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Central Excise - Case Laws
Showing 381 to 400 of 1430 Records
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2023 (10) TMI 421
Valuation - adoption of independent third party factory gate price for making the payment of Excise Duty when the goods are cleared to their depots - HELD THAT:- The identical issue was before this Tribunal in respect of the same Appellant, wherein the demand was issued for the period April 1991 to September 1995. There is nothing to suggest that the practice adopted by them during April 1991 to September 1995 was different from the practice adopted by them during the present period of dispute i.e., April 1994 to September 1996. Even the Revenue has not come out with any counter argument on this count.
The procedure adopted by the Appellant right through April 1991 to September 1996 remained the same for the value adopted by them for clearances to their depots which is based on the factory gate sales done by them for which they have produced the documentary evidence before the Lower Authorities. The procedure for the discounts being given at depots remained same as per the earlier period. The earlier Final Order of this Bench dated 09.05.2022 [2022 (5) TMI 1244 - CESTAT HYDERABAD] has already gone into considerable depth and has allowed the Appeal filed by the present Appellant and dismissed the Appeal filed by the Revenue. There is nothing on record to show that this Final Order of this Bench was taken up further by the Revenue before the Hon’ble Supreme Court nor is there anything to suggest that this Order has been stayed by the Apex Court - thus, conclusion arrived at by this Bench vide Final Order dated 09.05.2022 is squarely applicable.
Appeal allowed.
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2023 (10) TMI 385
Reversal of CENVAT Credit - inputs used in the manufacture/body building of vehicles on duty paid chassis supplied by NEKRTC, BMTC - benefit of Notification No. 6/2006- CE dated 01/03/2006 Sl. No. 139(i).
HELD THAT:- From the records, it is found that even though these documents have been submitted before the authorities below, however, no cognizance has been taken nor any finding on the same recorded to ascertain the claim of the appellant on facts as to whether separate accounts were maintained in availing credit on inputs used by the appellant in fabrication of vehicles cleared to M/s. Ashok Leyland and NEKRTC relating to 55 vehicles. Therefore, it remained to be examined whether in fact the appellants have availed cenvat credit on inputs used in or in relation to the manufacture of 55 vehicles as alleged in the notice or their claim of non-availment is correct.
There are force in the contention of the learned Advocate for the appellant that even though the audit team has recorded an observation that the appellant had availed cenvat credit on inputs used in the manufacture of 55 vehicles cleared to NEKRTC and others but details have not been furnished to the appellant substantiating the said objection.
It is prudent to remand the matter to the adjudicating authority to ascertain the fact in the light of the Annexure H & I submitted by the appellant in support of their claim that separate accounts were maintained for the inputs used in connection with bodybuilding activity carried out for M/s. Ashok Leyland and inputs used in the manufacture of 55 vehicles in question, where no cenvat credit availed - Appeal allowed by way of remand.
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2023 (10) TMI 384
Clandestine production and removal - excesses and shortages in stock - entire case is based on the records maintained by the appellant - invocation of principle of administrative inconvenience - HELD THAT:- The observations made in the impugned order to effect that the appellants were not maintaining the record is contrary as the entire case of the department is based on the Book Balance in the book of accounts and physical stock found at the time of visit. Further department itself has resumed these documents as seen by the Annexure attached - Thus the decisions relied upon by the Commissioner (Appeal) in ISATYABRAT SWAIN, M/S. SURYA POLYPACK PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE MEERUT I [2014 (10) TMI 559 - CESTAT NEW DELHI (LB)] for invoking the concept of administrative inconvenience etc., would not apply to the present case, where it was held that Similarly, in the case of INDIAN ALUMINIUM COMPANY LTD. VERSUS THANE MUNICIPAL CORPORATION [1991 (9) TMI 162 - SUPREME COURT] it was observed that non-observance of even a procedural condition not to be condoned if likely to facilitate commission of fraud and introduce administrative inconveniences. Admittedly, if the condition is so important that non-observance of the same may result in fraudulent activity, such condition cannot held to be an empty formality.
In any case when the entire case is based on the records maintained by the appellant, there are no justification in such observations which have been reproduced by the Commissioner (Appeal) in routine and stereotype manner without even examining even the panchnama.
The quantum of excess and shortages determined by the exercise of stock taking is negligible in all cases except for the scrap. The stock taking errors and the weighing scale errors etc could have accounted for the shortages and excesses. The decision relied upon in the impugned order, the will not support the case of department without any explicit and conclusive evidence in respect of the clandestine clearance being alleged. Further the goods which were still in the factory premises of the appellant have not been cleared. Hence there cannot be any charge of clandestine clearance made against the appellant in respect of these goods. Officers could have asked the appellants to rectify their book balance and got them tallied with the physical stock determined by them. Similar view has been expressed in case of KOCH RAJES CD. INDUSTRIES PVT. LTD. VERSUS COMMISSIONER OF C. EX., MUMBAI-IV [2005 (7) TMI 248 - CESTAT, MUMBAI].
