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Central Excise - Case Laws
Showing 461 to 480 of 1430 Records
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2023 (9) TMI 916
Levy of penalty under Rule 26 of the Central Excise Rules , 2002 - clandestine removal - evasion of duty - HELD THAT:- It is found that whether the appellant have cleared the goods to M/s Paras Bhavani Steel Pvt. Ltd., Ahmedabad clandestinely or otherwise, It can be decided only after the adjudication of the show cause notice dated 03.10.2012 issued to M/s. Laxcon Steels Ltd. and others. However, the said show cause notice is pending for adjudication. In these circumstances, deciding this appeal at this stage shall be premature as the entire case is based on clandestine removal of raw material of M/s Paras Bhavani Steel Pvt. Ltd., Ahmedabad by M/s Laxcon Steel Ltd.
The matter involved penalty against the present appellant should be re-adjudicated only on the basis of the outcome of the show cause notice F. No. DGCI/AZU/36-228/2012-13-2829 dated 03.10.2012. Accordingly, the penalty against the appellant is set aside for time being and matter remanded to the Adjudicating Authority to decide this matter after the outcome of the show cause notice dated 03.10.2012 issued to M/s. Laxcon Steels Ltd.
The appeal is allowed by way of remand to the Adjudicating Authority.
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2023 (9) TMI 915
Payment of interest on Central Excise duty - revenue neutrality - HELD THAT:- It is an admitted fact that it is a case of revenue neutrality, which means whatever duty has been paid by the appellant and the same is entitled as cenvat credit to the appellants themselves.
As it is a revenue neutral situation, it is held that no interest is payable by the appellant as held by this Tribunal in the case of M/S. JAI BALAJI INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, BOLPUR [2023 (6) TMI 1102 - CESTAT KOLKATA] wherein it has been held that we hold that it is the revenue neutral situation, no duty is payable by the appellant therefore whatever duty paid by the appellant Cenvat credit of the same has been availed by the sister unit, question of payment of interest does not arise.
Thus, no interest is payable by the appellant as it is a revenue neutral situation. Accordingly, the demand of interest is set aside - appeal allowed.
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2023 (9) TMI 914
Waste item or not - fatty acids, acid oils, gum and sludge, waxes and spent earth etc. - benefit of N/N. 89/95-CE dated 18.09.1995 denied - Applicability of the Notification No.10/96 dated 23.07.1996 to the plastic/ tin containers manufactured by the appellants - HELD THAT:- The issues raised in the impugned orders are no longer res integra after the decision of the Larger Bench in the case of M/S RICELA HEALTH FOODS LTD., M/S J.V.L. AGRO INDUSTRIAL LTD., M/S KISSAN FATS LIMITED VERSUS CCE, CHANDIGARH, ALLAHABAD [2018 (2) TMI 1395 - CESTAT NEW DELHI] where it was held that the removal of unwanted materials resulting in products like gums, waxes and fatty acid with odour cannot be called as a process of manufacture of these gums, waxes and fatty acid with odour. The process of manufacture is for refined rice bran oil.
As submitted by both sides, the decision of Larger Bench was affirmed by the Hon’ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I VERSUS MARICO LTD. [2022 (10) TMI 1174 - SC ORDER]. Coming to the Department’s contention that the decision in the case of COMMISSIONER OF CENTRAL EXCISE, JALANDHAR VERSUS AG FLATS LTD. [2011 (7) TMI 968 - CESTAT, NEW DELHI], which was affirmed by Hon’ble Supreme Court, was not discussed by the Larger Bench will not be of any avail as the decision in the case of M/s Marico Limited is the latest one and requires to be followed, therefore, by following the principles of judicial discipline, it is opined that waste, gums, fatty acids etc. arising during the course of manufacture of vegetable oils are eligible for the exemption Notification No.89/95.
Applicability of the Notification No.10/96 dated 23.07.1996 to the plastic/ tin containers manufactured by the appellants - HELD THAT:- Whatsoever, that plastic/ tin containers manufactured and used for packing of the final products i.e. vegetable oils are eligible for exemption Notification No.10/96 dated 23.07.1996.
All the appeals are allowed.
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2023 (9) TMI 913
Valuation of manufactured goods - to be valued under Section 4A or section 4 of the Central Excise Act, 1944? - Physician sample of Medicaments sold to the dealer for free distribution to the Doctors on which “not for sale” is mentioned - HELD THAT:- The appellant have manufactured and cleared the goods i.e. Physician sample mentioning clearly on the pack that it is not for sale. Since the goods is not for sale and no MRP is affixed on the product, the goods cannot be valued under Section 4A as the same is not for retail sale. Accordingly, the correct provision for valuation of physician sample is section 4, where the Excise duty is payable on the transaction value.
