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Central Excise - Case Laws
Showing 301 to 320 of 1430 Records
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2023 (10) TMI 1110
Delay in issue of show cause notice under Section 11 A of the Central Excise Act, 1944 - taking almost full 9 years for adjudication of the show cause notice after the first remand order - not considering the judgements regarding grant of cross-examination and the interpretation of section 9D of the Central Excise Act, 1944 - remanding the case second time in August 2022 to the original adjudicating authority - HELD THAT:- The Tribunal by the impugned order has only remanded the matter directing the authority to decide the matter afresh.
There are no question of law muchless substantial question of law arising in the present appeal. Hence, the appeal is dismissed.
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2023 (10) TMI 1109
Reversal of CENVAT Credit - demand on the ground that the Appellant has not followed the ISD procedure for passing of the Cenvat Credit when the Invoices were issued by the vendors in the name of the Head Office - HELD THAT:- There is no allegation in respect of goods on which Cenvat Credit has been taken by them. The utilization within the factory is also not in dispute. Admittedly, all the original documents have been produced by the Appellant before the Adjudicating Authority. Since the Appellant has clearly claimed that they have only one unit and there was no possibility of taking the Cenvat Credit in different units when the vendor has raised the invoice in the name of head office, there are no reason as to why the submission was not taken up for consideration by the Adjudicating Authority.
The Gujarat High Court in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS DASHION LTD [2016 (2) TMI 183 - GUJARAT HIGH COURT] has held that even in the absence of any ISD Challan in such cases, Cenvat Credit cannot be denied. The CBIC Circular No.1063/2/2018-CX dated 16/02//2018 has accepted the decision of the Hon’ble High Court of Gujarat.
The confirmed demand under OIO set aside - appeal allowed.
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2023 (10) TMI 1108
CENVAT Credit - fake invoices - allegation is that the appellants have not received the materials and have taken the cenvat credit without receiving the goods - HELD THAT:- Appellants have produced the documents evidencing the transportation of goods to the factory premises from M/s Shree Ganesh Forging Company and the payment of transportation charges were also recorded in the books of accounts. In that circumstances merely alleging that without any evidence that the appellants have not received the goods, the cenvat credit cannot be denied. Moreover, the appellants have produced the documents for transportation of goods and the said goods have been used in their factory for manufacture of final product, which has suffered duty.
The cenvat credit on the invoices received in their factory against the invoices issued by M/s Shree Ganesh Forging Company, cannot be denied to them - CENVAT Credit allowed - appeal allowed.
The Appellants Nos.(2),(3),(4),(5), (6), (7) & (11) have failed to produce any evidence with regard to transportation of goods - the cenvat credit is denied to them, therefore, their appeals are dismissed.
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2023 (10) TMI 1107
Recovery of short paid duty - job-work - rule 10A of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - HELD THAT:- A method of valuation for goods entrusted to be manufactured by ‘job-worker’ was incorporated only with effect from 1st April 2007 in Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 and. quite undubitably, to fill a necessary want in the context of transactions not fitting within the existing rules which provided alternatives to non-fitment within section 4(1) of Central Excise Act, 1944 owing to non-conformity with one or the other desiderata of ‘transaction value’ for assessment - The incorporation, insofar as ‘job-work’ is concerned, would have emerged from the imperative to handle a situation where the manufacturer, though a producer, is not the seller but does deliver to the buyer even though consideration for the goods is received by the seller. Essential to such framework arrangement is that ‘inputs’ should be supplied by the seller.
It is the imperative of a want in the ‘transaction value’ of the assessee that is contemplated, by the rules intended by section 4(1)(b) of Central Excise Act, 1944, to stand in as alternative in the design of each of the methods of valuation in Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. Thus, in the absence of ‘sale’, rule 4 is applicable, rule 5 when sale occurs beyond place of removal, rule 6 when the excisable goods are sold at a price that is not the sole consideration, rule 7 when sale takes place beyond both time and place of removal, rule 8 when goods are captively consumed by the assessee and rule 9 and 10 when clearance is not to independent person. A common characteristic of all of these, except where there is no sale, is sale by assessee - It would, thus, appear that the several rules, as originally included, were intended to make up for deficiencies in sale by assessee. Rule 10A of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 is certainly intended for sale but by person other than assessee.
From a harmonious reading of section 4 of Central Excise Act, 1944 and of the attendant Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, it is abundantly clear that it is not the method of valuation that determines the applicability but that the method flows from the identification of the rule most apt for each transaction - ‘Job work’ existed before April 2007 and incorporation effected thereafter was not intended to cover every ‘job-worker’ as per common parlance but of specific situations contemplated in rule 10A of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. That has not been demonstrated in the orders of the lower authorities.