Demand made in respect of shortages which are in range from 0.3 kgs to 23.60 kgs cannot be justified, without any evidence of any clandestine clearance or without any investigation also being made in this respect.
There are no merits in the impugned order, which in any case is completely vague as having failed to consider any of the issues that are involved in the matter and has gone on only to invoke the principle of “administrative inconvenience”, without even establishing the relevance of the same.
Appeal allowed.
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2023 (10) TMI 351
Refund claim - unspent amount lying in the current account (PLA) of an assessee - amount is merely an advance amount for payment of excise duty or is actually or shall be deemed to be “Excise Duty” for the purpose of claim of refund - HELD THAT:- As is evident from bare reading of Section 3 of CEA, in particular sub-section 1 thereof, duty of excise is leviable on all excisable goods which are produced or manufactured in India in the manner prescribed and at the rates set forth in Fourth Schedule. It is, thus, crystal clear that event of levy and collection of duty of excise is the production and manufacture of the excisable goods though, as prescribed, the duty is actually paid by the manufacturer at the stage of removal of excisable goods from the manufacturing unit or production house as the case may be.
The amount credited into the current account (PLA) by an assessee is, in a way, prospective excise duty to be utilized by the assessee at the stage of removal of excisable goods from his manufacturing unit from time to time.
From careful perusal of sub-Section 2 along with proviso thereof, it clearly comes out that the refund of duty of excise claimed by an assessee may be credited to the welfare fund except when such refund is relatable inter alia to unspent advance deposits lying in balance in applicant’s current account maintained with the Principal Commissioner of Central Excise or Commissioner of Central Excise - The term “unspent advance deposit” would mean, “unspent advance deposit of excise duty” refund whereof can be claimed by an assessee under Section 11B read with Rule 173G. Such refund in terms of proviso to Section 11B (2) is required to be made by tendering payment directly to the applicant-assessee.
Hon’ble Supreme Court in the case of Modipon [2017 (11) TMI 1429 - SUPREME COURT] answered the question in the context of provisions of Section 43-B of the Income Tax Act, nonetheless, what was held qua the amount lying in PLA is binding here - From the judgment of Supreme Court, it is now beyond any pale of discussion or debate that the amount credited by the asseessee in the account current is “duty of excise” paid in advance in respect of excisable goods manufactured to be paid by debit to such account at the stage of actual removal of excisable goods from the manufacturing unit.
Once it is held that the unspent amount in “PLA” is duty of excise, a fortiori Section 11B and Section 11BB would be attracted. If the refund claimed on account of unspent amount in PLA is not paid within three months, it shall become payable with interest till it is actually paid.
The respondents to pay to the petitioner interest at the rate of 6% per annum from the date of application till the order of refund within a period of two months from today - Petition allowed.
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2023 (10) TMI 350
Classification of goods - combipack which contains the EMD and MRR - to be classified under the Heading 85167920 of CETA 1985 or not - penalty u/r 25 of CER - HELD THAT:- The issue has been considered by the Tribunal in the case of KARAMCHAND APPLIANCES PVT. LTD. VERSUS COMMR. OF C. EX., CHANDIGARH [2013 (4) TMI 79 - CESTAT, NEW DELHI]. The Tribunal in the said case observed that the essential character of the combi pack is that of MRR and not EMD - The Tribunal thus held that the product is classifiable under 3808.10.
By judicial discipline, following the above decision of the Tribunal and hold that the goods viz. the combipack consisting of EMD & MRR are classifiable under 38089191 as determined by the department. The issue on merits is answered in favour of the Revenue and against the assessee.
Levy of penalty u/r 25 of Central Excise Rules, 2002 - HELD THAT:- The first Show cause notice has been issued invoking the extended period of limitation alleging suppression of facts with an intent to evade payment of duty. The adjudicating authority has rendered a finding that the issue was contentious and there were divergent views prevailing during the relevant time - the demand was thus restricted to normal period. In the absence of any malafide intention, penalty cannot be imposed under Rule 25 of Central Excise Rules, 2002 also. The said rule states that only when there is non-payment of duty with an intent to evade payment of duty, the penalty can be imposed.
The findings recorded by the original authority itself shows that there was no intention to evade payment of duty and therefore the penalty imposed under Rule 25 of Central ExciseRules 2002 is not justified and requires to be set aside - the impugned order is modified to the extent of setting aside the penalty of Rs.5,00,000/- lakhs imposed under Rule 25 of Central Excise Rules, 2002. The demand confirmed along with interest is sustained.
Appeal allowed in part.
