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Central Excise - Case Laws
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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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2024 (3) TMI 1035
CENVAT Credit - exempt goods or not - zinc dross which emerged during the manufacture of final product of the appellant, due to the galvanizing process involved in the said manufacturing process - HELD THAT:- The issue is no more res-integra. It was initially taken up by High Court of Mumbai in the case of HINDALCO INDUSTRIES LIMITED VERSUS THE UNION OF INDIA, CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, THE COMMISSIONER OF CENTRAL EXCISE [2014 (12) TMI 657 - BOMBAY HIGH COURT] wherein it was held that the dross and skimming of aluminium, zinc or other non-ferrous metals since emerges as waste, that the zinc dross and zinc ash cannot be treated as excisable commodities. Subsequent to the said decision, the Hon’ble Supreme Court had again took up the issue in the case of UNION OF INDIA VERSUS DSCL SUGAR LTD. [2015 (10) TMI 566 - SUPREME COURT] holding that the waste products (Baggasse in the said case) emerging during the manufacturing process of the final product are not the outcome of any process which can be termed as manufacture. Thus, such waste products cannot be categorized as exempted goods. Hence question of applicability of Cenvat Credit Rules does not at all arise.
Commissioner (Appeals) in the present case is observed to still have followed the said rescinded Circular dated 25.04.2016. The said act of the adjudicating authority not merely amounts to mis-interpretation of the provision, but it amounts to the violation of statutory principles, the circular dated 07.07.2022 being binding upon him. The ignorance of law laid down by the Hon’ble Supreme Court is a condemnable act of judicial indiscipline.
The order passed by the Commissioner (Appeals) is held not sustainable and the same is hereby set aside - Appeal allowed.
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2024 (3) TMI 1034
Exemption under N/N. 214/1986-CE dated 25.03.1986 - manufacture of Metallic Canisters falling under Tariff Heading No. 84799090 on job work basis - HELD THAT:- The principle of judicial discipline requires a lower judicial/ quasi-judicial authority to follow the ratio of the decision by a higher judicial/quasi-judicial authority. The Commissioner (Appeals) has just done that. This principle was explained at length in Supreme Court decision in UNION OF INDIA VERSUS KAMLAKSHI FINANCE CORPORATION LTD. [1991 (9) TMI 72 - SUPREME COURT] where it was held that In the light of these amended provisions, there can be no justification for any Assistant Collector or Collector refusing to follow the order of the Appellate Collector or the Appellate Tribunal, as the case may be, even where he may have some reservations on its correctness. He has to follow the order of the higher appellate authority. This may instantly cause some prejudice to the Revenue but the remedy is also in the hands of the same officer.
It is found that this appeal has been filed by the Revenue on the basis of an order passed by the Committee of Commissioners contrary to the principles of judicial discipline as laid down by the Supreme Court in Kamlakshi Finance Corporation Ltd.
The appeal is dismissed.
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2024 (3) TMI 981
Condonation of delay of 1191 days in filing this appeal - HELD THAT:- The belated manner in which the present appeal has been filed would not call for reiteration. Therefore, accepting the submissions of learned counsel for the respondent the appeal is dismissed on the ground of delay, leaving open the question of law, if any, which arises in this appeal to be agitated in any other appropriate appeal.
Application disposed off.
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2024 (3) TMI 980
Process amounting to manufacture or not - raw material fuller’s earth lumps were being subjected to undergo a process of getting crushed in job crusher and pulverized in pulveriser - manufacturing and selling of “Activated Bleaching Earth” and “Activated Carbon” - excisable goods or not - Whether this process and the resultant product can be classified as activated bleaching earth? - suppression of material facts or not - HELD THAT:- From the finding of fact given by the authority passing the Order-in-Original, what is established is that though fuller’s earth is the raw material which is subsequently converted into an “Activated Bleaching Earth” or an “Activated Carbon” through a mechanical process which includes a chemical treatment after crushing the fuller’s earth lumps altering the clay into powder and by increasing its bleaching potential. The very purpose of subjecting the fuller’s earth clay to chemical treatment in a mechanical manner is to alter the nature of the product. Further, the bleaching ability is enhanced by way of mechanical and chemical process and the filtration rate of the product also gets enhanced and becomes faster.
