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Central Excise - Case Laws
Showing 41 to 60 of 80284 Records
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2024 (4) TMI 3
Refund of the excess duty paid - whether subsequent negotiation of the prices can be the basis for reopening the assessment? - HELD THAT:- The appellant has adopted a selling price to the stock transferred goods on the basis of the sale from depots at or to the nearest time of its removable from the factory.
The learned Commissioner (Appeals) while setting aside the order of the adjudicating authority allowing refund claims of the excess duty paid on account of subsequent negotiation of the sale price from depots, observed Allowing refund in these cases amounts to reassessment of goods, which were already assessed finally by the respondent at the time of clearance of goods from factory. The refund amount is determined and sanctioned without any authority of law.
The observation of the learned Commissioner (Appeals) is in line with the opinion expressed by this Tribunal in the case of Finolex Cables Ltd. [2011 (3) TMI 414 - CESTAT, MUMBAI] wherein it is held that In the instant case, the appellant-assessee has discharged duty liability accordingly. Subsequent change in prices effected by the appellant at the depot does not affect the assessable value already determined and on which duty liability has been discharged. If that is allowed, the very object and purpose of Rule 7 of the Central Excise Valuation Rules will be totally defeated.
There are no reason to interfere with the order of the learned Commissioner (Appeals) - the impugned order is upheld - appeals filed by the appellant are dismissed.
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2024 (3) TMI 1279
Valuation - it is alleged that appellant is receiving Nutrient Based Subsidy, treating the same as additional consideration and thus form part of the assessable for the levy of Central Excise Duty - suppression of facts or not - HELD THAT:- The issue is covered in favour of appellant in the case of COMMISSIONER OF CENTRAL EXCISE, BANGALORE VERSUS MAZAGON DOCK LTD. [2005 (7) TMI 105 - SUPREME COURT] and M/S CORAMANDEL INTERNATIONAL LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, VISAKHAPATNAM-I [2014 (8) TMI 775 - CESTAT BANGALORE] where it was held that Subsidy paid by the Government cannot be considered as an additional consideration includable for excise duty in accordance with statute.
As the issue is apparently covered in the favour of the appellant in view of the precedent rulings, the impugned order is set aside - this appeal is allowed.
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2024 (3) TMI 1228
Clandestine removal - concealment of information of production capacities of its machines installed in the premises - manufacture and production of cigarettes - Evasion of GST and cess which is payable to the respondents - HELD THAT:- The power of judicial review under Article 226 of the Constitution of India is to ensure whether the processes through which a decision is taken by the competent authority is in consonance with the Act and Rules or not, but not the decision itself. Thus, all disputed facts and circumstances are to be adjudicated before the competent authority or before the appellate authority concerned. This certainly is the reason why the High Courts are not entertaining a writ petition against the show cause notices and competent authorities and notices. The demand notices are issued based on initial determination made by the original authorities.
A writ petition need not be entertained at this stage and High Court cannot adjudicate the issues relating to huge economic offence of stealthily procuring raw materials clandestine manufacturing and fraudulent supply of filter cigarettes of various brands during a particular period without payment of taxes, as alleged by the respondents resulting into issuance of show cause notices which were issued after conducting a detailed investigation in the matter by them. Even if the procedures are not followed by the authorities before issuance of show cause notices, they are bound to do so in accordance with the provisions of the Act and Rules.
The interim order granted by this Court stands vacated. However, the petitioner would be at liberty to avail the statutory alternative remedy in accordance with law, if so advised - Petition dismissed.
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2024 (3) TMI 1227
Valuation - brake shoes supplied by them to M/s SAL - Job workers of M/s SAL - whether the appellants are job-workers for M/s SAL and whether the valuation of the Brake Shoes manufactured by the appellant needs to be done taking recourse to CEVR,2000? - Rule 10A of the Central Excise Valuation (Determination of Price of Excisable Goods), Rules 2000 or CEVR, 2000 - HELD THAT:- The appellants submitted the correspondence between them and M/s SAL, which indicates that though M/s SAL are making payments to the suppliers of ingots, the same is but on behalf of, the appellants, by debiting to the account of the appellants. It is seen that this is only a financial arrangement and it in itself does not render the appellants to be the job-workers of M/s SAL.
There is no indication either in the orders placed by M/s SAL on the appellants or in the invoices issued by the appellants to M/s SAL, that the whole arrangement is of any job-work - the argument of the appellant that if they were job-workers for M/s SAL, M/s SAL would have availed the benefit of notification no. 214/86 - there is no reason for M/s SAL to pay for the full value of Brake Shoes rather than job charges, if the manufacture by the appellant was only on job-work basis.