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2023 (10) TMI 349
Recovery of Central Excise duty alongwith interest and penalty - attribution of the impugned ‘taxable services’ in production of ‘rectified spirit’ and of ‘kraft paper’ along with manufacture of ‘sugar’, ‘molasses’ and ‘denatured spirit’ that are cleared on payment of duty - availability of option other than the one resorted to by the adjudicating authority - HELD THAT:- The coverage of partial, and conditional exemption, as a bar to retention of credit, in terms of rule 6 of CENVAT Credit Rules, 2004 is no longer res integra.
The Tribunal in M/S. SHARDLOW INDIA LTD. VERSUS CCE, CHENNAI–II [2017 (8) TMI 1162 - CESTAT CHENNAI] has held that In similar case, where the goods were cleared to M/s. Space Centre and M/s. Baba Atomic Research Centre in the case of COMMISSIONER OF CENTRAL EXCISE, THIRUNELVELI VERSUS DCW LTD. [2008 (10) TMI 380 - MADRAS HIGH COURT], the jurisdictional High Court has considered that the said goods cannot fall under the category of exempted goods as provided in Rule 57CC(1) of the erstwhile Central Excise Act, 1944.
In M/S. MERCEDES BENZ INDIA (P) LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [2015 (8) TMI 24 - CESTAT MUMBAI], the Tribunal held that we do not understand that when the appellant have categorically by way of their intimation opted for option provided under sub-rule (3)(ii), how Revenue can insist that option (3)(i) under Rule 6 should be followed by the assessee.
Thus, it is not in doubt that any of the options may be chosen by the assessee - the recovery under rule 14 of CENVAT Credit Rules, 2004 restricted to such amount as is computed by the appellant herein.
There is no reason to sustain the penalty imposed under section 11AC of Central Excise Act, 1944 as there is no allegation of evasion of duty otherwise payable on account of non-availability of sufficient credit on clearance of dutiable goods - the impugned order is modified to limit recovery by any method then available under rule 6 of CENVAT Credit Rules, 2004 to be exercised by the appellant herein within 30 days of receipt of this order and to the extent of tax attributable to ‘input service’ used in manufacture of ‘rectified spirit’ during the relevant period.
Appeal disposed off.
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2023 (10) TMI 348
Fraudulent availment Cenvat credit without receipt of inputs - entire case is based mainly on the statements of various persons - request for cross-examination of those witnesses were not considered properly by the Adjudicating Authority - Violation of principles of natural justice - HELD THAT:- From Section 9D of Central Excise Act, 1944, it is seen that it is not a choice of the Adjudicating Authority whether to grant cross-examination or otherwise. It is mandate of the statute that the witnesses have to be examined before their statements are relied upon against the assessee in any case. Therefore the Adjudicating Authority must grant cross-examination of the witnesses before passing fresh order.
The impugned order set aside - appeal allowed by way of remand to the Commissioner for passing a fresh order that too preferably within a period of four months from the date of this order.
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2023 (10) TMI 347
Refund of pre-deposit alongwith interest and penalty - part amount rejected - amount covered under section 35F of CEA or not - HELD THAT:- The issue with respect to the amount deposited as interest during investigation stands clarified by the Department’s own Circular No. 111/05/2009 dated 24.02.2009 wherein it has been clarified that the tax and interest collected without authority of law has to be refunded where the tax which no longer remain the tax cannot continue to retain the character of interest.
This Tribunal Bangalore Bench in the case of G Tech Computer Education (supra) has relied upon the decision of High Court of Kerala in the case of THE COMMISSIONER OF CUSTOMS VERSUS M/S. SHREE SIMANDAR ENTERPRISES, [2012 (8) TMI 176 - KERALA HIGH COURT] wherein the Hon’ble High Court has held that when an appellate authority allows an appeal filed against imposition of tax, duty, fine, penalty, etc., it is the bounden duty of the assessing authority, as part of a democratic Government, to refund the amounts covered by orders of the appellate authority, when appeals are allowed fully or partially.
The amount of Rs. 62,12,944/- since was deposited during the investigation of such a proposal which stands finally set aside by this Tribunal, the entire deposited amount was liable to be refunded to the appellant, the entire amount being have acquired the character of pre-deposit as is required to be paid under section 35F of Central Excise Act alongwith interest - Commissioner (Appeals) has rightly granted interest on the amount of Rs. 54,84,578/- however has wrongly rejected the balance claim by bifurcating the amount of Rs. 7,28,366/- as interest. The order to that extent is hereby set aside.
Appellant is held entitled for the refund of Rs. 7,28,366/- alongwith the interest at the rate of 12% from the date of the order of this Tribunal dated 08.10.2020 - Appeal allowed.
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2023 (10) TMI 316
Denial to clear the goods on provisional assessment basis under Rule 7 of the Central Excise Rules, 2002 - It was held by High Court J.K. TYRE & INDUSTRIES LIMITED, VERSUS UNION OF INDIA, ASSISTANT COMMISSIONER, CENTRAL EXCISE, UDAIPUR. [2017 (3) TMI 1931 - RAJASTHAN HIGH COURT] that Since none of the conditions mentioned above exist in the present case and there is an equally efficacious alternative and statutory remedy of appeal under Section 35 of the Central Excise Act available to the petitioner, we are not persuaded to exercise the jurisdiction under Article 226 of the Constitution of India in this case.
