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Central Excise - Case Laws
Showing 361 to 380 of 1430 Records
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2023 (10) TMI 673
CENVAT Credit of service tax paid by the job workers - denial on the ground that the job worker should not have paid the service tax - exemption under N/N. 08/2005-ST and 25/2012-ST - whether the job worker has option to pay the service tax or compulsorily avail the exemption Notification No 08/2005 and 25/2012?
HELD THAT:- In terms of subsection (1A) of Section 5A of CEA for the purpose of central excise if an exemption is granted absolutely the manufacturer of excisable goods shall not have option to pay excise duty whereas the Notification necessarily to be availed by the assesse. Unlike sub section (1A) of Section 5A, there is no provision in the Finance Act, 1994 to compulsorily avail the exemption granted absolutely. Therefore, Notification No. 08/2005-ST and 25/2012-ST even though they grant absolute exemption but in absence of provision such as Sub section (1A) of Section 5A of Finance Act, 1994 the assessee has option either to pay service tax or to avail the exemption.
When the job worker has paid the tax without availing the exemption Notification there is no illegality in payment of such service tax. If this be so, then the service recipient, in the present case, the appellant are legally entitled to avail the cenvat credit as there is no dispute that the input services is directly used in or in relation to manufacture of their final product.
There are nothing illegal or wrong on the part of the appellant in availing the cenvat credit on the input services provided by the job worker to the appellant - the impugned order is not sustainable - appeal allowed.
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2023 (10) TMI 672
Refund of accumulated credit in CENVAT credit - rejection on the grounds that claim filed beyond the period of limitation of one year from the date of exports - no justification of inability to utilize the said credit - HELD THAT:- It is settled law that relevant date for the purpose of section 11B of Central Excise Act, 1944 would be the date of export/date on which the application could have been preferred/ date on which the last of the repatriation for the export of that quarter was received. This aspect has not been examined by the lower authorities.
The claim has also been held liable to be rejected for not having justified the inability to utilize the CENVAT credit towards domestic clearance. We do not find any such condition in the said notification or, for that matter, in rule 5 of CENVAT Credit Rules, 2004. The eligibility for availment of the scheme, though elaborating upon the non-utilization of accumulated CENVAT credit, has not designed a mechanism for such segregation save proportionality with exports which is not in dispute.
Such entitlement for claim of refund has not been examined and, having been disposed off at the threshold, lacks scrutiny on merits. It is necessary for the application for refund to be restored to the original authority for determination of the amount of refund eligible in accordance with the said notification - matter remanded to the original authority for fresh decision.
Appeal allowed by way of remand.
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2023 (10) TMI 644
100% EOU - Debonding - Utilization of accumulated Cenvat credit - amount of the counter-veiling duty payable at the time of de-bonding 100% EOU can be paid from the accumulated Cenvat credit by an EOU Unit or not - Extended period of limitation - HELD THAT:- This issue is no longer res-integra as this issue in the case of Dishman Pharmaceuticals and Chemicals Pvt. Limited vs. UOI [2015 (12) TMI 1211 - GUJARAT HIGH COURT] where it was held that various assessees, including the assessees situated within the jurisdiction of Ahmedabad Commissionerate have been given benefit of paying the excise duty foregone from the Cenvat credit account. Under the circumstances, prima facie, there appears to be no reason to deny such benefit to the petitioners.
It is found that the appellant unit was right in paying amount of counterveiling duty from the accumulated Cenvat credit and therefore the appeal on merit succeeds.
Extended period of limitation - HELD THAT:- Since the appellant have made a detailed declaration before the proper officer of the department regarding the facts of payment of various kinds of the dues and utilisation of Cenvat credit in the month of August, 2012 and department has already issued a no-dues certificate on 13.10.2012 to the appellants therefore, making allegation of any suppression of facts, misdeclaration or any other contravention with an intention to evade duty are not present in this case. Since the entire demand is beyond normal period, the same is hit by period of limitation and therefore, unsustainable.
