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Central Excise - Case Laws
Showing 321 to 340 of 1430 Records
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2023 (10) TMI 957
Time limitation - SSI Exemption - Submersible Pumps falling under CETH 8413 7010 - though the product of the appellant was claimed in confirmation to the standards of Bureau of Indian Standards (BIS) but the Certificate was obtained subsequently - HELD THAT:- It is the appellant’s claim that the goods manufactured by them is in conformation to standards of BIS. This claim of the appellant gets reinforced on the basis that for the same product subsequently, the appellant were issued certificate by the BIS certifying that the product manufactured by the appellant is as per the standards prescribed under BIS. On this basis the bonafide belief of the appellant is found factually correct. As per the claim of the appellant, the same product which was subsequently certified by BIS was in conformation to the standards of BIS, therefore, the appellant have rightly entertained the belief that their product is exempted under N/N. 8/2003.
There is no malafide on the part of the appellant with intent to evade payment of duty. For the demand under extended period in the present case for the period 01.01.2007 to 18.03.2009, the show cause notice was issued on 04.04.2012 which is much after the normal period of one year.
Since the appellant had no malafide intention the entire demand raised by invoking the extended period will not sustain on the ground of time bar itself - the demand is hit by limitation - Appeal allowed.
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2023 (10) TMI 956
CENVAT Credit - Denial of credit on the ground that supplier has paid Duty on exempt product - Gravure Printing Cylinders received by the appellant - Printing Blocks and Printing Types covered in the ambit (exempt) the Printing Cylinders or not - HELD THAT:- It prima facie appears that Printing Cylinders received by the appellant duly duty paid is not exempted. Therefore, the entire basis of the department fails. However, without going into this issue in detail, the appeal can otherwise be disposed of only on the ground that the assessment of the duty payment at the supplier’s end has not been questioned or challenged by the jurisdictional departmental officer of the suppliers. As there is no evidence available on record that the payment of duty by the supplier was questioned/ challenged / disputed by their jurisdictional officer, in such case, the payment of duty is found to be legal and correct and consequently, the appellant’s cenvat credit cannot be denied.
This issue has been considered time and again. In the case of COMMISSIONER OF CENTRAL EX. & CUS., SURAT-III VERSUS CREATIVE ENTERPRISES [2008 (7) TMI 311 - GUJARAT HIGH COURT], the Hon’ble Gujarat High Court in the facts that whether the activity of the manufacturer amounts to manufacture or otherwise to arrive at a conclusion that whether the goods are dutiable and it was held that The Tribunal is justified in holding that if the activity of the respondent-assessee does not amount to manufacture there can be no question of levy of duty, and if duty is levied, Modvat credit cannot be denied by holding that there is no manufacture.
Thus, it is settled that even if Excise duty is not payable on the product for any reason but the assessee paid the excise duty and said payment of duty is not challenged or questioned at the manufacturers end, no question can be raised as regard availment of the credit by the recipient of the goods. Accordingly, in the present case also, being the similar fact involved, the cenvat credit cannot be denied merely on the ground that the supplier was not required to pay the duty.
Appeal allowed.
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2023 (10) TMI 955
Reversal of CENVAT Credit distributed by its head office prior to its registration as Input Service Distributor - HO (registered as ISD) of the appellant while distributing 100% of the credit to a single unit has contravened the mandate under Rule 7 (d) of CENVAT Credit Rules, 2004 (as existed during the relevant period) or not.
Whether the appellant can avail the CENVAT Credit on ISD invoice which was issued by their head office without having ISD registration is correct or otherwise? - HELD THAT:- There is no dispute about the payment of Service Tax on the service received by the appellant. Therefore, merely because the ISD invoice was issued without having registration of the appellant’s head office, the fact of the payment of Service Tax will not get extinguished. Hence the credit cannot be disallowed. This issue has been considered by the Hon’ble Jurisdictional Gujarat High Court in the case of M/s. Dashion Ltd [2016 (2) TMI 183 - GUJARAT HIGH COURT], wherein the Hon’ble Court has held Tribunal, in our opinion, rightly did not disentitle the assessee from the entire Cenvat credit availed for payment of duty.
Before the amendment was carried out in the year 2016, the assessee was given the option to distribute the CENVAT Credit to one unit or also to other unit, and provision for proportionate credit was brought only post amendment of 2016. Therefore, it is at the option of the head office whether it wanted to distribute the credit to the appellant only or to distribute it to other units. Therefore, in view of existing provisions of CENVAT Credit Rules, 2004 during relevant period, the 100% credit availed by the appellant is in order in terms of Rule 2007, existing at the relevant time. Therefore on this count also the adjudicating authority has wrongly denied the credit.
The impugned order is set aside. The appeal is allowed.
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2023 (10) TMI 954
Denial of CENVAT Credit on capital goods to the extent of 50% thereof - appellant procured the capital goods and have not availed any cenvat credit of duty paid in the financial year 2006-07 and took whole of the cenvat credit in the financial year 2007-08 - HELD THAT:- The appellant has complied with the condition of Rule 4(2)(b) of the Cenvat Credit Rules, 2004 as they were entitled to take 50% of the credit in the financial year 2006- 07, where they have not taken any cenvat credit and balance amount credit they were entitled to take in the financial year 2007-08 which they have taken.