Another fact which stands established is that the raw material fuller’s earth in itself cannot be used for those purposes which it is subsequently used after the mechanical chemical process is undertaken. Yet another fact which is established from the pleadings is that the use of the Activated Bleaching Earth cannot be achieved if fuller’s earth is used as it is without the chemical treatment and the mechanical process which includes the heating process etc. The mechanical process which fuller’s earth is subjected to is to increase its bleaching performance and filtration properties and the product is also tailor made as per the specifications required by the client as per use at their plants.
The bleaching earth has a set of advanced formula of different combinations and it is applied by the manufacturer by using the production technology to manufacture different grades of Activated Bleaching Earth. All these process put together alters the fuller’s earth clay into an Activated Bleaching Earth giving it the properties that increases its bleaching potential.
The finding so arrived at by respondent No. 2 which stands affirmed by yet another detailed reasoned order passed by respondent No. 1, both of which again subjected to test before the Tribunal and the Tribunal also giving specific reasons in the course of affirming the orders passed by respondent Nos. 1 and 2 - there are no substantial merit in the arguments advanced by the learned counsel for the appellant calling for an interference to the findings given by the Tribunal.
Appeal dismissed.
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2024 (3) TMI 979
Clandestine Removal - Manufacture of Tobacco taking place or not - FFS packing machine was found installed in the unregistered premises during the search on 24.01.2012.
Whether the evidences available on record indicate that one FFS packing machine installed in the unregistered premises was in working condition and used for manufacturing of Chewing Tobacco? - HELD THAT:- There is no finding in the impugned order against the claim of the appellant that two vital parts namely, ‘Disc’ and ‘Suit’ were not fitted with the machine and it cannot be used to pack Chewing Tobacco. The investigation has not brought in any other evidence such as purchase of raw material, purchase of packing material, excess consumption of power during the period, buyers of the clandestinely cleared material, statements from transporters, etc., to prove clandestine manufacture and clearance of Chewing Tobacco - Mere presence of the packing machine alone is not sufficient to establish manufacture and clandestine clearance of chewing tobacco. In the absence of any other evidence, we hold that the investigation has not established that the packing machine was in operating condition and used for clandestine manufacture and clearance of Chewing Tobacco - question is answered in negative.
Whether evidences available indicate that Rule 18(2) of the CTPM Rules is applicable in this case to demand duty in respect of one FFS packing machine, from 08th March, 2010 onwards, as provided in the said Rules? - HELD THAT:- The investigation has not brought in any other evidence such as purchase of raw material, purchase of packing material, excess consumption of power during the period, buyers of the clandestinely cleared material, statements from transporters, etc., to establish clandestine manufacture and clearance of Chewing Tobacco from the unregistered premises - the one FFS packing machine found in the unregistered premises has not been fixed with two vital parts, without which the machine cannot be operationalized. In such circumstances, the investigation must have probed further to establish the manufacture and clandestine clearance of Chewing Tobacco by means of other evidences. Instead, the investigation has relied solely on the mere presence of the machine in the unregistered premises to demand duty. There is no evidence available on record to disprove the claim of the Appellant that the machine was non-operational and not used for manufacture of Chewing Tobacco. Mere presence of the packing machine alone is not sufficient to establish manufacture and clandestine clearance of chewing tobacco - the provisions of Rule 18(2) cannot be invoked in this case to demand duty for the period from 08th March, 2010 to 31st January, 2012 - question answered in negative.
Whether penalty under Section 11AC of the Central Excise Act, 1944, is imposable in this case? - HELD THAT:- Penalty is imposable under Rule 18 of the CTPM Rules read with Section 11AC of the Central Excise Act, 1944, only when it is established that Chewing Tobacco was produced and clandestinely removed. In view of the above findings, it is held that the investigation has not established manufacture and clandestine clearance of Chewing Tobacco. Hence, the penalty provisions are not applicable in this case. Accordingly, the penalty imposed on the Appellant is liable to be set aside.