The impugned order-in-original is without any merit and we set-aside the same.
Appeal allowed.
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2023 (10) TMI 592
CENVAT Credit - services of environmental due diligence audit of the factory site for investigation of soil and ground water contamination and services of consequential remedial action - inputs such as TMT Bars, Steel Support Structure, Joists, Beams, Angles, Channels, and MS Angles etc. used for support structure of capital goods in the factory of the appellant - clearance of MS Scarps and scrape of capital goods - Rule 3 (5A) of Cenvat Credit Rules, 2004 - time limitation - penalty.
Whether the services related to pollution control measures received by the appellant are eligible input services as defined under Rule 2 (l) of Cenvat Credit Rules, 2004? - HELD THAT:- The services in question related to pollution control of the factory is integral in the operation of the production activity in the appellant’s factory. Even though the services do not contribute directly in the manufacture but being necessary to run the factory in relation to the manufacture indirectly. As per the definition of input service if the services is used in or in relation to manufacture and whether directly or in directly, the same is qualified as input service. The court and Tribunal in various judgments held the services related to pollution control as input services and credit was allowed even though such services are not directly used in the manufacture of final product.
It is settled that the services which are in relation to pollution control of the factory, the same are input services in terms of Rule 2 (l) of Cenvat Credit Rules, 2004 and hence, eligible for cenvat credit.
Whether the services received prior to acquisition of the factory and commencement of manufacture? - HELD THAT:- The services related to pollution control are in relation to the production in the factory, therefore, the time of receipt of service is immaterial so long it is undisputed that the services were used in pollution control which in turn necessary for running the production activity in the appellant’s factory. Therefore, even if the services were received prior to acquisition of the factory, the fact remains the services were received by the appellant only and the invoices therefore were also issued in favour of the appellant.
It is a settled law that even though the services were received prior to the commencement of production so long it is in relation to the manufacturing activity of the assessee, the cenvat credit cannot be denied only because the same were received prior to acquisition of the factory and/ or commencement of the production.
Cenvat credit on various steel items such as TMT Bars, Steel Support Structure, Joists, Beams, Angles, Channels, and MS Angles etc - HELD THAT:- The learned Commissioner denied the cevat credit on the aforesaid goods relying on the decision of the Larger Bench of the Tribunal in the case of M/S VANDANA GLOBAL LIMITED AND OTHERS VERSUS COMMISSIONER, CENTRAL EXCISE AND CUSTOMS, CENTRAL EXCISE [2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT]. However subsequently to the impugned order passed, the Hon’ble High Court of Chhattisgarh in Vandana Global Ltd - 2018 (16) GSTL 462 reversed the larger bench judgment of CESTAT in case of Vandana Global Ltd. Moreover this issue has ben considered in the case of COMMR. OF CUS., C. EX. & S.T., BILASPUR VERSUS SINGHAL ENTERPRISES PVT. LTD. [2017 (7) TMI 1112 - CHHATTISGARH HIGH COURT] and M/S. MANGLAM CEMENT LTD. VERSUS C.C.E., JAIPUR-I [2018 (3) TMI 1547 - CESTAT NEW DELHI] as cited by the learned counsel. Therefore, in light of the Hon’ble Chhattisgarh High Court judgment and subsequent judgments the appellant is entitled for the cenvat credit on the aforesaid goods.
Demand of duty on clearance of waste and scrap of the capital goods - HELD THAT:- In the present case the demand is on the capital goods used by the appellant and cleared as waste and scrap. Obviously such waste and scrap does not arise out of manufacture of excisable goods. The capital goods itself became waste and scrap after used for long time, therefore, the demand of duty on such waste and scrap on its transaction value is absolutely correct and legal. Therefore, the demand on this count is sustainable on merit.
Extended period of limitation - HELD THAT:- The issue being interpretation of legal statute and appellant being registered under Central Excise, the suppression of fact, collusion, fraud etc. cannot by attributed on the appellant. Therefore, the demand for the extended period will not be sustainable. However, if there is any demand within a normal period in respect of waste and scrap of capital goods, the same need to be worked out and recovered by the department.
