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Central Excise - Case Laws
Showing 81 to 100 of 1430 Records
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2023 (12) TMI 474
Clandestine removal - Confiscation of seized goods - Levy of redemption fine and penalties - ingots and angles found excess in the premises of the factory without any entry in the statutory records.
Confiscation of goods - Redemption fine - HELD THAT:- There is no doubt that some stock was found in excess over the declared stock and were not found entered in the daily stock account of the appellant, but whether or not it was a deliberate act of the appellant within intent to remove the unrecorded goods without issue of invoice or without payment of duty has to be decided based on cogent evidence. This burden needs to be discharged by the Department. Whether a mere violation of Rule 10 of the Central Excise Act amounts to deliberate intention to evade is again to be proved by the Department - there is no such evidence which has been led by the Department - Even improper accounting is denying the mean clandestine removal, in the absence of circumstantial evidence proving the same. In view of the above, the redemption fine imposed on the goods set aside.
Imposition of penalty on appellant No. 1 - HELD THAT:- The essential ingredient that is required to be satisfied for invoking Section 11AC and Rule 25(1) is suppression, collusion etc. which has to be established with an intent to evade payment of duty. In the instant case, it is noted that excess quantity of MS Ingots and MS Angles were found which had not been entered in the statutory books, which is liable for penalty. However, other than the statement, no other corroborative evidence has been brought on record to show that there was an intent to evade. There is also no evidence brought out to establish that the appellant No.1 had indulged in similar evasion earlier - the Learned Counsel has submitted that no malafide intention of clandestine removal of excess goods had been established, and sufficient corroborative evidence has not been established to prove the intention to evade. This contention is agreed upon.
Tribunal in the case of NILESH STEEL & ALLOYS PVT. LTD. VERSUS COMMR. OF C. EX., AURANGABAD [2008 (3) TMI 572 - CESTAT, MUMBAI] observed that penalty should not have been imposed merely because the stock of finished goods are found in the factory without entry in the production register especially, when there is no evidence of clandestine removal. In view of the above settled position, the levy of penalty under Rule 25(1) on the appellant in the instant case cannot be upheld.
It is noted that the essential ingredients to invoke this Rule is if the person is involved in actual evasion or abets in any manner is consequently liable for penalty. No such evidence is brought on record to support the imposition of penalty under this Rule - it is noted that this Tribunal had in the case of Carpenter Classic Exim Pvt. Limited [2005 (12) TMI 185 - CESTAT, BANGALORE] had taken a view that personal penalty on the employee need not be imposed as he is acting under the direction of his employer - In the case in hand, there is nothing on record to show that the employee had benefitted by the activities of the appellant No. 1 during the visit of the officers. Therefore, the penalty imposed on appellant No.2 is set aside.
The impugned order set aside - appeal allowed.
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2023 (12) TMI 473
100% EOU - clearance of bulk drugs made in DTA under Advance Release Order (ARO) - goods cleared to own DTA and its subsidiaries on payment of Excise duty - 110% of the cost of production in terms of Rule 8 of Central Excise Valuation Rules, 2000 - case of the department is that the method opted by the appellant is not correct and legal and according to the department the valuation of the goods cleared in DTA should be done in terms of Rule 3 (3)(b),4 and Rule 8 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - extended period of limitation - revenue neutrality.
HELD THAT:- In the present case, taking the case of bulk drug- PHH it is admitted fact that among various sale price to unrelated parties the lowest price is Rs. 9,050/- per Kg, and similar facts in other identical drugs. Therefore, as per the unambiguous statutory provision in terms of Rule 4(3) reproduced above only the lowest of such values of the identical goods shall be taken to determine the value of goods cleared to the related party. Therefore, since the appellant have cleared their bulk drugs to their related parties undisputedly at a lower price than the price adopted by department, clearly establish that there is no reason to disturb the value of goods to determine the value of the goods cleared by the appellant to their related person.
In view of the decision in Autoline India Ltd. [2015 (4) TMI 772 - CESTAT NEW DELHI], it is settled that even in case of clearance of identical goods by an EOU to a related party the value of imported identical goods has to be applied, in absence of the same the method adopted by the revenue by applying the same price of the goods sold in India by EOU is incorrect and illegal.
