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Central Excise - Case Laws
Showing 41 to 60 of 1430 Records
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2023 (12) TMI 950
Clandestine removal - paints and varnishes - manufacture of goods bearing the brand names “REAL” and “NICE” of another person - ineligible to grant SSI exemption - suppression of facts - extended period of limitation - HELD THAT:- Apparently and admittedly there is no retraction to the admissions that appellants were engaged in clearances/sale of manufactured goods without proper invoices. The fact of having any assignment deed to have been executed in November 2010 was not brought to the notice of the investigation team at the time of search on 13.09.2011. The said assignment deed bears notarization of 24.11.2011 (as recorded by Commissioner (Appeals) in Para 9 of the order under challenge) i.e. the date after the searches were conducted in the appellant’s premises. Thus there are no infirmity in the order of the adjudicating authorities below when the said assignment deed as is stated to have been executed in favour of M/s. Real Industrial Coating (Appellant No. 1) to be an afterthought.
The department has been meticulous in checking the records about brand names/trade marks from the portal for the purpose as is maintained by Ministry of Commerce and Industry, Department of Industrial Policy and Promotion, Controller-General of Patent Designs and Trade Mark as recorded in Para 11 of the order under challenge. It is on record that during the period of investigation also the portal was still recording Shri Gulshan Kumar Matta as the brand owner instead of Shri Rambaksh Matta of M/s. Real Industrial Coating - there are no infirmity with the findings of authorities below that the brands ‘REAL’ and ‘NICE’ were the brands of a different person/third party than the manufacturer in the present case i.e. M/s. Real Industrial Coating was not the owner of these brands - the said exemption has rightly been denied to the appellants.
It is also observed that all the appellants herein while being examined during the investigation have admitted that the goods in question were cleared without the cover of proper invoices. 40% of the goods thereof were sold and purchased on kacchi parchis. The said kacchi parchis were recovered from all the premises as were searched during investigation and were taken on record as relied upon documents. Those documents are held to be the sufficient corroboration to the said admission of the appellants which apparently has never been retracted - The appellants have failed to produce any document which may corroborate the authenticity of the assignment deed of 27.11.2010. No evidence is produced to falsify the website extracts - there are no reason to differ when these admissions have been accepted as the sufficient proof of appellants’ alleged guilt - In the light of the said admission the present becomes a case of suppression of fact, fraud and collusion. Hence, the department has rightly invoked the extended five years period of limitation.
The show cause notice is dated 09.07.2015. The period of limitation (2 or 5 years, as the case may be) has to reckon from the relevant date, as is apparent from Section 11A(1)(a) and Section 11A(4) of Central Excise Act. As per Section 11A(3) of Central Excise Act, the period for issuing show cause notice shall be computed from the date of receipt of information to Central Excise Officer, about payment of duty, in writing, which shall be the date of filing returns - there are no reason to differ from the findings of the adjudicating authorities below that the show cause notice is issued prior the relevant date for the said period. Hence, the order to that extent is also sustainable.
The order under challenge is held sustainable - Appeal dismissed.
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2023 (12) TMI 949
Wrongful re-credit of CENVAT credit while availing the exemption under the Notification No.56/2002 - recovery of erroneous refund - levy of penalty.
It is the case of the Revenue that learned Commissioner has erred in as much as he did not impose penalty equivalent to the duty evaded in terms of Section 11AC.
HELD THAT:- Whereas the Commissioner has confirmed the demand of wrongfully availed credit of Rs.1,05,61,543/- under Section 11A and imposed penalty of Rs.20,39,919/-. Reasoning given by Commissioner was that the time under which the issue was under Stay can be excluded. We are of the opinion that Section 11AC does not provide for any such exclusion. Penalty under Section 11AC is related to the amount of duty evaded. Learned Commissioner could not have upheld the invocation of Section 11AC and imposed reduced penalty. The wordings of the Section 11AC are clear and therefore, there is no scope for any doubt in this regard.
The penalty is required to be imposed equal to the duty evaded or credit wrongfully availed or duty erroneously refunded.
The impugned order is modified to the extent of increasing the penalty imposed under Section 11AC from Rs.20,39,919/- to Rs.1,05,61,543/-. The appeal is, accordingly, allowed.