Penalty - HELD THAT:- Since there is no malafide attributed on the part of the appellant and extended period is not invokable, the penalty is not sustainable. Moreover, the major demand was set aside on merit. Corresponding to the said demand also no penalty can be imposed.
The impugned order is modified - Appeal allowed.
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2023 (10) TMI 591
Bar in availing the cenvat credit on the capital goods - Benefit of exemption notification No. 05/2006- CE dated 01.03.2006 - denial of exemption on the ground that the Ceramic Roller and Bellow are inputs and availment of credit on such inputs amounts to contravention of condition of the Notification No. 05/2006 –CE which is not correct - HELD THAT:- The appellant have conceded that they are ready to reverse the credit which was taken on ceramic rollers and bellow amounting to Rs. 1,57,799/- and also ready to pay interest there on. It is found that the appellant has already paid the amount of Rs. 2 Lacs, however, the interest element on the cenvat credit of Rs. 1, 57,799/- has not been quantified.
If the appellant makes good the reversal of cenvat credit and interest there on which can be adjusted against Rs. 2 Lacs already paid and if there is any shortfall, the same may be paid by the appellant at the time of de-novo adjudication. Thus the appellant is entitled for the exemption Notification - The appellant are eligible for the exemption Notification No 05/2006-CE on the payment of cenvat credit and interest thereon.
Appeal is allowed by way of remand to the Adjudicating Authority for computing the interest on the cenvat credit and ensure the payment thereof and thereafter a reasoned de-novo order may be passed.
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2023 (10) TMI 589
Availability of the credit of Sugar Cess (and Ed.Cess and SHE Cess) paid on raw sugar imported by the Appellant - HELD THAT:- The issue is no more res integra, as in their own case, the CESTAT Chennai, as reported in [2007 (8) TMI 147 - CESTAT, BANGALORE], has allowed the credit of Sugar Cess (and Ed.Cess and SHE Cess) paid on raw sugar. The department has challenged the validity of the said order before the Hon'ble Karnataka High Court and the Hon'ble High Court has upheld the said order of the Tribunal, as reported in [2014 (1) TMI 1469 - KARNATAKA HIGH COURT].
There is no stay available against the order passed by the Hon'ble Karnataka High Court and hence it is held that the ratio of the said decision is squarely applicable to the present case on hand as the facts of this case are the same as that of the order passed by the Hon'ble Karnataka High Court. Thus, by following the above cited decision of the Hon'ble Karnataka High Court, the Appellant are eligible for availing and utilizing the credit of Sugar Cess (and Ed.Cess and SHE Cess) paid on raw sugar imported by them.
Since, the credit is admissible, there is no question of demanding interest or imposing penalty on the Appellant.
The impugned order set aside - appeal allowed.
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2023 (10) TMI 588
Recovery of the erroneous refund of education cess or higher education cess - appellants are located in the state of Sikkim - N/N. 20/2007-CE dated 25.04.2007 - HELD THAT:- The refund claims were sanctioned in the light of the decision of the Hon’ble Apex Court in the case of M/S. SRD NUTRIENTS PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE GUWAHATI [2017 (11) TMI 655 - SUPREME COURT] and thereafter the decision of SRD Nutrients was over-ruled by the Hon’ble Apex Court in the case of M/S. UNICORN INDUSTRIES VERSUS UNION OF INDIA & OTHERS [2019 (12) TMI 286 - SUPREME COURT], it does not mean that at the time of sanctioning of refund claim, the decision of the Hon’ble Apex Court in the case of SRD Nutrients was valid.