This issue is no longer res-integra as the same has been finally decided by the Hon’ble Supreme Court in the case of COMMR. OF CENTRAL EXCISE & CUSTOMS, SURAT VERSUS M/S SUN PHARMACEUTICALS INDS. LTD. & ORS. [2015 (12) TMI 670 - SUPREME COURT] the relevant order of the Hon’ble Apex Court has held that Excise duty is payable in terms of section 4(i)(a) not under section 4A but on pro rata value of good cleared under section 4A i.e. on the transaction value between the assessee and distributor to whom, the physician samples were sold.
In view of the above Hon’ble Supreme Court judgment in the appellant’s own case issue is finally settled in favour of the appellant.
Appeal allowed.
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2023 (9) TMI 912
Process amounting to manufacture or not - appellant has been receiving basic raw materials from their principals and were fabricating the goods - Levy of personal penalty on Managing Director - HELD THAT:- The detailed findings show that the appellant was indeed engaged in activity amounting to manufacture in terms of Section 2(f) of CE Act 1944 and has also indulged in suppressing the facts which have come to light because of the investigation undertaken by the Department.
Accordingly, there are no merits in the Appeal filed by the appellant, both on account of merits as well as on account of limitation. The Appeal filed by Sri Sai Ram Industrial Equipments Pvt Ltd is dismissed. In case of personal penalty imposed on Shri K. Rambabu, Managing Director, since the Adjudicating Authority has not brought out the role of appellant resulting in the non-payment of service tax which nevertheless is a negligence on his part, the penalty of Rs 5,00,000/- is reduced to Rs 1,00,000/-.
Appeal disposed off.
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2023 (9) TMI 867
Reversal of CENVAT Credit - appellant engaged in activity of trading of coal - in the guise of removal of inputs as such, the appellant was engaged in rendering of services namely, ‘Trading of Goods’, which service was exempt as per the explanation to Rule 2(e) of the Cenvat credit Rules, 2004 - non-maintenance of separate records for taxable and exempt services - HELD THAT:- The case law relied upon by the appellant are not relevant to the facts of this case as in those cases, the case of the revenue was that the appellant is clearing input as such, therefore the issue arose whether in that circumstances, the appellant was required to reverse proportionate cenvat credit on input services or not, whereas in the case in hand, the case of the revenue is that the appellant is providing exempted service namely trading activity, in that circumstances, whether the appellant is required to reverse proportionate cenvat credit with regard to input and input services used in providing final exempted service or not? Therefore, the case law relied upon by the appellant are distinguishable from the facts and circumstances of the case, as the appellant has already revered proportionate cenvat credit for providing the exempted service namely trading activity. In that circumstances, proportionate reversal of cenvat credit on inputs cleared as such and proportionate cenvat credit attributable to exmepted service has already been reversed by the appellant the same is sufficient to meet the ends of justice.
The appellant is required to reverse proportionate cenvat credit on inputs cleared as such and proportionate input services used for providing trading activities i.e. trading of coal, therefore, there is no requirement of payment of 6%/10% of the value of trading activity provided by the appellant - the demand on account of non-maintenance of separate account for input or input services for final exempted service does not arise and the reversal of cenvat credit on input and proportionate credit on input service is sufficient to meet the ends of justice.
Appeal disposed off.
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2023 (9) TMI 866
CENVAT Credit - goods exported on FOC basis where no sale proceeds were received during the period from 13.04.2015 to 23.03.2017 - goods exported free of cost, being sent for promotional purposes - scope of SCN - HELD THAT:- The appellant has exported the goods on FOC basis without receipt of foreign currency. Further, there is no condition under Rule 19 of Central Excise Rules, 2002 read with Notification 42/2002-CE (N.T.) dated 26.06.2001 mandating receipt of foreign currency in case of FOC exports by an exporter - at the time of export no objection was raised by the department neither at the time of export nor at the time of submission of document with Central Excise department that receipt of sale proceedings in foreign currency is required for FOC exports.
Further, perusal of form A.R.E.1 shows that the export goods were having no commercial value and the value was declared for customs excise purpose only and no sale proceeds were realized against the exports. Further, in the invoices also it is clearly mentioned that the impugned goods are for export, free of cost being sent for promotional purposes as trade sample on no returnable basis.
