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Central Excise - Case Laws
Showing 281 to 300 of 1430 Records
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2023 (10) TMI 1301
Recovery of CENVAT Credit alongwith interest and penalty - second stage dealers were issuing invoices without actually supplying goods - opportunity of cross-examination not provided - principles of natural justice - HELD THAT:- The show cause notice is based on 9 relied upon documents of which one is a set of the invoices in dispute (RUD-9). These are alleged to be ineligible for CENVAT credit based on five statements of Sudarshan Singh of Aditya Enterprises (RUD-2), Ajay Sharma of Hari Om Steel (RUD-5), Vakil Luhar of M/s Mahalaxmi Scrap (RUD-6), Manoj Vijay authorized signatory of M/s Mahalaxmi Scrap (RUD-7) and Dharamveer Singh, Director of the assessee (RUD-8) - all the statements become irrelevant and, therefore, also inadmissible to the present proceedings.
The cross-examination of one of the persons Manoj Vijay was allowed in which he asserted that the goods were transported not to his premises but were transported directly to premises of the respondent. Once we ignore all these statements, the only evidence left are the letter of the Additional Director, DGCEI indicating that intelligence was received, the letter of the Additional Commissioner, Dhanbad, which is an alert notice indicating that Ganpati Enterprises was found to be non-existent and the letter of superintendent of Central Excise, Burdwan indicating that M/s Vedic Chemicals Pvt Ltd is also closed - It is true that if the manufacturer had not manufactured the goods they could not have been supplied by the manufacturer to the first stage dealer and further to the second stage dealer and to the respondent. It certainly creates enough reasons to doubt but the issue can only be decided through a thorough investigation. If the assessee says that it had received the goods, the question is, if the second stage dealer had supplied the goods. In this case, he says he had supplied the goods.
The next question is to enquire if the first stage dealer had sold the goods to the second stage dealer. The third stage of investigation is ascertaining if the manufacturer had supplied to the goods to the first stage dealer. Examining the records of each of this individual companies/ firms and recording their statements can only reveal the complete truth. If such an investigation requires statements to be recorded and if revenue proposes to use such statements in the proceedings against the assessee the procedure prescribed under the section 9D has to be followed. Otherwise, such statements are not only NOT admissible but are not even relevant to the proceedings. In this case, all the statements are rendered irrelevant as the Adjudicating Authority had not followed the procedure prescribed under section 9D.
There are no reason to interfere with the impugned order. The impugned order is upheld and the appeal filed by the Revenue is dismissed.
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2023 (10) TMI 1300
Interest on differential duty by invoking extended period of limitation - suppression of facts or not - Impugned order passed by not properly appreciating the facts and the law - violation of principles of natural justice - HELD THAT:- The appellant deposited the duty on supplementary invoices as and when the supplementary invoices were issued. It is also found that the appellant has deposited the interest under protest and has submitted that in the present case invoking the extended period of limitation to demand the interest alleging suppression is not sustainable because during the relevant period there were divergent views on the issue of liability of interest on payment of central excise duty while issuing supplementary invoices under the Central Excise Act, 1944.
This Tribunal in the case of SUPER THREADING INDIA PVT LTD VERSUS COMMISSIONER OF CE & ST, LUDHIANA [2021 (5) TMI 907 - CESTAT CHANDIGARH] and M/S. KEC INTERNATIONAL LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR [2022 (3) TMI 692 - CESTAT NEW DELHI] had held that extended period of limitation cannot be invoked as there is no fraud/mis-statement with intent to evade payment of duty.
Thus, invoking the extending period of limitation is not sustainable and the demand of interest by invoking the extended period of limitation is not justified and the same is set aside by remanding the matter to the Original authority to re-quantify the demand only for the normal period and any amount deposited over and above the normal period of one year should be returned back to the appellant as he has paid the entire disputed demand of interest under protest.
Appeal allowed by way of remand.
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2023 (10) TMI 1299
Captive Consumption - Benefit of exemption - Time Limitation - requirement to pay Central Excise duty on intermediate goods, i.e. dyed yarn - manufacture for captive consumption or not - benefit of Notification No. 67/95-CE dated 16.03.1995 denied - HELD THAT:- There is no dispute with regard to the fact that entire finished products were exported under bond/LUT and there was no domestic sale by the appellant. The appellant has exported their final product without payment of duty under letter of undertaking and bond executed by them and accepted by the jurisdictional Assistant Commissioner of Customs, New Delhi and the show cause notice dated 05.08.2004 issued by Commissioner of Customs (Preventive) New Delhi was withdrawn in the light of CBEC’s circular No. 19/05-Cus dated 21.03.2005.
