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Central Excise - Case Laws
Showing 401 to 420 of 1430 Records
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2023 (10) TMI 166
Application under SVDLR rejected - Rejection of application on the ground that the issue was pending before the Settlement Commission - ineligibility in light of Section 125(1) (g) of the Finance Act (No. 2) of 2019 - HELD THAT:- In the perception of the respondents, the petitioner no. 1 was held ineligible in light of Section 125(1) (g) of the Finance Act (No. 2) of 2019. The stand of the respondents is misconceived. Though the petitioners had filed application before the Settlement Commission, the said application was already decided by the Settlement Commission in the year 2002.
When there are arrears emerging out of orders of the Settlement Commission, the assessee is eligible under the scheme.
Therefore though no appeal or reference were pending, here was a case where the Settlement Commission had passed a Final Order on 24.05.2002. MA was also disposed of on 20.07.2004, thus no case was pending. Even reading of the communication dated 06.03.2020 under the RTI Act would reveal that the benefit of the circular particularly para 10 has been extended to others. Once it is held that the petitioner no. 1 was entitled to the benefit of the scheme, petitioner nos. 2 to 4 would automatically be held entitled to the benefit thereof.
The respondents are directed to accept the declarations filed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 and issue consequential statements of estimated amount payable in Form SVLDRS-3 and on payment of the estimated amount by petitioner no. 1 issue discharge certificates in Form SVLDRS-4 to the petitioner nos. 1 to 4 - petition allowed.
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2023 (10) TMI 165
Levy of penalty under Section 11AC of CentralExcise Act, 1944, Rule 25 and Rule 27 of Central Excise Rules, 2002 and Rule 15(2) of Cenvat Credit Rules, 2004 - appellant have defaulted the monthly payment of duty within the stipulated time period - subsequent payment of duty from CENVAT Credit - HELD THAT:- This is a simplicitor case of delayed payment of admitted excise duty liability on monthly basis. The appellant have never denied the liability and the entire transaction has been recorded in their books. Goods were cleared under invoices, therefore, it is not a case of avoidance or evasion of excise duty. In this fact the proviso to section 11A has no application as the appellant have never intention to evade the payment of duty. The ingredients provided under proviso to section 11A for invoking suppression, fraud mis-declaration etc. do not exist in this case. As per Rule 8 regarding monthly payment of duty also, there is no specific provision for imposition of penalty. There is only a requirement of payment of interest in case of delay.
As regard, the utilization of cenvat credit for payment of duty during default period, the same has been held in favour of the assesseein the Indsur Global Limited case by the Hon’ble Gujarat High Court, according to which the assessee is allowed to utilize the cenvat credit for payment of excise duty even during the default period. The entire penal provision was invoked on the basis that there is a non-payment of excise duty whereas the fact remains the appellant have already paid the major amount from cenvat credit and a small amount from cash and for the delay, interest was also paid. In this position, there are no penalty in regard to allegation of evasion of duty shall sustain.
The penalties under Section 11AC of the Act, Rule 25 of Central Excise Rules, 2002 and Rule 15(2) of Cenvat Credit Rules, 2004 are not sustainable - there is lapse on the part of the appellant for delayed payment of duty for which penalty under Rule 27 is sufficient - there is admitted position that the appellant have been filing ER-1 returns belatedly which appellant supposed to file by 10th of following month and thereby contravened of provision of Rule 12 of Central Excise 2002. Therefore, for this lapse the appellant is liable to pay the penalty in terms of Rule 27 of Central Excise Rules, 2002.
The penalty imposed for Rs. 60,000/- under Rule 27 of Central Excise Rules, 2002 is maintained - Appeal allowed in part.
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2023 (10) TMI 164
CENVAT Credit on duty wrongly paid - Classification of goods - printing cylinder - classified under Chapter heading No. 84425010 or not - exemption under Notification No. 49/2006-CE dated 31.12.2006 - whether supplier of printing cylinder was not supposed to pay the duty as the same were exempted under Notification No. 49/2006-CE dated 31.12.2006? - HELD THAT:- From the clarification vide letter F. No. V/Tal/DFA/SCN/Accuprint/08-13-14 dated 08.08.2003 given to the supplier of the Rotogravure Printing Cylinder, there is no ambiguity that the supplier have correctly paid the duty without availing the Exemption Notification 49/2006-CE dated 30.12.2006.