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2023 (12) TMI 902
Appropriate forum for determination of taxability or excisability of goods for the purposes of assessment - Supreme Court or High Court - Classification of services - intermediary services or not - Rule 2(f) of the Place of Provision of Service Rules, 2012 - HELD THAT:- Reliance has been placed upon the judgment of the Division Bench of the Delhi High Court in Commissioner of Income Tax, New Delhi vs. Menon Associates, [2014 (11) TMI 970 - DELHI HIGH COURT] wherein, a similar issue was considered regarding the concurrent appellate jurisdictions of the High Court and the Supreme Court. The discussion was, thus, made whether the appeal was maintainable before the Delhi High Court and after recording a finding that the issue was that whether service tax was payable and whether the service rendered was “export” and no service tax was payable, the appeal was directed to be returned back to take appropriate steps as per law.
Faced with this situation, counsels for the Revenue also could not point out any judgment to the contrary.
The appeal is not maintainable and the same is dismissed.
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2023 (12) TMI 901
Process amounting to manufacture or not - Availment of CENVAT Credit - Countervailing Duty (CVD) and additional Special Excise Duty paid on the imported Flux cored wires - availment of credit of these duties which were then utilised while paying duty on removal of finished goods - activity carried out on the imported Flux Cored Wire, did not amount to manufacture - violation of Rule 3 of CENVAT Credit Rules, 2004 - Extended period of limitation.
HELD THAT:- The case of the department against the Assessee was that the activity carried out by them did not amount to manufacture inasmuch as the flux cored wire remains flux cored wire only. In short, the process of drawing has not been disputed in the SCN. Issue of whether an activity or process amounts to manufacture has been discussed time and again by various courts including the Hon’ble Supreme Court. It is a settled law that for any process to be considered as manufacture it must satisfy the test given under Section 2 (f) of Central Excise Act, 1944 - While 2(f)(i) provides that any activity incidental or ancillary to the completion of a manufactured product will be treated as Manufacture, sub clause (ii) of Section 2 (f) of the CEA, 1944, is a deeming fiction as per which any activity specified in relation to any goods in the Section or Chapter notes of the Fourth Schedule as amounting to manufacture will be deemed to be treated as manufacture.
The activity of drawing or re-drawing a rod, wire or any other similar article into wire amounts to manufacture. In the present case as reproduced by us above, semi-finished flux cored wire in case of 400-700mm is passed through vertical killing rollers to achieve the shape and dimension of the coil having desired cast range between 800-1000mm. The said wire is thereafter layered to meet the Indian requirements post which the same are packed. Even going by the language of show cause notice, the department has not disputed that the activity of drawing/re-drawing of wire was carried out by the Appellant. Given the same we have no hesitation in holding that keeping in mind Note 10 to Section XV, the activity carried out by the Appellant amounts to manufacture.
The aforesaid activity/process is undertaken by the Appellant as proper cast, helix and layering are important for weld accuracy and improper wire cast and helix reduces weld quality and adds to direct labour and factory overhead costs. The said process independently also enhances the performance of the Final product manufactured by the Appellant and therefore even if it is assumed that the allegation made by the department that the input in its imported form is a fully manufactured product is accepted to be true, even then the process undertaken by the Appellant on the imported goods being incidental to the completion of the manufactured goods and would amount to manufacture in terms of Section 2(f)(i) of the CEA, 1944. The process carried out by the Appellant enhances the performance of the product as has been clarified by Mr. Balasubramanium. The Adjudicating authority has completely misunderstood the reliance placed by the Appellant on the said opinion and has wrongly displaced the same on the ground that the same has no bearing on facts of the present case.
There are merits in the submissions of the Appellant that the activity carried out by them is important to make the product marketable and the same can be treated as an activity which is incidental or ancillary to the completion of manufactured product. In view of the above, the process undertaken by the Appellant will prima facie amount to Manufacture under clause (i) of Section 2(f) of the Central Excise Act.