Since the appellant has got their goods manufactured/yarn dyed from job worker; in these circumstances, the job worker is the manufacturer of dyed yarn and if any duty is to be paid it is to be paid by the job worker. The dyed yarn by the job worker is not captively manufactured by the appellant and in that circumstance, the Notification No. 67/95-CE have no relevance to the facts of the present case - the original authority has held that since the finish goods manufactured by the appellant are chargeable to nil rate of duty under heading 5702.09 the benefit of Notification No. 67/95-CE is not available in view of the proviso to the said notification.
But in the present case entire quantity of goods manufactured was exported and these clearances cannot be considered as clearance for home consumption.
The appellants are entitled to the benefit of exemption Notification No. 67/95-CE. Further, when the appellants are entitled to exemption, the imposition of penalty on the director is bad in law.
The impugned order is set aside - Appeal allowed.
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2023 (10) TMI 1298
CENVAT Credit - credit availed by the appellant job worker based on supplementary invoices issued by Hindustan Unilever Ltd paying differential duty on the Bulk Detergent Powder, stock transferred to the appellant M/s. Indu Home Care Product - deniable on the ground of payment of such additional duty by Hindustan Unilever Ltd allegedly on account of suppression, etc. under Rule 9(1)(b) of CENVAT Credit Rules, 2004 - penalties under Section 11 AC(1)(c) of Central Excise Act upon the appellant - penalties under Rule 26 (2) upon HUL.
HELD THAT:- From Rule 9 (1) (b) of CENVAT Credit Rules 2004, it can be seen that the restriction of availment of credit on supplementary invoice is applicable in a case where the manufacturer supplier of inputs or capital goods not paid the duty or short paid the duty by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any provision of the Excise Act or of the Customs Act or the Rules made thereunder with intend to evade payment of duty only when such clearance is in the nature of sale of goods - In the present case the appellant is a job worker and they have received the goods on which CENVAT Credit was taken as a job worker, for the purpose of job work on behalf of M/s Hindustan Unilever Ltd. In this fact, the goods were received on returnable basis which does not involve the sale of goods as defined under Section 2(h) of Central Excise Act.
The ownership of goods remained with supplier M/s. Hindustan Unilever Ltd. As against the supply of goods there is no consideration paid by the appellant to M/s. Hindustan Unilever Ltd. Therefore, the transaction is clearly not covered under ‘sale’ of goods by M/s. Hindustan Unilever Ltd to the appellant. Therefore the combined reading of Rule 9 (1)(b) and Section 2(h), it is clear that only in a case of sale of goods, the restriction of CENVAT Credit on supplementary invoice is applicable. In the present case, the transaction being not a sale transaction the restriction shall not apply.
From the consistent view taken by the Tribunal and the courts it is settled that in a case where there is no sale of goods and only a stock transfer the restriction of availment of CENVAT Credit on supplementary invoice in case of non-payment or short payment of duty by the supplier unit shall not apply - Reliance placed in COMMISSIONER OF CUS. & C. EXCISE, HYDERABAD-IV VERSUS JAIRAJ ISPAT LIMITED [2008 (2) TMI 440 - ANDHRA PRADESH HIGH COURT] and UNITED PHOSPHORUS LTD. VERSUS COMMISSIONER OF C. EX. & S.T., SURAT-II [2013 (11) TMI 1530 - CESTAT AHMEDABAD] where it was held that when there is simply a stock transfer the prohibition under Rule 7(1)(b) will not be applicable.
Penalties - HELD THAT:- The appellants are entitled to the CENVAT Credit on the strength of supplementary invoices issue by M/s. Hindustan Unilever Ltd. consequently the penalties on the appellant as well as on the Hindustan Unilever Ltd shall also not sustain - Moreover, as regard the penalty on Hindustan Unilever Ltd as per the nature of the present case, there is no involvement of M/s. Hindustan Unilever Ltd in alleged wrong availment of CENVAT Credit by the appellant M/s. Indu Home Care Products. M/s. Hindustan Unilever Ltd rightly issued the supplementary invoice towards the payment of differential duty and the said issuance of the supplementary invoice is not illegal or incorrect. It is upto the appellant M/s. Indu Home Care Products, whether to avail CENVAT Credit or otherwise. Therefore, in any case, in the facts of the present case M/s. Hindustan Unilever Ltd cannot be fastened with any penalty under Rule 26 (2) of Central Excise Rules, 2002.
The impugned order is not sustainable, hence the same is set aside - Appeal allowed.