As the decision of Hon’ble Apex Court in the case of SRD Nutrients during the relevant period holding the field, in that circumstances, the refund claims were rightly sanctioned to the appellants as held by the Hon’ble High Courts in the above-cited decisions namely TRIPURA ISPAT (A UNIT OF LOHIA GROUP) VERSUS UNION OF INDIA, COMMISSIONER, CENTRAL GOODS & SERVICE TAX, ASSISTANT COMMISSIONER, CENTRAL GOODS & SERVICE TAX [2021 (1) TMI 753 - TRIPURA HIGH COURT], therefore, the show cause notice issued to the appellant are not sustainable.
The impugned orders are bad in law - Appeal allowed.
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2023 (10) TMI 587
Clearance of cement in bulk packs, on tender, to various institutional/industrial consumers by availing benefit of Notification No.4/2006-CE dated 01.03.2006 on the transaction value - requirement to affix MRP on the packages of the said goods - HELD THAT:- The issue has already been settled by this Tribunal, wherein this Tribunal in the case of M/S. ULTRATECH CEMENT LIMITED VERSUS COMMISSIONER OF CGST & EXCISE, DURGAPUR [2023 (7) TMI 1110 - CESTAT KOLKATA] has held the demand of duty is not sustainable against the appellant as the cement in 50 kgs bags sold to the above buyers qualifies as sale to institutional/industrial customers to avail the benefit of the above cited Notification.
As the issue is no more res integra, therefore, the appellants have cleared cement in 50 kgs. bags to the buyers qualified as institutional or industrial customers, therefore, they are entitled for the benefit of Notification No.4/2006-CE dated 01.03.2006.
There are no merit in the impugned order and the same is set aside - appeal allowed.
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2023 (10) TMI 525
CENVAT Credit - capital goods - printers and cartridge - packing materials - exclusion clause under Rule 2(a)(A)(i) of CCR - HELD THAT:- The items namely printers and the printer cartridges though covered by the definition of capital goods as argued by the appellant have not been used in the manufacturing premises but in the office of the appellant located within the premises of the appellant. Commissioner (Appeals) has referred to the exclusion clause. Exclusion Clause specifically excludes equipment or appliances used in the offices, definitely printer and its cartridges nothing but the equipment of appliance and not the furniture in respect of which board has issued the clarification since these equipments or appliances are used in office, they fall within the exclusion clause of the definition and hence credit in respect of these would not be permissible.
Similar view has been expressed by Mumbai Bench in case of M/S BHARTI AIRTEL LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE [2012 (4) TMI 362 - CESTAT, MUMBAI] observing there is no direct nexus between this item and the output service provided by the appellant. The appellant has not established sufficient nexus between printers and their output service.
Cenvat credit on the packing material which was delivered at the warehouses located at Lawrence Road, Delhi - HELD THAT:- There are no much justification in the order, it is settled principle in law till the time it can establish that the inputs were used in or in relation to manufacture and clearance of the finished products. The Cenvat credit in respect of the same cannot be denied. It is also the depot has been considered as the place of the clearance for the excisable goods, warehouse where these boxes were delivered is a depot of the appellant from where sugar was cleared after being repacked in these corrugated boxes, these facts are not in dispute.
Cenvat credit of Rs.41,078/- taken in respect of these packing materials is held to be admissible and remaining credit of Rs.29,341/- + Rs.23,610/- =Rs.52,951/- is held to be not admissible to the appellant. In the respect of credit disallowed the demand of interest also needs to be upheld. Penalty under Rule 15 (2) read with Section 11AC of the Central Excise Act, 1944 is upheld to the extent of Cenvat credit disallowed.
Appeal allowed in part.
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2023 (10) TMI 524
CENVAT Credit - Allegation of non-receipt of material - reliance placed upon the statements of directors - cross examination of witnesses - contravention of Section 9D of Central Excise Act - HELD THAT:- In the first instance the impugned order is bad in law because the whole case was built only on the statement of Mr. K.P. Khemka and Mr. Rupesh Bansal and Mr. Yashpal Sharma and no opportunity of cross examination was provided to the appellant despite specific request.