Whether it was open for the adjudicating authority to introduce a new document after the issuance of SCN and first stage of remand? - HELD THAT:- In the first round of litigation, vide order dated 02.04.2019 the case was remanded back for fresh adjudicating by this Tribunal with a specific direction that the vital argument on applicability of Note 10 to Section XV of CETA has not been considered - The Respondent in compliance with the directions of this Hon’ble Tribunal listed the matter for fresh hearing. However, we note the Respondent instead of deciding the matter basis the documents placed before him, has relied solely upon Panchnama dated 05.06.2020 wherein statement of Mr Shinde was recorded who stated that no process as mentioned by the Appellant of drawing was carried out in their factory premises.
The said Action on the part of the Respondent is clearly beyond the scope of remand order and cannot be upheld. It appears to us, that on finding that the SCN is issued contrary to Note 10 to Section XV, the Respondent decided to change the narrative of the allegations by introducing a new document in the form of Panchnama much after the close of Investigation and even after the first round of Litigation had concluded. In the said Panchnama the department has made out a totally new case i.e. no process was carried out in the factory of the Appellant and to prove the same statement of Mr. Shinde has been relied upon who admittedly started working as Plant Head with the Appellant organisation much after the period of dispute viz. 20.05.2018. The said action of introducing a new document and changing the case post issuance of the SCN cannot be permitted on more than one count - The impugned order on the other hand relies upon the Panchnama which was drawn after the first round of litigation. The said document to start with could not have been relied upon. If the department is permitted to improve upon or change its case after issuance of a show cause notice, the same will lead to every matter getting into an endless litigation loop. The same can never be the intention of the legislature.
There are merits in the submission of the Appellant that the department has tried to circumvent the provisions of Section 11A which permits issuance of show cause notice for a maximum period of 5 years from the date of issuance of Notice in case of fraud suppression or wilful mis-statement. Show cause notice dated 08.05.2017 was issued demanding cenvat credit for the period 2012-2017 by invoking extended period of limitation of 5 years. The Respondent by placing reliance on the Panchnama dated 05.06.2020 has totally introduced a new case and if the said document is admitted as evidence the period for which demand was sought to be confirmed will go much beyond the statutory period of 5 years - the Respondent had no jurisdiction to change the case made out in original show cause notice by introducing a new document post issuance of the same.
Extended period of limitation - HELD THAT:- There was no dispute raised on availment of credit on imported inputs as the main activity did not amount to manufacture. The same shows that all facts were well within the knowledge of the revenue and therefore question of invoking extended period of limitation in the present case does not arise. Even the other two audit reports are dated 29.04.2013 and 10.04.2014 and the period for which audit was conducted overlaps with the period of dispute in the present case. Accordingly, the department cannot allege fraud and suppression in the present case as all facts were within their knowledge. Hon’ble Supreme Court in following cases have held that extended period cannot be invoked if facts were within the knowledge of the department.
The issue in the present case relates to Manufacture and the bonafides of the Appellant can be seen from their act of paying duty on the Final product - the demand of cenvat credit is not sustainable both on merits and limitations - Appeal allowed.
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2023 (12) TMI 900
100% EOU - refund of unutilized cenvat credit on input and input services - rejection of refund claim on the ground that it was filed beyond the time limit from the date of issue of Order-in-Appeal in accordance with Explanation B(ec) to Section 11B - HELD THAT:- Rule 5 for refund of cenvat credit under Cenvat Credit Rules, 2004 read with Notification No. 27/2012-CE (NT) dated 18.6.2012 clearly states that refund claim should be accompanied with the copies of the shipping bills which is the basis for claiming any refund under the said Rule. The Original Authority on verification, sanctioned refund claim only to the extent of claim being complete and rejected balance as it was not accompanied with the relevant shipping bills.
The basis for filing a refund claim under Rule 5 is the shipping bill, whereas the appellant filed the complete refund claim along with the shipping bills only on 14.10.2019 i.e., after two years from the date of order of the Commissioner (A) is clearly time barred and hence, the claims rejected on time bar by the authorities is justified.
Also, the present appeal is under Rule 5 of the Cenvat Credit Rules, 2004 and hence the question of refund under Section 142 does not arise. Moreover, as per Section 142, any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse as seen from clause (3) of Section 142.