Revenue has not made out any case for rejection of declared value and fixing it at 110% of the cost of production as it is not established the appellants are job-workers of M/s SAL - the impugned order cannot be legally sustained - Appeal allowed.
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2024 (3) TMI 1226
Refund of duty paid in excess - Admitted tax or not - Valuation - freight from the factory of the appellant to the destination (customer’s premises) has to be added to the assessable value or not - place of removal - period 2014-15, April 2015, May 2015 and 1.6.2015 to 8.6.2015 - HELD THAT:- It is found that so far the fact of the not including freight in Assessable value is concerned, the same were not disputed by Revenue in the ROM Application. What was disputed by Revenue was that the said amount has been paid by way of admitted tax or self assessed tax and hence, it was not refundable unless the order of self assessment was modified in accordance with law.
The said amount of Rs.4,22,85,418/- does not form part of the self assessed tax or admitted tax of the appellant/assessee and accordingly, allowing the appeal of the assessee, it is held that they are entitled to refund of the said amount with interest as per Rules - appeal allowed.
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2024 (3) TMI 1225
Job-worker or manufacturer - Clearance of excisable goods of machine made dipped splints without payment of Central Excise duty and without following the job work procedures - whether the demand, interest and penalties imposed against the appellant is legal and proper? - HELD THAT:- From the facts narrated in the impugned order, it can be seen that the appellant was supplied with raw materials by another manufacturer. The appellant is only engaged in manufacture of machine made dipped matches. They have not manufactured any packing materials. At the time of interference by the department officers at the site of the appellant they have obtained delivery challan which evidences that the goods were being sent to the principal manufacturer. Merely because the procedure adopted for job work as per Notification No.214/86-CE is not followed, the department cannot demand duty from the job worker.
The Tribunal in the case of SREE RAYALASEEMA DUTCH KASSENBOUW LTD. VERSUS CCE., TIRUPATHI [2006 (6) TMI 505 - CESTAT, BANGALORE] has held that unless it is proved that the raw materials were not supplied by the principal manufacturer, the department cannot demand duty from the job worker.
It is also seen that the department had issued preliminary show cause notice to the principal manufacturer viz. M/s.Anja Lucifer Industries. The said party had filed an appeal before the Tribunal. The said party had opted for benefit of the Sabka Vishwas Scheme and had discharged duty as per the scheme. The principal manufacturer was thus issued discharge certificate and the appeal filed before Tribunal was dismissed accordingly. The goods therefore have already suffered duty at the hands of principal manufacturer.
The demand against the present appellant cannot sustain and requires to be set aside - Appeal allowed.
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2024 (3) TMI 1224
CENVAT Credit - input services utilized by them at the port of export like Port Services, CHA Services, CHA Services and Clearing & Forwarding Services - case of Revenue is that under N/N. 17/2009, the Appellant was eligible to get the exemption from payment of Service Tax on such services - HELD THAT:- There is no compulsion on the part of the appellant to avail the exemption as given under Notification No.17/2009.
In the case of M/S. SHYAM METALICS & ENERGY LTD. VERSUS COMMR. OF CGST & CENTRAL EXCISE, BHUBANESWAR COMMISSIONERATE [2023 (2) TMI 1030 - CESTAT KOLKATA], this Bench has relied on the final order in the case of M/S. ELECTROSTEEL CASTING LTD. VERSUS COMMR. OF CENTRAL EXCISE KOLKATA-III [2019 (2) TMI 1023 - CESTAT KOLKATA] and has held that the services rendered was within the definition of Rule 2(l) of Cenvat Credit Rules, 2004.
There are no merit in the Appeal filed by the Revenue - appeal dismissed.
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2024 (3) TMI 1172
Scope of Capital goods - whether the finding of the CEGAT/CESTAT, applying the ration laid down in the larger bench of CEGAT in the case of JAWAHAR MILLS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, COIMBATORE [1999 (4) TMI 153 - CEGAT, NEW DELHI] was correct, legal and proper, when the goods are specifically excluded from the purview of Capital Goods as defined in Rule 57 Q of Central Excise Rules, 1944? - HELD THAT:- The order of the larger bench of CEGAT was further subjected to challenge before the Hon’ble Supreme Court by the Department which stood decided on 27.07.2001 in the case of COMMISSIONER OF C. EX., COIMBATORE VERSUS JAWAHAR MILLS LTD. [2001 (7) TMI 118 - SUPREME COURT] where it was held that The stand of the revenue was not as has been projected now by Mr. Rohtagi. In this view, the question of directing remand of these matters for fresh decision by the Tribunal does not arise. On the facts and circumstances of these cases, therefore, the stand that the items in question are not used for manufacture of final product cannot be accepted for the reasons aforestated.