There are no merit in the impugned order and the same is set aside - appeal allowed.
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2023 (10) TMI 879
Violation of principles of unjust enrichment - failure to prove that duty burden has not been passed ignoring the evidence of records in the form of Books of Accounts, certificate from Oil marketing PSUs, especially in the backdrop of presumptive statutory provisions under Section 12B of Central Excise Act, 1944 - HELD THAT:- The assessee has shown duty element in the invoices as per the provisions of S.12-A of the Act. It is also stated that the same has not been recovered from their customers and the excess paid amount of Rs.32,65,057/- is shown as outstanding balance as receivables in their balance-sheet - Nonetheless, nothing concrete has been placed on record that the duty element shown in the invoices issued to customers has not been recovered from the customers. Under such circumstances, the concurrent finding of Tribunal that it is a case of unjust enrichment cannot be faulted with and the assessee has rightly been held not entitled to refund of Rs.32,65,057/- as excess amount of excise duty.
In none of the documents viz. Books of Accounts or certificate from Oil marketing PSUs, as mentioned in the substantial question framed, the assessee has shown to have not actually recovered the excess excise duty from the buyers.
The substantial question of law is answered in the affirmative and in favour of the revenue - Appeal dismissed.
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2023 (10) TMI 878
Entitlement to avail the credit of duty paid by the input supplier - correctness of denial of credit on the ground that the activity as the input supplier end was a non-manufacturing activity and thus the input supplier should not have paid the duty.
HELD THAT:- In the present case, the Tribunal has rightly allowed the appeal of the assessee by observing that even if the activity at the end of the input supplier has been held to be a non-manufacturing activity, the input recipient would be entitled to the credit of the duty so paid by the input manufacturer and rightly set aside the order dated 21.01.2013 passed by the Commissioner of Central Excise Delhi-III Commissionerate, Gurgaon, for recovery of inadmissible Cenvat Credit of Rs.43,55,22,721/- alongwith interest (Annexure A-7).
No substantial question of law arises for consideration. The present appeal is dismissed.
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2023 (10) TMI 877
Exemption when the goods are used elsewhere other than the factory of production - product ‘Danazol’ which is a bulk drug or medicine - appellant had cleared the product ‘Danazol’ to other manufacturers like M/s. Arvind Remedies - Sl. No. 47A of the Notification No. 4/2006-CE dated 1.3.2006 - Rule 6(3) of CENVAT Credit Rules, 2004.
Whether the product ‘Danazol’ which is a ‘bulk drug’ would fall under Sl. No. 47A of Notification No. 4/2006-CE dated 1.3.2006 or it has to be considered as ‘drug or medicine’ which falls under Sl. No. 47B of the said Notification? - HELD THAT:-
In case the goods fall under Sl. No. 47A of Notification No. 4/2006-CE dated 1.3.2006 and are unconditionally exempted, whether the common input credit used in the exempted product would be reversible / duty payable to the percentage of value of the exempted goods as per Rule 6(3) of CENVAT Credit Rules, 2004? - HELD THAT:- The judgments in AUROBINDO PHARMA LTD. VERSUS COMMISSIONER OF C. EX., HYDERABAD-I [2009 (3) TMI 810 - CESTAT, BANGALORE] and DR. REDDY’S LABORATORIES LTD. VERSUS COMMISSIONER OF C. EX., HYDERABAD [2009 (8) TMI 580 - CESTAT, BANGALORE] have held that since the term ‘bulk drugs’ and ‘drug and medicines’ have not been defined in the Notification, the definition as per Drugs (Price Control) Order, 1995 is relevant. As per Drugs (Price Control) Order, 1995, the term ‘drug’ have been defined to include ‘bulk drug’ and formulations. Thus, the said judgments put in mathematical terms could be understood as meaning that while ‘drug’ is a superset, ‘bulk drugs’ is the subset, whereby ‘bulk drugs’ are covered by the term ‘drugs’.
Hence, it is for the appellant to choose which ever Sl no of the exemption is more favourable to him. Judicial discipline requires to follow the ratio of the above judgments - the appellant is entitled to the benefit of unconditional exemption from tax as per Sl. No. 47A of Notification No. 4/2006-CE dated 1.3.2006.
In case the goods fall under Sl. No. 47A of Notification No. 4/2006-CE dated 1.3.2006 and are unconditionally exempted, whether the common input credit used in the exempted product would be reversible / duty payable to the percentage of value of the exempted goods as per Rule 6(3) of CENVAT Credit Rules, 2004? - HELD THAT:- It is seen that the department had followed a two-pronged strategy. Initially Show Cause Notices were issued to the appellant denying unconditional exemption for ‘Danazol’ under Sl. No. 47A of Notification No.4/2006-CE. Subsequently, they took the stand that the appellant is entitled for the benefit of Sl. No. 47A of Notification No. 4/2006-CE dated 1.3.2006, however, the appellant is required to reverse the credit/ pay the amount demanded as a percentage of sale value of the exempted goods ‘Danazol’, as per law during the relevant period, under Rule 6(3) of CENVAT Credit Rules, 2004 - it is found that there has been some confusion in the minds of the department and they have blown hot and cold on the same issue at different points of time.