The appeal is dismissed.
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2023 (12) TMI 899
Adjustment of excess duty to that of duty short-paid during the period of provisional assessment - Applicability of principles of unjust enrichment to the amount excess paid before adjusting the same with the amount short-paid while finalising provisional assessment under Rule 7 of the Central Excise Rules, 2002.
HELD THAT:- Undisputedly, the appellant has resorted to provisional assessment under Rule 7 of the Central Excise Rules, 2002 at the time of clearance of the goods from the factory to the depots, since certain conditional discounts passed on to the customers on sale from depots subsequently, the exact quantum of which is known only after its clearance from factory and sale from depots. When the exact amount of discount is ascertained, the admissible discounts are calculated on month-to-month basis and the assessable value at the time of clearance from the factory is redetermined and the duty payable is accordingly arrived at. Consequently, the difference between the duty paid and the duty payable is calculated and the assessment is finalized. The result of the said exercise may end up with recovery of differential duty short paid or refund of excess paid.
The Revenue’s contention is that after determination of the exact duty payable on finalization of assessment, excess duty paid cannot be adjusted against duty short paid, without testing its incidence of excess duty whether passed on to any other person in compliance with the statutory presumption under section 12B of CEA, 1944. It is their argument that netting of duty by passing the statutory presumption is not laid down under Rule 7 of Central Excise Rules,2002. Accordingly, duty liability is calculated against the duty provisionally paid at the time of clearance of the goods from the factory and the amount payable - The Revenue’s objection is that the duty excess paid cannot be adjusted against the duty short-paid during a particular month/period of assessment to arrive at the net result of refund or liability. It is the Revenue’s contention that there is no specific provisions under Rule 7 of the Central Excise Rules, 2002 directing such adjustment/netting off duty.
It has been brought to our notice that the said judgment of the Hon’ble Karnataka High Court in Sudhir Papers Ltd. vs. Commissioner of Central Excise, Bangalore-I [2011 (3) TMI 1443 - KARNATAKA HIGH COURT] has been accepted by the Revenue as communicated through their letter dated 17.11.2023. Needless to mention, the principle laid down by the jurisdictional High Court is binding on the Tribunal in view of the judgment of the Larger Bench of the Tribunal in the case of COLLECTOR OF CENTRAL EXCISE, CHANDIGARH VERSUS KASHMIR CONDUCTORS [1997 (7) TMI 186 - CEGAT, COURT NO. II, NEW DELHI].
The impugned order is set aside and the appeals are allowed.
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2023 (12) TMI 847
Burden to prove - failure to appreciate that onus lay on the respondent to prove that the conditions imposed in Notification Nos. 4/97-CE, 5/98-CE, 5/99-CE, 6/00-CE were satisfied in the instant case - failure to discharge the onus of proving that the two conditions mentioned in the said Notifications - role of the apex bodies was in the nature of selling or commission agents and not that of direct purchasers of the said goods from the Respondent.
HELD THAT:- In the midst of argument, learned counsel for the appellant prayed that the matter may be taken up tomorrow so that he may prepare the case thoroughly.
List the matter on 15th December, 2023 at 10:30 A.M. for further hearing.
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2023 (12) TMI 846
Proceedings are barred by time limitation or not - main grievance of the petitioner is that after a period of 12 years, the respondents have no locus standi to proceed against the petitioner.
HELD THAT:- The petitioner falls under Section 11(b) of CEA. Therefore, the respondents are supposed to have determined the amount of duty within a period of two years. Merely because the words "where it is possible to do so" are provided in the Act, it does not mean that they can take their own time to determine the excise duty. It must be done within a reasonable time i.e. within one or two years. In the present case, the delay is more than 12 years, which is an inordinate one - In the circular dated 21.12.1992, it is clearly stated that the Board's D.O.F.No.223/8/85-CX.6, dated 21-3-1985 had already stipulated a maximum period of 6 months from the date of issue of show cause notice within which the case is to be decided and as far as possible, this limit is to be adhered to. The said circular is in force as on today.