HELD THAT:- This Court is of the opinion that the impugned order does not call for interference. The appeal is accordingly dismissed.
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2023 (10) TMI 315
Method of Valuation of goods for finalization of the provisional assessments - cigarettes and Packaging Materials cleared for captive consumption - Revenue's contention is that while computing the cost of production it is not correct to exclude the unabsorbed overheads.
HELD THAT:- It is observed that whether unabsorbed overheads are includable in the cost of production or not is a legal principle that is to be decided by an expert. In this case, for the purpose of arriving at the cost of production, Cost Audit under Section 14 A of the Central Excise Act, 1944 by an independent Cost Accountant was ordered by the Chief Commissioner. In addition to this, the Chief Commissioner, Central Excise, Ranchi Zone, Patna has also constituted a special team to finalize the provisional assessment. On 14.11.07, the special team submitted their report. Though they were not professionally qualified to study the issue and submit a report, a sincere effort has been made to adopt the broad principles of CAS-4 to arrive at the cost of production. It was also observed by the special team that the cost incurred against the expenditure under “unabsorbed overheads” has not been considered while calculating the cost of production.
It is observed that when the Special team submitted their report and made an observation regarding non-inclusion of certain elements in cost of production as per CAS-4 principles, the Appellant submitted the clarifications/explanation wherein they categorically stated that the cost of production has been arrived at as per the principles adopted in CAS- 4 - There is nothing on record to Show that there were any deficiencies in the Report of the Special Audit Team. Neither the Authority who constituted the Special Audit Team nor the Reviewing Commissioner has expressed any lacunae in the Report. The Lower authority has gone by the Report and finalized the pending Provisional Assessments - the Deputy Commissioner has finalized the provisional assessments by adopting the principles of CAS-4 to arrive at the cost of production and the assessable value for the purpose of payment of duty has been correctly determined in the Order-in-Original dated 12.12.2007.
The method of valuation adopted by the adjudicating authority is as per the principles enshrined in CAS-4 and it does not warrant any intervention - Matter remanded for fresh adjudication for determining the valuation issue afresh - appeal allowed by way of remand.
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2023 (10) TMI 314
Method of calculation for availing CENVAT Credit - purchase of inputs from EOUs and availed full credit of CENVAT, as per the invoices - supplier EOUs did not avail the benefit of Notification No. 23/2003 dated 31.03.2003 - whether the method of calculation, for availing CENVAT Credit, adopted by the appellants, by taking into account the Tariff Rate of basic Customs Duty is correct? - extended period of limitation.
HELD THAT:- The learned Commissioner (appeals) observes that though the appellants have applied the formula given under Rule 3(7)(a) of the CENVAT Credit Rule, taking into account Tariff Rate of BCD is not correct; CENVAT Credit is to be calculated by taking into account the basic Customs duty leviable and charged. We find that the appellants rely upon Tribunal’s orders, by this bench in M/S SUN PHARMA LABORATORIES LTD VERSUS. CCE & ST, JAMMU & KASHMIR [2018 (12) TMI 1983 - CESTAT CHANDIGARH] and CESTAT Ahmedabad in SUN PHARMACEUTICAL INDUSTRIES LTD VERSUS C.C.E. & S.T. – SURAT-II [2023 (4) TMI 710 - CESTAT AHMEDABAD].
For the purpose of allowing the Cenvat credit, both the additional duties have to be taken into account and restricting the benefit to only one additional duty is not warranted under the strict interpretation principle of statutory interpretation. Further, CENVAT is as beneficial provision for reducing the cascading effect of taxation and if the object of CENVAT has to be subserved, the credit should be made available in respect of both the additional duty of customs. The economic rationale for the same has already been explained in the preceding paragraph.
The basic issue that is under dispute is as to whether the appellant requires to take credit of duty at the tariff rate or at the effective rate. The cases relied upon by the Department as well as the appellant are not exactly on the issue. In the case of Micropure Parental Pvt. Ltd. [2015 (10) TMI 1919 - CESTAT MUMBAI] , it was held that it is very clear that the term “BCD” in the second proviso implies the basic customs duty applicable on the goods by a normal importer from abroad. In the case of Venkateshwara Precision Components [2010 (8) TMI 243 - CESTAT, CHENNAI] , it was held that with effect from 01.03.2005, if the inputs were imported, the manufacture would be eligible for CENVAT credit of duties paid under Section 3(1) and Section 3(5) of the Customs Tariff Act, 1975; under the circumstances, there is no warrant to treat the terms “CVD” referred to in Rule 3(7) of the CENVAT Credit Rules as applicable only to additional duty leviable under Section 3(1) of the Customs Tariff Act; additional duty levied under Section 3(5) has also been made eligible for credit. In view of the factual position, it appears that the contention raised by the appellants is not discussed in the above cited cases. The answer to the issue raised in the impugned case is answered by the facts of the case alone and is not a legal issue to be decided.