The entire basis for denial of the credit is on the view which was completely contrary to the clarification given in the above letter dated 08.08.2013. It is found that it is the supplier’s Jurisdictional Officers who have to assess whether duty was correctly paid or otherwise and the same has been clarified by the supplier’s jurisdictional officer. The jurisdictional officer of the appellant has no jurisdiction to question the assessment or correctness of the payment of duty.
Thus, the appellant have correctly availed the cenvat credit on the Rotogravure Printing Cylinder supplied by M/s Accuprints System. Hence the demand is not sustainable - appeal allowed.
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2023 (10) TMI 163
Valuation of goods - value of freight charged separately on the invoices has to be excluded from the assessable value or not - Rule 5 of the Central Excise (Valuation) Rules - non-speaking order - violation of principles of natural justice - HELD THAT:- The finding in the impugned order are not supported by the exact provisions / clauses of the contracts examined. It is not understood from which clause of the contract or purchase order these conclusions have been reached.
The impugned order reaches to the conclusions without stating the exact provisions on the contract from which these conclusions have been reached. In this background, it is not found that the impugned order is a speaking order. The impugned order is therefore set aside and matter remanded to the Commissioner (Appeals) for fresh adjudication after giving exact reasons along with evidence for reaching the conclusions arrived at therein.
Appeal allowed by way of remand.
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2023 (10) TMI 162
Process amounting to manufacture - fitting the lens on to the frames to make spectacles that can be used by a customer - Department was of the view that after fitment of the lens in to the frames a distinct new marketable commodity viz. “spectacle” emerges - N/N. 16/2012-CE dated 17.03.2012 and at 6% (with CENVAT Credit) vide N/N. 19/2012 – CE dated 17.03.2012 - HELD THAT:- As categorically held by the Hon’ble High Court that the activity of fitting the power lens into the frames does not amount to manufacture. After appreciating the facts and evidence and also following the decision of the Jurisdictional High Court in the case of TITAN COMPANY LIMITED, M/S. PREMIER OPTICAL PVT. LTD., MRS. GEETANJALI D SOUZA PRABHU VERSUS COMMISSIONER OF CENTRAL EXCISE LTU, ADDITIONAL DIRECTOR GENERAL DIRECTORATE GENERAL OF CENTRAL EXCISE, CHAIRMAN CENTRAL BOARD OF EXCISE & CUSTOMS DEPARTMENT OF REVENUE AND THE JOINT COMMISSIONER OF CENTRAL EXCISE, CHENNAI II [2021 (10) TMI 1029 - MADRAS HIGH COURT], it is held that the activity does not amount to manufacture. The demand cannot be sustained. The issue on merits is answered in favour of the assessee and against the Revenue.
Time Limitation - HELD THAT:- The department has derived the figures from the income tax returns filed by the appellant. Several audits were conducted as the appellant is registered with service tax commissionerate. Further the issue is purely interpretational in nature. There is no evidence that appellant has suppressed facts with intent to evade payment of duty. Taking these aspects in to consideration, the show cause notice issued invoking the extended period cannot sustain. The issue on limitation is answered in favour of assessee and against the department.
The impugned order is entirely set aside. The appeals are allowed.
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2023 (10) TMI 161
Rejection of request of provisional assessment - it is submitted that the Adjudicating Authority has passed the impugned order without verifying the records - violation of principles of natural justice - HELD THAT:- It is found that initially the request for provisional assessment made by the respondent was rejected. In consequent to that impugned show cause notice has been issued to the respondent for demand of differential duty arising on account of discounts offered to their buyers. Although, the request of provisional assessment has been admitted by this Tribunal but no proceedings were initiated against the respondent for provisional assessment.
Further, in this case a show cause notice has been issued to the respondent which has been adjudicated by the Adjudicating Authority after verifying all the records as the Adjudicating Authority has confirmed part of the demand against the respondent and where they found the respondent is eligible and the respondent has rightly passed on the discounts to the buyers and thus, demand was dropped.
There are no infirmity in the impugned order and we also take the note of the fact that the revenue have misunderstood the proceedings initiated against the respondent. In fact, the impugned show cause notice has been issued after rejecting the request of provisional assessment by the respondent. In that circumstances, the defence taken by the Revenue that the Adjudicating Authority has to first adjudicate the provisional assessment and thereafter do the finalization of provisional assessment is misconceived.
The appeal filed by the Revenue is dismissed.