The Ld. Commissioner (Appeals) has not considered the evidence namely RG-23C part I and the bank statements showing payment to transporter and the supplier. Further, department has not been able to bring any independent evidence to prove the allegations of non-receipt of goods against the appellant. Besides this, statement of Shri Sushil Jain dated 09.02.2009 and Shri Suresh Sharma, the authorized representative of the transporter has been rejected without any basis.
In the case of M/S NIDHI METAL AUTO COMPONENTS PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-IV [2015 (4) TMI 649 - CESTAT NEW DELHI] and S.K. Foils Ltd. v. Commissioner of Central Excise, Rohtak [2014 (3) TMI 412 - CESTAT NEW DELHI] where the manufacturer and first stage dealer were same, relief was granted to the assessee on the observation that allegation had been made on basis of statement of manufacturer, dealer/ supplier of invoice and there is no discrepancy in the invoice and payment has been made through cheque.
The appellant has regularly filed the statutory returns on monthly basis and the fact of clearance of goods and availment of credit was duly reflected in the returns but the same has not been examined by the authorities below.
The impugned order is not sustainable in law - Appeal allowed.
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2023 (10) TMI 523
Payment of duty on facility charges recovered from other customers claiming that the agreements are different - HELD THAT:- The issue is no more res integra and the issue is covered by the judgment of this Tribunal in the case BOC India Ltd. [2018 (3) TMI 854 - CESTAT NEW DELHI]. This Tribunal after taking note of the Board Circular dated 10.11.2014 and 24.4.2014 held that The appellants are engaged in manufacture & supply of gases liable to Central Excise duty. They have put up storage facilities inside the clients premises to store such gases for subsequent consumption. For such activity, they are collecting fixed facility charges apart from the sale consideration for the gas. Admittedly, the clarification dated 10-11-2014 issued by the Board on similar set of facts, as well as, the clarification dated 24-4-2014 issued in respect of appellant’s unit in Orissa are applicable to the present dispute.
There are no reason not to follow the aforesaid judgment of this Tribunal. Hence, the facility charges, escalation charges, etc., collected from all customers are includable in the value of gases sold/supplied to their customers. However, in the facts and circumstances of the case, there are no reason to confirm the penalty imposed on the appellant - the impugned order is modified to the extent of setting aside the penalty of Rs. 5,00,000/- under Rule 25 of the Central Excise Rules, 2002 and duty amount confirmed along with interest is upheld.
Appeal disposed off.
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2023 (10) TMI 522
Levy of penalty u/r 26 of Central Excise Rules, 2002 - Revenue filed the present appeals on the ground that the Commissioner ought to have confirmed the charges against the present appellants made in the show cause notice in the impugned de-novo adjudication order - HELD THAT:- It is clear that the observation is in respect of the appellants which were before the CESTAT. Therefore, even though the operating portion of the order sets aside the impugned order but it is only in respect of appellants which were before the CESTAT. It is obvious that the parties, the appellants in the present case which were not before the CESTAT, the order of the CESTAT cannot be said to have been given in respect of the present appellant which were not the parties as appellants before the CESTAT.
In view of facts and specific observation made by the Learned Commissioner in the impugned order about the present appellants is absolutely legal and correct - there are no infirmity in the impugned order - appeal of Revenue dismissed.
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2023 (10) TMI 494
Concessional rate of duty - cement cleared for self-use and free issue to the contractor - benefit of N/N. 4/2006-CE dated 01.03.2006 as amended - HELD THAT:- The Mumbai Bench of the Tribunal in the case of ACC Ltd. [2017 (8) TMI 1168 - CESTAT CHENNAI] considered the similar issue and held that the duty demand cannot sustain holding that we are unable to accept the argument of the adjudicating authority that these two types of clearances amounting to 26434.30 MTs fall foul of the Notification No. 4/2006-C.E. These clearances, in our considered view, cannot be considered as retail sales and hence benefit of the said notification cannot be denied to them.
In the appellant’s own case for the earlier period, the Tribunal has applied the said decision to set aside the demand and also dismissed the appeal filed by the Department - the demand cannot sustain and requires to be set aside - appeal allowed.