Thus, in cases where the goods is cleared to related DTA parties which is identical to the goods sold to the unrelated party, the value adopted by the appellant is correct and legal and on the basis of price of goods cleared to unrelated DTA parties demand of differential duty is incorrect and illegal.
The revenue was supposed to find out the value of identical goods imported into India and if at all it is found that the price declared by the appellant is lower than the price of imported goods than price of identical imported goods could have been applied. However, in the present case the Adjudicating Authority straight away jumped to Rule 8 without making any effort to determine the value in terms of Rule 4 to 7 of Customs Valuation Rules. Therefore, the valuation determined by the department under Rule 8 cannot be accepted. As discussed above, since the department has not brought the value of identical imported goods. in the present case also the value declared by the appellant cannot be disturbed.
Extended period of limitation - revenue neutrality - HELD THAT:- It cannot be said that the appellant have suppressed any fact from the department with intent to evade payment of duty. It is further observed that since the supplies made under ARO and in other cases the Cenvat credit was available in respect of CVD/SAD portion to the recipient of goods, the entire issue was of revenue neutral. Therefore, for this reason also no mala fide intention can be attributed to the appellant for short payment of duty, if any. Therefore, there are no doubt in mind that looking to the facts of this case the appellant have not suppressed from or mis-declared the information to the department with intent to evade payment of duty. Accordingly, the extended period is not available in the present case.
The demand of excise duty in the present case is not sustainable - the impugned orders are liable to be set aside - Appeal allowed.
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2023 (12) TMI 472
100% EOU - eligibility for benefit of exemption available under Notification No. 8/97-CE dated 01.03.1997 and Notification No. 23/2003-CE dated 31.03.2003 to pay duty on DTA clearance of ‘Open End Yarn’ - case of the revenue is that ‘Open end yarn’ was manufactured by the appellant out of imported raw cotton hence not eligible for exemption - suppression of facts or not - time limitation.
HELD THAT:- The appellant has manufactured Ring Spun Yarn and Open End Yarn. The Ring Spun Yarn was manufactured out of imported raw cotton as well as locally procured raw cotton and in the process of production of the same, cotton waste was generated. The open end cotton yarn was manufactured from cotton waste. The sole basis on which the exemption is sought to be denied by the revenue is that Open End Yarn cleared in the DTA is produced out of the cotton waste allegedly arose of the imported cotton. Whereas it is found that the Notification only provides that finished goods should be manufactured or produced from raw materials manufactured or produced in India - In the present case, cotton waste is indeed produced in India. The goods cleared to DTA in the present case are ‘Open End Yarn’ which is manufactured wholly out of cotton waste generated at the time of manufacture of Ring Spun Yarn in the factory premises of appellant.
The entire quantity of imported cotton or domestic cotton used as raw materials for the manufacture of ‘Ring Spun Yarn’ and not for the ‘Open End Yarn - In the present matter imported cotton are raw material for “ Ring Spun Yarn” , it cannot be said that the same are “raw materials” as envisaged in Notification No. 8/97 for Open End Yarn. The expression “raw materials” is a material used in manufacture of goods; in the case in hand Open End Yarn is manufactured from cotton waste and not from the imported cotton.
The Supreme Court in the decision in COMMISSIONER OF CENTRAL EXCISE, SURAT-I VERSUS M/S FAVOURITE INDUSTRIES [2012 (4) TMI 65 - SUPREME COURT] upheld the judgment of this Tribunal in Favourite Industries and ruled that the benefit of exemption under Notification No. 8/97-C.E. is available where raw materials supplied by another 100% EOU are used by a 100% EOU and that such raw materials or goods belonging to 100% EOU would constitute raw materials or goods produced or manufactured in India. In view of the aforesaid Apex court judgment, it is clear that goods manufactured in EOU is duly considered to be manufactured in India. In the present matter the cotton waste was manufactured in Appellant factory and the same was used for Open End Yarn accordingly the condition of the Notification stand satisfied by the appellant - It therefore, also follows that when further goods are manufactured out of such cotton waste, which is an indigenous product, such further goods viz. Open End Yarn in this case, shall be goods which are manufactured wholly out of indigenous raw material and therefore, eligible for the benefit of the Notification. Clearly, in the present matter revenue has failed to consider the provisions of Section 2(d) and Section 3 of the said Act and erred in holding that cotton waste is not manufactured product.