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2023 (10) TMI 1297
100% EOU - clearance of Spent Sulphuric Acid to the fertilizer companies in DTA - eligibility for payment of ‘nil’ rate of duty Notification No.2/2008-CE dated 01.03.2008 for clearance of Linear Alkyl Benzene Sulphuric Acid - Notification No.4/2006-CE dated 01.03.2006 for clearance of Spent Sulphuric Acid to fertilizer companies - HELD THAT:- In view of the decision in SATYA METALS VERSUS UNION OF INDIA [2013 (8) TMI 161 - HIMACHAL PRADESH HIGH COURT], which is applicable to the facts of this case, the charging section for duty on DTA clearance is under the provisions of Section 3(1)(b)(ii) of the Central Excise Act, 1944 and as per the said provisions, the duty is to be levied and collected from a 100% EOU, would be the duty of Customs payable if the goods produced and manufactured outside India and the same have been imported into India. This is the basic charging section of duty leviable on a 100% EOU when clearing the goods to DTA. As per the said provisions, the duty of excise shall be levied and collected on any excisable goods, which are produced and manufactured by a 100% EOU and brought to any other place in India, shall be an amount equal to the aggregate of duties of customs which would be leviable under the Customs Act, 1962 or any other law for the time being in force, on like goods produced and manufactured outside India if imported into India and where the said duties of excise are chargeable with reference to their value, the value of such excisable goods shall, notwithstanding anything contained in any other provisions of this Act, be determined in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975.
Therefore, the duty payable in accordance with this Notification in respect of the said goods shall not be less than the duty of excise leviable on the like goods produced or manufactured outside EOU Unit, which is specified in the said Schedule read with the any other relevant Notification issued under Section 5A(1) of the Central Excise Act, 1944 - the appellant is entitled to pay the duty in terms of Notification No.2/2008-CE dated 01.03.2008 and Notification No.04/2006-CE dated 01.03.2006.
There are no merit in the impugned orders and the same are set aside - appeal allowed.
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2023 (10) TMI 1253
Denial of benefit of exemption - determination of the correct classification of goods manufactured by the appellant-1 - Corrugated Boxes and Laminated Paper - It is the claim of the appellant that their goods are more appropriately classifiable under heading 4823 which do not fall within the negative list of the specified goods as per area based exemption notification claimed by them.
HELD THAT:- In the present case under consideration appellants are clearing the laminated paper obtained by fusion of the paper and BOPP in rolls to be used for the wrapping of the photocopy paper. Marks and printings on the paper cleared, make it evident that the paper is used for wrapping of the photocopying paper as it states the name of the of supplier as “Century Pulp and Paper”, name of product as “copier paper”, further there is marking on the wrapper “COPIER MACHINE FRIENDLY”. From these marking and other indications on the laminated paper cleared by the appellant it is quite evident that the product is cleared for wrapping of the photocopying paper.
From perusal of entry at heading 48114900 (reproduced earlier in the quote from impugned order) it is observed that the said entry is preceded by a single dash entry “Gummed or adhesive paper and paper board” and a double dash entry “self adhesive”. All the gummed and adhesive paper and paper board, which are not of self adhesive nature will get classified under this heading. For getting classified under this heading the basic character which needs to be established is that the paper is Gummed or Adhesive paper. It is found that the product in dispute is neither gummed or adhesive paper and hence the classification under this heading gets ruled out.
There are no merits in the said observation as the he has failed to notice that the preceding three dash entry do not specify any such condition and preceding single dash entry is “other” thus the requirement of cut to shape and size as stated in 4823, would be applicable to the goods classifiable in all the headings prior to 4823.90 and not to the entries falling under this heading and subheading in this category.
These goods are correctly classifiable under heading 48239019 the benefit of exemption under Notification will be admissible to the appellant. Thus there are no merits in the demand made by denying the benefit of said exemption notification - Thus demand of duty and interest and the penalties imposed on both the appellants are set aside.
Appeal allowed.
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2023 (10) TMI 1252
Clandestine removal - Principles of natural justice - non-service of SCN - appellant was the manufacturer of any excisable goods in the factory or not - casting/ forging (commonly known as “Dhalai”) of LPG stove valve of brass and bar of brass (Saria) - levy of penalty u/r 26 of CER - HELD THAT:- It is evident that the appellant was not available to receive the hearing notice at the known address of their/ his residence or factory premises. Therefore the service of hearing notices was effected by way of pasting the same at residential and factory premises under proper panchnama. That being so appellant cannot complain about non receipt of show cause notice or the hearing notice. He chose to abstain from the proceedings by not responding to the notices given. For the above reason the principles of natural justice have been sufficiently complied with and the appellant cannot claim any violation of the same.
From the facts as admitted by the appellant and other in their statement recorded under Section 14 of the Central Excise Act, 1944 it is quite evident that factory at Gali No 15 Krishna Vihar Phase 1, Sevadham, Loni Gaziabad, is a factory jointly owned by the Appellant and his younger brother, without entering into any formal partnership. The factory has not been given any name nor has been registered with any of the government departments either centre or state. The entire activities undertaken in the factory were done clandestinely and no formal records were maintained about the operation.