In the present case, admittedly no intimation was provided to the petitioner with regard to keeping the call book and even in that case also, the Act provides time limit of six months to pass orders. However, in the present case, citing the internal circular issued by the respondents to keep the matters in the call book, the respondents have failed to adhere to the time limit provided in the statute. The circular is beyond the scope of the provisions of the Act and notifications provided therein. Therefore, keeping the call book without intimation to the petitioner and beyond the scope of the Act is unacceptable - the respondent department cannot keep the matter pending for a period of 12 years and thus, the present proceedings is clearly barred by limitation.
This Court is of the considered view that present proceedings could not be allowed to continue after a period of 12 years, particularly, when there is no mistake on the part of the petitioner. Adjudication of proceedings after a long period would cause serious prejudice to the parties. Hence, this Court holds that the present proceedings is barred by limitation and is unjustifiable.
The Show Cause Notice dated 09.03.2011 issued by the first respondent, is hereby quashed - Petition allowed.
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2023 (12) TMI 845
Recovery of wrongly availed CENVAT Credit - common input services used in or in relation to manufacture as well as trading - Head Office distributed credit availed on common input services used for both manufacture of finished goods as well as trading of goods - periods October 2012 to June 2013 and July 2013 to June 2014 - HELD THAT:- The foremost argument put forward by the Ld. counsel for the appellant is that the Department ought to have issued Show Cause Notice to the Head Office as it is the Head Office which has availed credit and distributed to the appellant as per the provisions of CENVAT Credit Rules, 2004. The Show Cause Notice is issued invoking Rule 14 of CENVAT Credit Rules, 2004. The said Rule states as credit wrongly ‘availed or utilized’. The credit is utilized by the appellant. In such circumstances, the Show Cause Notice issued to the appellant alleging wrongful availment of credit, is valid though it is the Head Office which has distributed the credit.
The second argument advanced by the appellant is that the Head Office has been maintaining separate accounts and that the Head Office has not distributed credit of input services pertaining to trading. The appellant has furnished detailed reconciliation statement. However, this requires to be verified - the matter requires to be remanded to the adjudicating authority who is directed to verify the contention of the appellant that credit pertaining to trading has not been distributed by Head Office and availed by the appellant. The adjudicating authority is also directed to verify the reconciliation statement furnished by appellant.
The impugned order is set aside - Appeal is allowed by way of remand.
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2023 (12) TMI 844
Eligibility for the benefit of exemption of Notification No. 67/95 dated 16.03.1995 read with CENVAT Credit Rules, 2004, on jig wires and jig rods - intermediate goods or not - definition of capital goods as per CENVAT Credit Rules, 2004 cover goods falling under Chapter Heading 76 or not - HELD THAT:- The issue stands decided in the appellant’s own case for earlier as well as subsequent periods - The Tribunal in NEEDLE INDUSTRIES (INDIA) PRIVATE LTD. VERSUS COMMISSIONER OF C. EX., SALEM [2014 (8) TMI 980 - CESTAT CHENNAI], held that these items are intermediate products captively used in the manufacture of dutiable final product and therefore, Cenvat credit cannot be denied.
After appreciating the facts as well as evidence placed and following the decision of the Tribunal in the appellant’s own case, the demand cannot sustain - the impugned order is set aside. The appeals are allowed.
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2023 (12) TMI 843
Levy of Service tax on Ocean freight - Refund pertaining to SB Cess and KK Cess - appellants did not file refund of the Service tax amount paid but only for the amount available as credit to the appellants - inapplicability in view of section 148(8)(a) of CGST Act.
Whether Service Tax demand on Ocean freight is sustainable? - HELD THAT:- It is found from the facts of the case that the Appellant pursuant to Audit findings have voluntarily paid the Service Tax on Ocean Freight along with interest - The issue of Service Tax on Ocean Freight was the subject matter of dispute in the case of M/S ASIATIC DRUGS & PHARMACEUTICALS PVT LTD VERSUS COMMISSIONER CGST-ALWAR [2022 (6) TMI 305 - CESTAT NEW DELHI] where it was held that I find that the transaction value for Customs duty and Excise duty (CVD), includes the Ocean Freight , and accordingly I hold that the appellant has suffered the double taxation, by again paying the service tax on the Ocean Freight, as demanded by the Revenue - thus, the recovery of Service Tax on Ocean freight is not legally justified and hence the demand is not maintainable.