The impugned order relying upon the RBI Master Circular No. 14/2012-13 dated. 02.07.2012 is not justified because there is no allegation regarding the same in the show cause notice which is the foundation upon which the department has to build its case. Therefore, the entire demand is bad in law at the impugned order has travelled beyond the show cause notice which cannot be done in view of the decision of the Supreme Court in the case of CCOMMISSIONER OF C. EX., BANGALORE VERSUS BRINDAVAN BEVERAGES (P) LTD. [2007 (6) TMI 4 - SUPREME COURT].
The impugned order is not sustainable in law - Appeal allowed.
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2023 (9) TMI 865
100% EOU - Goods supplied to Bharat Oman Refineries Ltd. Mumbai for setting up crude petroleum refinery for the purpose of calculating Excise Duty which is equivalent to 50% of all Customs Duty in terms of Notification No. 23/2003-CE dated 31.03.2003 - applicability of N/N. 21/2002-CUS Sr. No. 228 - HELD THAT:- It is a settled law that for the purpose of calculation of Excise duty in respect of goods manufactured by 100% EOU, all the Customs duty leviable on the similar goods if imported shall apply. As per Notification No. 23/2003-CE the 100% EOU is required to pay 50% of all the customs duty. While taking the customs duty exemption notification of customs if any applicable on the like goods also need to be considered.
In the present case, the appellant’s case is that they have supplied the goods for setting up crude petroleum refinery of M/s Bharat Oman Refineries Ltd., Mumbai. On going through the Notification No. 21/2002-CUS Sr. No. 228 the exemption entry does not bear any condition except the condition that the goods is specified under the list 17 of Notification are eligible for exemption if the same is meant for crude petroleum refinery. If this fact is satisfied than the appellant is eligible for concessional rate of 2.5% of basic customs duty (10-5 as per Notification 21/2002-CUS – 50% as per Notification No. 23/2003-CE = 2.5%).
The Adjudicating Authority has denied the exemption Notification No. 21/2002-CUS on the ground that the raw material imported by the appellant was under “Nil” Rate of duty in terms of notification No. 52/2003-CUS(EOU). Thus, the Adjudicating Authority has gone on all together irrelevant fact. Here the duty ability has to be decided in respect of the goods manufactured by the appellant, which is nothing to do with the duty ability of imported raw material of the appellant. Therefore, the entire finding of the Adjudicating Authority is on wrong interpretation of the Notification in the present case. The finished goods manufactured by the appellant, EOU is not attracting “nil” rate of duty. Therefore, the Adjudicating Authority’s finding is absurd and not relevant in the present case.
The matters needs to be reconsidered by the Adjudicating Authority by consideration the exemption Notification No. 21/2002-CUS in its correct spirit only after satisfaction that the goods in question i.e. Steel Pipes were supplied for the purpose of setting up of crude petroleum refinery by their buyer M/s. Bharat Oman Refineries Ltd. Mumbai - Appeal allowed by way of remand.
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2023 (9) TMI 864
Benefit of exemption under Sl. No.39 of the Notification No. 6/2006-CE dated 01.03.2006 and Sl. No. 276 of the Notification No. 12/2012-CE dated 17.03.2012 denied - - 2545 numbers of motor vehicles manufactured for transport of more than 12 persons falling under Chapter heading 8702 of CETA, 1985 but failed to pay duty - extended period of limitation.
Denial of exemption on the ground that clause (a) of the condition No.9 or 27 for availing benefit of said exemptions during the relevant period is not complied with inasmuch as the ownership of the chassis remains vested in the chassis manufacturer viz. VIPL.
HELD THAT:- There are no merit in the observation in analyzing/examining the issue whether ownership of the chassis after sale and delivery of possession continues to remain with VIPL thereby the clause (a) of the condition 9 of Sl. No. 39 of Notification No. 6/2006-CE and condition 27 of sr. no 276 of Notification No. 12/2012-CE 17.3.2012, as the case may be, is satisfied or otherwise. The term “ownership” has not been defined under Central Excise Act,1944 or the Rules made thereunder. ‘Ownership’ is a legal concept.
Applying the concept of ownership to the present case, it is found that the appellant and M/s VIPL are independent legal entities as both are incorporated under the Indian Companies Act,1956. The chassis manufactured by M/s VIPL sold to the appellant on payment of applicable VAT and excise duty. There is no condition appended to such sale which would indicate the transfer of title, possession etc. is incomplete. The appellant after receipt of the chassis undertake the activity of bodybuilding and dispose of the buses to their customers. In these circumstances, merely because the appellant and M/s VIPL belong to a common group of companies, the transaction between them cannot be considered other than sale or purchase of the chassis and the Ownership of chassis not transferred after sale of the same by VIPL to Appellant.