Thus, the demand of Central Excise Duty confirmed in the impugned order is not sustainable. As the duty demand of duty is not sustainable, the demands of interest and penalty are also not sustainable - appeal allowed.
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2024 (3) TMI 978
Classification of goods - Reusable Insulin Delivery Device bearing the brand name “All Star” - classifiable under Central Excise Tariff Heading 9018 3100 availing the benefit of concessional rate of duty as per Notification No. 12/2012-CE dated 17.03.2012 under Serial No. 310 or under Serial No. 309? - Department is of the view that appellant have wrongly availed Cenvat credit on the inputs and input service used in the manufacture of their finished products i.e. Reusable Insulin Delivery Device - HELD THAT:- It can be seen that Reusable Insulin Delivery Device is nothing but a ‘Syringe without needle’ and is rightly classifiable under Chapter sub-heading 9018 3100. So far as the availability of Notification No. 12/2012-CE is concerned, the entry at Serial No. 309 covers only parts and accessories of goods of heading 9018 and 9019 whereas we find more specific serial number for concessional rate of duty under the exemption Notification No. 12/2012-CE for the product will be under Serial No. 310 which reads as “All goods (other than parts and accessories thereof)”.
The impugned manufactured product is ‘Syringes without needle’ and the same cannot be classified as ‘parts and accessories’ of the goods of heading 9018. Therefore, the impugned product will be entitled for concessional rate of duty under Serial No. 310 of exemption Notification No. 12/2012-CE dated 17.03.2012. Accordingly, the appellant have rightly been paying excise duty at the concessional rate of 6% and they are entitled for Cenvat credit on the inputs and input services availed by them.
There are no merit in the impugned orders-in-appeal and the same are set-aside - appeal allowed.
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2024 (3) TMI 977
CENVAT Credit - credit denied on the ground that the appellant have taken credit on Aluminium ingots and thereafter it was removed without payment of duty as the same was not used in the manufacture - allegation solely based on the statements of transporter - transporter was not cross-examined - violation of principles of natural justice - Time limitation - Imposition of redemption fine - HELD THAT:- The allegation is solely based on the statements of transporter however, the transporter was not cross-examined and as per section 9D of Central Excise Act, 1944. It is mandatory on the part of the Adjudicating Authority to do examination in chief and thereafter allow the noticee for cross-examination for the witness which in the present case was not done by the Adjudicating Authority. Therefore, the statement of transporter cannot be relied upon. Moreover, the entire investigation and the witnesses were used for issuing show cause notice dated 30.08.2011 to Hiren Aluminium wherein the charge was that M/s. Hiren Aluminium has not received ingots sent by the appellant. Accordingly, the Cenvat credit availed by Hiren Aluminium on the same ingots was sought to be denied.
The entire chain, right from procurement of aluminium ingots from NALCO upto the delivery of aluminium conductors, the transaction was established and accepted by the Settlement Commission. This finding was given by Settlement Commission after considering the investigation and all the evidences which were also relied upon in the appellant’s present case. Therefore, once all those investigation and evidence have been appreciated and Settlement Commission has come to the conclusion as reproduced above, there is no scope for the Adjudicating Authority to rely upon the same evidences for taking contrary view to the findings given by the Settlement Commission and to confirm the demand of Cenvat credit. Therefore there is no material evidence with the department to establish their charge of clandestine removal of ingots on which the appellant has taken Cenvat credit.
Time Limitation - HELD THAT:- There is no dispute that the present case relates to period February 2008 to March 2008 and entire investigation was carried out in a case made out against Hiren Aluminium in the show cause notice dated 30.08.2011 for denial of Cenvat credit on standard wires wherein there was no allegation that the credit taken on ingots by the appellant was made. Thereafter the appellant was served a show cause notice dated 06.03.2013. In these facts, it is absolutely clear that entire information about the transaction were available with the department way back in October 2008 even then the department took five years to issue show cause notice to the appellant. Therefore, the demand is clearly time-barred.