The exemption has been correctly availed by them. The department is permitted to verify the mathematical accuracy of the claims of reversal made by the appellant and demand the excess credit taken or refund the excess reversal of credit made by the appellant if any. Needless to say that in case of a demand, the appellant may be given an opportunity to explain the reversal of credit made by them.
The benefit of Sl. No. 47A of Notification No. 4/2006-CE dated 1.3.2006 for the product 'Danazol’ is allowed - Credit reversed by the appellant under Rule 6(3) of CENVAT Credit Rules, 2004 is subject to verification by the department - appeal disposed off.
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2023 (10) TMI 876
CENVAT Credit - manufacture of sugar and molasses - Clearance of bagasse and pressmud (exempted products), emerging during the manufacture of the final product (sugar) - non-maintenance of separate accounts for the common input services used in the manufacture of both dutiable and exempted products contravention of provisions of Rule 6 of the CENVAT Credit Rules, 2004 - HELD THAT:- In terms of Explanation 1 to Rule 6 of the CENVAT Credit Rules, which was inserted with effect from 01.03.2015, the appellant has to reverse the credit or pay 6% of the value of the exempted products in case non-excisable goods are cleared for a consideration. The Board had also issued a Circular in line with the above Explanation. However, the said Circular came to be challenged before the Hon’ble High Court of Allahabad in the case of Balrampur Chini Mills Ltd. [2019 (5) TMI 972 - ALLAHABAD HIGH COURT] and the same was held to be invalid and quashed.
The Tribunal in a recent decision in the case of Khedut Sahakari Khand Udyog Mandli Ltd. [2022 (4) TMI 1360 - CESTAT AHMEDABAD] has followed the above decision of the Hon’ble Allahabad High Court to set aside the demand.
The demand cannot sustain and requires to be set aside - Appeal allowed.
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2023 (10) TMI 875
Valuation - liquidated damages paid or payable would form the part of the price of the cars for the purpose of payment of duty or not - Section 4(3)(d) of the Central Excise Act, 1944 - HELD THAT:- The sum and substance of the decision in SKODA AUTO VOLKSWAGEN INDIA PRIVATE LTD VERSUS COMMISSIONER OF CENTRAL EXCISE AURANGABAD [2023 (2) TMI 658 - CESTAT MUMBAI] is that in the event of rejection of the invoice value as transaction value, it is not open to the adjudicating authority to re-determine value without recourse to Central Excise (Determination of Price of Excisable Goods) Rules, 2000 and more particularly Rule 6 ibid.
The issue involved herein is no more res integra and there are no reason to deviate from view taken by us in the aforesaid decision. From the case records it is clear that the said Rule has not been invoked either in the show cause notice or in the order under challenge. Therefore on this ground alone the impugned order is liable to be set aside.
Appeal allowed.
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2023 (10) TMI 874
Clandestine removal - 3635.715 MT of MS bars of various sizes - demand based on the documents recovered allegedly from the said pen drive and statements recorded during investigation - corroborative evidences or not - cross-examination not permitted - violation of principles of natural justice - HELD THAT:- Although the cross-examination of the author of the diaries i.e. Mr.Suresh Mohata, entries in which to a large extent have been the basis of the issuance of show cause notice and confirmation of demand, was allowed by the adjudicating authority but the department failed to produce him for cross-examination - The appellants have asked for the cross-examination of those alleged six actual buyers but were not permitted.
The demand was confirmed by the Adjudicating Authority on the basis of the documents allegedly retrieved from the said pen drive coupled with some statements recorded during investigation as well as u/s. 14 ibid. Admittedly the cross-examination was not granted to the appellants as according to the adjudicating authority that was not relevant despite the fact that the charges in the show cause notice are based on the evidence emanating from the seized documents and statements recorded during the course of investigation.
Not allowing cross-examination is violative of the principle of natural justice. In catena of decisions it has been held that such statements cannot be relied upon. Denial of cross-examination by the adjudicating authority is a clear violation of the mandate of Section 9D ibid. - In the matter of Hi- Tech Abrasives Ltd. [2018 (11) TMI 1514 - CHHATTISGARH HIGH COURT] Hon’ble Chhattisgarh High Court has held that statements recorded u/s. 14 of the Act cannot be relied upon as evidence without following the rigour of Section 9D of the Act since the provisions of Section 9D are mandatory in nature. Mere recovery of private records, that too from the third party, is not sufficient to prove clandestine removal and a concrete and clinching evidence is required to prove such allegations and it is for the department to discharge the burden and prove the charges of clandestine removal against the appellants.
It is settled position that the statements of witnesses cannot be relied upon unless they are corroborated with cogent evidence and when there is no corroborative evidence to support statements of witnesses those statements cannot be relied upon without offering a chance of cross-examination to the person charged. Denial of cross-examination vitiates entire proceedings as it amounts to violation of principle of natural justice - It is no doubt true that there is no right of cross- examination if sufficient corroborative evidence exists, but in the present case we are unable to find the sufficient corroborative evidence against the appellants and therefore the appellants were justified in asking for cross-examination.