The reference to concept of ‘related person’ under Section 4 of the Central Excise Act, 1944, in analysing, the condition of the Notification whether ownership of the chassis is continued to be vested on chassis manufacturer by the learned Commissioner in the impugned order is out of context, in as much as, the question is not for determination of the value of the chassis sold; hence, reliance placed on the meaning of interconnected undertaking under Section 4 of the Central Excise Act, 1944 is also irrelevant.
Further, the clause 1.7 of the Chassis Supply Agreement and Master Agreement dated 01.04.2001 providing license to manufacture entire range of products of ‘AB Volvo’ like trucks, buses, construction equipment etc. to M/s VIPL does not establish the case that the ownership of chassis after being sold by M/s VIPL to the appellant continued to vest on the chassis manufacturer i.e. M/s VIPL - on merit the Appellants are eligible to the benefit exemption Notifications 06/2006-CE dt. 01.3.2006 and 12/2012-CE dt. 17.03.2012.
Extended period of limitation - HELD THAT:- The allegations of suppression of the fact of bodybuilding on the supplied chassis by M/s VIPL and availing benefit of exemption Notifications have not been established. Consequently, invoking of extended period is also not justified. Since, the issue on merit i.e. admissibility of exemption notification has been decided in favour of the assessee, the entitlement of CENVAT Credit on duty paid inputs becomes academic and hence not deliberated.
Thus, the appellants succeed both on merit as well as on limitation - appeal allowed.
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2023 (9) TMI 863
Exemption benefit on captive consumption under N/N. 67/95-CE dt. 16.03.1995 - control panels were cleared for home consumption on payment of duty and also were cleared without payment of duty by availing exemption under Notification No.6/2006-CE dt. 01.03.2006 - HELD THAT:- The issue stands decided in appellant own case M/S. ALSTOM T&D (INDIA) LTD. & SCHNEIDER ELECTRIC INFRASTRUCTURE LTD. APPELLANT VERSUS COMMISSIONER OF GST & CENTRAL EXCISE CHENNAI [2019 (3) TMI 2034 - CESTAT CHENNAI] where it was held that The issue stands decided in M/S. AREVA T AND D INDIA LTD. VERSUS CCE & ST, LTU, CHENNAI [2018 (2) TMI 209 - CESTAT CHENNAI] where it was held that the eligibility of the appellant-assessee for exemption under Notification No. 67/1995 cannot be disputed. They have followed the provisions and complied with the provisions of Rule 6 and all the connected requirements of the Notification No. 67/1995.
The demand cannot sustain and requires to be set aside - appeal allowed.
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2023 (9) TMI 807
Capital goods or not - CENVAT Credit - HELD THAT:- Although, the merits of the said question are engaging the intention of this Court in other pending matters, it is noticed that the impugned order merely held that the extended period of limitation could not have been invoked by the revenue, regard being had to the fact that conflicting views of the Tribunal expressed in different Benches was prevailing at that time. In these circumstances, this Court is of the opinion that no substantial question of law is involved.
Petition dismissed.
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2023 (9) TMI 806
Clandestine removal of chemicals - as per the opinion of Sher-E-Kashmir, University of Agricultural Sciences & Technology, Srinagar, the chemicals cannot be used for post-harvest treatment of apples - HELD THAT:- The opinion relied upon by the Department is inconclusive inasmuch as the same certificate which asserts that the said chemicals cannot be used for post-harvest treatment of apples beyond the period of 25 days also mentions that the university has not undertaken any studies regarding the use of such chemicals in the post-harvest scenario. Therefore, the certificate cannot be said to be conclusive. Moreover, the Jammu Centre of the University has certified that the said chemicals can be used for treatments of apples; the Department counters the submissions of the appellants and the opinion of the Jammu Centre of the University merely by stating that as apples are not grown in Jammu, the certificate cannot be relied upon.
If the Department did not want to rely upon the technical opinion, the same should have been done by countering technical opinion by expert opinion authoritatively countering the opinion given. This having not been attempted or done, the Department cannot brush aside the technical opinion as per the whims and fancies or even for Revenue considerations - It is found that learned Commissioner has, categorically, observed that the Jammu unit of the university have given opinion at the instance of the Department only and the Department cannot be selective in using the reports.