Imposition of redemption fine - HELD THAT:- As it is held that the appellant have not cleared aluminium ingots clandestinely and demand on that count is not sustainable consequently, no confiscation can be made and no consequential redemption fine will sustain. Secondly, without prejudice, the goods on which redemption fine was imposed was not available for confiscation - It is settled legal position by the Larger Bench of this Tribunal in the case of SHIV KRIPA ISPAT PVT. LTD. VERSUS COMMISSIONER OF C. EX. & CUS., NASIK [2009 (1) TMI 124 - CESTAT MUMBAI] as well as in COMMISSIONER OF CUSTOMS, MUMBAI VERSUS RISHI SHIP BREAKERS [2008 (8) TMI 650 - CESTAT, MUMBAI] that in case goods are not available, no redemption fine can be imposed therefore, on both counts, redemption fine imposed on the appellant is not sustainable.
The impugned order is not sustainable hence, the same is set-aside - Appeal allowed.
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2024 (3) TMI 976
Area Based exemption in Kutch district - admissibility of exemptions for goods manufactured using plant and machinery installed after the cut-off date of 31.12.2005. - Wrongful availment of benefit of N/N. 39/2001-CE dated 31.07.2001 by availing re-credit/refund of duty paid on finished excisable goods manufactured by both the oil splitting units - Penalty on managing director.
HELD THAT:- It is pertinent to note that the exemption under the Notification was limited to twice the value of the investment, for each year, in cases where the original value of the plant and machinery installed in the factory was below Rupees 20 crores on the date of commencement of the commercial production and in cases where the original value of investment in plant and machinery was in excess of 20 crores, there was no limitation with respect to the extent of the exemption available under the Notification.
The Notification, as initially enacted, did not provide for any time period within which the commercial production had to commence, being the date relevant for reckoning the original value of investment in plant and machinery as also for reckoning the 5 year period for which the exemption was to be available. All that was required was that any civil construction work in the factory premises and any installation of plant and machinery therein commences only after 31st July 2001 but before the cut-off date.
It is impermissible to read in any condition or word into an exemption notification, especially a benevolent one which has been issued with the objective of encouraging investment in the earthquake ravaged region of Kutch. In our view there is neither any legal basis nor rationale for reading in the word 'ALL' in the exemption notification and with reference to the same construe that since some machinery was installed after the cut-off date, the benefit of the exemption would not be available, to goods manufactured using the said machinery.
This Tribunal has also in the case of M/S WELSPUN LTD. VERSUS C.C.E. & S.T. RAJKOT [2019 (1) TMI 371 - CESTAT AHMEDABAD] held that in the context of this very notification that there is no bar in installing Plant and Machinery post 31.12.2005 as long as the unit has commenced commercial production not later than 31.12.2005.
The reasoning of the adjudicating authority that under the Himachal/Uttarakhand exemption scheme, exemption was even extended to existing units, undertaking substantial expansion, which was missing in Kutch, would in our view make no difference, to the question whether any addition of plant and machinery after the cut-off date would dis-entitle the unit to the benefit of the exemption. The aspect regarding the unit commencing commercial production by a cut-off date equally applies to the Kutch as also the Himachal/Uttarakhand exemption notification - the clarification issued by the CBEC vide Circular No. 939/29/2010-CX dated 22.12.2010 to the effect that there is no bar or restriction on any addition/modification in the plant or machinery or on the production of new products by an eligible unit after the cut-off date and during the exemption period of ten years, would apply equally in the context of the Kutch notification.
The presumption of the adjudicating authority that this second splitting column was installed within 7 days of the same having been shipped by the manufacturer in October 2006, which does not seem to be logical and reasonable especially when viewed in light of the statement recorded under Section 14 of the installation agency, as per which the column was installed in March 2007.