Extended period of Limitation - HELD THAT:- The Department has not brought anything on record to substantiate the allegation of suppression etc. to enable invocation of extended period. Commissioner (Appeals) set aside the penalty and has also not given any specific findings on the invocation of the extended period. In the facts and circumstances of the case, the extended period cannot be invoked.
The appeal is allowed on limitation by holding that the impugned order is sustainable for the normal period.
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2023 (10) TMI 289
Clandestine removal of manufactured goods - Penalty - corroborative evidences - evidence of excess procurement of raw material, additional consumption of power and manpower needs to be adduced - Department has not established the production capacity of the appellant to support their allegation - HELD THAT:- The entire case started with the information received by the Central Excise authorities from the Income Tax Department regarding the unaccounted sales, purchase and production of goods in form of soft copies of the data of Tally and Visual Udyog Software, the scan copies of the lose papers and diaries seized by the income tax department and photocopies of the Panchnama and the statements recorded by the Income Tax authorities of persons namely Shri Shankarbhai Mehta, M.D., Shri Vikram Mehta Supervisor, Shri Sachin Shah working in dispatch sections of the accounts department & preparing the sales invoices and Shri Pravinchandra Shah. Further statements were recorded by the Central Excise authorities and on conclusion of the statements, a show-cause notice was issued to Appellant.
Department has not brought out any independent facts or evidence such as who is the buyers of clandestine removed goods, whether the transactions shown in the Tally Data and Visual Udyog Software data pertaining to actual removal of goods or otherwise and no corroborative evidence produced in support of details mentioned in the said data. In the present matter clandestine removal of a huge quantity of 92,352.04 MT. valued at Rs. 5,10,02,81,112/- in respect of clandestine manufacture and removal of goods involved. However not a single rupee of unaccounted cash was found during the search conducted by the Income-tax.
Sub-section (4) of Section 36B requires issue of a certificate in this behalf by a person occupying the responsible official position in relation to the operation of the relevant device or the management of the relevant activity (whichever is appropriate) shall be evidence in any matter stated in the certificate and for the purpose of the sub-section, which shall be sufficient for a matter to be stated to the best of the knowledge and the belief of the persons stating it - In the present case, firstly the Central Excise department has not taken the data from the computer, moreover revenue has not stated that how the income tax officers took the print out of data stored in the computer and hard disc. It is on records that the officers had not obtained any certificate as required under Section 36B of the said Act. It is also noted that none of the conditions under Section 36B(2) of the Act, 1944 was observed.
In the case of PREMIER INSTRUMENTS & CONTROLS LTD. VERSUS COMMR. OF C. EX., COIMBATORE [2004 (12) TMI 200 - CESTAT, CHENNAI], the Tribunal has held that the printout of the personal computer of the company’s officer, had not fulfilled the statutory condition laid down under Section 36B(2) of the Act and the demand is not sustainable.
In the present matter undisputedly the above prescribed certain guidelines were not followed by the Revenue during the investigation of impugned matter before accepting electronic documents as an admissible piece of evidence - Upon perusal of the judgment of the Hon’ble Supreme Court in the case of Anvar P.V. [2014 (9) TMI 1007 - SUPREME COURT], it is noted that the Apex Court has categorically laid down the law that unless the requirement of Section 65B of the Evidence Act is satisfied, such evidence cannot be admitted in any proceeding.
Section 36B of the Central Excise Act is pari materia to Section 65B of the Evidence Act. Consequently, the evidence in the form of computer printouts, etc., recovered during the course of investigation can be admitted as in the present proceedings only subject to the satisfaction of the condition of Section 36B - In the present case, the main evidence on which, Revenue has sought to establish the case of clandestine manufacture and removal of goods is in the form of the computer printouts taken out from the Computer and other electronic devices seized by the Income tax authorities and shared to the revenue in respect of which the requirement of Section 36B has not been satisfied.
It is observed that the allegation of suppression of production and clandestine removal is a serious allegation and it has to be established by the investigation by affirmative and cogent evidence. CESTAT in the case of SOBER PLASTICS PVT. LTD. VERSUS COMMISSIONER OF C. EX., JAIPUR [2001 (10) TMI 420 - CEGAT, NEW DELHI] has held that demand based on weighment slips, slips recovered from Dharamkanta etc. relied upon for raising demand not verified with reference to transactions is not sustainable. Further, it is settled position of law that proof and evidence of purchase of raw materials and sell of final product clandestinely is necessary in to establish the allegation of suppression of production and clandestine removal of goods and that the allegation are to be proved with affirmative evidences.