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2023 (10) TMI 112
Clandestine removal - irregular availment of Cenvat Credit - removal of 556.780 MTs of old and used C.I. Moulds (capital goods) without payment/reversal of Cenvat credit, in the guise of captive use during the period from 2006-07 to 2008-09 - HELD THAT:- It is found that the applicant were maintaining the Mould Register, wherein receipt/consumption of the CI Moulds were duly entered. From the Mould register, we find the Appellant has received 434.644 MT of C.I.Mould during the period 2006- 07 to 2008-09 and 122.136 MT remained as opening balance. The Appellant contented that all the moulds purchased during the material period were put into use during the relevant period.
There are force in the submission of the Appellant that after receipt of the Moulds, the same were utilized in the manufacture of finished goods namely, MS ingots and in the process of manufacture, the C.I. moulds were exhausted, and ultimately, the same were melted along with other raw materials for manufacture of the finished goods - there is no provision in the Cenvat Credit Rules, 2004 to reverse the credit availed on capital goods after they were put into use in the manufacture of final products, even if they are worn out or damaged due to wear and tear.
In absence of physical presence of such moulds in the factory, the department alleged that those were cleared clandestinely and hence demanded the Cenvat credit availed on such Moulds - It is observed that non availability of the moulds in the stock or physical absence of goods, cannot be a reason to allege clandestine clearance. There must be positive evidence available on record to substantiate the allegation of clandestine clearance. In the present case, the department has not brought in any evidence to establish clandestine clearance of the used C.I. Moulds.
The Appellant contended that these mould were capital goods on which Cenvat credit has been availed. Admittedly, when the credit in respect of these capital goods was availed, the same was in order. These capital goods have been put to use for a number of years, when the same were ultimately unfit for use, they were scrapped. The Appellant claims that the scrap were used in the furnace for manufacture ingots. However, the department's allegation is that there was no evidence for such consumption - there are no justification for reversal of Cenvat credit availed by the Appellant on the said capital goods, which after being put into use scrapped. Thus, the Appellant has taken Cenvat credit correctly on the capital goods, namely C.I. Moulds and there is also no provision in the Cenvat credit Rules to reverse the Cenvat credit when they are scrapped after put into use.
In view of the above, the Appellant is not required to reverse the Cenvat credit availed on the capital goods, M.I. Moulds. Since, the credit is not liable to be reversed, there is no liability of interest or penalty. Accordingly, the penalty imposed in the impugned order is also set aside.
Appeal allowed.
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2023 (10) TMI 111
Clandestine removal - mild steel ingots - gully - risers - cross-examination sought was denied - breach of statutory mandate of section 9D of Central Excise Act, 1944 - violation of principles of natural justice - HELD THAT:- It is no secret that establishing ‘clandestine removal’ is easier said than done and much latitude, in the form of preponderance of probability and deducing from corroborative evidence affirming testimony in statements, is permissible in determining the outcome. However, the proceedings may not be allowed to draw upon that flexibility for discarding even the most fundamental canon of evidence. Reliance upon a statement, to the exclusion of any material facts, in a show cause notice is, in effect, ‘examination-in-chief’ and credibility of the contents therein for resort to conclusion of detriment rests upon quicksand except by assertion through challenge of ‘cross-examination’; we are unable to appreciate the notion of lack of bias in such denial that, especially in the light of section 9D of Central Excise Act, 1944, should not have occurred save with detailed justification - A case made out on statements and peripheral records must find corroboration in each other; the validity of statements lies in sustaining through cross-examination and, hence, the significance of section 9D of Central Excise Act, 1944.
The request of the appellants for determination of its validity as evidence was not only ignored but the adjudicating authority proceeded to dispose off the notice without placing on record the reason for such denial. That is certainly not in consonance with the principles of natural justice or even in conformity with adherence to testing of evidence. A determination, judicial or quasi-judicial, is application of known law to established facts. The facts are not established here and the adjudication proceedings stand vitiated accordingly.
In the light of sanctity of section 9D of Central Excise Act, 1994, the outcome of the notices can rest squarely on statements that comply thereon and any documents, including ‘data repository’, that are, substantially, unchallenged - The plea for cross-examination of witnesses were made before the adjudicating authority. Both were willfully and deliberately denied in breach of statutory mandate of section 9D of Central Excise Act, 1944. Nothing remains of the facts upon which the detriments in the impugned order had been erected. Consequently, the impugned order lacks authority of law.
Appeal allowed.