Appeal allowed.
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2023 (10) TMI 1106
Clandestine removal - shortage of finished goods - clearance made under parallel invoice number - evidences for which were gathered from various incriminating records recovered from its premises - department did not provide ‘non-relied documents’, neither examined the witnesses nor opportunity of cross-examination was given.
Shortage of Billet - Demand of Rs.90,749/- - HELD THAT:- The physical stock taking had been done by way of estimation and there is no exact weighment done. Thus, the variation in the physical stock being less than 10%, is considered to be normal variation, not calling for any adverse inference. Accordingly, the demand of Rs.90,749/- set aside.
Clearances under parallel invoice - Demand of Rs.69,648/- - HELD THAT:- The appellant had given cogent explanation during the course of investigation being – that as the goods were not accepted by the Saurabh Rolling Mills Pvt. Ltd., the same were diverted by way of sale in transit to M/s. Om Kiran Ispat Udyog - the court below erred in confirming this amount, solely based on the statement of the Director of Saurabh Rolling Mills, without examining the said Director in the adjudication proceedings. Such evidence is not reliable as in spite of request by the appellant, cross examination was not allowed. Thus, the evidence of Shri M.K. Gupta is hit by the provisions of Section 9 D of the Act - there is no other evidence or reason to reject the cogent explanation given by the appellant - Demand deleted.
Goods rejected by consignee - demand of Rs.54,550/- & Rs.32,603/- - HELD THAT:- The goods were rejected by the consignee /buyer. The same were returned to the factory of the appellant. In his statement, Shri Sanjay Nachrani, Director had explained that the goods have been received back on the rejection by the buyer and further, in support thereof, submitted the goods receipt note for proper accounting of the same - Revenue had not made further investigation in the matter nor the cogent explanation found to be false - due to some error in record keeping or procedural lapse on the part of the appellant, the demand is held to be unsustainable - demand set aside.
Evasion of Central Excise duty by Clandestine Removal - demand of Rs.3,98,700/- - HELD THAT:- For each of the instance/allegation, the appellant have given cogent explanation explaining the nature of kachcha parchies, which have not been found to be false. Further, no evidence has been found of any clandestine removal. Accordingly, the said demand o Rs.3,98,700/- is unsustainable and the same is hereby deleted.
Evasion of Central Excise duty in respect of Finished Goods and Inputs respectively - Clandestine removal - demand of Rs.10,88,887/- - HELD THAT:- The demand is based on third party records. There is no corroboration nor any admission. Further, the said third party (Sunil Steels) have denied the evidence, as to have been maintained by them or at their instance. Thus, the demand is simply presumptive, hence the same is deleted.
Removal of excisable goods clandestinely on the basis of incriminating notebook recovered and seized from the common office premises of the group companies - demand of Rs.1,94,514/- - HELD THAT:- The demand is confirmed on the allegation of clandestine removal. There is no basis to confirm the demand, based on rough note book and thus, the demand is presumptive. Hence, the same is set aside.
The impugned order is set aside - appeal allowed.
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2023 (10) TMI 1105
Condonation of delay in filing appeal - appeal dismissed on the ground that the appeal is filed beyond the period of limitation of 60 days and further beyond the condonation period of 30 days - HELD THAT:- There is no lack of diligence on the part of the appellant in presenting their appeal. It is further found that although there is error or mistake on the part of the staff or clerk in filing of the appeal, but it is found that there is also constructive error or negligence on the part of the receiving clerk in the Department. Either such clerk should have directed and guided the person, who had come to file appeal, to the right counter. Alternatively, it was the duty of the Assistant Commissioner to forward the appeal papers to the office of the Commissioner (Appeals), as it has been received by him mistakenly.
The appellant has filed the appeal on 26.09.2018 and the Commissioner (Appeals) have erred in taking the date of filing appeal as 15.03.2022 - the appeal was filed in proper time as permitted under law.
The impugned order is set aside and the appeal is allowed by way of remand to the Commissioner (Appeals) to hear the appellant on merits and pass a reasoned order, in accordance with law - Appeal allowed by way of remand.
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2023 (10) TMI 1104
Exemption from Central Excise duty - Huydel Gates, Hoist Mechanism & Gate Parts and materials including mandatory tools and tackles for hydro mechanical works cleared to Mega Power Project of NPTC - applicability of N/N. 06/2006-CE dated 01.03.2006 and N/N. 12/2012-CE dated 17.03.2012 - HELD THAT:- It is open to the Board to issue instructions that appeal should not be filed where the monetary aspect is not very high to reduce litigation, but it cannot be urged by the appellant that the decision of the Tribunal would not have any precedent value. Any decision of the Tribunal would continue hold the field till it is set aside by the High Court or the Supreme Court.