Time Limitation - suppression of facts or not - HELD THAT:- It is on records that department was fully aware about the activity of appellant and all the facts were in the knowledge of the department at the time of issuance of first show cause notice dated 31.01.2005. In this fact when the department was in complete knowledge regarding the use of raw material and clearance of finished goods in DTA, however, the department has not raised any objection at the relevant time. Therefore, there is absolutely no suppression of fact or mis-declaration with intent to evade payment of duty on the part of the appellant. Therefore, extended period of demand cannot be invoked. Hence the demand for extended period is not sustainable on limitation also.
The demand of duty is not sustainable on merit as well as on limitation. Accordingly, the impugned order is set aside - Appeal allowed.
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2023 (12) TMI 471
Entitlement for refund on the valve which is not a manufactured goods and the same was received and cleared as such - malafide intent - suppression, of facts or not - extended period of limitation - HELD THAT:- The Notification No. 39/2001-CE dated 31.07.2001 is undisputedly applicable for the refund of duty paid on the manufactured goods - In the present case, valve has not undergone the manufacturing process. The appellant also admitted that the valve was cleared as such and the duty was paid in terms of Rule 3(5) of the Cenvat Credit Rules, 2004. In this fact it is clear that the valve which is cleared as such without involving manufacturing process and duty paid there on is treated as duty paid on removal of inputs in terms of Rule 3(5) of the Cenvat Credit Rules, 2004. Therefore, the refund granted to the appellant under Notification No. 39/2001-CE dated 31.07.2001 which is not applicable to the removal of input as such, the said refund is correctly recoverable from the appellant.
Notification No. 39/2001-CE dated 31.07.2001 clearly prescribes that the refund mechanism is provided only in respect of manufactured goods. The appellant knowingly paid the duty and claimed the refund of unmanufactured goods which itself is malafide intention. Secondly, the appellant have not disclosed that the valve on which the cenvat credit was availed has not undergone into the manufacturing process of the finished product. Therefore, there is clear suppression of fact on the part of the appellant. Hence, the submission of the appellant cannot be agreed upon, that the extended period was wrongly invoked. Accordingly, the recovery of the demand of erroneous refund was rightly made. Hence there are no infirmity in the impugned order.
The impugned order is upheld. Appeal is dismissed.
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2023 (12) TMI 434
Incorrect availment of CENVAT Credit - inputs - SS Patta/Patti, SS Circle, SS Flat, SS sheet etc. - denial of credit on the ground that Appellant melts its inputs and produces SS Billets/Wires/rods/bars etc. and there is no proof that the Appellant uses SS Patta/Patti, SS Circle, SS Flat, SS Sheet (assuming it to be virgin material) - HELD THAT:- In the facts and circumstances of the present case, it must be held that the Appellant had in fact received SS waste and scrap supplied to them through dealers, on documents, which otherwise show that it was seconds/defective etc. and had correctly availed Cenvat Credit thereon, in absence of any cogent evidence regarding either diversion of such goods by suppliers or replacement thereof by the Appellant from any other local source - Also, when it comes to the issue of availing Cenvat Credit on MS scrap, the allegation is that the domestic scrap was received by the Appellant Company on which no Central Excise duty would have been paid, whereas the credit was availed on basis of invoices raised by the dealers. There revenue department has doubted the factum of dealers themselves receiving duty paid MS scrap.
The cross examination of various witnesses was granted to the Appellant, wherein it transpires that most witnesses have either stated that they do not remember the details of the transaction or that the statements did not correctly bring out the factual matrix involved, leading to the evidentiary value of the oral evidences to be diminished. In certain occasions, the contradicting stand taken by some witnesses in first retracting their statements and then during the course of later proceedings stating that they mistakenly retracted it, leading to strong suspicion on the genuineness of the manner in which the statements were recording and entire investigation was done.
Even in case of MS scrap, there is no allegation or proof of flow back of amounts by anyone to the Appellant as well. There is no evidence of procurement of domestic scrap in cash from open market as well. There is no evidence of sale of duty paid scrap by Dealers in question, to any third party in cash as well. The factum of duty paid goods being cleared by manufacturers and receipt of proper invoice by the Appellant are not in dispute as well - The 9078 MT of MS scrap was procured by the dealers and as involved in the present case, if domestic scrap was procured locally to substitute this, not a single supplier for domestic scrap (which presumably was sent to the Appellant) is identified by revenue. Such huge quantity of MS scrap if was sold to other buyers by the Dealers, again it is not shown to whom it was sold as well. There is no proof of receipt or payment for domestic scrap by any person to any other person as well.