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2023 (10) TMI 110
Recovery of differential duty - clearance of goods by job-worker - undervalued goods - alleged ‘less charging’ in the value of supplied inputs, and discharge of 1% on freight and 5% on unloading charges and 15% on profit and overheads - penalty on employees of company - HELD THAT:- Clearance of goods by the ‘job-worker’ merits valuation in the same manner that ‘captive consumption’ would and, relying upon ‘cost computation’, in the manner determined by the Hon’ble Supreme Court in UJAGAR PRINTS, ETC. ETC. VERSUS UNION OF INDIA AND OTHERS [1988 (11) TMI 106 - SUPREME COURT], does not preclude scrutiny of assessing authorities. The charge in the show cause notice is that ‘additional consideration’, as received by the ‘job-worker’, from the principal having paid the cost of transportation and other charges that, otherwise, would, ordinarily, have not been. No evidence has been placed on record to counter this allegation. Furthermore, no evidence has been adduced to suggest that the allegation of pricing as being below that of procurement cost was incorrect. Consequently, the costs involved in the transaction between the ‘job-worker’ and principal require addition to the declared value.
That the procedure prescribed in rule 57F of Central Excise Rules, 1944 were followed cannot alter the excisability or mode of determination of value – such treatment is akin to ‘inputs’ having reached the ‘job-worker’ directly – as the same would have been included in the price at which an ‘independent manufacturer’ would have cleared the goods to the principal. The plea for the privilege of excluding these costs is not tenable.
Levy of penalty on employees of company - HELD THAT:- Both are employees of the respective corporate entities and there is no evidence of any pecuniary benefit deriving to the two persons directly or indirectly. As ‘limbs’ of their respective employer organizations, they may have had a role in the price-setting but with penalizing of the corporate entities that derived the benefit, it would be improper to penalize the ‘limbs’ for vicarious responsibility.
Appeal disposed off.
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2023 (10) TMI 109
Valuation of manufactured goods - process amounting to manufacture or not - assessable value arrived by the appellant on re-engraving of duty paid cylinders supplied by the customers free is in accordance with the provisions of Central Excise Valuation (Determination Of Price Of Excisable Goods) Rules, 2000 or not - demand of differential duty - HELD THAT:- This issue has been settled by the Larger Bench of this Tribunal in the case of JSS. PRINTING INDUSTRIES PVT. LTD. VERSUS COMMR. OF C. EX., CALCUTTA [2000 (10) TMI 63 - CEGAT, COURT NO. II, NEW DELHI] where it was held that the work carried out to re-engrave the rollers second, third or fourth time, as the case may be, will not amount to process of manufacture.
However, this issue has not been brought before the authorities below.
The appeals be remanded to the adjudicating authority to consider the judgment of the Larger Bench of this Tribunal directing discharge of service tax on the activity of re-engraving of Rotogravure Printing Cylinders under ‘Business Auxiliary Service’.
Appeal allowed by way of remand.
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2023 (10) TMI 108
Computation of period for filing of appeal in stipulated time - appeal dismissed being time barred on the ground that the appeal has been filed before him 92 days after the admitted communication date of the Order-in-Original - HELD THAT:- The Learned Commissioner (Appeals) has dismissed the appeal being time bar on the ground that the appeal was filed after 92 days. As per the fact of the present case, we find that the admitted date of communication of the Order-in-Original was considered and accepted by the commissioner (Appeals) i.e. 23.06.2014. But the appeal was dismissed on the ground that since the appeal was filed on 22.09.2014, which is beyond 90 days and beyond 90 days the commissioner (Appeals) has no power to condone the delay.
In the fact of the present case, the admitted communication date of the Order-in-Original is 23.06.2014, which has to be excluded in terms of Section 9 above. Therefore, the commencement of the period shall be from 24.06.2014 and from that date 90 days completes on 21.09.2014 - 21st September, 2014 being a last date for filing appeal falls on Sunday, therefore in terms of Section 10 the appeal could have been validly filed on 22nd September, 2014, in this case the appeal was filed on 22.09.2014. Thus, the appeal was filed well within the stipulated period of 90 days. Therefore, the contention of the Learned Commissioner (Appeals) that the appeal was filed after 92 days, without considering the General Clause Act, 1897 is absolutely incorrect and illegal.