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2023 (10) TMI 428
Wrongful availment of CENVAT credit - Removal of machinery after two days of taking credit - Failure to correctly interpret and apply the provisions of Rule 4, Rule 11A, 11AB and 11AC of the Cenvat Credit rules, 2002 - suppression/mis-statement of facts - extended period of limitation - HELD THAT:- The Appellate Tribunal, after considering the contentions of the parties held that the appellant had availed 50% of the credit on both the Autoconers at their Baddi plant on 29.01.2002; after availing credit on both the machines if there was transfer of one of the two Autoconers to Guna plant during 2001-2002, the right course would have been to debit the full credit of Rs. 5,62.949/- pertaining to the transfer of Autoconer and to take its full credit at the Guna plant - The Tribunal held that the fact of removal of one Autoconer to Guna Plant, which took place within two days of taking credit, was not brought to the notice of Central Excise Authorities, and it was detected only during the course of audit, and so the levy of penalty by the Commissioner of Appeals was sustainable.
Thus, the question of Tribunal incorrectly interpreting and applying provisions of Rule 4 of the Cenvat Credit Rules 2002, Section 11A, 12 AB and 11AC of the Act does not arise.
In the instant case, the appellant does not deny the transfer of one Autoconer from the Baddi Plant to the Guna Plant in the State of Himachal Pradesh on 31.01.2002, having availed 50% of the credit duty paid on both the Autoconers at Baddi on 29.01.2002. The finding of the Tribunal that this was detected by the audit and only then the explanation was offered by the appellant is not disputed by the appellant - the Tribunal did not err in holding that after availing credit on both the machines, if there was transfer of one of the two Autoconers to Guna plant during 2001-2002, the right course would have been to debit the full credit of Rs. 5,62,949/- pertaining to the transfer of Autoconer, and to take its full credit at the Guna Plant, and this view is consistent with Rule 4 (2) (a) of the Cenvat Credit Rules, 2002 - The fact of removal of one Autoconer to Guna plant, which took place within two days of taking credit, was not brought to the notice of the Central Excise Authorities, and it was detected only during the course of audit. As such there is nothing wrong if penalty is levied on the appellant either.
Appeal dismissed.
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2023 (10) TMI 427
Classification of goods - SSI exemption - Loader fitted in the tractor supplied by the customer - classifiable as a whole under Chapter heading 8705 or any other Chapter heading?
The assessee’s claim is that the product manufactured by them is Loader which is accessory of the tractor and is classifiable under Chapter heading 8708 and eligible for SSI exemption under Notification No. 8/2003-CE dated 01.03.2003.
HELD THAT:- From various photographs it can be seen that no activity is carried out on the tractor which is already manufactured by the Tractor Manufacturing Company. The tractor is supplied by the customer and on the readily manufactured tractor the loader is fitted and such loader is manufactured independently by the assessee. In this entire process and the nature of the tractor which is received on which loader is fitted, the conclusion is drawn that the appellant’s activity of manufacturing loader independently occurs by taking various alteration and since it is to be fitted in the tractor therefore, the assessee’s activity is under manufacture of the whole vehicle but limited to manufacture of loader. Merely by fitting such loader which is manufactured and mounted on the tractor, cannot be said to be amounting to manufacture of ‘special purpose motor vehicle’ classifiable under heading 8705. In case of manufacture of special purpose motor vehicle, the fabrication and mounting of special purpose body of motor vehicle is fabricated and mounted on the chassis.
In the present case, tractor is already manufactured and in majority of cases the clients use his tractor for some time and thereafter it is given to the assessee only for fitting loader in the fully manufactured tractor.
The Adjudicating Authority after analyzing relevant Chapter notes of the tariff as well as Chapter note of HSN has rightly interpreted that the tractor alone is of no use and it is used as a power machine for the purpose of use of tractor and different equipment is fitted in the tractor. Therefore, the equipment such as loader in the present case is part of tractor which is much different from the vehicles classifiable as a special purpose motor vehicle under Chapter heading 8705.