The revenue has not been able to substantiate its case, except raising allegations based on mere conjectures and surmises, that the Appellant had not received MS and SS scrap through the dealers. There is no other corroborative evidence to substantiate such serious charges and the demand on this count as such must be quashed and set aside.
The impugned orders are set aside - Appeal allowed.
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2023 (12) TMI 433
Refund claim - Substantial expansion of installed capacity and availed benefit of N/N. 50/2003-CE dated 10.06.2003 - denial of refund claim on the ground that the appellants have violated conditions of Notification No.49-50/2003-CE dated 10.06.2003 and SSI Exemption No.08/2003 dated 01.03.2003 and also for the reason of unjust enrichment.
The appellants argue that the new unit started by them has no connection with the existing manufacture and has to be treated as a new unit for the purpose of the notification.
HELD THAT:- This issue has been considered by the Bench at New Delhi in the case of Tirupati LPG Industries Ltd. [2015 (10) TMI 622 - CESTAT NEW DELHI]; whereas the appellant in the impugned case was manufacturing V.P. Rings and has established a unit to manufacture/ fabricate machinery, in the case of Tirupati LPG Industries Ltd. [2015 (10) TMI 622 - CESTAT NEW DELHI], they were manufacturing LPG Cylinders and have started a unit for manufacture of ACSR Conductors and claimed the exemption under Notification No.50/2003; the facts of both the cases are identical.
The machinery manufactured by the appellants by establishing a separate unit which started production after 07.01.2003, is eligible for benefit of Notification No.50/2003 - the contention of the learned Counsel for the appellant that there is no condition, whatsoever, in the said notification, so as to restrict benefit to only those units which are permitted by the District Industries Centre or any other authority, is agreed.
Principles of unjust enrichment - HELD THAT:- The appellants have submitted a certificate issued by a professional Charted Accountant, which has not been negated with evidence and therefore, it is found that there is no reason as to why the certificate should be disbelieved. Moreover, the bona fides of the appellant are established by the fact that an amount of Rs.93,120/- was not claimed by them for the reason that the same has been recovered from the customers; the same has been confirmed by the report of the Revenue Officer also - the claim of the appellant that in respect of an amount of Rs.32,206/-, cum-duty value must be considered, not agreed; it is found that the moot point is not about the cum-duty value but is about the fact whether the appellants have recovered the amount representing as duty from the customers. Therefore, the appellants are not eligible for this portion of the refund.
The appeal is partly allowed.
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2023 (12) TMI 432
Violation of principles of unjust enrichment - Denial of access to eligible refund of duties of central excise, arising from finalization of provisional assessment for clearances effected from April 2011 to June 2011 - HELD THAT:- It is seen that several orders of the Tribunal have held that such refunds cannot be withheld on the ground of unjust enrichment. Furthermore, these were not only accepted but also those in which first appellate authority followed the decision of the Tribunal.
Reliance can be placed in M/S. SAVITA OIL TECHNOLOGIES LTD. VERSUS COMMISSIONER OF CGST & CE, BELAPUR [2023 (2) TMI 1225 - CESTAT MUMBAI] where it was held that In case of N G Thakkar [2012 (3) TMI 248 - BOMBAY HIGH COURT] it has been held that the decisions of the lower appellate authorities that the duty element has not been passed on to the customers is based on verification of the evidence adduced by the assessee.
There are no merit in the impugned order which is set aside - appeal allowed.
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2023 (12) TMI 374
Activity amounting to manufacture or not - appellant inserts 100gm toothpaste tube and one toothbrush in the blank slots provided in the promo pack at their facility/ factory - eligibility for the exemption contained in the Notification No.50/2003 as the declaration was filed late - activity undertaken by the appellants attracts service tax or central excise duty - invocation of extended period of limitation - HELD THAT:- Having given the entire description of the combi pack received by the appellants and their activity of inserting 100 gm toothpaste and a toothbrush in the combi pack and closing the pack, learned Commissioner comes to the conclusion that the pack with complete contents is only marketable to the ultimate consumer and the job undertaken by the appellants amounts to manufacture - it is found that as per Chapter Note 6 cited above, the following processes amount to manufacture: (a) labelling or re-labelling of containers. (b) packing from bulk packs to retail packs. (c) adoption of any other treatment to render the product marketable to the consumer.