Whether the appellants are eligible for sanction of refund of Service Tax paid on Ocean Freight and on licence fee paid to Government under Reverse Charge basis paid for the period prior to 01.07.2017, under Section 142(3) of CGST Act,2017? - whether the said refund becomes inapplicable in view of section 148(8)(a) of CGST Act? - HELD THAT:- The refund claim has been rejected by Commissioner (Appeals) by resorting to Section 142(8)(a) of GST Act, 2017 - it is found that similar issue was analyzed by the Tribunal regarding the issue of sanction of refund of Service Tax paid during the GST era in M/S INDO TOOLING PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS AND SERVICE TAX & CENTRAL EXCISE, INDORE (M.P) [2022 (3) TMI 1100 - CESTAT NEW DELHI] wherein it was held that from a conjoint reading of sub-sections (3), (5) and (8)(a) of the CGST Act, it is evident that an assessee is entitled to claim refund of service tax under RCM paid after the appointed day under the existing law and such claim has to be disposed of according to the provisions of the existing law. As the appellant was entitled to Cenvat credit of the said amount of Rs. 9,85,827/-, which is now no longer available due to GST regime, they are entitled to refund of the said amount.
The rejection of refund claims cannot be justified - the impugned order is set aside and appeal is hereby allowed.
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2023 (12) TMI 842
Recovery of CENVAT Credit alongwith interest and penalty - input services - erection, installation and commissioning of research and development centre - garden maintenance service - canteen services - bus transport service - HELD THAT:- The biggest component of the disallowance in the impugned order is the service availed for ‘establishment of research and development centre’ at the premises of appellant and, primarily, based on circular of Central Board of Excise & Customs (CBEC) issued in 2008. The said circular relates to availment of services of ‘commercial and industrial construction service’ which, to the extent utilized for erection of immovable property, was ruled as ineligible - it is found that this narrow perspective of the activity undertaken by the appellant is not appropriate inasmuch as it was not restricted to construction of a building but outfitting as ‘research and development centre’ which was essential for manufacture. The issue which came to be considered by the Central Board of Excise & Customs (CBEC) was the excisability of movable goods, upon being fixed permanently, to acquire the character of non excisability which excluded application of Central Excise Act, 1944 while the present dispute does not relate to ‘output service’ but to the manufacturing undertaken by the appellant which stands on an entirely different footing.
Insofar as ‘garden maintenance service’ is concerned, the reliance placed by the Learned Authorised Representative on the decision in STANADYNE AMALGAMATIONS PVT. LTD. VERSUS COMMISSIONER OF C. EX., CHENNAI [2011 (2) TMI 644 - CESTAT, CHENNAI] does not appear to reflect the correct law inasmuch as the decision that maintenance and repair of photocopier, air conditioner, water cooler etc., are essential without, which the factory cannot run; therefore, the service tax paid on the services is admissible as credit.
Likewise, on the aspect of ‘canteen facility’, several decisions of the Tribunal enumerated have set out the terms for availment of credit of tax paid on such services - It would also appear that the appellant has reversed credit insofar as the ‘bus transport service’ is concerned which, thus, no longer continues as dispute.
Thus, on the entitlement of tax paid on the services as CENVAT credit, the impugned order lacks merits - appeal allowed.
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2023 (12) TMI 841
Disallowance of credit - goods transport agency service - other services related to ‘storage and warehousing’ of goods after clearance from the factory of production - Penalty u/r 15 of CENVAT Credit Rules, 2004 - HELD THAT:- It is found from the records that the adjudicating authority has examined the definition of ‘excisable goods’ and ‘place of removal’ in Central Excise Act, 1944. It is worth noting that ‘place of removal’ is relevant only for the purpose of determination of ‘transaction value’ in section 4 of Central Excise Act, 1944. Furthermore, ‘place of removal’ is a concept which enables duty leviable on manufacture to be restricted to such value as is attributable to cost involved in production and clearance from the factory but which, nevertheless, includes such expenses when such sale occurs at a further point. There is no doubt that the goods removed by the appellant are subject to assessment at value declared as ‘retail selling price’ subject to abatement.
