, capacitor grade from plain plastic film would amount to manufacturing process and the MPP classifiable under CETH 3920 2090 would be a manufactured good. Once the process is considered as manufacturing process, the credit becomes admissible. Accordingly, Appellant is entitled to Cenvat credit, which has been disallowed by the Impugned Order.
Appeal allowed.
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2023 (11) TMI 252
Refund claim - rejection on the ground of time limitation - relevant date for filing the refund claim under Section 11B on the basis of the date of finalization of assessment - Section 11 B of the Central Excise Act, 1944 - rejection also on the ground of unjust enrichment - HELD THAT:- From the perusal of the Section 11 B (1) along with explanation at (eb) it is quite evident that relevant date in the cases of the finalization of assessment, is not the date of finalization of provisional assessment but is the date of adjustment of duty after the final assessment thereof. In the case of refunds arising as result of finalization of assessment will be the date when either that amount is paid to the appellant or credited to the fund. In the present case neither has been done till date, nay, on the date when the application for the refunds have been filed under Section 11 B. That being so the refund claim cannot have been held as time barred for the reason that the relevant date for counting the period of limitation has not even started - the rejection of three refund claims on the ground of time bar cannot be upheld.
Unjust enrichment - HELD THAT:- The duty in this case is paid by the appellant on the normal transaction value and not the actual transaction value. The actual transaction value at which the goods were sold by the appellant may be different from the normal transaction value determined on the basis of maximum aggregate quantity of sale value. Further it was for the reason that correct assessable value could not have been determined at the time of clearance of the goods from the factory gate, the assessment were ordered to be provisional. The actual assessable value is as per the finalization order and duty determined accordingly.
Appellants have produced a certificate dated December 15, 2021 from the Chartered Accountant, G Ganesh to establish that they have not passed on the burden of the duty to their customers - in view of the Certificate of Chartered Accountant it is abundantly evident that appellant have rebutted the presumption of having passed on the burden of duty claimed as refund to the consumer. Hence the rejection of the refund claims on this ground also is not justified.
There are no merits in the impugned order and the same is set aside - appeal allowed.
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2023 (11) TMI 217
Time Limitation - suppression of facts or not - CENVAT Credit - capital goods used in the captive power plant installed outside the factory - period June 2012 to December 2012 - HELD THAT:- From the correspondence and certificate issued by the Deputy Commissioner of Central Excise-Division-IV, Ahmedabad, it is absolutely clear that the fact about installation of capital goods in the factory premises of Nandan Exim Limited and availment of cenvat credit there on by the Respondent was very much disclosed by the Respondent and was in the knowledge of the department. The appellant also filed their ER-1 return during the relevant period wherein the availment of Cenvat Credit on such capital goods was categorically declared. Therefore, there are no suppression of fact on the part of the Respondent. The adjudicating authority has correctly considered the fact on demand being time barred.
Even though there is some discrepancy in the Plot No./ Survey No. in the address, it was categorically declared to the department that the capital goods were installed in the factory of Nandan Exim Limited. On the basis of this Certificate issued by the department, entire facts of availment of credit on capital goods by the respondent, installation of capital goods at the factory premises of Nandan Exim Limited were in the knowledge of the department. On the basis of such information, the department could have conveniently issued the show cause notice if at all they feel any discrepancy to the appellant will within the normal period of one year. However, in respect of credit taken during June 2012 to December 2012, the show cause notice was issued on 31.03.2015 i.e. more than two years after the date of taking credit.
There are no hesitation to hold that the demand was wrongly made under the extended period in the show cause notice - the adjudicating authority has rightly dropped the proceedings on limitation.
Appeal of Revenue dismissed.
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2023 (11) TMI 216
CENVAT Credit - denial on the ground that the input service invoice the Mumbai address is mentioned whereas the credit was taken by the appellant in their factory address which is different from the Mumbai address - nexus between the input services in question and manufacturing of the final product.
Denial on the ground that the input service invoices bear the name of appellant’s Mumbai office - HELD THAT:- In this regard on going through the ISD invoices and the submission made by the learned counsel we find that the entire allegation in the Show cause notice is incorrect in as much as the appellant claimed that the cenvat credit was taken on ISD invoice. It appears that the Adjudicating Authority has not considered the ISD invoices, if it is found that the appellant has taken the credit not on the basis of invoices issued to their Mumbai office but on the ISD invoice which are obviously bearing the name and address of the appellant factory, the appellant is premia facie eligible for credit.
Nexus of input service in question with the manufacturing activity of the appellant - HELD THAT:- This issue is no longer res- integra as in respect of all the input services in question, the Tribunal in one or more judgments allowed the cenvat credit holding that there is a nexus between the input services and manufacturing of the final product - Reliance can be placed in the case of M/S. AHLCON PARENTERALS (INDIA) LTD. VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & CENTRAL GST, JAIPUR [2022 (7) TMI 1180 - CESTAT NEW DELHI] where it was held that credit allowed in similar circumstances - the entire matter needs to be reconsidered by the Adjudicating Authority keeping in mind.
Appeal allowed by way of remand.
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