Applicability of judgment of Supreme Court in the case of SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [2007 (12) TMI 11 - SUPREME COURT] - HELD THAT:- Since the appeal itself was filed within stipulated time period of 90 days, the ratio of the judgment of the Hon’ble Supreme court in the case of SINGH ENTERPRISES as also in the case of COMMISSIONER OF CUSTOMS & CENTRAL EXCISE VERSUS M/S HONGO INDIA (P) LTD. & ANR. [2009 (3) TMI 31 - SUPREME COURT] not relevant.
The impugned order is set aside and appeal is allowed by way of remand to the commissioner (Appeals) to decided matter on merit within a period of two months from the date of this order.
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2023 (10) TMI 55
Valuation of Inter-unit transfer of goods for captive consumption - entire value (i.e. 115% / 110% of the cost of production) or the actual cost of production (that is 100% of cost) excluding notional loading (that is 115% / 110%) of the goods manufactured by 1 unit, would be the cost of raw material of the another unit (who used the goods in the manufacture of another article) for the purpose of determining the value under Rule 8 of the Valuation Rules and Cost Accounting Standard-4 issued by ICWAI - Confiscation of goods - imposition of redemption fine - penalty.
HELD THAT:- It would be appropriate that this appeal is remanded to the Tribunal by setting aside the impugned order dated 22nd March 2013 with a direction that the Tribunal on remand reconsiders the issue in the light of the decision of the larger bench in the case of M/S ITC LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI [2016 (4) TMI 280 - CESTAT CHENNAI].
Appeal disposed off.
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2023 (10) TMI 54
Condonation of delay in filing appeal before Commissioner (Appeals) - sufficient reason for delay provided or not - delay occurred on account of illness of appellant - HELD THAT:- The plea of illness put forth by the appellant for explaining the delay caused in filing of the appeal to the Commissioner (Appeals) is on the face of the record untenable. The the demand notice of which the appellant is aggrieved was passed by the Assistant Commissioner, CGST, Dibrugarh Division on 01.05.2019. The limitation for filing appeal against this order to the Commissioner (Appeals) is 60 days which may be further extended by 30 days as per Section 35 of the Central Excise Act. The appellant has annexed the documents of his medical condition and the travel documents along with the writ petition, a perusal whereof would reveal that the appellant proceeded from Dibrugarh to Chennai on 02.07.2019 - the appellant was not suffering from any such medical condition from 01.05.2019 to 27.07.2018 which could have prevented him from filing an appeal against the order dated 01.05.2019 within the stipulated period of limitation.
Law is well settled by a catena of judgments that the limitation for filing appeal as provided under Section 35 of the Central Excise Act overrides the provisions of Section 5 of the Limitation Act and hence, the delay cannot be condoned beyond 30 days from the statutory period of appeal i.e. 60 days of communication of the order to the aggrieved person.
In the present case, admittedly the appellant filed the appeal against the order dated 01.05.2019 to the appellate authority i.e. Commissioner (Appeals) on 03.10.2019 which is well beyond the period of 60 days and further extended by 30 days. In the memo of appeal filed along with the writ petition, there is no indication justifying the reasons for delay in approaching the Commissioner (Appeals) against the order in original - on a perusal of the memorandum of appeal filed before the CESTAT, there are no justifiable cause because even in this memorandum, it is clearly stated that the order imposing service tax passed by the Assistant Commissioner was received by the appellant on 23.05.2019. As per discharge summary (page-31), the appellant was hale and hearty till 27.07.2018 on which date he was admitted in the hospital in relation to cardiac issues which manifested in the morning of 27.07.2018. The appellant was discharged from the hospital on 30.07.2018 but the appeal came to be filed as late as on 03.10.2019.
Considering the statutory bar prescribed under Section 35 of the Central Excise Act and the law as laid down by Hon'ble the Supreme Court in the judgments, the appeal to the Commissioner (Appeals) could not have been entertained on merits as the same was time barred - reliance can be placed in SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [2007 (12) TMI 11 - SUPREME COURT].
The judgment relied upon by the appellant's counsel in M/S. SHEKHAR RESORTS LIMITED (UNIT HOTEL ORIENT TAJ) VERSUS UNION OF INDIA & ORS. [2023 (1) TMI 256 - SUPREME COURT] dealt with the extension of a scheme issued under the service tax regime. In the said case, Hon'ble the Supreme Court held that the appellant therein was not responsible for not availing the benefits of the scheme in time. Thus, the said judgment is clearly distinguishable that the same has no application to the controversy at hand - In the case of COMMISSIONER OF INCOME-TAX VERSUS PHEROZA FRAMROZE AND CO. [2017 (5) TMI 436 - SUPREME COURT], the Hon'ble Supreme Court while considering the provisions of Section 268 of the Income Tax Act, held that the High Court has inherent jurisdiction to condone the delay. The said judgment also, does not deal with the mandatory provisions of the Central Excise Act and hence, is not applicable for deciding the controversy involved in this appeal.