The Hon’ble High Court of Judicature at Allahabad in the matter of COMMISSIONER OF CENTRAL EXCISE, MEERUT-I, MEERUT & ANOTHER VERSUS M/S PARMARTH IRON PVT. LTD., BIJNOR. [2010 (11) TMI 109 - ALLAHABAD HIGH COURT], while relying upon the law laid down by the Hon’ble Supreme Court in cases of ARYA ABHUSHAN BHANDAR VERSUS UNION OF INDIA [2002 (3) TMI 54 - SC ORDER] and SWADESHI POLYTEX LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, MEERUT [2000 (7) TMI 85 - SC ORDER] and of the Hon’ble High Court of Judicature at Bombay in case of GYAN CHAND SANT LAL JAIN VERSUS UNION OF INDIA [1975 (10) TMI 33 - HIGH COURT OF JUDICATURE AT BOMBAY], has held that at the stage of adjudication, it is the right of an assessee to seek cross-examination of the witnesses whose statements are sought to be relied upon by the Revenue and that cross-examination is necessary so that it could be established whether the statements recorded had been voluntarily given and/or are relevant for the issue or based on personal knowledge or hearsay and the like.
The department has miserably failed to substantiate the allegation of clandestine manufacture and clearance by any tangible or corroborative evidence. The diaries or pen-drive from a third party cannot be said to be sufficient proof of such allegation and the department has failed to make out a case beyond any doubt.
Appeal allowed.
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2023 (10) TMI 873
Process amounting to manufacture - activity of repacking and relabelling of imported and indigenously procured spare parts of Dumpers (Mechanical Drive and Electrical Drive), Water Sprinklers and Motor Graders at their marketing division - from January 2008 to February 2010 and March 2010 to March 2011 - Extended period of limitation.
HELD THAT:- The Larger Bench was constituted pursuant to a direction of the Hon’ble Supreme Court, as there were conflicting views expressed by the Mumbai Bench of the Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS M/S JCB INDIA LTD [2014 (2) TMI 632 - CESTAT MUMBAI] and Chandigarh Bench of the Tribunal in the case of M/S ACTIN CONSTRUCTION EQUIPMENT LTD., SHRI VIJAY AGGARWAL AND SHRI P.K. BANSAL VERSUS CCE, DELHI-IV [2016 (10) TMI 473 - CESTAT CHANDIGARH]. After analysing the scope of Sl. No.100 of the Third Schedule to the Central Excise Act, 1944, relevant material it has been observed by the Larger Bench in M/S. ACTION CONSTRUCTION EQUIPMENT LTD, SHRI P.K. BANSAL, SHRI VIJAY AGARWAL, COMMISSIONER OF CENTRAL EXCISE, M/S. JCB INDIA LTD., TATA HITACHI CONSTRUCTION MACHINERY CO. LTDM, LARSEN & TOUBRO LIMITED, J. KUMAR, M/S. PROFICIENT EQUIPMENT SOLUTIONS VERSUS COMMISSIONER, CENTRAL EXCISE, & CUSTOMS, DELHI-IV, M/S. JCB INDIA LTD., THE COMMISSIONER, CENTRAL EXCISE, AND CUSTOMS, NAGPUR [2023 (6) TMI 1320 - CESTAT MUMBAI (LB)] that The amendment made in the Third Schedule to the Central Excise Act by Finance Act, 2011 w.e.f 29.04.2010 by adding serial No.100A to the Third Schedule is prospective in nature.
Distinguishing the said ratio, the Revenue has argued that the equipment considered in the said judgment are different and hence, the principle laid down in the said judgment cannot be made applicable to the facts of the present case. It was argued that the Mumbai Bench of the Tribunal specifically considered parts of the dumpers in M/s. Komatsu India Pvt. Ltd., therefore, the said judgment be followed and applied to the present case.
The said approach of the Revenue is incorrect in as much as the judgment of M/s. Komatsu India Pvt. Ltd. case rests on the principle settled by the Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS M/S JCB INDIA LTD [2014 (2) TMI 632 - CESTAT MUMBAI] which was referred to Larger Bench when the Chandigarh Bench of the Tribunal expressed doubt about the correctness of the said judgement in M/S ACTIN CONSTRUCTION EQUIPMENT LTD., SHRI VIJAY AGGARWAL AND SHRI P.K. BANSAL VERSUS CCE, DELHI-IV [2016 (10) TMI 473 - CESTAT CHANDIGARH]. Secondly, the Larger Bench also in laying down the principles has held that the meaning of the word ‘automobile’ occurring in Air (Prevention and Control of Pollution) Act, 1981 or the Motor Vehicles Act, 1988 cannot be adopted but the meaning has to be understood is in general sense and as used in common parlance. Further, emphasizing the said meaning as in common parlance, the Larger Bench opined that the scope and meaning of ‘automobiles’ be understood as the conveyances for transportation of passengers and goods on road; also in the same manner, it has been understood by the department in various Circulars issued from time to time.
Sl. No. 100 of the Third Schedule shall not be applicable to parts and spares of Dumpers repacked and relabelled by the Appellant for the period from January 2008 to February 2010. Also, the said activities do not fall within the scope of ‘manufacture’ under either clause (i) or (ii) of Section 2(f) of CEA,1944, hence, not leviable to excise duty. However, for the period from March 2010 to March 2011, the said activities be considered to be ‘deemed manufacture’ being covered under the amended entry at Sl. No.100 of the Third Schedule.