It is only because of the Circular that a ground has been taken in this appeal that the Commissioner (Appeals) erred in relying upon case laws which were not acceptable to the department as the appeal was withdrawn from the Supreme Court on monetary limits. The intention of the Circular is to prevent an assessee from asserting that the department has accepted the decision. ‘Such cases’ in the Circular refers to decisions taken by the authority not to file an appeal because of monetary limits and not to the decision of the Tribunal.
There is, therefore, no merit in this appeal. It is accordingly dismissed.
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2023 (10) TMI 1086
Transfer of accumulated CENVAT Credit of the EOU Unit to the DTA Unit after exit of EOU status - HELD THAT:- As per Rule 10 if a manufacturer shifts the factory to another site or the factory is transferred on account of change in ownership or on account of sale, merger, amalgamation, lease or transfer of the factory to a joint venture then the manufacturer is allowed to transfer the CENVAT credit lying un-utilised in its accounts to the Unit that is sold, merged, leased or amalgamated - In the present case, the Unit has become a DTA after exiting from EOU status. Under Central Excise law both these units are considered as separate entities. The accumulated credit cannot be denied to both the units and the department cannot recover such credit which belongs to the appellant.
The issue stands covered by the decision in the case of TECUMSEH PRODUCTS INDIA P. LTD. VERSUS C.C.,C.E. & S.T., HYDERABAD-IV [2015 (9) TMI 1487 - CESTAT BANGALORE] where it was held that a successor DTA unit can get the transfer credit of the unutilized credit lying with its predecessor unit, which is an EOU in the present case.
The demand cannot sustain and requires to be set aside. The impugned order is set aside - Appeal allowed.
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2023 (10) TMI 1085
CENVAT Credit - input service or not - waste treatment services received from Bharuch Enviro Infrastructure Limited, Ankleshwar for treatment of their factory's waste which arises out of the manufacture of final product - HELD THAT:- As per the Hon’ble Supreme Court judgment in the case of INDIAN FARMERS FERTILISER COOP. LTD. VERSUS CCE., AHMEDABAD [1996 (7) TMI 141 - SUPREME COURT], it has been held that effluent treatment activity is essential in relation to the manufacture of final product. In the present case, the entire case of the department is that the effluent treatment activity is not in relation to the manufacture of the final product.
Following the said Apex court judgment, this Tribunal also taken a view that the effluent treatment activity is indeed in or in relation to the manufacture of final product, therefore, the cenvat credit cannot be denied.
The issue is no longer res-integra and same has been decided in favour of the assessee. Accordingly, the impugned order is set aside - Appeal allowed.
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2023 (10) TMI 1084
Levy of penalty under Rule 25 of Central Excise Rules, 2002 - Wrongful availment of Exemption N/N. 6/2022-CE dated 01.03.2022 which was superseded vide N/N. 6/2006-CE dated 01.03.2007 - relaxed drum - suppression of facts or not - extended period of limitation - HELD THAT:- It was a recurring issue and for the previous period also in the appelant’s own case this Tribunal in AMBICA ENGINEERING WORKS VERSUS C.C.E. & S.T. -SURAT-I [2022 (6) TMI 706 - CESTAT AHMEDABAD], as regard the bonafide of the appellant recorded the submission and given the finding that In the present case the demand for the period 15.04.2004 to February 2008 was raised by the Show cause notice dated 06.04.2009 hence the entire demand is prior to normal period of one year, therefore the same is hit by the limitation. Accordingly we hold that the demand raised in the SCN and confirmed by the Adjudicating Authority is not sustainable being time barred.
From the above observation of the Tribunal, it can be seen that on the identical issue in the appellant’s own case for the previous period, this Tribunal has taken a view that there is no malafide intention on the part of the appellant and demand for the extended period was set aside. Since the issue being a recurring, the subsequent show cause notice which is in the present case was issued which is for a normal period, therefore, neither Rule 25 nor Section 11AC can be invoked as there is no suppression of fact. Since on the issue of merit, this Tribunal has already taken a view that considering the nature of the case, there is no malafide intention on the part of the appellant, in the present case also the appellant cannot be liable for penalty under Rule 25.
The penalty under Rule 25 of Central Excise Rules 2002 is not imposable in the facts of the present case, hence the penalty imposed under Rule 25 is set aside - The duty demand is maintained.