The appellant’s activity is not clearly covered by (a) or (b) above and it is not the case of the Department also. It is the contention of the Department that the process undertaken by the appellants falls under (c) and thus, amounts to manufacture - It is M/s CPIL that manufactures the toothpaste and purchases toothbrush on payment of duty and supplies the same to the appellant. The goods have already become marketable before they reach the premises of the appellants. It is the case of the Department that the process undertaken by the appellants makes them marketable as the combi pack contains a disclaimer that “individual items are not for sale”.
The marketability of the goods and the manner in which they are marketed by an individual manufacturer are quite different. The manner in which the goods are marketed does not at all make them marketable. If that is the case, no toothpaste or toothbrush should have been marketed not only by M/s CPIL but also by others, in a standalone condition. However, it is everybody’s knowledge that toothbrush and toothpaste are also sold as individual pieces. The scheme of offering them in a combi pack does not make them marketable only as a combo. To that extent, we find that learned Commissioner has failed to distinguish between “marketability” and the manner in which the said product is “marketed”. The appellants are merely completing the process of combi pack manufactured by the principal manufacturer i.e., M/s CPIL - the process undertaken by the appellants takes care of the manner in which the said product is marketed and in no case makes the goods marketable. Therefore, the process undertaken by the appellant does not amount to manufacture.
Whether the appellants are eligible for the exemption contained in the Notification No.50/2003 as the declaration was filed late? - HELD THAT:- In terms of the Notification No.50/2003, a manufacturer who intends to avail of the exemption under the notification shall exercise his options in writing before affecting the first clearance and such option shall be effective from the date of exercise of the option and shall not be withdrawn during the remaining part of the financial year. Further, the manufacturer shall while exercising the option under Condition as above inform in writing to the jurisdictional Deputy Commissioner or Assistant Commissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise giving the following particulars viz. (a) Name and address of the manufacturer, (b) Location/ locations of factory/ factories; (c) description of inputs used in manufacturer of specified goods; (d) description of the specified goods produced; (e) date on which option under this Notification has been exercised - by undertaking the activity in the specified area, the appellants have made themselves eligible as per the substantial condition of the notification. In such circumstances, it has to be held that the declaration is only procedural. Moreover, all the details as required as per the notification have been furnished by M/s CPIL. The appellants are eligible for the exemption contained in the Notification No.50/2003 as the declaration was filed late.
Extended period of limitation - HELD THAT:- The Department was kept informed about the activities of the appellants by their principal manufacturer as early as 2007. Therefore, we find that there is no positive act on the part of the appellants to show intent to evade payment of duty. Further, the appellant has entertained a bona fide opinion that the said activity did not amount to manufacture but was exigible to service tax. At no point of time even though a couple of audit inspections were conducted, Department did not raise any objection as to the payment of service tax on the activity undertaken by the appellants. Therefore, Department has not made out any case for invocation of extended period.
The impugned order set aside - appeal allowed.
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2023 (12) TMI 373
Benefit under Notification No.12/2009 denied - Reversal of CENVAT credit availed on imported zinc skimming - service tax paid on transport of goods and Custom House Agent Services which are common services for the manufacture of zinc ingots and zinc ash - Violation of principles of natural justice - HELD THAT:- The learned Commissioner has not given any findings as to how the report dated 16.03.2010 was wrong and not required to be considered. This is a clear violation of principles of natural justice - it is also found that the appellants have not given suitable submissions as to whether the CENVAT credit of duty paid on the imported zinc skimming and the common input services has been reversed or not. It is also not clear from the records of the case as to whether the appellants reversed the duty paid on the zinc ash, though on a mistaken notion, or the credit availed on entire items and common input services. Under the circumstances, the matter needs to travel back to the Commissioner to examine the report dated 16.03.2010 and to record reasons as to why the same was not considered.
The appeal is allowed by way of remand to the Adjudicating Authority.
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2023 (12) TMI 372
Violation of principles of natural justice - appeal rejected without issuing a notice - appeal was time barred or not.