The aforesaid view was further considered by the Hon’ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS LTD. [2010 (7) TMI 12 - SUPREME COURT] wherein, the Hon’ble Supreme Court again reiterating the view rendered in the case of Jawahar Mills where it was held that the Tribunal was correct in law in holding that the assessee was entitled to avail of MODVAT credit in respect of the subject items viz. steel plates and M.S. channels used in the fabrication of chimney for the diesel generating set, by treating these items as capital goods in terms of Rule 57Q of the Rules
In view of the authoritative decision of the Hon’ble Supreme Court in the aforesaid two cases, particularly, in the case of Jawahar Mills, which was relied upon by the CESTAT while deciding the appeal of the Department at the first instance which is under challenge in the present appeal, we do not find any merits in the submissions made by the learned Senior Counsel for the Department.
The appeal, thus fails and is accordingly rejected.
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2024 (3) TMI 1171
CENVAT Credit - received only invoices and no goods - reliability of statements recorded - HELD THAT:- Statements of the above persons have been summarised in the SCN. Not one of these persons was questioned about any of the disputed invoices on the strength of which the appellant had taken Cenvat credit. If the department’s case is that only specific invoices were supplied without goods the least one expects is to question if it was so. All the statements were general statements and are vague and not one deals with the invoices in dispute.
It has also not been disputed that the appellant had recorded the receipt of inputs in its RG-23A Part I and Part II registers. It is also not the dispute that the appellant had paid for the inputs. It is also not in dispute that the appellant had manufactured final products and had cleared them on payment of duty. There is also nothing on record to show that the stock of the inputs and final products in the appellant’s premises were taken and any shortage of either inputs or final products was discovered as a result.
The entire SCN is based on presumptions and assumptions and the confirmation of demand based on such an SCN cannot be upheld - the impugned order is set aside - Appeal allowed.
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2024 (3) TMI 1170
CENVAT Credit - purchase and sale of goods i.e., trading of goods - availing common input services without maintaining separate inventory for the taxable and exempted services in terms of rule 6(2) of the Cenvat Credit Rules (CCR), 2004 - separate accounts are not being maintained for dutiable and exempted services - whether proportionate reversal of credit is sufficient to comply with the relevant CCR, 2004? - period of dispute is July 2014 to June 2017 - HELD THAT:- Rules 6 very clearly establish that the taxpayer has been given an option to reverse the credit along with the interest when common credit is availed on inputs and input services on both dutiable and exempted goods/services.
In the case of M/S. SIFY TECHNOLOGIES LTD. VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI [2023 (3) TMI 12 - CESTAT CHENNAI] relied upon by the Revenue, the facts are entirely different and the question there was one who manufactures and clears simultaneously dutiable and exempted goods, various alternatives were provided to the taxpayer and having chosen a particular option, they cannot avail any other option simultaneously and the amended provisions are also not being considered - In the present case, the appellant does not manufacture consciously dutiable and exempted products but at times, trades in goods that were found to be excess and therefore, he was liable to reverse the CENVAT credit availed on the traded goods which are nothing but exempted products. Since the audit officers have noticed this irregularity, the appellant having accepted it, they have reversed the proportionate credit as laid down by Rule 6(3A) of the CCR, 2004 which is one of the options provided to the tax payer. Therefore, the question of denying this option to the appellant is not acceptable.
The Hon’ble High Court of Telangana Hyderabad 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] had observed We may also note that in the event the petitioner was found to have availed Cenvat Credit wrongly, Rule 14 of the Cenvat Credit Rules, 2004 empowered the authorities to recover such credit which had been taken or utilised wrongly along with interest. However, 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.
In the case of COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX VERSUS M/S RAJASTHAN PRIME STEEL PROCESSING CENTER PVT LTD., SHRI SACHIN GUPTA, SENIOR EXECUTIVE (ACCOUNTS AND EXCISE) , SHRI RAJPAL SINGH, SENIOR MANAGER (FINANCE AND ADMINISTRATION) AND AUTHORISED SIGNATORY [2019 (8) TMI 1175 - RAJASTHAN HIGH COURT] in a similar set of facts, the Hon’ble High Court observed that “in short, the Revenue argument is that Rule 6(3A) is not nearly procedural but was binding upon the assessee, who could not have claimed the benefit of even proportionate credit or it would have otherwise been entitled to input service for which CENVAT Credit was admissible, without following the procedure the Show-cause notice in this case covers two different periods(2011-16) substantial part of that period was when Rule 6(3A) did not exist - In the present case the period of dispute is after the introduction of Rule 3(A) in the CENVAT Credit Rule 2004 which was introduced from 01.04.2016, and Rule 3 provided an option to pay an amount as determined under subrule (3A) which allowed the appellant to reverse the proportional credit.