Appeal allowed in part.
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2023 (10) TMI 1083
Clearances of Armoured Panels and Stretcher Assembly to HAL, Bangalore - Duty exemption benefit of Notification No. 63/1995-CE dated 16.03.1995 denied - allegation of the Department is that the Notification grants exemption only to the goods manufactured by these units and not for suppliers of the inputs / products by other vendors or contractors or job workers - suppression of facts or not - extended period of limitation.
HELD THAT:- This exemption certificate clearly indicates (i) name and address of the supplier (ii) description of the goods to be manufactured and supplied (iii) the items that are required for the production of Advanced Light Helicopter (ALH) against the order of Ministry of Defence, Government of India, and, (iv) these goods are exempted from payment of excise duty leviable under Notification No. 63/1995-CE dated 16.03.1995.
A scrutiny of the relevant Notification indicates in respect of other entries, it is specifically mentioned who has to manufacture and where to be utilized. The entries at column Nos. 4 to 7 indicate that certain specified goods are to be manufactured by M/s. HAL or other mentioned units including where they are to be used. In respect of entry No. 16 for items Pistol, Rifle and SLR falling under Chapter 93, the conditions specified include that the goods are to be manufactured by Bharat Dynamics Limited, Hyderabad and before clearance of the said goods, a certificate granting of exemption from the Deputy Secretary of Ministry of Home Affairs is required to be submitted. Whereas in the instant case there is no mention in the impugned Notification regarding who is competent to issue the above duty exemption certificate - it is opined that the Notification is deficient to this extent. It is not known how the practice of issuance of these exemption certificates by the officials of HAL came into practice.
In the case of THE COMMISSIONER OF CENTRAL EXCISE BENGALURU-V VERSUS M/S. DATASOL INNOVATIVE LABS [2017 (2) TMI 1171 - KARNATAKA HIGH COURT] had held a similar issue in favor of assessee. Though the Department filed appeal against such order before the Hon’ble High Court of Karnataka, the Hon’ble High Court upheld the order of the Tribunal without rendering any finding on the question of law framed on merits of the case.
Moreover, the Hon’ble Apex Court in the case of GOVERNMENT OF KERALA & ANR. VERSUS MOTHER SUPERIOR ADORATION CONVENT [2021 (3) TMI 93 - SUPREME COURT] has observed that an exemption Notification has to be read as a whole so as to give affect for the purpose for which it is issued.
Time limitation - HELD THAT:- The Show Cause Notice dated 05.07.2013 was issued demanding duty for the period from 2008-2012 invoking extended period under proviso to Section 11A(1) / 11A(4) of the Central Excise Act, 1944. The appellant has cleared the impugned goods on the basis of the exemption certificates given by the officials of M/s. HAL and all the details were furnished in the invoices and in the ER-1 returns. These exemption certificates have certified that these goods are meant for ALH Project and would be used by HAL for ALH Project and would be supplied to the Ministry of Defence for their use. As such, no suppression with an intent to evade duty is attributable to the appellant. So, the demand of duty invoking extended period is not legal and so not sustainable.
The appellant succeeds on merits as well as on limitation - Appeal allowed.
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2023 (10) TMI 1082
CENVAT Credit - inputs - purchase of tubes and flaps from other manufacturers and clearing the same along with the tyres to the original equipment manufacturers and overseas purchasers - Penalty of company and directors.
It is the contention of the Department that the said tubes and flaps are not used in the manufacture of the tyres and as such do not qualify to be “inputs” in view of the definition given under Rule 2(k) of CCR, 2004.
HELD THAT:- It is seen that the definition of Inputs as above has a wider connotation and the inputs can be used directly or indirectly and may or may not be contained in the final product. Moreover, they can also be accessories of the final products cleared along with the final products. It is not the case of the Department that these inputs fall under any exclusion clause of the definition. The Courts and Tribunals have been consistently holding that the definition of Inputs is wide and comprehensive. There are number of decisions in favour of the appellants in cases with identical facts.
Only one decision of Hon’ble Kerala High Court is against the appellants and the same is relied upon in the impugned order. Learned Counsel for the appellants submits that Hon’ble Apex Court [2011 (11) TMI 881 - SC ORDER] has stayed the operation of the said decision, of the Hon’ble Kerala High Court in COMMISSIONER OF CENTRAL EXCISE VERSUS APPOLLO TYRES LTD. [2010 (8) TMI 287 - KERALA HIGH COURT]. Even after the decision of Hon’ble Kerala High Court in the above case, Tribunal has been consistently holding that the credit of tubes and flaps is admissible for the manufacturers of tyres.