Clandestine removal - HELD THAT:- There are no attempt has been made by the Department to ascertain the stock available and the stock consumed. Though, it has been alleged that the respondents have cleared the stock of inputs clandestinely, no investigation, whatsoever, appears to have taken place in this regard to ascertain the purchasers, the transportation and the receipt of such sale - the learned Commissioner observed that no evidence was put on record to substantiate the said allegations; the show-cause notice is silent on important issues like from where the job work was done, to whom and how these chemicals were sent; onward movement and return of formulations and there is no evidence on the purported use of the formulations in any of the orchards. Therefore, the Department has not made any case of clandestine removal against the appellants.
The learned Commissioner has gone through the issue raised in the show-cause notice and the submissions of the appellants and has given a considered and reasoned opinion on the basis of available evidence on record. The Department has not brought out any cogent reason, whatsoever so as to negate the findings of the learned Commissioner. Under the circumstances, no case has been made out against the impugned order.
The impugned order is sustainable and requires no interference - Appeal of Revenue dismissed.
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2023 (9) TMI 805
Revenue neutrality - clearance of goods without payment of duty - period involved in the year 2010- 2011 to 2014-2015 and the show-cause notice has been issued on 23.03.2016 - time limitation - HELD THAT:- It is fact on record that the appellant has cleared the goods from their unit without payment of duty to their sister unit and the said sister unit cleared the said coals on payment of duty. Although it is a situation of revenue neutrality, but the appellant was monthly required to pay duty at the time of clearance from the transferor unit, otherwise, the Central Excise Act will become redundant - thus, at the time of clearance of goods, the appellants were liable to pay duty.
Time Limitation - HELD THAT:- In the facts and circumstances of the case that when the fact of clearance of coals from the transferor unit without payment of duty was in the knowledge of the respondent as various correspondences were made during the impugned period and the show-cause notices have been issued to the appellant by invoking extended period of limitation, in that circumstances, it is held that whole of the demand is barred by limitation. Accordingly, on limitation, the appellants succeed.
Thus, on merit appellants are liable to duty, but on limitation, the show-cause notice fails - appeal allowed.
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2023 (9) TMI 804
Clandestine Removal - control panels and fans - liability of duty on the goods cleared by them to their principal manufacture - Reversal of CENVAT Credit - allegation that the inputs were not received in their factory and cleared directly to their customers - Inclusion of drawings and design supplied by the principal manufacturer to the appellant.
Liability of appellant to pay duty on the goods cleared by them to their principal manufacture - HELD THAT:- In this case the principal manufacturer is sending inputs to the appellant on job work challans on which the appellant has not taken the cenvat credit and after job-work, the appellant is clearing the same to the principal manufacturer without charging any duty and the appellant is charging only the job-work charges and the principal manufacturer is discharging duty on final product. In that circumstances, relying on the decision of this Tribunal in the case of AUTOMATIVE STAMPINGS & ASSEMBLIES LTD. VERSUS COMMR. OF C. EX., VADODARA [2009 (6) TMI 773 - CESTAT, AHMEDABAD], wherein this Tribunal has observed We find no reasons to add the value of such lugs in the value of the clutch covers manufactured by the appellant, especially when such job has been done by the appellant in terms of Rule 4(5)(a) of the Cenvat Credit Rules, 2002 - the appellant is not liable to pay duty on job-worked goods.
Reversal of CENVAT Credit - allegation that the inputs were not received in their factory and cleared directly to their customers - HELD THAT:- Although the goods were not received in their factory and cleared directly to their customers, but on payment of duty. When the inputs have been cleared to their customers directly on payment of duty, the payment of duty shall be treated as reversal of cenvat credit as held by the Hon’ble Bombay High Court in the case of THE COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS AJINKYA ENTERPRISES [2012 (7) TMI 141 - BOMBAY HIGH COURT], wherein Hon’ble the Hon’ble High Court has observed once the duty on final products has been accepted by the department, CENVAT credit availed need not be reversed even if the activity docs not amount to manufacture - he appellant is not required to reverse the cenvat credit on the input cleared without receiving in the factory on payment of duty.
Inclusion of drawings and design supplied by the principal manufacturer to the appellant - HELD THAT:- The inclusion sought to be made in the assessable value on the basis of imaginary figures, which is not sustainable. It is a fact on record that the appellant has not borne any cost of drawings and design supplied by the principal manufacturer and the principal manufacturer has borne the cost of design and drawings and paid duty on their final product - the cost of design and drawings cannot be included in the job-charges of the appellant, therefore, no duty is payable by the appellant.
The impugned order is set aside and in the result, the appeal is allowed.