Whether the Commissioner (Appeals) was correct in rejecting their appeal without issuing a notice to them as per principles of natural justice? - HELD THAT:- The principles of natural justice are not a straight-jacket formula. It has been held by courts that whether in fact, prejudice has been caused to the person by not doing a certain action, has to be considered on the facts and circumstances of each case. To sustain the allegation of violation of principles of natural justice one must establish that prejudice has been caused by non-observance thereof.
This being a case where the burden of proof has been shifted by the department to the appellant by issue of letter dated 27.9.2021, it was for the Appellant themselves to demonstrate that the Appeal was filed within the time limit prescribed by the statute, no prejudice has been caused to them by not giving them a notice regarding time-bar - the Commissioner (Appeals) decision cannot be faulted on this score.
Whether the appeals filed by them were time-barred? - HELD THAT:- The issue raised by the appellant involves a question of fact and law. Although the issue of fact was examined by the learned Commissioner (Appeals) before coming to a conclusion it is found that the Tribunal being the last fact-finding authority, it is essential that the Appellants pleading should be examined for its correctness.
It is seen that a document is deemed to be served by post by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.
It is seen that a document is deemed to be served by post by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.
The Appellants pleadings fails both on facts and law - impugned order merits to be upheld - Appeal dismissed.
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2023 (12) TMI 371
Entitlement for interest on refund of amount depositted as pre-deposit - interest on sanctioned amount of refund has been denied on the ground that refund has been sanctioned within three months from the date of communication of the order of appellate authority - Section 35FF of Central Excise Act, 1944 - HELD THAT:- The amount in question was not deposited under Section 35F, however is akin to predeposit for the reasons as discussed above. Resultantly, we hold that the said proviso is not applicable to the given set of circumstances. Irrespective that the amount in question except for Rs.3,11,00,000/- was deposited prior 06.01.2014 - the findings are liable to be set aside. Section 35FF itself prescribes the rate of interest in the range of 5% to 36% when these provisions is read in the light of the above provisions and the decisions with respect to the rate of interest.
The appellant is entitled to receive interest at the rate of 12%. Though the department has impressed upon that the demand with respect to Rs.16,00,60,335/- has been remanded for de novo adjudication but apparently and admittedly as on date the said demand also stands set aside vide the final order of this Tribunal dated 20.10.2017 [2017 (12) TMI 7 - CESTAT NEW DELHI].
The appellant is held entitled to have interest on the amount of refund sanctioned at the rate of 12% per annum from the date of the deposit of the amount till the date of refund thereof. Except that for an amount of Rs.13,50,500/- which was deposited during investigation but towards the duty liability that too from the Cenvat account. The appellant shall be entitled for the interest on the said amount from the date of the final order of the Tribunal dated 20.10.2017 (vide which the duty demand was set aside) till the date of payment thereof - Appeal allowed.
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2023 (12) TMI 370
Exemption under N/N. 08/2003-CE dated 01.03.2003 availed - requirement of discontinuation of availment of cenvat credit - invocation of sub-rule (2) of Rule 11 of Cenvat Credit Rules, 2004 - HELD THAT:- In the final order of this Tribunal in the case of COMMISSIONER OF C. EX., CHANDIGARH VERSUS CNC COMMERCIAL LTD. [2006 (2) TMI 576 - CESTAT, NEW DELHI] it was observed that the said rule contemplated that additional payment was not allowed to be demanded by invoking the said rule.
The original authority has dropped the demand by relying on the final order of this Tribunal in the case of CNC Commercial Ltd. The said final order was ultimately affirmed by Hon’ble Supreme Court.
The order passed by the original authority through which proceedings initiated through show cause notice dated 09.06.2009 were withdrawn, is upheld - the impugned order set aside - appeal allowed.
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2023 (12) TMI 369
CENVAT Credit - electricity is an excisable goods or not - demand of an amount equal to 10% of the electricity sold to PSEB and consumed by the appellant in their residential colony meant for their workers - applicability of Rule 6 of CCR - period from April 2006 to February 2009 - HELD THAT:- The appellant though had reversed the entire amount of Rs. 14,20,586/- availed on all input services (Manpower supply and Insurance Service) which has been used for generation of electricity but his defence is that in fact he was required to reverse only proportionate credit. The appellant has also furnished calculation chart of proportionate credit required to be reversed alongwith his reply to the show cause notice but the same was not considered by both the authorities.