The appellants are eligible to avail CENVAT credit on flaps and tubes cleared in a set packing along with the tyres manufactured by them. It is further found that Department’s objection that the assessable value of tubes and flaps is separately shown in the invoices and therefore, CENVAT credit is not available, is not acceptable.
Penalty of company and directors - HELD THAT:- As the credit is admissible on merits, penalty imposed on the company and the Directors is not sustainable.
The impugned order is set aside - Appeal allowed.
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2023 (10) TMI 1081
Recovery of CENVAT Credit along with interest and penalty - applicability of scheme of neutralisation - trading activity - input service used in common to the extent attributable to ineligible activity - rule 6(3) of CENVAT Credit Rules, 2004.
HELD THAT:- The scheme of neutralisation is to be exercised only by the assessee. Furthermore, it is also abundantly clear that rule 6 of CENVAT Credit Rules, 2004 merely sets out the scheme of neutralisation and entirely for the assessee to comply with; any failure thereto was to be set right under the authority of rule 14 of CENVAT Credit Rules, 2004.
In re Mercedes Benz India (P) Ltd, [2015 (8) TMI 24 - CESTAT MUMBAI] it was held that We also note that trading of goods was considered as exempted service from 2011 only, thus it was initial period. We are also of the view that there is no condition provided in the rule that if a particular option, out of three options are not opted, then only option of payment of 5% provided under Rule 6(3)(i) shall be compulsorily made applicable, therefore we are of the view that Revenue could not insist the appellant to avail a particular option. In the present case admittedly it is appellant who have on their own opted for option provided under Rule 6(3)(ii).
Thus, it is clear that exercise of option vests entirely with assessee at any stage and proceedings under rule 14 of CENVAT Credit Rules, 2004 would have to be restricted to that which is least detrimental to the assessee.
The demand based on the harshest of the options as ordered by the original authority does not sustain. However, in having taken that extreme step, the claim of the appellant that obligation contemplated in the scheme has been duly complied with was not ascertained. The discharge of the obligation must be in consonance with the computation envisaged in rule 6 of CENVAT Credit Rules, 2004.
The matter remanded back to the original authority who shall limit proceedings under rule 14 and rule 15 of CENVAT Credit Rules, 2004, if any, only to deficit, if any, in compliance as set out - impugned order set aside.
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2023 (10) TMI 1080
Clearance of Cement - Benefit of exemption - Valuation - Fixation of MRP - whether the Assessee’s goods are covered by the mischief of the third proviso to S.No.2 of the explanation to the exemption notification 4/2007-CE dated 01.03.2007? - time limitation - HELD THAT:- S.No.2 of the explanation defines what constitutes the “retail sale price” and its third proviso says where the retail sale price of the goods are not required to be declared under Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and thus not declared, the duty shall be determined as is in the case of goods cleared in other than packaged form. In other words, if the retail sale price is not required to be declared and hence also not declared, the goods shall be treated as if they are cleared in other than packaged form and charged to duty accordingly. Such cases are covered by S.No.1C of the exemption notification.
In the case of RAIN COMMODITIES LTD. VERSUS COMMISSIONER [2011 (4) TMI 1303 - SC ORDER], the Tribunal made a factual observation that the cement was cleared in bulk and denied the benefit of notification at S.No.1A and instead gave the benefit at S.No.1C. This judgement was followed by the Commissioner in the impugned order. There is another judgement in the case of COMMISSIONER VERSUS SAGAR CEMENTS LTD. [2011 (2) TMI 1379 - SC ORDER] in which cement was cleared in 50Kg bags and retail sale price was printed as per the directions of the Controller of Legal Metrology, Govt of Andhra Pradesh. The Assessee relies on this case.
Evidently the cement was cleared in large quantities but packed in 50kg bags to institutional buyers, after declaring the retail sale price on each bag even though they were not required to so declare under the Standards of Weights and Measures (Packaged Commodities) Rules 1977. Thus, the present case is similar to the case of Sagar Cements Ltd, which attained finality at the level of Hon’ble Supreme Court, except to the extent that there was no letter from the Controller of Legal Metrology requiring the Assessee to declare the retail sale price in the present case.
Time Limitation - HELD THAT:- The demand is also time barred as no evidence of fraud, or collusion or wilful misstatement or suppression of facts, with an intent to evade payment of duty has been brought on record. It was only a case of the Assessee’s claim Vs the Revenue’s claim. In such a case, once the ER-1 returns are filed, it would be reasonable to expect the Revenue officers to assess them and in case of any dispute, raise a demand within the normal period of limitation. Therefore, issue is also in favour of the Assessee on the ground of limitation.