The amendment effected in rule 2(l) of CENVAT Credit Rules, 2004 enabling ‘goods transport agency service’ to be availed of till ‘place of removal’ and the consequential decision of the Hon’ble High Court of Karnataka affirmed by the Hon’ble Supreme Court in Commissioner of Central Excise, Belgaum v. Vasavadatta Cements Ltd [2018 (3) TMI 993 - SUPREME COURT] did not exclude the possibility of such outward transport – included in the assessable value – from being eligible for availment of credit when circumstances so warranted. Evaluation of the submissions of the appellant on this score had not been undertaken by the original authority.
Impugned order set aside - matter remanded to the original authority for a fresh decision keeping all issues open - appeal allowed by way of remand.
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2023 (12) TMI 840
Entitlement to pay the duty by utilizing their Cenvat credit account during the period when asked to pay the duty consignment wise, through PLA - Rule 8(3A) of the Central Excise Rules, 2002 - HELD THAT:- In this case, the Appellant has partly used Cenvat credit for discharging their duty liability during the debarred period - It is observed that the issue is no longer res integra as the Hon’ble Calcutta High Court in the case of M/S. GOYAL MG GASES PVT. LTD VERSUS UNION OF INDIA & OTHERS [2017 (8) TMI 1515 - CALCUTTA HIGH COURT] has declared Rule 8 (3A) as ultra vires - in the case of M/S. RANA SPONGE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX, BBSR-I [2023 (3) TMI 689 - CESTAT KOLKATA], by following the decision of the Hon'ble Calcutta High Court, this Tribunal has set aside the demand confirmed.
The Appellant is entitled to pay the duty by utilizing their Cenvat credit account during the period when they were asked to pay the duty consignment wise, through PLA, under Rule 8(3A) of the Central Excise Rules, 2002 - the impugned order confirming the demand is not sustainable. Since, the demand itself is not sustainable, the question of demanding interest or imposing penalty does not arise.
The impugned order set aside - appeal allowed.
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2023 (12) TMI 839
Valuation of Excise Duty - 'facility charges' collected by the Appellant from TISCO is includable in the assessable value or not - invocation of extended period of limitation - HELD THAT:- The ‘facility charges' are recovered from TISCO in terms of Para 7.15.2 of the agreement. These charges are payable towards the fixed assets developed/ deployed and the operation and maintenance of the same, irrespective of the supply of DM water. The Appellant submits that they were under the bonafide belief that the same did not merit inclusion in the assessable value.
It is observed that contention of the Appellant is supported by the decision of the Tribunal, Kolkata in the case of BOC INDIA VERSUS COMMISSIONER OF CENTRAL EXCISE, JAMSHEDPUR [2004 (11) TMI 219 - CESTAT, KOLKATA]. In the said decision, the Tribunal kolkata has held that the 'facility charges' collected by the assessee from those customers on whose factory they have erected and maintained Vacuum Insulated Storage Tank, is not includable in the assessable value as these charges are no way connected with the sale of gases.
Extended period of limitation - HELD THAT:- There are merit in the contention of the Appellant that there is no suppression of fact involved in this case. It is observed that penalty cannot be imposed when the Appellant is acting under a bona fide belief - the extended period of limitation is not invocable in this case and for the same reason no penalty imposable on the Appellant.
The demand of duty confirmed in the impugned order and the penalty imposed set aside, by invoking the extended period of limitation.
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2023 (12) TMI 781
Maintainability of appeal - low tax effect - Valuation - Deduction towards discounts and additional taxes paid - HELD THAT:- The appellant submitted that the appeal could be disposed of as the appeal envisages a low tax effect, having regard to the Notification dated 08.08.2019.
The appeal does not survive for further consideration and is, accordingly, dismissed.