The Adjudicating Authority has considered all the parameters, considered the photographs, physical aspect of the product, use of the product namely tractor to arrive at the conclusion that loader being accessory of the tractor, is correctly classifiable under Chapter heading 8708 - there are no infirmity in the impugned order - appeal of Revenue dismissed.
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2023 (10) TMI 426
Exemption of duty on the clinker, used captively in the production of cement vide N/N. 67/1995-CE dated 16.03.1995 as amended - Denial on the ground that the final product viz., Cement cleared to the SEZ unit is an exempted product - final product cleared to Special Economic Zone (SEZ) without payment of duty - HELD THAT:- The said issue was considered by the Tribunal in a batch of cases including the case of the appellant in M/S ULTRATECH CEMENTS LTD AND OTHERS VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, TIRUCHIRAPALLI AND OTHERS [2015 (10) TMI 1058 - CESTAT CHENNAI] where it was held that appellants are eligible for exemption under Notification 67/95-CE on clinker captively consumed for manufacture of cement cleared to SEZ units/developers without payment of duty for both the periods prior to and after the amendment of SEZ Act.
In the case of COMMISSIONER OF CENTRAL EXCISE, TIRUCHIRAPALLI VERSUS MADRAS CEMENTS LTD. [2017 (12) TMI 1664 - CESTAT CHENNAI], the Tribunal has applied the said decision to set aside the demand.
The demand cannot sustain. The impugned order is set aside - appeal allowed.
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2023 (10) TMI 425
Reversal of CENVAT Credit - exempt turnover - requirement of reversal under clause (i) or (ii) of sub- Rule (3) of Rule 6 of CCR? - wrong maintenance of records - Clearance of both taxable and exempted finished goods - ratios of inputs were skewed - Suppression of facts - extended period of limitation - HELD THAT:- Rule 6(3) categorically starts with the words – Notwithstanding anything contained in sub-rule (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow any one of the following options, which, inter alia, include option to pay an amount equal to the specified percentage of value of exempted goods or exempted services, along with other option of reversing the proportionate amount under sub-rule (2) or maintain separate accounts for the receipt consumption in the inventory of inputs, as provided in clause (a) of subrule (2) and take credit only on inputs under sub-clause (ii) and (iv) of the said clause (a), and pay an amount as determined under sub-rule (3A) in respect of the input services.
Once it is the case that proper records have not been maintained with regard to receipt of inputs and its utilization, sub-rule (3) gives option to the Assessee, and thus, Revenue cannot enforce any of the option(s) under sub-rule (3). Thus, Appellant is entitled to reverse the amount of credit as per option in clause (i) of sub-rule (3) of Rule 6 i.e., pay an amount equal to the specified percentage (5% or 6%) of the value of exempted goods, in the facts of the present case.
Appellant shall be entitled to consequential benefits, in accordance with law. As the Appellants have admittedly paid the amount of Rs.1,28,95,173/- during audit/ investigation under protest, they shall be entitled to refund of the same with interest as per Rules - Appeal allowed.
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2023 (10) TMI 424
Denial of CENVAT Credit - procurement/import of capital goods between 2005-06 and 2007-08 - denial on the ground of lack of evidence of having been received at the designated factory of the appellant - HELD THAT:- The physical verification of imported machinery was undertaken after closure of the factory. There is no reference in the orders of the lower authorities to audit having included physical verification of these; in any case, their existence at the sister units could well have been ascertained and failure to do so is dereliction on the part of the adjudicating authority as central excise authority having jurisdiction over the factory of the appellant. Choosing to style alleged ‘non-intimation of transfer’ as sufficing to deny credit also demonstrates failure to cite the authority under which the appellant was required to intimate such transfer.