As the demand is not sustainable on merits as well as limitation, the question of interest and imposition of penalties on the Assessee do not arise. In view of the above, the Impugned Order needs to be set aside - appeal of assessee allowed.
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2023 (10) TMI 1079
Refund claim of Excess duty paid - modification in the rates of duty on Motor Spirit (MS) and High Speed Diesel (HSD) by issuing two Notifications viz. No.22/2014 and 24/2014 - HELD THAT:- Hon’ble High Court of Calcutta in COMMISSIONER OF CGST & CX HALDIA COMMISSIONERATE VERSUS M/S INDIAN OIL CORPORATION LIMITED, REFINERY DIVISION [2023 (2) TMI 1201 - CALCUTTA HIGH COURT] held that the notification would come into effect only from the date of its publication and the Tribunal rightly allowed the assessee’s appeal.
The impugned orders cannot be sustained and all therefore set aside. The appeal filed by the Appellant is allowed.
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2023 (10) TMI 1069
Benefits under the budgetary scheme dated 5-10-2017 - Utilization of Cenvat credit for the purpose of payment of taxes with reference to the exemption notification dated 25-7-2007 - stage to pay the taxes by cash after exhausting the Cenvat credit was yet to come - whether the units have availed the benefit under the notification dated 25-7-2007, with reference to the subsequent scheme dated 5-10-2017?
HELD THAT:- A reading of the communication dated 22-2-2023 makes it discernible that a decision had been taken that even in respect of those units who had paid their tax dues pursuant to the earlier exemption notification dated 25-7-2007 by utilizing the Cenvat credit, but the stage to pay the further taxes by means of cash was yet to come, would be considered by the authorities to be units who have availed the benefits under the earlier exemption notification dated 25-7-2007 - As the decision contained in the communication dated 22-2-2023 answers the issue that was before the Court that such units should also be considered to be units who have availed the benefits under the exemption notification dated 25-7-2007, having accepted the contents of the communication dated 22-2-2023, no further adjudication is required in these batch of writ petitions.
The consequence of such units being considered to be units who have availed the benefits under the exemption notification dated 25-7-2007 would be that such units, including the writ petitioners herein, would be entitled to all such entitlements, legal consequences etc. of being considered to be units who have availed the benefits under the exemption notification dated 25-7-2007 and the respondent authorities may do the needful accordingly.
Petition closed.
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2023 (10) TMI 1046
Relevant date for calculation of interest - interest under Section 11BB of the Central Excise Act, 1944 would accrue from the date of expiry of 3 months from the date of receipt of application for refund (or) on the expiry of 3 months from the date of communication of the order of the Appellate authority / Court?
HELD THAT:- This Court finds that the present issue viz., whether the liability of the revenue to pay interest under Section 11BB of the Act would accrue/commence from the date of expiry of 3 months from the date of receipt of application for refund (or) on the expiry of 3 months from the date of the order to the adjudicating authority/ Court stands resolved by the judgment of the Supreme Court in RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. [2011 (10) TMI 16 - SUPREME COURT] reported in 2011 (273) ELT 3 wherein after finding that the appellant’s claim for rebate of duty was rejected by the Assistant Commissioner and was subsequently allowed in appeal which was affirmed in further appeal before the Joint Secretary, Government of India it was held that It is manifest from the aforeextracted provisions that Section 11-BB of the Act comes into play only after an order for refund has been made under Section 11-B of the Act. Section 11-BB of the Act lays down that in case any duty paid is found refundable and if the duty is not refunded within a period of three months from the date of receipt of the application to be submitted under sub-section (1) of Section 11-B of the Act, then the applicant shall be paid interest at such rate, as may be fixed by the Central Government, on expiry of a period of three months from the date of receipt of the application.
The above judgment of the Hon’ble Supreme Court in the case of Ranbaxy has been subsequently followed in the case of MANISHA PHARMO PLAST PVT. LTD. VERSUS UNION OF INDIA [2020 (11) TMI 726 - SUPREME COURT]. Following the above judgments of the Hon’ble Supreme Court, this Court has no hesitation to hold that interest on refund in terms of Section 11 BB of the Act would accrue in the event of delay in grant of refund beyond 3 months from the date of application i.e., 16.11.1994 in the present case.