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2023 (9) TMI 803
Levy of Excise Duty - Angles, Channels, Joist, TMT Bars etc. used captively for fabrication of capital goods/support structures which were embedded to earth - mis-utilization of the benefit of Notification No.67/95-CE(NT) - HELD THAT:- It is not disputed by the revenue that these items have been used by the appellant for fabrication of capital goods which has been captively consumed for fabrication of capital goods and support structures which were ultimately used in manufacture of their final product i.e. ingot.
Relying on the decision of the Hon’ble Chhatisgarh High Court in the case of M/S VANDANA GLOBAL LIMITED AND OTHERS VERSUS COMMISSIONER, CENTRAL EXCISE AND CUSTOMS, CENTRAL EXCISE [2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT], wherein the Hon’ble High Court has observed Section 37 of the Central Excise Act, 1944 is a rule making power. Section 37(2)(xvia) provide for the credit of duty paid or deemed to have been paid on the goods used in, or in relation to, the manufacture of excisable goods. Though the power to make rules include the power to give retrospective effect, while doing so the provision under consideration is neither made retrospective nor could it be treated as one.
The appellant is not required to pay duty on the items in question which has been used by them captively for fabrication of support structures and capital goods as inputs, which has been ultimately used for manufacture of their final product, i.e. M.S. ingots & wire rods - the impugned order is set aside - the appeal is allowed.
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2023 (9) TMI 802
Refund of unutilised CENVAT credit on closure of factory in the form of cash - applicability of binding judicial precedent that would govern the field than the statutory enactments - Doctrine of merger. - Scope of the Decision of Supreme Court where SLP was dismissed in a short order.
Appellant is challenging the legality of such order of the Commissioner of Central Tax (Appeals) who followed the latter Division Bench Order on the Hon'ble Bombay High Court passed in M/S. GAURI PLASTICULTURE P. LTD., AND OTHERS VERSUS THE COMMISSIONER OF CENTRAL EXCISE AND UNION OF INDIA AND ORS. [2018 (4) TMI 1233 - BOMBAY HIGH COURT] and not the previous one namely JAIN VANGUARD POLYBUTYLENE LTD. VERSUS COMMISSIONER OF C. EX., NASHIK [2009 (6) TMI 790 - CESTAT, MUMBAI] judgement of the same High Court that was passed following the judgment of the Hon'ble Supreme Court passed in UNION OF INDIA VERSUS SLOVAK INDIA TRADING CO. PVT. LTD. [2007 (1) TMI 556 - SC ORDER] - difference of opinion.
Matter was referred to third member bench in [2021 (9) TMI 1478 - CESTAT MUMBAI]
Opinion given by S.K. MOHANTY - INTERIM ORDER NO. 31/2023 - ORDER ON DIFFERENCE OF OPINION -
HELD THAT:- The opinions of the learned Members in the Bench are explicitly divergent only on the effect of the dismissal of SLP of Revenue against the decision of the Hon’ble Karnataka High Court in the case of Slovak India Trading Co. Pvt. Ltd. The issue of limitation raised by the learned Member (Technical), though has not been discussed separately by the learned Member (Judicial); but vide the Interim Order dated 28.09.2021, since has directed for grant of refund along with interest, a divergent stand has been taken impliedly. The other issues, though stated explicitly as points of reference, are not required to be addressed inasmuch as no discussions have been made by either of the Members on those issues in the body of the Interim Order.
On reading of the judgement of Hon’ble Supreme Court, it is amply made clear that the issue regarding cash refund of accumulated Modavt/Cenvat credit, in the case of closure of factory was appreciated by the Hon’ble Court and upon consideration of various decisions rendered by the Tribunal, in allowing such refunds, the concession made by the learned ASG to such extent was accepted and accordingly, the SLP was dismissed. Further, it is an admitted fact on record that the decisions of the Tribunal referred to by the Hon’ble Supreme Court in the judgement dated 25.01.2007 have not been appealed against by the Revenue, meaning thereby that the principles or the issue dealt with and decided by the Tribunal were accepted by the Revenue.
In view of the judgment of the Hon’ble Apex Court in the case of COMMISSIONER OF C. EX., HYDERABAD VERSUS NOVAPAN INDUSTRIES LTD. [2007 (1) TMI 5 - SUPREME COURT] it cannot be said that the Hon’ble Supreme Court had dismissed the SLP in case of Slovak India Trading Co. Pvt. Ltd., without assigning any reasons therein.