Under the scheme of CENVAT Credit Rules, 2004, taking of credit is permitted on receipt of goods in factory, subject to such variations as permitted therein, and not to be denied if availed against proper documentations. Any allegation of non-receipt of such ‘capital goods’ at factory, in contradistinction with non-availability that may be justified with explanations subject to ascertainment, would, therefore, have to be based on, and also sustained on, clear evidence of diversion.
There are no compelling motive for diversion of imported and locally procured goods save that two establishments set to take credit – one on document and the other on availability of ‘capital goods’ – which, in the absence of supporting evidences, defies logic as having occured. It would appear that the entire exercise was half-hearted and relying entirely on presumptions which is a characteristic that is anathema to adjudicatory proceedings.
The impugned order is set aside - Appeal allowed.
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2023 (10) TMI 423
100% EOU - Valuation - terry towels / terry fabrics of cotton falling under chapter 63 of the Central Excise Tariff Act 1985 - failure to adopt 8% ad valorem as per the Central Excise Tariff Act, 1985 while calculating the CVD in respect of clearances effected to DTA as provided in N/N. 23/2003 CE dated 31/3/2003 read with section 3 of Central Excise Act 1944 - HELD THAT:- The issue stands squarely covered by the decision of the Tribunal in the appellant’s own case in COMMISSIONER OF CENTRAL EXCISE, SALEM VERSUS SRI GUGAN MILLS AND SARADHA TERRY TOWELS LTD. [2018 (6) TMI 908 - CESTAT CHENNAI] where it was held that In UOI vs Plastic Processors [2005 (4) TMI 581 - SUPREME COURT], the hon’ble Apex Court has held that CVD was payable at effective rates and not at tariff rates on clearances made by 100% EOU into DTA.
The demand cannot be sustained. The impugned order is set aside - Appeal allowed.
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2023 (10) TMI 422
Reversal of CENVAT Credit - exempted goods are cleared or exported to EOU or to SEZ - seeking reversal alongwith interest - Clearances of exempted goods in DTA, paying 10% amount - penalties
In respect of Rs.15,59,640/- - HELD THAT:- The Revenue is admitting that the amount has already been paid but insisting that the interest is required to be paid on this amount. In respect of Rs.29,61,191/- already reversed by the Appellant, Revenue admits that interest of Rs.1,47,209/- has already been paid. The interest amount paid is not being disputed on account of any quantification.
In respect of Rs.74,64,464/- - HELD THAT:- The AR’s Office has queried the details from the Jurisdictional Commissioner to get it verified as to whether 10% of the value of the clearance of the exempted goods was being paid by the Appellant, as claimed by them. They have received letter dated 21.06.2013 from the Office of the Commissioner, Visakhapatnam, stating that the Assessee has reversed 10% of the value of clearances. This letter has been annexed with the synopsis submitted by the Revenue.
Interest amount - HELD THAT:- In respect of the interest of Rs.29,61,191/-, the same stands paid by the Appellant. Since the Appellant has not brought in any evidence to the effect that they were carrying sufficient balance, we reject their submission that interest is not required to be paid. The interest of Rs.1,47,209/- paid by them meets the requirement of interest as demanded in the OIO - Similarly, in respect of Rs.15,59,640/-, since the AR’s Office has received confirmation about payment of the same and the Appellant is not contesting the same, no Appeal lies from the Appellant’s side on this count. However, they are required to pay the interest on this amount.
Clearances of exempted goods in DTA, they have paid 10% amount - HELD THAT:- This fact has been verified by the Revenue and the Jurisdictional Authorities have confirmed that this is correct. Therefore, once the Appellant pays the 10% amount on the clearance of exempted goods, the demand of Rs.74,64,464/- would amount to once again demanding reversal of the Cenvat credit which is legally not permissible. Therefore, Appeal allowed to the extent that the confirmed demand of Rs.74,64,464/- is set aside.
Penalties - HELD THAT:- Since the issues involved are that of interpretation and almost the entire duty demands have been dropped at the first stage itself and even the balance confirmed demand is being set aside now, the penalties are set aside.
Appeal disposed off.
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