Thus, the CESTAT was absolutely justified in refusing to entertain the appeal filed by the appellant and in refusing to direct the Commissioner (Appeals) to condone the delay in filing of the first appeal, as stated above. As a consequence, the appeal lacks merit and is dismissed.
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2023 (10) TMI 53
CENVAT Credit - input services - Constructions Services - Outdoor Catering - Travel Agent - AMC on Photocopy - Sify Communication (Broad Band Service).
Constructions Services - HELD THAT:- As regards Construction Services which was availed by the appellant prior to December 2008 for modifying the facilities related to production are covered in the definition of “Input Service” as provided under Rule 2(l) of the CENVAT Credit Rules, 2004. This issue has been decided in favour of the appellant in the case of M/S RICO AUTO INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EXCISE-DELHI-III [2023 (5) TMI 601 - CESTAT CHANDIGARH].
Outdoor Catering - HELD THAT:- The CENVAT credit has only been denied on the ground that the sample salary slip of one of the employees shows that the appellants are recovering some amount from the employees for providing outdoor catering but this allegation was not there in the show-cause notice and hence, the Order-in-Original has travelled beyond the show-cause notice. Moreover, prior to 1st April, 2011, CENVAT credit on Canteen Services was permitted as held by the Hon’ble High Court of Karnataka in the case of TOYOTA KIRLOSKAR MOTOR PRIVATE LIMITED, VERSUS THE COMMISSIONER OF CENTRAL TAX, BANGALORE [2021 (5) TMI 880 - KARNATAKA HIGH COURT] which was affirmed by the Hon’ble Supreme Court in TOYOTA KIRLOSKAR MOTOR PRIVATE LIMITED VERSUS THE COMMISSIONER OF CENTRAL TAX [2021 (12) TMI 420 - SC ORDER] also. Therefore, the CENVAT credit has rightly been availed with regard to the outdoor catering.
Travel Agent - HELD THAT:- The service tax paid to travel agents for making arrangements of the employees to visit customers, suppliers and other authorities is for the purpose of business only and cannot be termed as ‘for personal use of the employees’. This is also covered in the case of M/S. RAMCO CEMENTS LTD. VERSUS CCE, PUDUCHERRY [2017 (4) TMI 427 - CESTAT CHENNAI].
AMC on Photocopy - Sify Communication (Broad Band Service) - HELD THAT:- These services fall very much in the definition of “Input Service” as both the services are required for the business purposes and not for any personal use.
The impugned order set aside by allowing all the five appeals of the appellant - appeal allowed.
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2023 (10) TMI 52
Determination of annual capacity of production without issuance of the show cause notice - principles of natural justice - HELD THAT:- Although the appellant has not challenged the order of re-determination of annual capacity of production determined by the Joint Commissioner on subsequent dates, but while demanding duty from the appellants, the appellants are having right to challenge the re-determination of annual capacity of production as held by the Hon’ble High Court in the case of M/S. BENGAL HAMMER INDUSTRIES (P) LTD. VERSUS UNION OF INDIA & ORS. [2023 (5) TMI 437 - CALCUTTA HIGH COURT].
The order of re-determination of annual capacity without issuance of show cause notice is not sustainable. Accordingly, the impugned orders have no merits, therefore, the same are set aside.
Appeal allowed.
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2023 (10) TMI 50
Refund claim - payment under protest or not - duty amount paid by the appellant through reversal of cenvat credit and thereafter disputing/contesting the same on grounds of limitation - refund claim is time barred as it is filed after one year from the order or not - adjustment of the penalty amount from the sanctioned refund amount - HELD THAT:- The appellant avers that the time limit does not apply in their case as the payment of the duty amount through reversal of Cenvat Credit was disputed/ contested from the show-cause stage, hence it was paid under protest, and therefore the time limit under Section 11B does not apply. It is found that the appellant on being pointed out by the audit has agreed and paid the duty amount. Thereafter, after the issue of the show-cause notice they have contested the demand on the ground of limitation, the same cannot be considered as payment under protest.