Extended period of limitation - HELD THAT:- This Tribunal in M. PITCHIAH, DIRECTOR (FINANCE) BEML LTD. AND OTHERS VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX BANGALORE-I [2014 (8) TMI 135 - CESTAT BANGALORE] examined all aspects on the applicability of extended period for the said activities relating to Mysore Division and following the principle laid down by the Hon’ble Supreme Court in JK. COTTON SPINNING AND WEAVING MILLS LTD. AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [1987 (10) TMI 51 - SUPREME COURT] held that invoking extended period of limitation for demanding duty in implementing a retrospective operation of the law for the period from April 2010 cannot be sustained - there are no reason in not following the judgment of the Tribunal in appellant’s own case more or less for a similar period and show-cause notice issued in the same month i.e., April 2013. In the result, invoking of extended period of limitation is bad in law.
Thus, invoking of extended period of limitation is bad in law. Accordingly, the demand be confined to the normal period of limitation. Consequently, the penalties imposed on the appellants, in the facts and circumstance of the case is unwarranted. Consequently, penalty imposed on all the appellants are set aside.
Appeal disposed off.
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2023 (10) TMI 872
Exemption for Captive Consumption - quantity of coal captively used for further production/manufacture of coal within the mines - denial of benefit of N/N. 67/95 on the ground that the coal is ‘produced’ and not ‘manufactured’ - HELD THAT:- The grounds of denial of Cenvat credit very strange. The Appellant has opted for payment of Central Excise Duty at the normal tariff rate of 5% with CENVAT credit facility”, which is not in dispute. Having allowed the CENVAT credit facility, which is available on inputs used in the manufacture of final product, the Authorities have inprinciple accepted that the “activity of coal mining amounts to manufacture”. The department has not raised any objection to payment of duty by the Appellant by treating the process as amounting to ‘manufacture’. In fact, the very demand in the Notice has been raised by charging duty at the rate of 5%, which is applicable along with Cenvat facility.
For the purpose of demanding duty on coal, the Department considers that the Coal mining activity would amount to ‘manufacture’. But, the very same coal mining activity has been considered as not amount to ‘manufacture’ for the purpose of consideration of exemption under Notification No. 67/95. Thus, there is no merit in the impugned order that has denied the benefit of Notification No. 67/95 to the Appellant for the coal consumed captively.
The Appellant is eligible for the benefit of Notification No. 67/95 for the coal consumed captively to generate steam to be used as power for the purpose of lifting coal within the mines - the demand confirmed in the impugned order is not sustainable - Appeal allowed.
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2023 (10) TMI 871
Valuation of excisable goods transferred to other units - same products are also sold by the Appellant to unrelated buyers from its depots/ stockyards - to be valued at 110% of cost of production under Rule 8 of the Central Excise Valuation Rules, 2000 or not - HELD THAT:- The issue is no longer res integra as as the issue has already been decided in favour of the Appellant in the case of ISPAT INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., RAIGAD [2007 (2) TMI 5 - CESTAT, MUMBAI], wherein it has been held that the provisions of Rule 8 of Central Excise Valuation Rules will not apply in a case where some part of the production is cleared to the independent buyers.
The submission of the Appellant agreed upon that it is a settled position that Rule 8 of Excise Valuation Rules will not be applicable if apart from captive consumption, independent sales are also taking place directly from the factory gate or the depot of the manufacturer - Rule 8 of Central Excise Valuation Rules will not be applicable in this case and hence the demand of duty confirmed in the impugned order is not sustainable. Since the duty demand is not sustainable, the question of demanding interest and imposing penalty does not arise.
The impugned order set aside - appeal allowed.
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2023 (10) TMI 870
Reversal of CENVAT Credit - Ms Angles, MS Beam and other MS Items which have gone into the capital goods used in factory premises - inputs used in the High Mast Tower on account of capital goods - address has by mistake been given as HPCL, Mumbai (their Head Office) - HELD THAT:- It is seen from the Certificate issued by the Chartered Engineer that the MS Items have been used within the factory premises for completion of the EPC Project within the factory premises.
The Tribunal in the case of M/S. MADRAS CEMENTS LTD. VERSUS CCE, HYDERABAD [2016 (6) TMI 761 - CESTAT HYDERABAD] has held credit is admissible on MS items used for fabrication of structural supports. Such supports and fixation is necessary for functioning of the plant/machinery/equipment without movement and vibration without which the process of manufacturing could not be done.
In the case of COMMISSIONER OF C. EX., TIRUNELVELI VERSUS INDIA CEMENTS LTD. [2006 (1) TMI 445 - CESTAT, CHENNAI], the Tribunal has held The ratio arrived at in various decisions/judgments referred to by the ld. Counsel for the Respondents has made it clear that the components spares etc. used for Generator set, cursher plant, conveyor system etc. are eligible capital equipment and credit in respect of them is admissible under Rule 57Q(1) of the C.E. Rules, 1944.
In the case of COMMISSIONER OF C. EX., TIRUNELVELI VERSUS INDIA CEMENTS LTD. [2005 (8) TMI 274 - CESTAT, CHENNAI], the Tribunal has held there is no dispute of the fact that the capital goods in question were used as parts/components of cement-manufacturing plant. During the material period, parts and components of ‘plant’ were recognised as eligible capital goods for Modvat credit under clause (b) of Explanation (1) to Sub-rule (1) of Rule 57Q of the Central Excise Rules, 1944. The lower appellate authority has rightly allowed capital goods credit to the respondents.