Since the investigation has failed to adduce evidences to establish suppression of production and clandestine removal of the goods and failed to discharge the onus to prove the allegations, the allegations are not sustainable - the allegation of clandestine removal of 92,352.04 MTs of finished goods is not established. Hence, the impugned demand of central excise duty is liable to be dropped for lack of evidences.
The charges of clandestine removal against M/s. Rajputana Stainless Ltd. are not sustainable - the impugned order is not sustainable - Appeal allowed.
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2023 (10) TMI 288
CENVAT Credit - inputs - Option to avail benefit of exemption and Cenvat Credit - Scope of Section 5A - N/N. 04/2006-CE under Sr. No. 91 which prescribes the concessional rate of duty of 4% with condition No. 11 - HELD THAT:- The exemption notification entries it is clear that both exemption entries carry conditions for allowing either nil rate of duty or 4 % of duty therefore there is no doubt that both the exemption entries are conditional. The contention of the Revenue is based on Section 5A (1A) which prescribes that in case of absolute exemption the asseessee has no option except to avail such exemption.
In the present case, both the exemption entries are subject to certain conditions therefore both the entries have absolute exemption. In this position it is an option to the appellant to choose any one of the exemption entries. Therefore, in the present case the appellant has chosen to avail the exemption under Sr No. 91 is absolutely legal and correct.
There is no doubt that the appellant has availed the exemption under Sr. No 91 correctly and legally - they are entitled for the cenvat credit under Cenvat Credit Rules, 2004.
Appeal is allowed.
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2023 (10) TMI 287
CENVAT Credit - input services used for setting up of plant and factory after 01.04.2011 - denial on the ground that input service used for setting up of plant/factory is not entitled in terms of Rule 2(l) of the Cenvat Credit Rules, 2004.
HELD THAT:- The said issue has been dealt by this Tribunal in the case of Aditya Aluminium [2023 (9) TMI 55 - CESTAT KOLKATA] , wherein this Tribunal has observed that the subject input services have a direct nexus with the manufacture of finished goods in the ‘means’ clause of the definition of input services. Accordingly we hold that even if the word ‘setting up of a factory’ has been specifically excluded from the definition w.e.f.01.04.2011, such services are covered within the ambit of main clause of the definition. Hence, it would still qualify as an input service as per Rule 1(I) of CCR, 2004.
As the issue has already been decided and no more res integra, therefore, the input service namely erection, commissioning and installation for setting up of new plant have a direct nexus with the manufacturing activity of the appellant, therefore, the said service duly qualifies as input service in terms of Rule 2(l) of Cenvat Credit Rules, 2004, therefore, the appellant is entitled to take cenvat credit on the services in question for setting up of plant even after amendment w.e.f. 01.04.2011.
There are no merit in the impugned order, the same is set aside - appeal allowed.
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2023 (10) TMI 224
Valuation of excise duty - manufacture of Sorbitol Liquid Glucose - excess freight collected as compared to the actual freight paid to the transporters should be included in the assessable value or not - HELD THAT:- On the identical issue, in the same set of facts, in the appellant’s own case, this Tribunal in KASHYAP SWEETNERS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, VAPI AND JITENDRA PANDEY VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, VAPI [2023 (7) TMI 1111 - CESTAT AHMEDABAD] held that excess amount of freight collected from the customers is profit on account of transportation and not part and parcel of the value of the goods and thereby not included in the assessable value.
In view of the above decision in the appellant’s own case only for the different period, there being identical issue involved in the present case, the issue is no longer res-integra accordingly, the demand and penalties are not sustainable.
Appeal allowed.
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2023 (10) TMI 223
Clandestine Removal - Availment of credit of countervailing duty paid by the respondents - inputs were actually not received by the respondents in their factories - the receipt and consumption of the same are wrongly shown in the manufacture of the final product, which was cleared on payment of duty - said imported inputs stand diverted by the respondents in the open market around Delhi - reliance placed in the third party evidences - Corroborative evidences or not - HELD THAT:- The Revenue could not bring any corroborative evidence that the disputed imported goods were diverted to any other place. It is not the Revenue‘s case that respondents‘ production of final product is not proportionate to the receipt of the imported inputs. The Revenue has also not shown that if the respondents have not received the imported inputs, where the same have gone. In the absence of any evidence to show the disposal of such imported inputs to any other person, the denial of credit merely on the RTO check post reports and transporter records is not justified.
In the present matter incorrect vehicles numbers were recorded on the transportation documents and on that basis revenue alleged that said vehicles are not transport vehicles / incapable of carrying the consignments. In this regard, merely because wrong vehicle number mentioned on the duty paying documents that itself does not prove that the goods have not been transported. It has been observed in various cases that it is common that the wrong vehicles number is mentioned in the documents due to clerical error or due to wrong presentation of vehicle number by the truck drivers.