The combined production achieved even after the installation of the second Splitter seems to be lesser than what could have been achieved by a single Splitter alone. Further the 200 TPD capacity as explained by the appellant is the output guaranteed by the supplier of technology at 99% degree of split. Obviously the production numbers clearly show that the daily production was higher than 200 TPD and that the plant was functioning operating at a lesser degree of Split and was able to achieve a production of around 15000 MT per month - the second Splitter was installed with a view to improve the quality of the output and not to increase the production, which fact seems to be vindicated by the production data. We are therefore of the view that, applying the TRU clarification dated 10.7.2008 the additional plant and machinery having been installed with a view to improve the quality of production and not with a view to increase the production, the benefit of exemption cannot be denied to goods manufactured using the second Splitting Column.
The imposition of penalty on the Managing Director, Mr.Rustom Joshi is also not sustainable.
The impugned order is set aside. The appeals are allowed.
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2024 (3) TMI 975
Manner of computation of proportionate reversal of credit determined under Rule 6(3A) of the Rules - Interpretation of statute - Rule 6(3A)(b)(ii) of CCR - Cenvat credit on inputs and input services used for manufacture of LPG & SKO - contention of the department is that for the purpose of reversal, the “Total Cenvat Credit Taken on Input and Input services” should be considered while the contention of the appellant is that “Total Cenvat credit taken on Input and Input services” should include only common Input and Input services used in exempted manufactured goods - HELD THAT:- It would be clear from a conjoint reading of sub-rules 6(1), (2) and (3) of Rule 6 that the total Cenvat credit for the purpose of formula under Rule 6(3A) is only total Cenvat credit of common input and input service and cannot include Cenvat credit on input and input service exclusively used for the manufacture of dutiable goods. If the interpretation of the Revenue is accepted, then the Cenvat credit of part of Input and Input service even though used in the manufacture of dutiable goods, shall stand disallowed, which is not provided under any of the Rule of Cenvat Credit Rules, 2004.
The Government has substituted the sub-rule (3A). The legislators very consciously substituted the Rule with intention to give a clarificatory nature to the provision of sub-rule (3A) so as to make it applicable retrospectively. It was all along not the intention of the Government to deny Cenvat credit on the input/input service even though used in the dutiable goods. Keeping the said view in mind, the substitution in sub-rule (3A) of Rule 6 was made. Therefore, the substituted provision of sub-rule (3A) shall have retrospective effect being clarificatory. In the case of GOVERNMENT OF INDIA VERSUS INDIAN TOBACCO ASSOCIATION [2005 (8) TMI 113 - SUPREME COURT], the Hon’ble Supreme Court held that “the word “substitute” ordinarily would mean “to put (one) in place of another”; or “to replace” - As per the interpretation of the Hon’ble Supreme Court, the sub-rule (3A) being substitution shall have a retrospective effect and will be applicable for all time since when the Rule was enacted. Therefore, for this reason also, for the purpose of calculation of Cenvat credit reversal, in the formula, total Cenvat credit shall mean credit of only common input and input service and not of input and input service exclusively used for the manufacture of dutiable product on which the Cenvat credit is eligible to the appellant in its entirety.
Availment of Cenvat credit on inputs and input services used for manufacture of LPG & SKO - HELD THAT:- The issue is no more res integra in view of the Hon’ble High Court of Gujarat decision in the case of RELIANCE INDUSTRIES LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI [2022 (11) TMI 923 - CESTAT MUMBAI], wherein the Hon’ble High Court has held that LPG is a by product generated in the process of refining and no reversal is required in this matter.
Since the issue decided in respect of above by-products in above terms, it is not required to deal with issues of what value to be considered for reversal.
The impugned order is set aside. Appeal is allowed.
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2024 (3) TMI 974
Principles of Estoppel against law - Classification of goods - handmade branded unmanufactured tobacco under the brand name of ‘Rajhans’ - classifiable under CETH 24039910 or not - demand confirmed on the ground that appellant had agreed to classification of the said products as manufactured product - purchase of certain perfumeries etc. for mixing the same - HELD THAT:- The finding of the Commissioner (Appeals) to the effect that appellant has admitted the product as manufactured tobacco cannot be the reason for holding against them. It is settled in law that there cannot be any estoppel against the law in the matter of classification.