From the above, it is very clear that even if the manufacturer or a provider of service had failed to exercise the option under subrule (3) will be allowed to pay proportionate credit along with the interest at the rate of 15% per annum from the due date for payment of amount till the date of payment. However, there is nothing on record to show that the appellant has reversed the entire proportionate credit along with interest, therefore the matters needs to be remanded for verifying the same.
There are no reason denying the benefit of reversal of proportion CENVAT credit to the appellant - the impugned order is set aside - appeal allowed by way of remand for verification of payment/reversal of the proportional cenvat credit along with interest.
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2024 (3) TMI 1169
CENVAT Credit - clearance of inputs as such without reversal of payment of amount of credit availed on the said inputs - it is alleged that while clearing the inputs as such, they were required to reverse the input on the highest value of input received in a particular month - HELD THAT:- The said method of adoption of value is not correct as held by this Tribunal in the case of LSR SPECIALITY OIL PVT LTD, AROKIA SAMY, RAMESH BABU VERSUS COMMISSIONER OF CENTRAL EXCISE, BELAPUR [2015 (9) TMI 983 - CESTAT MUMBAI] wherein this Tribunal has held that the average value of input procured in a year is to be taken for reversal of cenvat credit on input cleared as such and the adjudicating authority has also relied on the said decision.
Admittedly, the show-cause notices were issued to the assessee to direct them for reversal on highest value of inputs in a particular month when they were procured, which is not correct. The adjudicating authority cannot improve the case of the Revenue by adopting the decision in the case of LSR Speciality Oil Private Limited at the stage of adjudication.
The charge made in the show-cause notices against the assessee as highest value of input for the month of procurement cannot be adopted for reversal of the cenvat credit by the assessee, is set aside - the impugned order is not sustainable in the eyes of law - appeal filed by the Revenue is dismissed.
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2024 (3) TMI 1135
Valuation - inclusion of advertisement and publicity expenses incurred by the dealers as per the terms and conditions of the dealership agreement mutually agreed between the appellant and their dealers, in the assessable value of the vehicles sold by the appellant - Extended period of Limitation.
The case of the Department is that the price at which the appellant sold the vehicles to the dealers is not the sole consideration and that is the reason that the learned Commissioner in the impugned order confirmed the demand of duty by treating the expenses borne by the dealers on advertisement and publicity as additional consideration liable to be included in the assessable value, on which duty was not paid by taking resort to the provisions of Section 4(1)(b) of the Act read with Rule 6 of the Central Excise Valuation Rules, 2000.
HELD THAT:- The perusal of various clauses of the dealership agreement shows that the expenses incurred by the dealers, have been incurred by them on their own accord, and not for or on behalf of the appellant because the dealership agreement does not provide for any such expenses to be incurred by the dealers on behalf of the appellant.
The price of the vehicles remains the same and is not dependent upon whether the dealers are incurring expenses on advertisement or not. No doubt that the main reason for undertaking advertisement by the dealers is to promote their own business and incidentally the appellant is also benefitted by increase sale of the vehicles, but it cannot be the only ground for inclusion of advertisement expenses incurred by the dealers to the assessable value for the purpose of determining the duty payable from the sale of the excisable goods - perusal of various terms and conditions shows that such expenses are purely optional at the end of the dealers and they have to decide whether to incur such expenses or not, because it is found that there are certain dealers who do not opt for incurring such expenses and a list of those dealers has also been given by the appellant in their additional submissions.
There is no dispute with regard to the advertisement expenses which stands reimbursed by the appellant to the dealer, which already stands factored in the assessable value of the goods.
This issue has been considered by various benches of the Tribunal and some of the judgments relied upon by the appellant, specifically held that the advertisement expenses incurred by the dealers on their own accord, is not to be included in the assessable value for the purpose of payment of excise duty. In this regard, we may refer to the decision of this Tribunal in the case of M/S HONDA SEILS POWER PRODUCTS LTD & OTHER VERSUS COMMISSIONER OF CENTRAL EXCISE, MEERUT-III [2013 (10) TMI 450 - CESTAT NEW DELHI] wherein the identical issue was involved and the Tribunal, after considering the submissions of both the parties, held there is nothing in their agreements from which it can be concluded that appellants had enforceable legal right against the dealers to insist on incurring of certain amount of expenses on advertisement and publicity of the appellant’s products. Just a Clause in the agreements requiring the dealers to make efforts for promoting sales of the appellant’s products cannot be treated as a clause imposing legal obligation on the dealers to incur certain level of expenses on advertisement. In view of this, we hold that the impugned orders are not sustainable.