Time Limitation - HELD THAT:- The appellant has filed the refund claim after one year after the Hon’ble CESTAT in CYIENT DLM PVT. LTD. VERSUS COMMISSIONER OF CENTRAL TAX, MYSURU COMMISSIONERATE [2019 (3) TMI 176 - CESTAT BANGALORE], the relevant date for filing the refund in such cases is as per Section 11B(5) Explanation (B) (ec) of Central Excise Act, 1944, which mentions that the relevant date for filing the refund is the date of order of the Appellate Tribunal, however in this case the refund claim has been filed after one year of the Tribunal’s order, hence it was held to be time-barred.
Adjustment of the proportionate penalty imposed and adjusted by the adjudicating authority - HELD THAT:- The Commissioner (Appeals) has held that the Hon’ble Tribunal’s has not passed any order as regards the penalty on the ineligible cenvat credit availed by the appellant. The appellant submits that the Hon’ble Tribunal has followed the decision in the case of COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX LARGE TAXPAYER UNIT, BANGALORE VERSUS M/S BILL FORGE PVT LTD, BANGALORE [2011 (4) TMI 969 - KARNATAKA HIGH COURT] of the Hon’ble High Court of Karnataka and interest only has been set aside, hence the Hon’ble Tribunal has not passed any order as regards the penalty. It is found that proportionate penalty amount is payable as there was wrong availment of Cenvat credit. Therefore the imposition and adjustment of the penalty amount from the sanctioned refund amount is maintainable.
The appeal is not maintainable and hence the same is dismissed.
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2023 (10) TMI 49
CENVAT Credit - waste Met Coke generated during the course of sieving of Met Coke to be used in the manufacture of steel - common input services used for the said exempted product Met Coke as well as taxable goods - non-maintenance of separate records - Rule 6 of Cenvat Credit Rules - HELD THAT:- The Hon’ble Supreme Court in UNION OF INDIA VERSUS DSCL SUGAR LTD. [2015 (10) TMI 566 - SUPREME COURT] in similar circumstances while examining the applicability of Rule 6(2) bagasse generated during the course of manufacture of sugar held In the present case it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the Section or in the Chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of Section 2(f) of the Act and the absence of manufacture, there cannot be any excise duty.
It is found that subsequently this judgment has been followed in series of cases including by the Tribunal in the case of COMMISSIONER OF C. EX. AND CUS., RAIPUR VERSUS JAYASWAL NECO INDUSTRIES LTD. [2017 (7) TMI 1184 - CHHATTISGARH HIGH COURT], wherein it is held that the waste Met Coke generated during the course of manufacture of sieving of iron ore fines cannot be subjected to Rule 6 of the Cenvat Credit Rules, 2004.
There are no merit in the impugned order, consequently the same is set aside - appeal is allowed
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2023 (10) TMI 7
Clandestine removal - Undervaluation of goods - evasion of duty - it is alleged that the goods sold through Surya Rubbers & Chemicals Pvt. Ltd. (SRCL) and Pyramid Rubber Company Pvt. Ltd. (PRCL) are not accounted in the books of RRPL - Non-existing/dummy units - HELD THAT:- There are strong force in the statements made by the appellants that when adjudicating authority has held that RRPL, SRC and PRC are related persons, it contradicts the finding in the impugned order that SRC and PRC are only dummy units created for procuring the tenders offered by KSRTC. In addition to that during hearing, the Learned counsel for the appellant draws our attention to large number of documents including registration, deed of partnership, VAT registration and proforma of registration issued by Central Excise authorities to SRC & RRPL firms, books of accounts etc., to substantiate that the units are functioning independently and not dummy units as alleged.
Considering the law laid down by the Apex Court in the matter of Commissioner of Central Excise, New Delhi Versus Superior Products and Goodyear South Asia Tyres Pvt. Ltd. [2015 (8) TMI 61 - SUPREME COURT], wherein it is categorically held that all the three units even few of the directors or responsible persons are one and same, they cannot be considered as related persons since all the three were having separate legal entities.
Undervaluation - HELD THAT:- The document relied on by the adjudicating authority to adopt the value of the rubber cannot be considered as admissible evidence. Moreover, appellant had produced documents issued by Rubber Board regarding the average value of rubber at the relevant time. If the Investigating authority had reason to believe that the cost of rubber at the relevant time was higher than the value shown in the books of accounts, they could have obtained authentic data from the Rubber Board or other agency than relying on unsigned/unauthenticated document allegedly recovered during investigation. Moreover, there is no evidence regarding place of recovery of said document, it is unsigned and it was not brought to the notice of concerned person during investigation - Considering the above fact, there is no reason to allege undervaluation regarding transactions carried out between the RRPL, SRC and PRC.