Appellant has not challenged any of the findings recorded by the Commissioner in the impugned order. When the appellant has in his statement recorded under section 14 while giving the details of working of the unit have admitted that he was actively involved in the working of the unit the grounds taken in the appeal which are in nature of alibi do not merit any consideration - His active involvement in the clandestine activities is an admitted fact and penalty imposed on him under Rule 26 is total justified.
There are no merits in this appeal - appeal dismissed.
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2023 (10) TMI 1251
Recovery of credit of duty paid on inputs precluding entitlement to the benefit of notification no. 30/2004-CE dated 9th July 2004 - manufacture of several articles of ‘wool’ and of ‘polyester’ - recovery pertaining to entitlement to notification no. 30/2004-CE dated 9th July 2009 which was sought to be interpreted as intended only for assessees who lacked specified facility which to the appellant could not claim - refusal to entertain application of refund of ₹ 1,19,37,987 remitted as ‘deposit’ for July 2004 to February 2009 during pendency of dispute.
Recovery of credit of duty paid on inputs precluding entitlement to the benefit of notification no. 30/2004-CE dated 9th July 2004 - HELD THAT:- It is not open to the authority empowered under section 11B of Central Excise Act, 1944 to dispose off a claim for refund on grounds of such being premature in any circumstance whatsoever. As the competent authority has not considered the eligibility for refund except at the threshold, it would only be appropriate to restore the claim before the original authority for fresh disposal.
Dis-entitlement of the appellant to benefit of notification no. 30/2004-CE dated 7th July 2004 for non-compliance with the substantive condition of eligibility owing to which demand of ₹ 22,07,315 was confirmed in relation to availment of exemption for the period from September 2008 to February 2009 - HELD THAT:- The remand order of the Tribunal is specific as is the report of the jurisdictional central excise authorities. However, the order of the original authority that was before the first appellate authority to culminate in the impugned order predates the remand ordered by the Tribunal and the defence thereof was not before the original, or first appellate, authority.
Eligibility to benefit of notification no. 30/2004-CE dated 9th July 2004 owing to reversal of credit - HELD THAT:- The factual aspects of eligibility – both by reversal of CENVAT credit as well as existence of facility for manufacture of ‘staple fibre’ in the light of decisions of the Tribunal – have not been examined by the lower authorities.
With the claim for refund restored to the original authority and with these two aspects having to be examined afresh, the issues would have to be go back for re-adjudication. Accordingly, the impugned order is set aside and all the disputes restored to the original authority for a fresh determination.
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2023 (10) TMI 1250
Refund in lieu of transfer to successor credit account - rejection of claim for monetization of accumulated CENVAT credit - HELD THAT:- It is on record that several disputes relating to the retrospective application of the debarring, as well as other connected issues, are pending in writ proceedings before the Hon’ble Supreme Court. Though the decision of the Tribunal in Mylan Laboratories Ltd [2020 (3) TMI 837 - CESTAT HYDERABAD] has rejected the claim for refund of unutilized cess from ineligibility after substitution of the existing tax regime with the new levy, there are several other decisions which have allowed refund of this very cess.
On perusal of the said decisions, viz., that of the Tribunal in Schlumberger Asia Services Ltd [2021 (5) TMI 954 - CESTAT CHANDIGARH] and in re International Seaport Dredging Pvt Ltd [2022 (6) TMI 822 - CESTAT CHENNAI] it is seen to pertain to monetization of the cess - It would appear that the decision of the Tribunal in re Mylan Laboratories Ltd did not have the benefit of judicial determination that prompted subsequent decisions of the Tribunal.
The matter is remanded back to the original authority for re-determination of eligibility in accordance with settled law on refund of accumulated CENVAT credit considering the peculiarities of the facts and circumstances therein.
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2023 (10) TMI 1215
Grant of Sanction for prosecution - petitioners would submit that the Prosecution is bad in law since no proposal was made for prosecuting the second petitioner - HELD THAT:- Any sanction required to be issued by a specified authority which would be the competent authority, the documents pertaining to the case have to be examined by such competent authority and proceedings have to be issued by giving reasons as to why prosecution has to be launched. A duty is cast upon the competent authority to apply its mind to the facts of the case to grant sanction. A statute requiring sanction to be made is for the purpose or ensuring that criminal prosecution is not launched vexatiously or improperly or in a routine manner or when no offence is made out. The competent authority has to shoulder responsibility of scrutinizing the available material and record its satisfaction to criminally prosecute a person.
The Honourable Supreme Court in MANSUKHLAL VITHALDAS CHAUHAN VERSUS STATE OF GUJARAT [1997 (9) TMI 618 - SUPREME COURT] held that whether a sanction is valid would depend upon the material placed before the sanctioning authority. Grant of sanction is not an idle formality or an acrimonious exercise but a solemn and sacrosanct act.