The advertisement expenses incurred by the dealers are not to be included in the assessable value unless there is a enforceable legal right of the appellant to insist on incurring of certain quantum of expenses on advertisement by the dealers which is not the facts in the present case.
Extended period of Limitation - HELD THAT:- The issue relates to interpretation of the complex provisions of law and the fact, and further that various benches of the Tribunal have considered and decided the said issue, clearly shows that there is no intention to evade payment of duty. Moreover, for invoking the extended period of limitation, the Department is required to establish fraud, collusion, wilful mis-statement or suppression of facts or contravention of any of the provisions of the Act or Rules with an intent to evade the payment of tax. There is nothing in the impugned order that any of these ingredients stand proved. Hence, the substantial demand up to September, 2010 is barred by limitation.
The impugned order is not sustainable in law and therefore, the same is set aside - appeal allowed.
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2024 (3) TMI 1100
Valuation - computation done at 110% of the cost of production of goods at the second unit received through inter-plant transfer - Rule 8 of the Central Excise Valuation Rules, 2000 - Revenue Neutrality - HELD THAT:- In UNION CARBIDE INDIA LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, CALCUTTA [2003 (9) TMI 89 - SUPREME COURT], Hon'ble Supreme Court had laid down ratio that for the purpose of computing the cost of production, Rule 6 of the Valuation Rules is squarely applicable to the cases of inter-plant transfer for determination of cost of production under Rule 8, where goods are not sold but are captively consumed by the Appellant and the interpretation made to distinguish cost and price in the case of CHALLAPALLI SUGARS LIMITED & HINDUSTAN PETROLEUM CORPORATION LTD. VERSUS COMMISSIONER OF INCOME-TAX, AP & COMMISSIONER OF INCOME-TAX (CENTRAL) , CALCUTTA [1974 (10) TMI 3 - SUPREME COURT] by the Hon'ble Supreme Court was also considered to arrive at the conclusion that cost of raw material at Jamshedpur would also remain as cost of material consumed at Tarapur, by removing the notional profit. It is however worth mentioning, here that no finding is available in those two judgments that Rule 6 of Valuation Rules, as existing then was similar to Rule 8 of the Valuation Rules, 2000.
It would not be a breach of judicial propriety to give a finding that Appellant is liable to pay the duty, interest and penalty as demanded in the Show-cause notice that was also confirmed by this Tribunal - Appeal dismissed.
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2024 (3) TMI 1099
Levy of penalty u/r 25 of CER - Availment of fraudulent credit - issuance of Cenvatable invoices without actual dispatch of goods - Penalty on Registered Dealers - Penalty on Unregistered Dealers and Transporters - HELD THAT:- The adjudicating authority finds that the charge levelled against the respondents was that they have facilitated and abetted M/s AIPL in availing fraudulent credit; a careful consideration of type of offences indicates that that the circumstances covered fall under Rule 26(2) of Central Excise Rules, 2004 introduced w.e.f. 01.03.2007 and therefore, penalty cannot be imposed under Rule 25 of Central Excise Rules, 2004.
Only for the reason that the offence relating to imposition of penalty for issuing Cenvatable invoices without supply of goods is made an offence specifically from 01.03.2007, it cannot be concluded that there was no provision in the rules for imposition of penalty for such offence before 01.03.2007. It is found that a bare reading of the provisions gives a clear understanding that even before the amendment Rule 26 provided for imposition of penalty in the cases where the dealer did not account for the excisable goods or in cases of contravention of provisions of the Act and the Rules. It cannot be said that the dealers have accounted for the rules in a proper manner and did not contravene any provisions of law - The very fact that they have issued invoices in the name of M/s AIPL facilitating them to avail Cenvat credit while they have removed the goods elsewhere is a proof in itself that they did not account for the excisable goods properly and have violated the provisions of Rule 9 of Central Excise Rules, 2004.
Now, the question that comes is as to whether such non-accountal and contravention of provisions is with an intent to evade payment of duty. It is on record that the dealers are registered. They are aware of the provisions of law relating to issuance of invoices. Even then, they have issued Cenvatable invoices in the name of M/s AIPL without ensuring that the goods are also consigned to M/s AIPL. A positive act evidencing the intent to evade payment of duty is in the form of issuing Cenvatable invoices. Therefore, the dealers had contravene the provisions of rules with intent to evade payment of duty and they have rendered themselves liable to pay penalty under Rule 25 even before the insertion of sub-Section (2) under Rule 26.