Reliance placed in the case of ELSON MACHINES PVT. LTD. VERSUS COLLECTOR OF CENTRAL EXCISE [1988 (11) TMI 107 - SUPREME COURT] where it was held that Plainly there can be no estoppel against the law. The claim raised before us is a claim based on the legal effect of a provision of law and, therefore, this contention must be rejected.
No evidence has been brought on record either in the impugned order or in the Order-in-Original to show that the goods cleared by the appellant were classifiable under CETH 2403. What operation was undertaken, what was the nature of the products has not been examined and recorded. Nothing is available on record as to what made the finished goods cleared by the appellant during this period different from what was being cleared by them in past and post the brief period of February 2012 to August 2012. The impugned order itself hold that the products produced and cleared by the appellant during the entire period of demand was unmanufactured tobacco.
In the case of YOGESH ASSOCIATES VERSUS COMMISSIONER OF CENTRAL EXCISE, SURAT-II [2005 (9) TMI 173 - CESTAT, MUMBAI] Bombay Bench has held The explanatory notes to HSN especially when pari materia are binding to arrive at the classification and the law on this issue is well settled. We, therefore have no reason to take out the product impugned in these appeals, from the Heading 2401.10 as arrived by us and place it elsewhere under Chapter 24.
There are no merits in the impugned order to this extent - appeal allowed.
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2024 (3) TMI 916
Process amounting to manufacture - process undertaken on stators received from job workers i.e. the process of shaping, varnishing and baking - HELD THAT:- Perusal of the pleadings and the records would reveal that the order of assessment and the other materials available with the appellant do not indicate that the nature of the process undertaken at the assessee’s Service Centre in respect of the so-called retrieving old stators from old compressors received by the assessee and mere using of old stators and subjecting the old stators to some process and renewing the same would not be sufficient. Moreover, all these allegations and contentions raised by the learned Senior Standing Counsel for CBIC would amount to be factual in nature. Therefore, in the course of exercising the powers under Section 35G of the Act, this Court cannot interfere with the finding of facts unless there is any strong substantial question of law or perversity made out. On this very ground, there are no merits in the appeals preferred by the appellant.
In the teeth of the aforesaid finding by the Tribunal and that no sufficient material available with the Department to negate the said finding given by the Tribunal, it is difficult to interfere with the said finding of the Tribunal. All these appeals filed by the Department therefore being devoid of merits, deserves to and are accordingly rejected.
Appeal dismissed.
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2024 (3) TMI 915
Refund claim - amount was paid in GST era under Reverse Charge Mechanism towards banking and financial service received for expenses made in foreign currency for facilitation of external commercial borrowings (ECB) - time limitation - HELD THAT:- The party has not only paid duty of extended period in 3 installments i.e. in April 2018, October, 2018 and November 2018 but has also paid interest and penalty there upon seggregating the three. On this issue, it is found at Commissioner (Appeals) has correctly held that payments made were part of the recovery action under the enforcement done by DGCI and therefore duty, interest and penalty were paid for extended period. It is also found that adjudicating authority whose findings have been endorsed in the impugned order, has correctly held that the amount is paid as part of the recovery action. The input credit or refund of the same cannot be allowed.
It is held that in recovery action and when penalties imposed and are discharged and duty paid under extended period, the credit to person who has evaded tax and then paid duty, interest and penalty cannot be allowed - appeal dismissed.
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2024 (3) TMI 914
Inclusion of certain elements of cost in assessable value and revision of the method of determining assessable value applicable to transactions between related persons - inclusion of advertisement and sales promotion costs - HELD THAT:- The finality, insofar as the first notice was concerned, was equally applicable to subsequent ones. The claim of higher precedent from decision of the Tribunal was also settled by the first appellate authority in later order despite which the obduracy on the part of the original authority continued to be manifested in remand proceedings. Even so, the finality accorded to that precedent by the Hon’ble Supreme Court in re P&B Pharmaceuticals P Ltd [2003 (2) TMI 68 - SUPREME COURT] should have sufficed for the original and first appellate authority in the latest round.