The respondents are directed to calculate the statutory interest in terms of Section 11 BB of the Act i.e., 3 months from 16.11.1994 (date of application for refund) until 20.02.2020 when the refund was actually granted and pay the same within 4 months from the date of receipt of a copy of this order - Petition disposed off.
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2023 (10) TMI 992
Exemption on investment in investment in plant and machinery after 06.02.2010 under N/N. 01/2010-CE dated 06.02.2010.
Denial of benefit on the ground that as per the conditions of the notification, the investment in plant and machinery ought to have been made after 06.02.2010 whereas in the instant case the appellant had made substantial expansion prior to 06.02.2010 except for generator which is added after 06.02.2010.
HELD THAT:- On analysing the provisions in serial no. 8(i) of the Notification it is found that the it talks of undertaking substantial expansion by way of increase of not less than 25% in the value of fixed capital investment in plant and machinery and having commenced commercial production from such expanded capacity on or after 6th day of February, 2010. It is found that the language of the notification is very clear and the only requirement of the notification is that in order to avail the benefit of exemption is that the unit should have commenced commercial production from such expanded capacity on or after 06.02.2010 by investing 25% or more.
In the present case, the appellant has produced the certificate issue of the director industries Centre Anantnag vide letter No. DICA/DEV of 2013/273 whereby they have certified the date of commencement of commercial production from substantial expansion as 12.11.2012. Further, there is a difference between the condition prescribed in serial no. (i) and Serial No. (ii). The department cannot import condition prescribed in another serial no. (ii) to deny the exemption to the appellant which was not present in serial no. (i) under which the appellant had availed the benefit.
Further, it is found that the investment made by the appellant after 31.03.2004 is to the tune of 29.24% as certified by the Chartered Accountant in the certificate dated 31.03.2017 which is on record.
The appellant is entitled to the benefit of exemption Notification No. 01/10-CE and denial of the same by the Commissioner (Appeals) is set aside - Appeal allowed.
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2023 (10) TMI 991
Area based exemption - Computation / Determination of Value Addition - Rejection of the applications of fixation of special rate - Time Limitation - N/N. 32/99-CE dated 08.07.1999 - HELD THAT:- The said issue has been examined by the Hon’ble Apex Court and the Hon’ble Apex Court in the case of UNION OF INDIA & ANOTHER ETC. ETC. VERSUS M/S V.V.F LIMITED & ANOTHER ETC. ETC. [2020 (4) TMI 669 - SUPREME COURT] has held that the pending refund application shall be decided as per the subsequent notification/industrial policies, which were impugned before the respective Hon’ble High Courts and they shall be decided in accordance with the law and on merits and as per the subsequent notifications/industrial policies impugned before the respective Hon’ble High Courts.
Further, the Hon’ble Guwahati High Court in the case of M/S JYOTHY LABS LTD. (ERSTWHILE JYOTHY LABORATORIES LTD.) VERSUS UNION OF INDIA AND 2 ORS., PRINCIPAL COMMISSIONER CGST COMMISSIONERATE, ASSTT. COMMISSIONER OF GST AND CENTRAL EXCISE [2021 (8) TMI 726 - GAUHATI HIGH COURT] has held that making such application for fixation of special rate under Notification No. 32/99-CE and Notification No. 31/2008-CE, after the judgement of Hon’ble Supreme Court in the case of UNION OF INDIA & ANOTHER ETC. ETC. VERSUS M/S V.V.F LIMITED & ANOTHER ETC. ETC. [2020 (4) TMI 669 - SUPREME COURT] were in time.
As all the applications were filed by the appellants before 20.04.2020. In that circumstances, all the applications were filed within time, therefore, the applications in question cannot be rejected on limitation.
The first ground for denial of special rate of fixation is that the balance sheet is not in conformity with Section 211 of the Companies Act, 1956 and there is no provision to prepare the balance sheet or financial records under the provision of 211 of the Companies Act, 1956 - HELD THAT:- As per the said provisions, the profit and loss accounts and the balance sheet of the Company shall comply with the accounting standards - the figures in the Extract of Balance Sheets, arem based on which the value addition, has been calculated, is very much in conformity with Companies Act and the Income Tax Act - The rejection of application for special rate fixation on the balance sheet is not in conformity with the Companies Act, 1956, is not correct. On the said ground, the said application cannot be rejected.