Coming to the case of the transporters, they have not only confirmed the fact that the goods consign to M/s AIPL were transported upto Delhi and in no case were transported to M/s AIPL. Moreover, they have issued transport document evidencing procurement of goods by M/s AIPL - the transporters have also rendered themselves liable to pay penalty under Rule 26 ibid.
Even before insertion of sub-Rule 2 under Rule 26 of Cenvat credit Rules 2004, provisions existed for imposition of penalty under Rule 25 for the offence of issuing Cenvatable invoices without movement of goods. Similarly, there is a provision to impose penalty and for confirming a non-existent transportation goods under Rule 26 of Cenvat Credit Rules, 2004 - Revenue has a strong case in their favour and the impugned order cannot be sustained as far as dropping of penalty on respondent dealers/transporters - such penalty leviable on different dealers/transporters should be commensurate with the offence committed and to wipe of the benefit that has accrued to them while working as a deterrent against any such future repetition of the same.
The impugned order is modified to the extent of non-imposition of penalty on the respondents - Appeal disposed off.
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2024 (3) TMI 1098
Benefit of Nil Rate of duty - CENVAT Credit - MS Pipes - common inputs used in manufacture of dutiable as well as exempted final products without maintaining the separate accounts - fulfilment of the requirements of N/N. 6/2002-CE as amended by N/N. 47/2002 - HELD THAT:- The pipes are meant for intended use mentioned in Notification no. 47/2002/CE dated 06-09- 02 of Department of Revenue Ministry of Finance and Company Affairs, GOI, Issued under condition 47A of the above Notification. Thus, these certificates are found to specifically mention that the pipes are for being used for transferring water from source to the treatment plant and from there to the storage facility. The Certificates are issued by the Competent Government Authority. Hence, we do not find any reason to reject these certificates. Non-availability of these certificates at the time of clearance is nothing but a mere procedural lapse. Substantial benefit of Nil rate of duty arising out of a notification cannot be denied to the appellant on the said ground.
The appellant has otherwise duly complied with the requirement/ condition of the notification. Hence, it is held that the appellant cannot be held liable for duty demand with respect to such clearances for which certificates have been produced on record. Adjudicating authorities are held to have misinterpreted the certificates. It is merely a difference of language and the difference in the format of those certificates. The gist of the certificates is about the same purpose as is mentioned in Notification No.6/2002 as amended vide Notification No.47/2002 to claim the ‘Nil Duty’ benefit. Thus the appellant is held not liable to pay any excise duty.
The order under challenge is not sustainable. The same is hereby set aside. Appeal stands allowed.
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2024 (3) TMI 1040
CENVAT Credit - trading was exempted service - common input services used by the appellant towards manufacture of the goods, providing taxable service and also providing trading - HELD THAT:- It can be seen that mention of trading as exempted service appeared in Chapter V of Finance Act, 1994 for the first time with effect from 01.04.2011. The present demand is for the period prior to 01.04.2011. Therefore, the definition of exempted services with effect from 01.04.2011 is not applicable to the period of the present show cause notice. During the period of present show cause notice, there was no whisper of trading in Chapter V of Finance Act, 1994 which deals with the provisions of law related to levy of service tax.
There was no provision of law for disallowance of cenvat credit availed on service tax paid on input services which also were utilized for trading activity during the relevant period - part of the impugned order through which cenvat credit of Rs.1,97,62,992/- was disallowed is set aside. Once the said cenvat credit is held to be admissible, then there is no question of short payment of service tax as held in the impugned order.
The impugned order set aside - appeal allowed.
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2024 (3) TMI 1039
CENVAT Credit - input service availed by the appellant at the depot level - nexus with the manufacture of the excisable goods either directly or indirectly in or in relation to the manufacture of the final product and clearance of the final product up to the place of removal - Rule 2 (L) of Cenvat Credit Rule, 2004 - time limitation - HELD THAT:- The appellant has appointed C & F agents for receiving the consignment of the goods manufactured by them and they were storing the goods on behalf of the appellant at various depots. The goods were further sold/distributed to their ultimate buyers as per the orders received by such C & F agent from the appellant - the contention made by the appellants that the ownership of the goods which were cleared from the factory has remained with them up to depot or the warehouse of the consignment agent (who was working on their behalf ) and actual sale of the goods have taken place from such depos, agreed upon.
It can be seen from the definition of the place of removal that if the goods are actually sold to an independent buyer from depot of the consignment agent, the place of removal of the excisable goods will be such premises of the consignment agent or depot of the manufacturer. Since all the cost incurred up to the place of removal will be integral part of the price and therefore, all the input and input services which are received up to the place of removal of the manufactured goods, the assesse becomes entitled for credit of the same as per the provisions of the CENVAT Credit Rules.