The prosecution instituted without a proper sanction would fail since the proceedings would be void for want of a valid sanction. The Court cannot take cognizance of an offence until pre-requisite of sanction is fulfilled by the prosecution and filed before the Court - In the present case, except the office communication dated 01.08.2014, there is no separate sanction order which is accorded by the Chief-Commissioner. A mere letter conveying that the Chief Commissioner had accorded administrative approval for launching criminal prosecution cannot be a valid document to launch prosecution against the petitioners.
Since there is no valid sanction as required, the proceedings against the petitioners in CC.No.32/2015 on the file of Special Judge for Economic Offences at Hyderabad, are hereby quashed - the Criminal Petition is allowed.
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2023 (10) TMI 1214
Condonation of delay in filing the appeal by the Commissioner (Appeal) - HELD THAT:- In terms of Section 85 (3A) of the Finance Act, 1994, it is observed that the appeal was to be filed before the Commissioner (Appeal) within two months of the date of the receipt of the order in original by the appellant. As per the proviso Commissioner (Appeal) has been granted the power to condone delay of one month in filing the appeal on sufficient cause being shown - In the present case appeal was filed before the Commissioner (Appeal) after more than a year from the date of receipt of order in original. Hence Commissioner (Appeal) has rightly held that appeal was filed beyond the prescribed period of limitation and has dismissed the same on this ground alone.
This issue is squarely covered by the decision of Hon’ble Supreme Court in the case of SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [2007 (12) TMI 11 - SUPREME COURT], wherein it has been held that Commissioner (Appeals) could not condone the delay beyond the 30 days in filing the appeal before him.
There are no merits in this appeal filed by the appellant - appeal dismissed.
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2023 (10) TMI 1213
Method of valuation - to be valued under section 4 of CEA or not - related party transaction - case of the department is that since the manufacturing firm and the trading firms are run by one family members they are related in terms of Section 4 of Central Excise Act 1944 - levy of penalties - extended period of limitation - suppression of facts or not - HELD THAT:- Entire case is made out on the allegation that there is undervaluation of the excisable goods cleared by M/s Asha Industries on the ground that the buyer namely IPCO Sales Agency is related to M/s. Asha Industries. It is found that manufacturer Asha Industries is a partnership firm and the buyer M/s IPCO Sales Agency is proprietorship firm - a proprietorship firm and the partnership firm even though the said proprietor is one of the partner in the partnership firm, both cannot be a related person. However, this is a highly debatable issue.
Time Limitation - HELD THAT:- The appellant manufacturer was partnership firm and the names of the partners are appearing on the registration i.e. Shri Indu bhai M Patel, Shri Devang bahi R Patel, Smt. Nayna ben A Patel. With this information the department was very well within the knowledge of the constitution of the manufacturer partnership firm - appellant from time to time informed the department regarding any change either in the manufacturer firm or in the buyer firm M/s IPCO Sales Agency.
In the present case the demand was raised for the period 2002-06 to 2007-08 by issuing the show cause notice dated 30.09.2013 therefore, the entire demand is covered under the extended period of limitation - It is accepted that the above letters were submitted by the appellant with the department whereby the department was kept informed from time to time about the constitution of the manufacturer’s partnership firm as well as the buyer’s proprietorship firm. Therefore there is no suppression of fact on the part of the appellant.
In the facts and circumstances of the present case, we find that the judgments relied upon by the Learned Counsel which are on the issue of limitation directly apply in the present case. Accordingly, the entire demand is beyond the normal period of limitation. Hence the same is not sustainable on the ground of time bar. Since the demand itself is not sustainable, penalty on the appellant and other two appellants under Rule 26 shall also not be sustainable.
Appeal allowed.
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2023 (10) TMI 1162
Area based exemption under N/N. 50/2003-CE - non-fulfilment of mandatory condition of the notification that the unit must have commenced its commercial production on or before 31.03.2010 - amount involved in the appeal being less than prescribed threshold limit under litigation policy - HELD THAT:- Both the authorities have considered the evidence produced and concluded that commercial production was started prior to 31.03.2010.
Even a single clearance made by the Respondent would have justified the start of production by the Respondent - Further, this issue as observed by Commissioner (Appeals) has been settled in favour of the Respondent by the decision in case of CCE VERSUS M/S HARI CHAND SHRI GOPAL [2010 (11) TMI 13 - SUPREME COURT]. Revenue has not contradicted the said finding of Commissioner (Appeals).
There are no merits in this appeal which could have been dismissed for the amount involved being less than prescribed threshold limit under litigation policy.
Appeal filed by the revenue is dismissed.
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2023 (10) TMI 1161
Clearance of footwear (not intended for retail sale) - denial of benefit under N/N. 12/2012-CE dated 17.03.2012 (Entry No.180) - denial of benefit on the ground that the goods cleared are not intended for retail sale - applicability of Section 4 or Section 4A of Central Excise Act, 1944 - Penalty of Rs.25 lakhs on the Secretary Shri Ajay Agarwal.