Following the ratio of the cited case law, the Cenvat Credit of Rs.62,82,025/- on MS Angles, MS Beam and other items on which the Cenvat Credit has taken is allowed. On the same ground, the Cenvat Credit of Rs.26,201/- taken on inputs used for fabrication of High Mast Tower is allowed.
In respect of Rs.10,146/- since the Invoice has been made in the name of HPCL, Mumbai (the Head office), this is only a clerical error and does not prevent the Appellant from taking the Cenvat Credit, since there is no dispute about their usage by the Appellant - In respect of Radha Krishna Transport, there is no necessity of the transporter to indicate the Service Tax Registration Number. As a matter of fact, in case of GTA services, the Service Tax has to be paid on Reverse Charge basis by the recipient of the service. Therefore, the Cenvat Credit on 33,900/- is allowed.
The impugned order towards the confirmed demands along with interest and penalties set aside - appeal allowed.
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2023 (10) TMI 869
Appropriation of refund of pre deposit sanctioned to the Respondent, against another demand where stay has been granted and pending for more than 180 days - HELD THAT:- The issue is no loner res integra as per the decision of Hon’ble Punjab and Haryana High Court in the case of PML INDUSTRIES LTD. VERSUS CCE. [2013 (4) TMI 101 - PUNJAB AND HARYANA HIGH COURT], which has been affirmed by the Hon’ble Supreme Court in COMMISSIONER VERSUS PML INDUSTRIES LTD. [2016 (10) TMI 728 - SC ORDER], wherein the Hon’ble High Court held that The condition of vacation of stay for the inability of the Tribunal to decide the appeal is burdening the assessee for no fault of his. Such a condition is onerous and renders the right of appeal as illusory. An order passed by a judicial forum is sought to be annulled for no fault of assessee.
Thus, there are no arrears against the Respondent so as to appropriate the refund. Hence, the appeal filed by the department has become infructuous and is accordingly dismissed.
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2023 (10) TMI 868
Levy of Excise Duty - sale of fixed asset (plant and machinery) - applicability of Sub Rule (5) of Rule 3 of CCR, 2004 - time limitation - HELD THAT:- Rule 3(5) makes it abundantly clear that it shall apply to such inputs or capital goods on which Cenvat Credit has been taken and that such capital goods have been sold as such. There is no denial to the fact that the goods which have been sold by the appellant were such assets which have been used by the appellants since its purchase till the date of those were sold. Resultantly, one condition of the above quoted provision i. e. goods are removed “as such” stands un-complied with the meaning of the expression “as such” has been clarified by the Larger Bench of this Tribunal in the case of MODERNOVA PLASTYLES PVT. LTD. VERSUS COMMISSIONER OF C. EX., RAIGAD [2008 (10) TMI 51 - CESTAT, MUMBAI].
The other condition for the applicability of rule 3 (5) of Cenvat Credit Rules, 2004 is that the appellant would have availed the Cenvat Credit on the capital goods in question. The said condition is the bone of contention for the impugned appeal - it is observed that merely from the balance-sheet entries the department has presumed that the appellant would have availed the Cenvat Credit on the capital goods as were removed in the afore-mentioned financial years. Thus, the initial burden was of the Department / Revenue to prove the said presumption. Department has not placed on record any such document nor there is any specific allegation about any specific amount to ever been availed by the appellant as Cenvat Credit.
The capital goods which are shown adjusted in the financial year 2015-16 are mentioned to have been purchased in the year 1986-89 and that they could not have been sold even as scrap. There is no evidence produced by the department to rebut or falsify the said submission - the allegations of the Department in the Show Cause Notice were merely presumptive and Department could not produce any evidence to prove those presumptions. The order has wrongly held the purchase invoices as sales invoices.
Time Limitation - HELD THAT:- The Show Cause Notice is miserably silent about any allegation of malafide, willful suppression etc. on the part of appellant to evade the impugned amount. Hence any basis for invoking the extended period of limitation is found absolutely missing in the present case. Resultantly, the Show Cause Notice itself gets hits by the time limitation.
Appeal allowed.
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2023 (10) TMI 807
Refund of duty paid on inputs for executing the export obligations under Rule 18 of CER read with notification No. 41/2001-CE (NT) dated 26 June 2001 - Misconstruction of Clause 4 (c) of the Notification dated 26 June 2001 which permitted removal of waste on payment of duty if such waste was manufactured or processed out of the factory of the applicant seeking rebate.
HELD THAT:- There is no gainsaying that the fixation of input output norms is done to enable the manufacturer exporters to seek rebate for the inputs used in the export of the manufactured product. Admittedly, the goods had been duly exported presumably meeting with all the relevant regulatory norms between the period September, 2003 to January, 2004. It is pertinent to indicate that two rebate claims were filed on 07 January 2004 and third one on 01 March 2004, whereas, the rest of the three were filed after the aforesaid communication dated 18 March 2004. However, the petitioner has not placed on the record a copy of its letter dated 08 January 2004 and it is not clear if the said letter pertained to any request about fixation of input-output norms with regards to export obligations already undertaken or to be taken in future.