The orders passed in de novo proceedings by the original authority were not correct in law. That last which was upheld in the impugned order was also incorrect in law. The concurrence accorded to that impropriety by the first appellate authority piles gross impropriety on impropriety. We find no cause to allow this travesty of justice and judicial decorum to continue.
The impugned order set aside - appeal allowed.
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2024 (3) TMI 913
CENVAT Credit - retention of credit that enabled obtaining of refund under rule 5 of CENVAT Credit Rules, 2004 - HELD THAT:- The appellant was exporting almost 98% of turnover for the period upto March 2010 and about 87% thereafter is a finding in the impugned order that has not been controverted in appeal of Revenue. That such exports should not have to bear the burden of duties inhering in the goods is undeniable and, therefore, if not refund under rule 5 of CENVAT Credit Rules, 2004, rebate was allowable under Central Excise Rules, 2002 with option left to assessee. The denial of credit was not enforced immediately upon grant of exemption; instead resort was had to section 11A of Central Excise Act, 1944 and, consequently, rebate was not an available option. This militates against the contention of Learned Authorized Representative that the cited Explanation has retrospective effect.
The denial of credit was not enforced immediately upon grant of exemption; instead resort was had to section 11A of Central Excise Act, 1944 and, consequently, rebate was not an available option. This militates against the contention of Learned Authorized Representative that the cited Explanation has retrospective effect. We, therefore, examine the entitlement in terms of operation under the CENVAT credit scheme. As we have premised, this is a dispute about eligibility for retention of credit availed validly under rule 3 of CENVAT Credit Rules, 2004. It is only upon deployment of such goods in the production of ‘exempted goods’, which ‘menthol crystal’ was since 1st March 2008, that rule 6(1) of CENVAT Credit Rules, 2004 is brought to bear - to the extent that ‘inputs’ were deployed in goods that have been exported, availment of credit is not faulted. Even if exempted goods were removed on bond for export after March 2010, that procedural lapse, with its own attendant consequence, has no bearing on eligibility for retention of credit. Therefore, only the availment of credit in relation to ‘inputs’ used in production of domestically cleared goods remain.
There can be no dispute on availment of credit of duty paid on attributable goods till March 2010 as these were cleared on payment of duty. For the period thereafter, it is on record that the default provision in rule 6(3) of CENVAT Credit Rules, 2004 for payment of 10% of value of exempted goods cleared domestically would entitle retention of credit. The impugned order, and appeal of Revenue, appear to have, in their respective contentions which do not relate to the same ‘input’, misconstrued the meaning of ‘common’ and the bar on ‘retention’ which are applicable to both categories of inputs – raw materials and consumables – that are used in production - None of the goods in the dispute are consumables and, owing to export as well discharge of duty liability or liability of 10% on value of domestically cleared goods, there is no scope for recovery under rule 14 of CENVAT Credit Rules, 2004 or section 11A of Central Excise Act, 1944. Other consequences too fail.
The demand fastened on assessee in the impugned order does not sustain. Appeal of assesse is allowed.
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2024 (3) TMI 912
Non-reversal of credits availed in respect of exempted services - waste and scrap of packing materials viz. corrugated boxes, cartoons, MS scrap, plastic, industrial refuse etc. - Rule 6(3) of CENVAT Credit Rules, 2004 - HELD THAT:- No demand is raised on the Appellant in the Show-cause notices on the ground that it was engaged in trading which was treated as an exempted service against which it cannot avail credits on inputs but the demand was solely based on the ground that out of two varieties of manufacturing waste, one is exempted from payment of Excise Duty for which demand is raised against non-reversal of the allegedly inadmissible credit availed on those exempted products and it is a settled principle of Law, which has been affirmed by the Hon'ble Supreme Court through various decisions including that of MARUTI SUZUKI INDIA LTD. VERSUS COMMISSIONER OF C. EX., DELHI-III [2015 (12) TMI 1598 - CESTAT CHANDIGARH], that duty is not payable on waste and scrap of packing material of inputs and demand is not sustainable if it had travelled beyond the Show-cause notice or made contrary to it, as has been held in the COMMISSIONER OF CENTRAL EXCISE VERSUS GAS AUTHORITY OF INDIA LTD. [2007 (11) TMI 276 - SUPREME COURT].