The issue in context with doctrine of merger was discussed by the Hon’ble Supreme Court in the case of GANGADHARA PALO VERSUS REVENUE DIVISIONAL OFFICER [2011 (3) TMI 252 - SUPREME COURT], wherein the Hon’ble Court have held that even if the SLP is dismissed with reasons, however meagre (one sentence), there is merger of orders. It has further been held that once the SLP is dismissed, giving reasons by the Hon’ble Supreme Court, however meagre, it becomes a declaration of law. Thereafter, the decision which is merged with the decision of Hon’ble Apex Court, is non-existent, and thus, cannot be reviewed.
Since the principle of the doctrine of merger has been adequately dealt with by the Hon’ble Supreme Court in Gangadhara Palo, it is not felt proper to discuss the binding precedence of the judgments referred to by the learned Members at the referral paragraphs.
It is concluded holding that the ratio of the judgment by the Hon’ble Supreme Court in Slovak India Trading Co. Pvt. Ltd., has the binding effect on all Courts, Tribunal etc., in view of the mandates, contained in Article 141 of the Constitution of India - the limitation aspect would not apply to the facts of the present case for denial of the refund benefit to the appellant.
The learned Member (Judicial) that the impugned order is required to be set aside agreed upon and the appeal is required to be allowed with consequential benefit to the appellant - appeal allowed (majority order).
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2023 (9) TMI 768
Refund of Excess duty paid - capacity based duty - closure of factory - change in constitution of business - permanent cessation of work or not - HELD THAT:- On 25-06-2011, the respondent closed down their factory. The intimation given by the respondent to the Assistant Commissioner of Central Excise by letter dated 22.06.2011 would show that the respondent permanently ceases to work in respect of all the machines installed in the factory and it would be followed for surrender of registration due to the change of constitution of name. In such a peculiar facts and circumstances of the case, in our considered view, the refund claim filed by the respondent would come within the purview of Rule16 of Rules 2008.
The contention of the revenue that the respondent had not permanently ceased to work in as much as they had only changed the constitution of their firm and therefore, it cannot be treated as “permanently ceases to work”. It is difficult to accept the contention of the learned Authorised Representative for the Revenue, as after the change of constitution new company came into existence and respondent firm (Partnership firm) has been treated as permanently ceases to works. There is no provision in Rules 2008 that after declaring “permanently ceases to work”, the manufacturer would not be entitled to reopen his factory with new name. Rule16 would cover the situation, where a manufacturer filed an intimation to the Deputy/ Assistant Commissioner of Central Excise intimating permanently ceases to work for surrender of registration. There is no bar on reopening of the factory with new registration in Rules, 2008, which is a subsequent event.
In the undisputed facts of this case one important aspect needs to be kept in mind that the revenue gravely erred in contending that the factory was not permanently ceased to work as the changed Pvt. Ltd. Company restarted the production. On this, we are very clear in our mind that there is clear distinction in the ownership of partnership firm and a Private Limited Company. Therefore even if a partnership firm ceased their operation and in place of the same a Private Limited Company started operation, both being separate legal entities, it cannot be said that the partnership firm has not ceased it’s production permanently.
It’s very obvious that when one entity closed it’s production and surrendered the registration and a new entity obtained a fresh registration with a new PAN, the former entity became non-existent and it’s closure of production is clearly falls under the term ‘permanently’. Accordingly, the present case is clearly covered under Rule 16 of the Rules and consequently the respondent is legally entitled for the refund of duty.
There is no infirmity in the impugned order - Appeal filed by Revenue is dismissed.
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2023 (9) TMI 717
Invocation of extended period of limitation - Valuation of manufactured goods - Waste Rubber Granules (Patta) and Waste Rubber Granule (RD) - rejection of declared value - Rule 8 of Customs Valuation Rules, 2000 - demand of interest and penalty - revenue neutrality - HELD THAT:- It is not in dispute that Section 11A provides for a limitation of one year for issuing the SCN. This period can be extended to five years in case the duty is not paid, short paid, not levied, short levied or erroneously refunded on account of fraud or collusion or willful statement or suppression of facts or violation of the provisions of Act or Rules with an intent to evade the payment of duty - while the assessee was required to self–assess duty and file ER-1 return, a check against such self-assessment was the scrutiny which the officers were mandated to do by Rules. Audit is the next level of check against the scrutiny by the officers. If the audit points out some wrong assessment which was not pointed out by the officer scrutinising the ER-1 return, the fault lies at the doorstep of the officer. It does not, by itself, establish that the assessee had suppressed any facts.