Applicability of central excise duty on removal of waste/scraps generated during the course of the manufacture of S.S. Utensils etc. - HELD THAT:- A careful perusal of the notification No. 41/2001 dated 26 June 2001 would show that the exporter has to furnish a declaration that CENVAT credit has not been availed and the notification clearly spells out that any waste arising during the manufacture of export goods may be removed on payment of duty as if such waste has been manufactured in the factory of the manufacture - the removal of waste, or sale thereof in home or domestic market, does not prohibit or bar a claim for rebate under the said Rule or notification. Paragraph 4(c) does refer to payment of duty but the said clause applies when there is removal of material or the same is partially processed at a location different from or outside the factory of the applicant.
Since presumably the export obligations had been met, the Revisionary Authority took a hyper technical view of the matter. It is evident that in terms of the notification No. 10/2003 dated 01 March 2003, the description of the goods in question was covered vide item No. 28 viz. HSM 7323.90, which is code for S.S. Utensils, read with item No. 51, where the rate of duty is spelt out to be ‘NIL’. Meaning thereby that no duty was payable on such waste and scrap arising during the course of manufacture of the same goods. This is exemplified from the clarification letter issued by the Office of Commissioner of Central Excise, Delhi dated 26 July 2005 placed on the record, and therefore, the impugned order dated 27 September 2019 holding that pre-conditions provided by the Notification No. 41/2001 dated 26 June 2001 were not met by the petitioner, is perverse and cannot be sustained in law.
The impugned order dated 27 September 2019 is hereby set aside and the matter is remanded back to the Adjudicating Authority to decide the rebate claims of the petitioner after affording a fresh opportunity for hearing in accordance with law - Petition disposed off by way of remand.
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2023 (10) TMI 806
Principles of unjust enrichment - refund was granted but the same credited to the Consumer Welfare fund - refund claim was for duty paid under protest - HELD THAT:- The learned Commissioner while passing the impugned order observed the Chartered Accountant’s certificate did not mention that the excise duty for the past period have not been included in the commercial invoices and was borne by the appellant themselves but he failed to appreciate that as per common trade practice commercial invoices are issued when no duty is charged and once the duty is charged then excise invoice are to be issued. In this matter for the past period the appellant had paid the duty ‘under protest’ so naturally only commercial invoices had been issued to their customers and this fact had also been recorded by this Tribunal in its order while remanding the matter to the learned Commissioner.
The learned Commissioner had only to see whether the Chartered Accountant’s certificate endorses the claim of the appellant that they have not charged the duty from their customers to whom they have already issued commercial invoices. It is found that the said certificate explicitly supported the stand of the appellant as it mentioned by stating that ‘HCCBL has not received any amount over and above the amount mentioned in the respective Commercial invoices issued by them during the period February, 2000 to November 12, 2001.’
Since the Chartered Accountant’s certificate has certified that the appellant has not recovered the duty amount of Rs.6,02,000/- from their customers, the same is not hit by the bar of unjust enrichment. The appellant is therefore entitled for refund claimed.
Appeal allowed.
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2023 (10) TMI 805
Clandestine manufacture and clearance of excisable goods - unmanufactured tobacco - actual manufacturer of the unmanufactured tobacco - levy of penalty u/r 26 on Shri Suresh Prasad Sah, Appellant 2 - HELD THAT:- From the documents available, it is clearly established that the lease agreement was a bogus one. Shri Suresh Prasad has impersonated another person and introduced him as Shri Mahesh Prasad before the Notary. Mahesh Prasad is non existent. There is no evidence that Shri. Gautam Kushwaha was in any way connected with the manufacturing activity. Thus, it is found that the department has considered Appellant 1, the owner of the premises as the manufacturer of the goods found in the said premises.
Evidence available on record to implicate Shri Krishna Kumar as the manufacturer - HELD THAT:- Appellant 1 has made a genuine lease agreement and leased out the property on a monthly rent of Rs.6000/. The department has verified the genuineness of the lease agreement from the Notary and found that the lease agreement executed by him was genuine - there is no material evidence available on record to establish that he is directly involved in the manufacturing activities. There is no evidence that the machines were purchased in his name. There is no evidence that he has purchased raw materials from the market using cash. The goods has not been physically cleared to any customers. In the absence of any such evidence, we hold that Appellant 1 cannot be held as the manufacturer of the goods found in the premises rented out by him.
Levy of penalty under section 26 of the Central Excise Rules 2002 on Shri Suresh Prasad Sah, Appellant 2 - HELD THAT:- It is observed that his involvement in the clandestine manufacture and clearance is very well established by his own admission. He is also involved in introducing a non-existence person Shri Mahesh Prasad before the Notary for executing the lease agreement. Accordingly, he is liable for penalty under section 26 of the Central Excise Rules 2002. Accordingly, the penalty imposed on Shri Suresh Prasad Sah is upheld.
Appeal disposed off.
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2023 (10) TMI 804
Clandestine removal - Ferro Silico Manganese - reliability on Pen drive printouts - can be admitted into evidence or not - period from 2005 to November, 2007 - high consumption of electricity during the years 2005-06 and 2006-07 can be relied upon to allege clandestine manufacture or not - absence of any evidence of procurement of the major raw materials for manufacture of Silico Manganese - penalty on the Appellant company and it's Directors.