The order passed by the Commissioner of Central Excise, Customs & Service Tax, Aurangabad are thereby conformed - Appeal dismissed.
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2024 (3) TMI 911
CENVAT Credit - denial of credit on the ground that the appellant has incorrectly considered the electrodes as “inputs” and availed full credit whereas they are capital goods, in respect of which only 50% of CENVAT Credit is available in the year of receipt as per the CENVAT Credit Rules, 2004 - HELD THAT:- Circular No. B22/51/86-TRU dated 21.10.1986 clarified the position that It is only for the purposes of Notes 1 to 4, Section XVI that the word 'machine' (used in Notes) refers to any machine, machinery, plant, equipment, apparatus or appliance mentioned in the heading of Chapter 84 or 85. Otherwise, the whole phrase "machine, machinery, plant, equipment, apparatus, etc." would have to be used wherever the word "machine" is used in the Notes. As carbon electrode is essential for manufacture of aluminum, it should be eligible for Modvat credit, as it would satisfy the criterion of input.
Also, the issue whether electrodes can be treated as ‘input’ for availment of CENVAT Credit or ‘capital goods’ came before the Tribunal in the case of THE COMMISSIONER OF GST & CENTRAL EXCISE VERSUS M/S. CHEMFAB ALKALIES LTD. [2023 (7) TMI 947 - CESTAT CHENNAI] wherein the Tribunal observed The Tribunal in the case of COLLECTOR OF C. EX. VERSUS METTUR CHEMICALS & INDUSTRIALS [1990 (12) TMI 243 - CEGAT, MADRAS] held that cathodes used in the electrolytic process being incidentally consumed in the manufacture of caustic soda is an ‘input’ as defined under erstwhile Rule 57A of Central Excise Rules, 1944 and eligible for modvat credit.
As the issue is no longer res integra in view of the clarifications issued by the C.B.E.C. by way of Circulars from time to time and the decision in the case of M/s. Chemfab Alkalies Limited, it is held that on all the items which have been used by the appellant in the process of manufacture of their final product, the appellant is entitled to avail CENVAT Credit, as inputs.
There are no merit in the impugned orders and accordingly, the same are set aside - appeals filed by the appellant are allowed.
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2024 (3) TMI 910
Method of valuation - calcined alumina - to be valued in accordance with Rule 4 or 11 of Central Excise Rules, 2000 by considering normal transaction value of sale of calcined alumina (Smelter) of normal transaction value? - invocation of extended period of limitation - HELD THAT:- On going through the technical specifications, it is clear that technical specification of both the products is different as having variation in the composition. Moreover, the calcined alumina (sale) is sold by the assessee in in PP bags of 50 kgs each whereas the calcined alumina (Smelter) is sold in bulk or loose form.
Both the products are two different products and there is no allegations in the impugned showcause notice that the assessee is clearing calcined alumina (smelter) to independent buyers. Therefore, the valuation adopted by the assessee under Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules,2000, is correct and they have paid duty correctly - Otherwise also, the assessee is clearing the said goods to their sister unit, therefore, it is the situation of revenue neutrality. In that circumstances also, the differential duty cannot be demanded.
There are no merit in the impugned order demanding duty from the assessee for the normal period of limitation - also there are no merit in the appeal filed by the Revenue to demand duty from the assessee by invoking extended period of limitation - the appeal filed by the assessee is allowed.
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2024 (3) TMI 852
Benefit of exemption on Nozzle and Nozzle Holders cleared for use in the manufacture of Injectors - it was held by CESTAT that The ‘nozzle holder’ and ‘nozzle’ are entitled for the benefit of Notification Nos. 217/85-C.E., dated 8-10-1985 and 75/86-C.E., dated 10-2-1986 - HELD THAT:- The Customs, Excise and Service Tax Appellate Tribunal, Bangalore has arrived at correct conclusion. The Civil Appeal is, therefore, dismissed.
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