Thus, the appellant are entitled for input, input service credited up to the place of removal which is in this case is the depot or consignment agent premises.
Time Limitation - HELD THAT:- For the period July, 2010 to May, 2013 the impugned show cause notice has been issued on 20 July, 2015 invoking extended time proviso under Section 11A of Central Excise 1944 read with Rule 2014 of CENVAT Credit Rule, 2004. The fact that CENVAT Credit of Service Tax was availed by the appellant on the strength of proper duty paying documents and all the transaction have been mentioned in the statutory books of account maintained by the appellant, also noted. The Cenvat Credit of input services are reflected in the monthly return in the form of ER-1 of the appellant. In that circumstances there are no ground on the part of the department to allege suppression of facts or willful mis-statement and therefore the demand beyond normal period of limitation is certainly time barred.
The impugned order set aside - appeal allowed.
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2024 (3) TMI 1038
CENVAT Credit - input services - Construction Service - Rent a cab Service - Outdoor Catering (Canteen) Service - Services used by the Head Office (ISD) - C&F and Cargo Handling Service - applicability of Notification No. 3/2011-CE dated 01.03.2011 - invocation of extended period of limitation.
Construction Service - Denial on account of lack of nexus between the construction services and manufacturing of the goods - HELD THAT:- The construction relates to the setting up of the factory which in turn, is directly used for manufacturing and is directly covers under the inclusive part of the definition of ‘input service’. Moreover, during the relevant period, construction service was included in the definition of ‘input service’ and it is only after 01.04.2011 that it has been specifically excluded from it - the construction service, during the relevant time, was within the definition of ‘input service’ and therefore, the appellant is entitled to Cenvat Credit of the same.
Rent a cab Service - Credit denied only on the ground that this service is not used in relation to the manufacture of the product and the cost of the same has been recovered from the employees - HELD THAT:- Rent a cab service has been mainly used for official purposes and the same relates to the business of the appellant. Here it is noted that a part of the cost of this service is recovered from the employees and as per the appellant, only 20% of it, is recovered from the employees and the same has been reversed along with interest and 80% is absorbed in the manufacturing cost. Accordingly, the appellant is entitled to avail 80% of the cost of this service and the Original Authority is directed to verify the quantum of Cenvat Credit reversed by the appellant as claimed by them. On principle, the appellant is entitled to avail Cenvat Credit on this service.
Outdoor Catering (Canteen) Service - credit denied on account of the fact that it is not related to the manufacture of the product and the same is recovered from the employees - HELD THAT:- It is a statutory requirement to provide this facility to the employees as required under the Factories Act and moreover, it enhances the productivity of the employees, which is indirectly related to the manufacture of the final products - As regards the submissions of the appellant that they have only recovered 30% of its cost from the employees and the same has been reversed along with interest, this fact of reversal needs to be verified by the Original Authority and for this purpose, the case is remanded back to the Adjudicating Authority to verify the same.
Services used by the Head Office (ISD) - HELD THAT:- Cenvat Credit in respect of courier service, mandap keeper service, event management, cargo handling and C&F service has been denied on the ground that the same is not in relation to manufacturing activities of the appellant and hence, the same is not admissible - the Tribunal in the case of M/S. ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE C.R. BANGALORE [2016 (8) TMI 8 - CESTAT BANGALORE] after following the decision of the Hon’ble Karnataka High Court in COMMISSIONER OF C. EX., BANGALORE-I VERSUS ECOF INDUSTRIES PVT. LTD. [2011 (2) TMI 1130 - KARNATAKA HIGH COURT], has held that the assessee is entitled to Cenvat Credit of service tax as distributed by the ISD - the appellant is entitled to Cenvat Credit with regard to these services.
C&F and Cargo Handling Service - HELD THAT:- The definition of ‘place of removal’ as provided under Section 4(3)(c) of the Act inter alia includes depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory. Further, C&F and Cargo services are used for the purpose of unloading, storing, accounting and thereafter dispatch of the goods to the specified dealers on ‘FOR’ basis. In this regard, the learned Counsel for the appellant also referred to certain invoices issued by the appellant to prove that all the goods were supplied ‘FOR’ upto the place of buyer’s premises, entire risk is borne by the appellant and therefore, all the expenses incurred by the C&F agent, on which service tax is charged, will fall within the definition of ‘input service’ - the appellant is entitled to Cenvat Credit of service tax regarding C&F expenses.