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2023 (12) TMI 780
Valuation of goods - inclusion of value of the bought-out-items supplied directly to the customer's place, in the assessable value of the Industrial Furnaces - HELD THAT:- It is observed that the agreement entered by the Appellant in this case was a composite contract for supply and installation and commissioning of the industrial furnace at the customer's premises. The Appellant has duly discharged duty on the supply of components manufactured by them. They have supplied the bought out items directly to the customer's premises where the furnace was erected by utilizing both the bought out items and the goods manufactured by them. The bought out items used in erection of the furnace makes it a part of the immovable property, after erection of the furnace. Hence, no excise duty can be charged on the supply of such bought out items - no excise duty can be charged on the supply of such bought out items.
It is observed that after erection of the furnace, the bought-out items are part of the immovable property - the value of bought out items, which are traded goods of the Appellant, are not includable in the assessable value for the purpose of charging central excise duty. Accordingly, the demand confirmed in the impugned order is not sustainable and is set aside. Since the demand itself is not sustainable, the question of demanding interest and imposing penalty does not arise.
Appeal allowed.
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2023 (12) TMI 779
Recovery of CENVAT Credit alongwith interest and penalty - pro-rata adjustment, undertaken by the appellant, is in conformity with rule 6 of CENVAT Credit Rules, 2004 or not - adjustment for reversal done on annual basis - conformity with the prescription in rule 6(3) of CENVAT Credit Rules, 2004 pertaining to consequence of non-maintenance of separate records.
HELD THAT:- The Tribunal, in M/S STAR AGRIWAREHOUSING & COLLATERAL MANAGEMENT LTD. VERSUS COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, JAIPUR (RAJASTHAN). [2020 (10) TMI 198 - CESTAT NEW DELHI] has held that The procedure prescribed in Rule 6(3A) of the [Cenvat] Credit Rules is only to make the provisions of Rule 3 workable. By means of proportionate reversal the requirement of Rule 6(3) has been substantially satisfied. This is also provided in Rule 6(3D) of the Cenvat Credit Rules which was introduced at a later date.
Thus, the provisions of rule 6, offering alternatives, are subject to preference on the prioritization of options. The claim of the appellant that they had apportioned input services between excisable goods and exempted service and followed up with reversal of credit to the extent attributable to the latter does not appear to have been examined in the order of the adjudicating authority.
The impugned order set aside - matter remanded back to the original authority for a fresh decision after taking note of the submissions of appellant herein - appeal allowed by way of remand.
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2023 (12) TMI 746
Scope of appeal - Refund of excess paid duty - price variation clause - rejection on the ground of unjust enrichment - HELD THAT:- Admittedly the Adjudicating Authority found the refund admissible on merits. However, the same was rejected on the ground of unjust enrichment - it is further held that other than this issue of unjust enrichment, the Commissioner (Appeals) have travelled beyond the scope of the appeal and his other observations are by way of obiter dicta.
Unjust enrichment - HELD THAT:- Admittedly Appellant have not received the full amount as per the invoices and further at the time of finalisation of the supply bill, under the contract in question, the buyer of the goods – South Central Railway, have made adjustment of both the downward revision of the price including the excise duty, which is evident from the communication dated 18.08.2010 which have been annexed in the appeal paper book. Thus, it is evident that, as the buyer of the goods have paid reduced adjusted amount, the Appellant never received the amount of duty being claimed as refund, being excess duty paid, admittedly - Appellant have satisfied that it is the Appellant who have borne the burden of duty for the amount of Rs. 5,26,244/-. Accordingly, the Appellant is entitled to refund of the amount of Rs.4,77,292/-, which is not barred by limitation.
The impugned order is set aside - appeal allowed.
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2023 (12) TMI 745
Cenvat credit - Demand of interest raised against the appellant treating the goods as capital goods - entitlement to take the cenvat credit of 50% of duty paid in the year of procurement of the said goods and remaining 50% in the successive year - HELD THAT:- It is found that the goods used as a damping/patching material in the blast furnace to provide high voltage to the furnace and prevent hot metal from coming out during the manufacture of the ferro alloys. As these items have been used and consumed by the appellant during the manufacturing process, therefore, these are to be treated as inputs not capital goods.
The appellant has correctly taken the cenvat credit on the said goods as inputs. Therefore, the proceedings against the appellant are not sustainable - the demand of interest is not sustainable against the appellant - appeal allowed.
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