Demand confirmed on the basis of computerized data maintained by the Computer Operator of the Applicant Shri Ajay Behera which has been retrieved from a Pen drive recovered from one of the office table drawer of Shri Behera.
Whether evidences available on record substantiate that the data retrieved from the pen drive and other computers belonged to the Appellant's company and the data can be relied upon as evidence to demand duty? - Whether the conditions mentioned in Section 36B has been followed in this case or not, to rely upon the computer printouts as evidence? - HELD THAT:- The entire case has been buit up on the basis of the data retrieved from the pen drive and the subsequent statements recorded from the responsible persons. Thus, authenticity of the data is very essential to substantiate the allegations. The pen drive has been recovered from Shri. Ajat Kr. Behera and hence his statement is very crucial regarding the data available in the pen drive. It is a fact on record that Shri Ajay Kr. Behara has been employed only 4-5 months earlier to the date of recovery of the said data. Hence, the evidentiary value of his statement with respect to the data for the earlier period does not carry any weight.
Pen drive is a floating device and unless the computer from which the electronic record was produced is identified, the data recovered from the pen drive cannot be admitted as evidence. In the instant case the data recovered from the pen drive pertains to the period 2005-06, 2006-07 and 2007-08. Shri Ajay Kumar Behera, Computer Operator has joined in the company only on 12.04.2007. His statemnt has been relied on to validate the data available in the pen drive for the period 2005-06 and 2006- 07 also. No effort has been made to identify the person who has entered the data for the period prior to 12.04.2007.
In the present case the author of entry of data has not been identified only for the period prior to 12.04.2007. For the period after 12.04.2007 also, the data available in the pen drive has not been accepted by the Accountant Shri. Sujit Pruseth who is responsible for the data or the Directors - the questions are answered in the negative.
Whether the procedure as set out in Section 9D of the Central Excise Act, !944 was followed in this case or not? - If not followed, then whether the statements recorded under Section 14 of the Central Excise Act, 1944 can be relied upon to demand duty? - HELD THAT:- It is observed that the statement of Shri. Behera cannot be taken as voluntary. Further, the adjudicating authority has not permitted the cross examination of Shri. Behera to bring out the truth. In his statement dated 23.11.2007, the Director Shri. Sitaram Agarwal has denied his involvement in the activity of clandestine clearance. But, in the Notice it has been alleged that he has accepted clandestine removal of finished goods - Had the adjudicating authority followed the provisions of Section 9D and examined the witnesses who have given the statements, the truth in this statement could have come out - the statements recorded in this case has lost its evidentiary value by not following the provisions of Section 9D - Procedure set out in Section 9D has not been followed in this case. Question is answered in negative.
Whether the allegations of clandestine clearance of finished goods by the Appellants are substantiated with corroborative evidence? - HELD THAT:- No inquiries were conducted with regard to the alleged clandestine removal on the basis of the aforementioned records recovered. The sales records shows cash receipts of Rs. 7 crores, which the Revenue alleges that sales proceeds of clandestinely cleared silico manganese in cash. However, no verification was done to ascertain this - The Appellants cited many judgments wherein it has been categorically laid down that when the names of the buyers were available in the seized records it would be incumbent on the investigation to make inquiries from the buyers for establishing clandestine removal.
In the instant case, the investigation has not brought in any corroborative evidence to substantiate the allegation of clandestine removal - the investigation has failed to establish the alleged clandestine clearance of goods by the Appellants and hence the demands confirmed in the impugned order are not sustainable. Accordingly, question answered in the negative.
Whether high consumption of electricity during the years 2005-06 and 2006-07 can be relied upon to allege clandestine manufacture and clearance to demand duty during the relevant period? - HELD THAT:- It is observed from the Project Report of the Appellant that electricity required for production of 1 MT of Silico Manganese is 3800 units. As against this, the Appellant has consumed 7900 and 5564 units per MT during the years 2005-06 and 2006-07 respectively. It is observed that there was widespread variation in consumption of electricity between months. For Example in the month of April 2006, the electricity consumption per month comes to 28000 to 31000 units per MT - the excess electricity consumption alone cannot be an evidence to substantiate the allegation of clandestine clearance - question answered in negative.
Whether the demands confirmed in the impugned order on clandestine clearance of finished goods is sustainable, without verification at the buyer's end? - Also, in the absence of any evidence of procurement of the major raw materials for manufacture of silico Manganese, without invoices, whether demand is sustainable? - HELD THAT:- The revenue has failed to corroborate unaccounted clearance available in the data retrieved from the pen drive by verification at the customer's end. Since it is already held that the data recovered from the pen drive does not have any evidentiary value, the conclusion arrived at by the investigation with one verification cannot be considered as corroborative evidence for the clandestine clearance of entire 3474.950 MT of Silico Manganese alleged to have been cleared through cash transaction. Hence, question answered in negative.
Whether penalty is imposable on the Appellant company and it's Director, on the basis of the evidences available on record? - HELD THAT:- It is found that no evidence has been brought on record to establish that the Directors are involved in clandestine manufacture and clearance of the goods. As the evidence available on record does not establish the clandestine manufacture and clearance, the penalty imposed on the Directors is not sustainable. Accordingly, the same is set aside - question answered in the negative.
The impugned order set aside - appeal allowed.
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