Invocation of extended period of limitation - HELD THAT:- The Revenue has not brought anything on record to satisfy the ingredient for invoking the extended period of limitation as the appellant was subjected to regular audit and the Department was aware of the fact that the appellant is availing Cenvat Credit of tax paid on input service and therefore, substantial demand in this case is barred by limitation.
The impugned order is not sustainable in law and therefore, the same is set aside - with regard to the services of ‘Rent a cab service’ and ‘Outdoor catering service’ the Original Authority will verify the quantum of reversal made by the appellant; and for this limited purpose, the matter is remanded back to the Original Authority - appeal allowed in part and part matter on remand.
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2024 (3) TMI 1037
Clandestine manufacture and removal - 47658 M.T. of Pig Iron - demand worked out based on the details available in the computer print-out recovered from the premises of the Appellants office and premises associated with them and the statements recorded from the concerned persons - evidentiary value of the computer print-outs - admissible evidences or not - procedure as set out in Section 9D of the Central Excise Act, 1944 was followed in this case or not - reliability of statements recorded under Section 14 of the Central Excise Act, 1944 - penalty on the Appellant companies and it's Director, on the basis of the evidences available on record.
Whether the computer printouts taken from the pen drives recovered during the search can be relied upon as evidence to demand duty? - Whether the conditions mentioned in Section 36B has been followed in this case or not, to rely upon the computer printouts as evidence? - HELD THAT:- The procedure prescribed in Section 36B must be followed to rely on the computer sheets as evidence. It is observed that the department has not followed the procedure prescribed in Section 36B. The author of the entries made in the computer has not been identified. The certificate as prescribed under Section 36B(4) has not been obtained. Hence, the computer sheets recovered from the pen drives cannot be relied upon to arrive at clandestine clearance - As the department has not followed the mandate under section 36B, the data recovered from the print outs available in the computer sheets cannot be relied upon to work out the duty liability on the allegation of clandestine removal. Accordingly, the answer to the question are in the negative.
Whether the procedure as set out in Section 9D of the Central Excise Act, 1944 was followed in this case or not? - If not followed, then whether the statements recorded under Section 14 of the Central Excise Act, 1944 can be relied upon to demand duty? - HELD THAT:- The adjudicating authority has not followed the procedure prescribed under Section 9D, accordingly, the statements cannot be relied upon to confirm the demands. Thus, the answer to question is in the negative.
Whether the demands confirmed in the impugned order on clandestine clearance of finished goods is sustainable in the absence of any evidence of procurement of the major raw materials or sale of the finished goods clandestinely? - HELD THAT:- There is no evidence of clandestine removal, purchase and consumption of unaccounted raw materials, discrepancy between recorded stock and physical stock, seizure of any goods, consumption of excess electricity, actual clandestine removal of finished goods without payment of duty, mode of removal, evidence of transporters and buyers of the clandestinely removed goods and flow back of funds pertaining to clandestine removals have been brought on record in this case. Without having any such tangible evidence, clandestine manufacture and clearance of goods cannot be sustained on the basis of mere assumptions and presumptions. Accordingly, the demand confirmed in the impugned order is not sustainable. Thus, the answer to question is in the negative.
Whether penalty is imposable on the Appellant company and it's Director, on the basis of the evidences available on record? - HELD THAT:- The allegation of clandestine removal against the appellant-company is not sustainable. Accordingly, the role of Director of the appellant-company in the alleged clandestine clearance is not established. It is also observed that no benefit of the alleged illegal activities have accrued to the Director. Therefore, the penalty imposed on the Director of the appellant under Rule 26 of the Central Excise Rules, 2002 is not sustainable and the same is set aside. Thus, the answer is in the negative.
The demand of duty confirmed in the impugned order is not sustainable. The demand of interest and penalty imposed on the Appellants are also not sustainable - Appeal allowed.
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2024 (3) TMI 1036
Time Limitation - classification of goods - Bio-fertilizers - Single Micronutrients - Multi-micronutrients/ Micronutrient mixtures and Plant Growth Regulators (PGR) - HELD THAT:- Having regard to the observations and submissions of the learned AR, as also the arguments made by the learned Advocate for the appellants, in the interest of justice, the issue of classification needs to be remanded back where the Original Authority will give them full opportunity to explain their case and also take into account the statutory provisions as well as the case laws cited by the appellant.
The dispute of classification with respect to all the four products to the Original Adjudicating Authority is remanded to reconsider the same. The Adjudicating Authority shall also provide crossexamination of the Chemical Examiner, if prayed by the Appellants. Further, after hearing the appellants and examining the evidences produced, the Adjudicating Authority shall pass a reasoned order in accordance with law for the normal period.
Penalties et aside - the Appeal is allowed in part and remanded in part.
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