The stand taken by the revenue is that since the goods were cleared to institutional buyers, provisions of Legal Metrology (Package Commodities) Rules, 2011 were not applicable in the present case and therefore, assessment should be as per provisions of Section 4 of Central Excise Act, 1944.
HELD THAT:- The issue is no more res-integra and the Hon’ble Supreme Court in CCE, Panchkula Vs M/s Liberty Shoes Ltd. [2015 (12) TMI 1159 - SUPREME COURT] has held that Once we find that the footwear is an item which is specified under Section 4A, which is covered by Weights and Measures Act and Rules, and MRP was fixed on the products supplied, which were not exempted under Rule 34 of the Rules, the provision of Section 4A of the Act shall stand attracted.
It is found that retail sales price was embossed on footwear supplied to Arm Forces and Paramilitary forces. Therefore, by respectfully following the judgement of Hon’ble Supreme Court in the case of CCE, Panchkula Vs M/s Liberty Shoes Ltd. the assessment would be under the provisions of Section 4A of the Central Excise Act, 1944.
Penalty of Rs.25 lakhs on the Secretary Shri Ajay Agarwal - HELD THAT:- Since the entire demand against the main Appellant is found to be unsustainable, the penalty imposed on the Appellant No.2 cannot be justified. Accordingly, the same is set aside.
The impugned order cannot be sustained and is accordingly set aside - Appeal allowed.
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2023 (10) TMI 1160
Invocation of extended period of limitation - suppression of facts or not - Levy of service tax - Business Auxiliary Service - commission income received on account of sale of bonds.
Appellant contended that the services rendered by them in relation to marketing of securities have been concluded prior to June 2003 and service tax under the category of ‘Business Auxiliary Service’ was introduced as a taxable service only w.e.f 01.07.2003, as defined under Section 65(105)(zzb)of the Finance Act, 1994.
HELD THAT:- The Appellant has not denied the rendering of services related to sale of bonds and earning commission income. The contention of the Appellant is that such services were rendered by them prior to introduction of service tax under the category of ‘Business Auxiliary Service’ w.e.f 01.07.2003. The bills submitted by them in support of this claim was not accepted by the lower authorities on the ground that there was no running serial number in the bills.
Extended period of limitation - HELD THAT:- The demand in the impugned order pertains to the period 2003-2004 and the Notice was issued on 11.06.2007, beyond the normal period of limitation. The details of commission income received by the Appellant have been collected by the Audit team form their Audited Balance Sheet, which is a public document. Thus, there is no suppression involved in this case, Hence, the demand raised by invoking extended period of limitation not sustainable. As the Notice was issued on 11.06.2007 for the demand pertained to the period 2003-2004 , the entire demand of service tax in the impugned order is time barred.
Appeal allowed.
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2023 (10) TMI 1159
CENVAT Credit - allegation of contravention of rule 3(5) of Cenvat Credit Rules - clearance of pure lead ingot on which CENVAT Credit was availed, but were sold ‘as such’ in the home market on payment of an amount as duty which was less than the amount of Cenvat Credit availed by them at the time of it’s procurement.
HELD THAT:- The department has not adduced any evidence to substantiate the allegation that the Appellant has availed excess credit on the inputs and paid less duty at the time of clearance of the inputs ‘as such’. In the grounds of appeal, the department stated that the Appellant themselves are manufacturers of pure lead ingot of a quantity more than required for its captive consumption. Hence, there was no necessity for importing the pure lead ingot and then re-selling the same in the market - the allegation is very strange. In business, there is nothing wrong in manufacturing one product and importing the same to meet the market requirement. If there is any malafide intention in it, the department should have brought it out clearly with evidence. Mere allegation without any evidence is not sufficient to demand the differential duty.
There is no material evidence available on record to substantiate the allegation of the department regarding excess availment of Cenvat credit on the imported pure lead ingot. Hence the allegation of excess availment of credit by the department is not sustainable - Further, the department has not adduced any evidence for diversion of Cenvat credit availed inputs ‘as such’. All the allegations of the department were only on presumption basis, without any evidence.
One such allegation of the department is that during the period Sept 2010 to March 2011, the Appellant procured 1,11,808 Kgs of pure lead ingot and availed Cenvat credit. During this period they have also manufactured 13,77,957 Kgs of the same pure lead ingot and cleared the same to domestic market. Thus, allegation of the department is that there is no need to procure 1,11,808 Kgs of pure lead ingot when they themselves manufactured 13,77,957.10 Kgs of pure lead ingot during the same period - it is found that there is nothing wrong in procuring pure lead ingot from outside sources when there was a shortage. Just because they manufacture huge quantity of pure lead ingot, it does mean that they should not import the same goods to meet their requirement. Thus, the allegations are only on presumption basis without any evidence.