Regarding the submission made by the learned AR relating to the payments made by PRC and SRC allegedly to the rawmaterial suppliers, to a specific question regarding the books of account related to manufacturing activities for the goods supplied by the SRC and PRC, the learned AR fairly admits that there are no such records available on record.
Appeal allowed.
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2023 (10) TMI 6
Process amounting to manufacture - process of galvanization undertaken by the appellant on job-work basis - Extended period of limitation - HELD THAT:- The appellants have been carrying out the process of galvanization on job-work basis for the raw-materials supplier which has been in dispute since 1992. The dispute was finally settled in their favour by the judgment of this Tribunal in 2001. By virtue of Chapter Note 4 to Chapter 73 of CETA in the Budget 2002, the process of galvanization was included in the scope of ‘manufacture’. Thereafter the audit carried out scrutiny of the records of the appellant in 2004 and recovered Rs. 24,746/- towards duty and Rs. 2,476/- as interest observing that the procedure prescribed under Notification No. 214/86 has not been observed undertaken in the said process of galvanization for unregistered manufacturers. Further in the audit conducted in November, 2006, the Department itself raised an objection holding the view that the process of galvanization since does not amount to manufacture, therefore service tax is applicable for carrying out the said process on job-work basis - Consequently, an amount of Rs. 9,32,846/- (Rupees Nine Lakhs Thirty Two Thousand Eight Hundred and Forty Six only) has been recovered as service tax from the appellant.
Extended period of limitation - HELD THAT:- It is difficult to sustain the order of the lower authorities holding that the appellant had suppressed the activity of process of galvanization carried out on job-work basis in their factory but not disclosed to the Department. Hence, extended period of limitation cannot be applicable for recovery of the duty on the process of galvanization carried out on job-work basis holding the said process as ‘manufacture’.
The impugned order is set aside on the ground of limitation and Appeal is allowed only on limitation without any consideration on merit being not contested by the Appellant.
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2023 (9) TMI 1653
Validity of notification dated 01.03.2007, which withdrew certain tax benefits - invalidated by the doctrine of promissory estoppel due to premature withdrawal of benefits - whether notification No.69/03-CE dated 25.08.2003 was completely overshadowed by the subsequent notification No.8/2004-CE dated 21.01.2004? - misuse of process or public interest element - HELD THAT:- The present review petition has been filed pursuant to the liberty granted by the Apex court on the first proposition advanced before it that the decision of the Appellate Court relying upon the judgment in the case of Unicorn Industries [2019 (9) TMI 791 - SUPREME COURT] is incorrect.
It needs to be mentioned at the outset that the very notification No. 11 of 2007 dated 1st March, 2007, was also in question before the Apex Court in the case of Unicorn Industries apart from the other withdrawal notification No.21 of 2007, dated 25th April, 2007. The Gauhati High Court had struck down the withdrawal notifications in the case of M/S Dharampal Satyapal Limited Vrs. Union of India & Ors. [2016 (5) TMI 1074 - GAUHATI HIGH COURT], a sister concern of the present petitioners. The judgment of the Gauhati High Court has also been fairly placed titled as M/S Dharampal Satyapal Limited Vrs. Union of India & Ors. Para 27 of the judgment incorporates the stand of the respondent authorities in support of the withdrawal notification.
The decision of the Gauhati High Court on the withdrawal notification No. 11 of 2007 was subject matter of challenge before the Apex Court in Unicorn Industries. It is pertinent to say that based on the same stand of the respondents-Union of India including their contentions that under the exemption notification the mechanism of escrow was being subjected to misuse, the decision in the case of Unicorn Industries and other analogous civil appeals was rendered. As such, the instant plea raised by the review petitioners on the above Grounds are not such which are not covered by the ratio rendered by the Apex Court in the case of Unicorn Industries.
Conclusion - The cumulative effect is that the notification dated 01.03.2007, Annexure-L to the writ petition, cannot be sustained and accordingly the same is set aside. The withdrawal of tax benefits was unjustified under the doctrine of promissory estoppel, the earlier notification was effectively merged with the latter, and the respondents failed to substantiate their claims of public interest or misuse to justify the withdrawal.
The instant review petition is accordingly dismissed.
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