Revenue Neutrality - HELD THAT:- Revenue neutrality is a concept which has evolved through a series of decisions only for the limited purpose of determining if the assessee could have had an intention to evade payment of duty. This intention is an essential ingredient to invoke extended period of limitation. If it is Revenue neutral situation where, the excess duty, if paid, would have been available to the appellant itself or its another unit or a related unit as CENVAT credit, there cannot be an intention to evade because the assessee would gain nothing by evading - Beyond the limitation, Revenue has no remedy although the charge remains. It is like a time-barred debt which, though owed, cannot be recovered by the creditor. If differential duty was chargeable but was not paid and it is later discovered by audit and it gets time barred under Section 11A, the responsibility for it rests squarely on the officers mandated to scrutinize the returns in time and raise a demand in time.
Since the entire demand is beyond the normal period of limitation, the demand in the impugned order or the consequential interest and penalties cannot be sustained. The impugned order is set aside - Appeal allowed.
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2023 (9) TMI 716
CENVAT Credit - Recovery of 6% of the value of honey treating it an exempted goods cleared by the appellant - Rule 6(3)(i) of the CCR, 2004 - HELD THAT:- As regards credit of other services ISD applied provisions of rule 6(3)(ii) of Cenvat Credit Rules, 2004 and apportioned the remaining credit in production value ratio of all the units and such apportionment, only so much credit as proportionate to the taxable turnover of all the units was distributed by the ISD. The credit was not distributed by ISD was reversed at its end. For period post 01.04.2014 except the credit pertained to trading activity, the ISD distributed the entire credit among all the units in their production value ratio and thereafter the appellant themselves applied the provisions of rule 6(3)(ii) of CCR on cenvat credit distributed by the ISD in the ratio of taxable turnover to the total turnover during the preceding financial year on provisional basis and the same was adjusted by the appellant on the basis of final ratio by 30th June of the next financial year.
On going through the said pre-show cause notice consultation letter and dropping proceeding against the appellant, it is clear that the appellant is reversing proportionate cenvat credit, as per Rule 6(3)(a) therefore appellant is not required to pay 6% of the value of Honey cleared by them.
The provisions of rule 6 are not applicable to the facts of this case as Honey is not an exempted goods - the proceedings against the appellant are not sustainable under Rule 6 of the Cenvat Credit Rules, 2004.
The impugned orders deserve no merits, accordingly the same are set aside - Appeal allowed.
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2023 (9) TMI 715
Reversal of CENVAT Credit - liability to pay 5% / 10% / 6 % of value of the exempted final products cleared for the disputed period 01.02,2008 to 30.11.2012 in terms of Rule 6 (3) (i) of CCR 2004 as proposed in the SCN - extended period of limitation - HELD THAT:- The facts bring out that the appellant has reversed the proportionate credit to the tune of Rs.10,91,346/- along with interest on 05.01.2013. In spite of this, the show cause notice has been issued on 05.03.2013 alleging that the appellant has to pay an amount equivalent to 5% / 10% / 6% of value of exempted final goods for the reason that the appellant has not filed declaration giving the option to the department that they intend to reverse the proportionate credit of the inputs used in the manufacture of exempted products.
The issue stands covered by decision in the case of M/S TIARA ADVERTISING VERSUS UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE [2019 (10) TMI 27 - TELANGANA AND ANDHRA PRADESH HIGH COURT]. The Hon’ble High court held the second respondent did not choose to exercise power under this Rule but relied upon Rule 6(3)(i) and made the choice of the option thereunder for the petitioner, viz., to pay 5%/6% of the value of the exempted services. The statutory scheme did not vest the second respondent with the power of making such a choice on behalf of the petitioner.
Similar view was decided by the Tribunal in the case of M/S NAVA BHARAT VENTURES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE CUSTOMS & SERVICE TAX, HYDERABAD (VICE-VERSA) [2021 (11) TMI 426 - CESTAT HYDERABAD] where it was held that The obligations under Rule 6 are in the form of various alternatives and the assessee is free to choose any option. There is no mechanism either in the CCR or in the Act to enforce any of the options or one of the options on the assessee. If the assessee does not choose any of the options and still avails CENVAT credit, such irregularly availed CENVAT credit can, of course, be recovered under Rule 14 of the CCR.
Thus, the demand cannot sustain and requires to be set aside. The issue on merits is decided in favour of the appellant.
In the present case the appellant has reversed the proportionate credit before the SCN. There is no evidence put forward by the department to establish that there was suppression of facts with intent to evade payment of duty. For this reason, the appellant succeeds on the ground of limitation also.
The impugned order is set aside. The appeal is allowed.
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