Appeal of assessee allowed.
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2023 (10) TMI 1158
Reversal of CENVAT Credit - fake invoices - vendor not having proper infrastructure for manufacturing and generating such scrap at his end - activity of cutting and generating scrap, amounts to manufacture or not - denial of cross-examination - violation of principles of natural justice - HELD THAT:- When a proper invoice has been made by vendor, which clearly shows the payment of Excise duty and the vendor has filed their Returns, the eligibility of cenvat credit cannot be questioned at the end of the appellant who is the receiver of goods. Further, it is also observed from the Orders passed by the lower authorities that they have not denied the cenvat credit on this ground.
Paper transaction - non-receipt of scrap - HELD THAT:- In spite of seeking a copy of these statements and seeking cross examination of these persons, the same was not granted by the authorities. When the statement itself is not issued to the appellant, it is not clear as to whether the same were supporting the Department’s case or not - merely by the observations of the adjudicating authority cannot be relied upon that the statements are in favour of the Department. It is a gross error on the part of the Adjudicating authority that when the appellant sought to cross examine of the said 8 persons, the same was not granted - It has been held in catena of decisions that the persons recording the statement under Section 14 of Central Excise Act, 1944 have to reiterate the same before the adjudicating authority and then only it should be admitted as an evidence. After this, an opportunity should be given to the noticee to cross-examine them. In this case, in spite of the appellant seeking cross examination of these persons, the adjudicating authority has failed to give them this opportunity.
Non-issue of recorded statement of 8 transporters and 2 other officials, denial of cross-examination of these persons and nonproviding of the statements/letters from RTO about the vehicles, are grave errors committed in the investigation process which have proved to be fatal to the Department’s stand.
The entire proceedings have been initiated based on presumption and assumption without any concrete evidence brought in by the Department against the appellant. After going through in details of payments made both to the vendor and to the transporter for the freight charges, which are already admitted in the show-cause notice itself, the Department has not made out any case against the appellant.
Appeal allowed.
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2023 (10) TMI 1157
Constitutional Validity of Rule 8 (3A) of the Central Excise Rules, 2002 - bar on use of the credit accumulated in Cenvat Credit in making payment of Central Excise Duty - failure to pay duty involving on goods removed for the months of November & December 2006, within the due dates as specified in Rule 8(1) of the Central Excise Rules, 2002 - demand of duty alongwith interest and penalty - HELD THAT:- It is found that the provisions of Rule 8 (3A) of the Central Excise Rules, 2002, based on which the demand for duty has been raised by the Department has been struck down by the various High Courts as ultra vires.
In this connection, reference can be made for the decisions in INDSUR GLOBAL LTD. VERSUS UNION OF INDIA & 2 [2014 (12) TMI 585 - GUJARAT HIGH COURT], M/S. MALLADI DRUGS & PHARMACEUTICALS LTD. VERSUS THE UNION OF INDIA, THE COMMISSIONER OF CENTRAL EXCISE [2015 (5) TMI 603 - MADRAS HIGH COURT], M/S SANDLEY INDUSTRIES VERSUS UNION OF INDIA AND OTHERS [2015 (10) TMI 2455 - PUNJAB & HARYANA HIGH COURT] PRECISION FASTENERS LTD & 1 VERSUS COMMISSIONER OF CENTRAL EXCISE & 2 [2014 (12) TMI 655 - GUJARAT HIGH COURT] and M/S A.T.V. PROJECTS INDIA LTD. VERSUS UNION OF INDIA AND OTHERS [2016 (9) TMI 321 - ALLAHABAD HIGH COURT].
In view of the above decisions including the decision of the Jurisdictional High Court, there is no bar in making use of the accumulated Cenvat Credit for making payment of Central Excise Duty even during default period.
The Jurisdictional High Court at Calcutta, in the case of M/S. GOYAL MG GASES PVT. LTD VERSUS UNION OF INDIA & OTHERS [2017 (8) TMI 1515 - CALCUTTA HIGH COURT] has followed the decision of the Gujarat High Court in INDSUR GLOBAL LTD. VERSUS UNION OF INDIA & 2 [2014 (12) TMI 585 - GUJARAT HIGH COURT] and has held the portion of rule 8 (3A) as ultra vires.
Thus, there is no bar in making use of the accumulated Cenvat Credit in making payment of Central Excise Duty even during the default period. In the result, the Impugned Order is set aside - appeal allowed.
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2023 (10) TMI 1112
Invocation of extended period of limitation - applicability of proviso to Section 11A of the CE Act - Classification of goods - chewing tobacco - to be classified under the CET SH 2403 9910 as 'chewing tobacco' or to be classified under CET SH 2403 9930 as 'zarda/jarda scented tobacco' - product manufactured and cleared by the Assessee for the period 01.03.2006 to 10.07.2006 - penalty u/r 26.