The main ground raised by the appellant before both the authorities regarding the non applicability of Rule 6 of CCR, 2004 has not been considered and not given any findings in the impugned order. There is no finding in the impugned order regarding the stand of the appellant to reverse only proportionate cenvat credit and not the whole cenvat credit on input services.
This case needs to be remanded back to the Ld. Commissioner (Appeals) to decide afresh after considering all the pleas/grounds raised by the appellant - Appeal allowed by way of remand.
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2023 (12) TMI 368
Activity amounting to manufacture or not - activity of galvanizing for goods falling under Chapter 72 of CETA - HELD THAT:- It is found that the activity of galvanizing of the items falling under chapter 72 amounts to manufacture was introduced w.e.f. 08.04.2011 through Chapter (V) of the Finance Act, 2011.
As during the impugned period, galvanization of the items falling under chapter 72 of the CETA did not amount to manufacture, in that circumstances, the appellant is not liable to pay duty on galvanizing activity of the goods falling under chapter 72 of the Tariff Act during the impugned period.
The demand of excise duty is not sustainable against the appellant - the impugned order set aside - appeal allowed.
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2023 (12) TMI 367
Recovery of CENVAT Credit - credit passed on by the appellant as the first stage dealer/importer by debiting DEPB pass book - Rule 12 of Cenvat Credit Rules, 2002/ Rule 14 of Cenvat Credit Rules, 2004 - HELD THAT:- From a plain reading of the above provisions, it is clear that the Cenvat Credit has been taken and utilized wrongly, could be recovered from the ‘manufacturer’ only. In the present case, the show cause notice has been erroneously issued to the appellant-dealer for passing on the credit by debiting the DEPB passbook instead of to the ‘manufacturer’, who received the credit. It is found that the purchasers, who have received the invoices, categorically denied availment/utilization of Cenvat Credit during the relevant period even though it was passed on to them in dealer’s invoice. Necessary evidences have been annexed to the Appeal paper-book. No contrary evidence has been placed by the Revenue to rebut the same. Thus, recovery of credit from the first stage dealer/importer-appellant as confirmed in the impugned order, cannot be sustained.
The impugned order is set aside - Appeal allowed.
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2023 (12) TMI 308
Levy of Central Excise Duty - sale of computer systems - examination of documents not carried out properly - principles of natural justice - HELD THAT:- There was a specific direction given in the remand order of Tribunal to pass order after considering the documents. It is seen from the impugned order that while it contains a list of documents numbers there is no examination of documents whatsoever even on the sample basis.
The order of Commissioner is based on his belief that at the material time what was the practice in the trade. There is no examination whatsoever of the documents like invoices. Not even one invoice has been examined in detail. The impugned order merely repeats the allegations made in the show cause notice that too without giving any independent finding whatsoever. In this background, the impugned order which is based on presumptions cannot be sustained and the same is set aside. The onus of proving that the activity of manufacture had taken place was on the revenue and revenue has failed to fulfill the said obligation despite repeated opportunities being given.
There are no merit in the case, the same is set aside - appeal allowed.
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2023 (12) TMI 307
CENVAT Credit - availment of credit after payment of Additional Customs Duty (ACD) & SAD on the demurrage charges - HELD THAT:- It is found that the whole demand of Customs Duty on demurrage is misconceived - Appellant had rightly taken Cenvat credit on the basis of challans and bills of entry. Further, there is no element of fraud, suppression, etc., involved and the issue is wholly interpretational in nature. Accordingly, the Impugned Order is set aside so far disallowance of Cenvat credit on the issue of demurrage is involved along with penalty imposed.
Appeal allowed.
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2023 (12) TMI 306
Chargeability of interest in terms of rule 7 of Central Excise Rules, 2002 following confirmation of demand on finalization of provisional assessment - assessments were rendered as provisional under rule 9B of Central Excise Rules, 1944, the finalization occurred after Central Excise Rules, 2002 came to into effect - HELD THAT:- The issue pertaining to leviability of interest on finalization of provisional assessment, in all cases pertaining to clearances prior to 2001, has been set at rest by the Central Board of Indirect Taxes & Customs (CBIC) circular no. 354/66/2001-TRU dated 21st June 2021 where it was held that In Rule 7 relating to provisional assessment, provision has also been made for charging of interest or for allowing refund, as the case may be. It may be clarified that these will apply to cases in which provisional assessment is resorted to on or after 1-7-2001 and not to past cases of provisional assessment even if the assessments are finalized on or after 1-7-2001.