Whether the statutory auditor’s report is acceptable or not? - HELD THAT:- The statutory auditor’s report is acceptable in terms of the decision of this Tribunal in the case of THE COMMISSIONER OF CENTRAL EXCISE & CUSTOMS GUNTUR. VERSUS M/S. CRANE BETEL NUT POWDER WORKS [2011 (2) TMI 785 - CESTAT BANGALORE] wherein this Tribunal has observed In the absence of any effective rebuttal of the said Chartered Accountant certificate by leading a contrary evidence, we are of the considered view that the Chartered Accountant’s certificate which indicates that the duty liability has not been passed on and has been absorbed by the assessee, cannot be rejected as an evidence in support of non-passing of the burden of incidence of duty - thus, the statutory auditor’s report is acceptable as an evidence.
Another issue raised by the ld. Commissioner that the gross sales value based on all India average rate is not acceptable - HELD THAT:- For the purpose of calculation of actual value addition, as per the prescribed format, relevant figures from the audited Balance Sheet have been extracted, which has been enclosed along with each application. Hence, it is not a case that a separate Balance Sheet was prepared for the purpose of special rate fixation, as held by the adjudicating authority. An extract of Balance Sheet containing figures required for computation, in a format exclusively to suit the calculation of value addition was enclosed, which gets evidenced from the Notes accompanying the said extract of Balance Sheet, to the effect that the said extracted Balance Sheet has been prepared solely for the purpose of and as basis for claim of fixation of special rate and nowhere the Notification stipulates that copy of the Balance Sheet is to be enclosed. Instead, it mandates that the value addition must be calculated based on the audited Balance Sheet and in the present case, the computation of value addition has been done based on the figures taken from such audited Balance Sheets only.
Another reason for rejection of application is that the average rate of VAT at the rate of 12.5% is not acceptable - HELD THAT:- The average rate of VAT at the rate of 12.5% is equalized the basis and the same is permissible for fixation of special rate. Hence, rejection of special rate of fixation, the applications cannot be rejected on that ground.
The next issue is that inclusion of work in progress is not correct - HELD THAT:- What is to be added is the inventory of goods available at the end of each of the Financial Years and not cleared. Similarly, the value of inventory not cleared at the end of the financial year preceding to the Financial Year under consideration has to be deducted. It may be relevant to note that the term “inventory” would include stock of finished goods as well as stock of unfinished goods in as much as some stock of goods may be incomplete or just few steps/process away from the stage of completed finished product. The said stock of incomplete/ unfinished goods, which have passed through some processes and are yet to be subjected to some processes to reach the final stage of production, are termed as ‘work-in-progress’, which are also the part of the inventory, as per the accounting standards - the work in process is to be included in the opening stock and closing stock in computation of actual value addition.
The rejection of the applications of fixation of special rate by the adjudicating authority is not correct and are in violation of law - Appeal allowed.
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2023 (10) TMI 958
CENVAT Credit on rejected inputs - suo moto credit - process amounting to manufacture or not - goods received in their factory and subjected to various processes like blackening, buffing, final inspection, packing etc. which were subsequently exported, without payment of duty.
Admissibility of CENVAT Credit of Rs. 2,40,75,746/- on the inputs/goods subjected to various processes viz. blackening, buffing, final inspection, packing etc. in the factory and the resultant the finished goods were exported - HELD THAT:- No evidence has been placed by the Revenue in support of the allegation that without subjecting the received inputs to various processes by the appellant, these goods be considered as marketable and could be exported as it is. The processes undertaken by the appellant are necessary to put the product in marketable condition as per the requirement of the customers; the appellants, on the other hand, adduced evidence in the form of rejection letters of the customers rejecting the goods supplied by the Appellant as it did not meet their requirement as per the order placed. Hence, various processes blackening, buffing, final inspection, packing etc. carried out on the inputs be considered as processes amounting to manufacture.
More or less similar principle has been laid down by the Hon’ble Apex Court in the case of FLEX ENGG. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [2012 (1) TMI 17 - SUPREME COURT] where it has been observed In the absence of the revenue having adduced any such evidence or contorted the assessee’s claim that the machines cannot be sold unless testing is done with some alternative evidence as to their marketability, the stand of the revenue cannot be accepted.
Therefore, the processes carried by the appellant in their premises result into manufacture and accordingly, CENVAT Credit availed on the duty paid on inputs received is admissible to the appellant.
Suo moto credit - HELD THAT:- The credit of Rs. 28,700/- is irregular in view of the judgment of Larger Bench of this Tribunal in the case of BDH INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX. (APPEALS) , MUMBAI-I [2008 (7) TMI 78 - CESTAT MUMBAI-LB].
The impugned Order is modified to the extent of setting aside demand of CENVAT credit of Rs.2,40,75,746/- with interest and penalty, however, the recovery of suo moto credit of Rs.28,700/- with interest and penalty is confirmed - Appeal disposed off.
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