In the case of M/s. Steel Tubes of India Limited v. CCE, Indore [2008 (4) TMI 713 - CESTAT NEW DELHI] , it was held that merely because vehicle numbers mentioned in some of the invoices are not of transport vehicles, the same is not sufficient to deny the credit when there is evidence of receipt and utilization of inputs and no evidence of diversion is available.
It is found that though the reports from the transport or commercial department check posts states that the goods did not cross the border posts, but for this reason, it cannot be concluded that the goods did not pass through the transit state - In the facts of the present case, Check Posts report cannot be sole basis for denial of Cenvat credit. The entire transactions were duly recorded in statutory records of the respondents - there are no reason or tangible evidence to say that inputs in question were not received by the respondents.
In the whole matter department has relied upon third party records and statements. The Cenvat demand alleging fraudulent availment of Cenvat credit on strength of Bills of entry without receiving imported inputs cannot be sustainable solely based on statements of third party and their records. So long Shri Keshav Singh Tomar, Branch Manager of the transport TASH in his statement admitted that they had transported the goods from UP Border office for Respondents at Daman; the goods were received from ICD Tughlakabad under sealed containers through M/s D.V. Bhaskhi and M/s J.M. Baxi who were Customs House Agents - in the present case the reliance of third party documents /statements while conforming demand against present respondents are also observed to be unjustified and unreasonable. It is settled principle of law that in case, if the Revenue wants to rely upon the entries of the third party, the burden lies upon the Revenue Authority to prove the genuineness and authenticity of the said entry and to connect the said entry with the respondents, in case, if the respondents deny to have any connection with such entry. Therefore the charge of non receipt of non receipt of input is not maintainable only on the basis of third party records and data. It is necessary to check the evidentiary value of the third party evidence.
The Cenvat demand is solely based upon the statement of third parties and the assumed interpretation of the same is not sustainable. The charge against the respondents are required to be arrived at on the basis of positive and tangible evidences including the evidences relating to procurement of raw-materials, conversion of the same to final products, clearances of the same and identification of the buyers and receipt of unaccounted cash etc. - The Revenue has miserably failed to produce corroborative evidence on records so as to substantiate the charges of non- receipts of imported goods and substitution of the same with kabadi scrap and availment of the wrong Cenvat Credit.
Since the investigation has failed to adduce any corroborative evidences to establish clandestine removal of the goods and failed to discharge the onus to prove the allegations, the allegations are not sustainable - the allegation of clandestine removal of finished goods is not established - Reliance can be placed in COMMR. OF C. EX., COIMBATORE VERSUS SANGAMITRA COTTON MILLS (P) LTD. [2003 (11) TMI 146 - CESTAT, CHENNAI] and VAKHARIA TRADERS VERSUS COMMISSIONER OF CENTRAL EXCISE, SURAT-I [2004 (4) TMI 413 - CESTAT, MUMBAI].
The learned Commissioner as regard the disputed matter has very consciously considered the facts of the case, allegation of the Revenue and evidences on records and came to the conclusion that the allegation of clandestine removal of the goods and non receipt of inputs, on which credit was availed, are not established by the Revenue. Hence he rightly dropped the proceedings of the show cause notice.
There is no infirmity in the order of the learned Commissioner and the same does not require any interference. Therefore the impugned order is upheld.
Appeal of Revenue dismissed.
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2023 (10) TMI 222
Bar on utilization of CENVAT credit - Liability to pay duty during the default period i.e. from 01.01.2012 to 31.03.2012 from cash without utilizing the cenvat credit - Rule 8(3A) of Central Excise Rules, 2002 - HELD THAT:- In case of Indsur Global Ltd. [2014 (12) TMI 585 - GUJARAT HIGH COURT], the Hon’ble Gujarat High Court held the provision of Rule 8(3A) as ultravirus. The consequential effect of the said judgment is that the assessee is allowed to pay the excise duty by utilizing the cenvat credit during the default period also. Following the said Hon’ble High Court judgment, this Tribunal has passed various judgments in favour of the assessee.
Considering this settled legal position which is in favour of the appellant, the impugned order is not sustainable - Appeal allowed.
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2023 (10) TMI 221
Valuation of goods - manufacture of N-Methyl Pyrrolidone on Job-work basis - collection of certain amount towards Toll Charges or Conversion Charges, Trial Run Charges and Utility Charges from their principal M/s AACL - to be included in the manufacturing cost or not - HELD THAT:- There is no dispute that irrespective of any value of Job-work goods considering it as not a sale, the appellant have paid the excise duty on the same transaction value, at which the principal manufacturer has sold the goods to unrelated person - From the invoices, it can be seen that the Job-worker’s invoice reference was given in the sale invoice of the principal manufacturer and it is observed that in both the invoices the assessable value is the same transaction value, at which the goods were sold by the principal manufacturer.