Furthermore, in another dispute of theirs decided by the Tribunal, in CADBURY INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [2009 (1) TMI 701 - CESTAT, MUMBAI], it was held that interest will be payable from 1-7-2001 from which date these rules became effective.
The Hon’ble High Court of Bombay, in M/S. DGP HINODAY INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-1 [2012 (3) TMI 327 - BOMBAY HIGH COURT] has clearly held that interest liability would arise only when the assessments were made provisional after the new rules came into existence.
The impugned order does not sustain and is accordingly set aside - Appeal allowed.
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2023 (12) TMI 305
Classification of finished goods - printed plastic sheets - to be classified under sub heading 3920 39 as ‘printed PVC sheets’ or as ‘products of printing industry’ corresponding to sub heading 4901 90 in Schedule to Central Excise Tariff Act, 1985? - HELD THAT:- The facts do not appear to be straightforward inasmuch as the submission of both sides appear to be at cross purposes.
On the one hand, it is claimed by the appellant that they manufacture plain ‘plastic sheets’ which, upon clearance on payment of duty, are transferred to a group entity at the same premises for printing and, thereafter, sought to be cleared on payment of ‘nil’ duty applicable to goods corresponding to sub-heading 4901 90 of Schedule to Central Excise Tariff Act, 1985. On the other hand, this fine distinction remains unattended in the orders of lower authorities who have proceeded merely to hold that the finished goods are in conformity to the description corresponding to sub-heading 3920.39 of Schedule to Central Excise Tariff Act, 1985 with applicable rate of duty - In either situation of the last activity being undertaken by separate unit, or even by the same unit, legitimizing of clearance, as manufacture of ‘plastic sheets’ with attendant duty liability at the earlier stage, is implicit owing to submission of the appellant not having been challenged by the respondent-Commissioner herein.
It is proceeded on the assumption that the duty had been discharged on plain ‘plastic sheets’ which are, thereafter, subject to further processing.
The decision of the Hon’ble Supreme Court in re Caprihans India Ltd, [2015 (11) TMI 1170 - SUPREME COURT] for the earlier period, has held that the activity of ‘printing’ does not amount to ‘manufacture’ and, if such activity was sought to be charged to duty at the last stage, the proceedings would fail on that score. If, on the other hand, the appellant had not discharged duty liability on plain ‘plastic sheets’, then such liability will arise notwithstanding further processing into a non-dutiable item, owing to the decision rendered by the Hon’ble Supreme Court.
The impugned order set aside - matter remanded back to the original authority - appeal disposed off.
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2023 (12) TMI 304
Availment of CENVAT credit fraudulently without actually receiving the goods in the factory - denial of relief for penalty as provided under SVLDR Scheme - declaration as required under the SVLDR Scheme not made - HELD THAT:- It is clear from the provision of Section 124 that the applicants are eligible for relief of entire penalty or late fee. Now the question arises as to whether the immunity or relief is automatic or is consequent upon the declaration required to be filed by the assessees. The statutory provisions indicate that the appellants are eligible for relief for the entire amount of penalty or late fee. The relief is not subject to the satisfaction of the committee constituted for operationalization of the Scheme as in the case of settlement of duty. Had the appellants filed declarations, the said committee had no role but to give relief as contained in Section 124 - the filing of declaration, more so, in the instant case, where only penalty is involved, remains a procedural issue or a formality. Tribunal and High Courts have been consistently holding that procedural infractions, if any, should not come in the way of a substantial right.
Penalty - HELD THAT:- Though, no positive act of connivance was evidenced by the above appellants, Commissioner goes on to impose penalty on the appellants - such an order passed without appreciation of the facts and law cannot be sustained. On going through the records of the case, it is seen that no investigation at the end of the transporter/ truck drivers has taken place to falsify the claims of the appellants and to support the allegations by the Department. In the absence of the same, penalty cannot be fastened to the appellants merely because of the fact that there was a fraud committed by the company which procured goods from the appellants. Also, the financial transactions claimed by the appellants have not been negated - penalty cannot be imposed on the appellants.
The benefit of the Scheme cannot be denied to the appellants just because they did not file the declaration under SVLDR Scheme - the impugned order cannot be sustained on merits also as far as the imposition of penalty, on the appellants herein, is concerned - Appeal allowed.
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