Invocation of extended period of limitation - applicability of proviso to Section 11A of the CE Act - HELD THAT:- The tribunal has proceeded to hold that limitation would apply and show cause notice should not have been issued beyond one year in view of the fact that the Assessee intimated their intention to change, without addressing the various issues which has been raised. In other words, the tribunal by cryptic order has negatived the contentions of the Revenue and held that the invocation of the extended period of limitation was not warranted. This finding, not being in consonance with the facts obtained on the hand, we are unable to subscribe our views to the judgment of the tribunal.
The question is to be answered against the Assessee and in favour of the Revenue and affirm the finding of the adjudicating authority and reverse and/or set aside the finding recorded by the tribunal which has been observed at the initial stage herein given that it is not only contrary to the facts but also contrary to law as noticed hereinabove. It is for these precise reasons the Adjudicating Authority was of the clear view that there has been a deliberate intention to avoid payment of duty by the Assessee by misclassification and willful misstatement of its product and hence it was justified in invoking the extended period as provided in the proviso to Section 11A(1) of CE Act, 1944.
Classification of goods - HELD THAT:- The stand of the Assessee has been consistent to the effect that product manufactured by it is to be classified as 'zarda/jarda scented tobacco' and at the insistence of the jurisdictional Deputy Commissioner the Assessee was classifying the goods under CET SH 2403 9910 i.e., 'chewing tobacco', for which there was also an order of determination passed Under Rule 6(2) of CTPM rules. Whereas in the other matters, namely URMIN PRODUCTS P. LTD. VERSUS COMMR. OF C. EX., AHMEDABAD [2010 (3) TMI 461 - CESTAT, AHMEDABAD] and Flakes-n-Flavourz the facts were entirely different.
In Urmin Products the Assessee had declared the product as 'chewing tobacco' and then changed the classification to 'zarda/jarda scented tobacco' and again came back to the original position of declaring it or classifying it as 'chewing tobacco'. These classifications in Urmin Products were at the behest of the Assessee himself - In Flakes-n-Flavourz, the Assessee was alleged to be manufacturing 'zarda/jarda scented tobacco' and clearing it as 'chewing tobacco', and on facts it was found that there were additives added to the tobacco. In the said case this Court on facts held that there was no wilful suppression attributable to the assesssee and the Revenue had failed to establish the product as 'zarda scented tobaccot'.
In the instant case the Assessee had clearly declared his product as 'zarda/jarda scented tobacco' falling Under Sub-heading 2403 9930 in Form 1 filed and based on the said declaration, capacity determination order dated 04.03.2015 Under Rule 6(2) had been passed re-classifying the product as 'chewing tobacco'. Accordingly, for the period April 2015 in Form-1 the Assessee had described the product as 'Jayanti Zarda Scented- 2403 9910'. However, in the capacity determination order dated 05.05.2015, the Deputy Commissioner classified the goods as 'chewing tobacco'. As such, there was no misstatement or suppression of facts, collusion, or fraud in the instant case and hence on facts, the principles enunciated in Urmin's case is distinguishable.
Penalty u/r 26 of CER - HELD THAT:- There has been no penalty levied Under Rule 26 on the ground that there has been no intent to evade duty.
The findings of the tribunal warrant no interference by this Court and the appeal has to fail - Appeal dismissed.
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2023 (10) TMI 1111
CENVAT Credit - machineries used in the co-generation/captive power plant - electricity - exempted product applying the terms of rule 6(4) of the CENVAT Credit Rules 2004 or not - Revenue had observed that the co-generation power plant is a turn-key project like power plants which are not excisable goods.
HELD THAT:- The show cause notices which are the subject matter of these writ petitions have been issued between the period 2009 to 2015 on the ground that the machineries/components which are used in the cogeneration plant is being used for generating electricity which is an exempted commodity and therefore the petitioners are not entitled to CENVAT Credit. This conclusion has been arrived at by applying the provisions of Rule 6(4) of the CENVAT Credit Rules 2004 which states that CENVAT Credit cannot be allowed on capital goods which are used exclusively in the manufacture of exempted goods other than the final products which are exempted from whole of duty of Excise duty leviable. Therefore, it is clearly seen that the respondents whose earlier show cause notices have reached finality are attempting to raise a new issue which was not pleaded earlier.
The issue of producing a User Test Certificate not having been demanded in the impugned Show Cause Notices and the order dated 28.06.2023 having been passed on the joint submissions of the counsel where once again there was no reference to the User Test Certificate, the Review petitions have to be allowed and since the question of CENVAT Credit having reached finality, and the impugned Show Cause Notices are issued on a new ground with reference to the subsequent periods of the writ petitions have to be allowed - the writ petitions/review petitions are allowed and the show cause notices subject matter of the writ petitions are quashed.
The writ petitions are allowed.
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