From the Rule 10A(i), it is clear that in respect of Job-work goods, when the same is sold by the principal manufacturer, the transaction value of the said goods sold by the principal manufacturer shall be adopted by the Job-worker for payment of Excise Duty.
In view of the clear provision for valuation of Job-work goods, as provided in the above Rule 10A(i), there is no reason to add any other element in the transaction value - the demand in the present case is completely illegal and incorrect and without support of any law.
The impugned order set aside - appeal allowed.
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2023 (10) TMI 168
Precedent decision - Learned Additional Solicitor General appearing for the appellant submitted that the observations of the Tribunal in paragraph 12 of the impugned final order M/S BIRLA CORPORATION LIMITED VERSUS COMMISSIONER, CGST & CENTRAL EXCISE, JABALPUR (M.P.) [2023 (3) TMI 1067 - CESTAT NEW DELHI] would become a precedent in subsequent cases as those observations are general in nature and, therefore, would be followed by the Tribunal in other cases.
HELD THAT:- The said contention of learned ASG cannot be agreed for the simple reason that those observations have been made in the context of what has been stated by the Tribunal in paragraph 13 of the impugned final order wherein details of as many as five audits for the relevant periods have been noted by the Tribunal and, therefore, in the facts and circumstances of the said case, the Tribunal held that the Department could not have the benefit of the extended period of limitation.
Appeal dismissed.
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2023 (10) TMI 167
100% EOU - Import of Cotton contained in Cotton Waste which is subsequently cleared at NIL rate of duty - Fulfilment of conditions of Exemption Notification No. 23/03-CE dated 31.03.2003 or not - benefit of N/N. 53/97 dated 03.06.1997 & Notification No. 52/03- Cus dated 31.03.2003.
HELD THAT:- It is not in dispute that the assessee’s unit is an export-oriented unit (EOU) since the year 1997, hence, being entitled to the benefits as conferred under the EXIM policy. It also appears to be not in dispute that the assessee was clearing cotton waste which was generated from the process of manufacturing of cotton yarn. Thus cotton waste was not the product for which the LOP was granted. Such cotton waste was excisable and the rate of duty specified for cotton waste being Nil, also appears to be not in dispute. Even otherwise, in respect of cotton waste generated in a 100% export-oriented unit, the rate of duty was Nil as specified in Notification No. 23/2003 dated 31 March, 2003 being General Exemption No. 32 - Also cotton waste being excisable was classified under Heading no. 52.02 under Chapter 52 of the Central Excise Tariff Act 2001-2002 at Nil Page 12 of 17 rate of duty. It thus appears that on clear application of Notification No. 23/2003-CE dated 31 March, 2003 as also Notification No. 52/2003-Cus dated 31 March, 2003, the cotton waste as generated in the assessee’s unit and as cleared in the domestic tariff area, although excisable fell under the category of Nil duty.
The CESTAT was thus correct in observing that when a manufacturer sets out to produce waste which is only incidentally generated in the process of manufacture of finished goods, the law would regard such waste as excisable goods, however, being exempted by application of notifications as discussed above, which permitted clearance into the domestic tariff area by adhering to the prescribed procedure - Once the notification(s) as discussed hereinabove provided Nil rate of duty in respect of such goods incidentally produced or manufactured by 100% export oriented unit and allowed it to be sold in the domestic tariff area, no duty could be leviable thereon. Even otherwise not only the notification provided for exemptions but also the provisions of the Customs Tariffs Act provided for Nil duty.
It is agreed that the observations of the Tribunal that the decision of the Supreme Court in Collector of Central Excise vs. M/s. Dhiren Chemicals Industries [2001 (12) TMI 3 - SUPREME COURT]] would not apply to the present case. In any event, M/s. Dhiren Chemicals Industries was not a case which pertained to an export oriented unit. Such decision as rendered by the Constitution Bench of the Supreme Court had arisen in view of the conflict between the view taken in the decision of Collector of Central Excise, Patna vs. Usha Martin Industries [1997 (8) TMI 77 - SUPREME COURT] and the decision in Motiram Tolaram & Anr. vs. Union of India & Anr. [1999 (8) TMI 68 - SUPREME COURT]. The Constitution Bench resolved the conflict by holding that the conclusion reached in Usha Martin Industries (supra) that the exemption notification had imposed a condition on the export product should contain the raw materials on which an appropriate amount of duty of excise has already been paid, was not a correct view.
The Tribunal in the case of Winsome Yarns Ltd. [2000 (10) TMI 406 - CEGAT, NEW DELHI] in similar circumstances, had held that when the exemption notification provide Nil rate of duty and as such no duty was payable by the appellant therein on the cotton waste falling under heading 52.02 of the Central Excise Tariff Act. It appears that the said decision has been accepted by the Department as there is no material placed on record that the said decision of the Tribunal was assailed much less reversed.
The appeal does not involve any substantial question of law - Appeal dismissed.
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