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Central Excise - Case Laws
Showing 101 to 120 of 80285 Records
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2024 (3) TMI 635
Valuation - non-inclusion of After Sales Service (ASS) and Pre-Delivery Inspection (PDI) charges in the assessable value - HELD THAT:- This Tribunal in the appellant’s own case for the previous period [2023 (11) TMI 370 - CESTAT CHANDIGARH] has decided the issue in favour of the appellant involving identical issue - this issue is no more res integra and has been settled by various judicial forums as relied upon by the appellant. It has been consistently held that the cost of ASS shall not be includible in the assessable value of the goods.
The impugned order not sustainable - appeal allowed.
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2024 (3) TMI 634
Penalty imposed on them under Rule 15(2) of the CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 - appellant has taken CENVAT Credit on the strength of fake invoices, but the same was reversed along with interest - HELD THAT:- In the case of THE COMMISSIONER OF CENTRAL EXCISE CUSTOMS & SERVICE TAX VERSUS M/S. JUHI ALLOYS LTD., ANIL KUMAR SHUKLA [2014 (1) TMI 1475 - ALLAHABAD HIGH COURT], the issue before the Hon’ble High Court of Allahabad was the availment of CENVAT Credit to the manufacturer whereas the invoices had been issued by the registered dealer which were found to be fake. Therefore, it was held that CENVAT Credit could not be denied.
Further, in the case of M/S. RAJAN ENGINEERING WORKS VERSUS CCE, DELHI-IV, FARIDABAD [2011 (7) TMI 626 - CESTAT, DELHI]. The demand in the said case was raised only on the basis of the statement of the input supplier, which is not the case in hand as, in this case, the appellant has admitted that they had taken the CENVAT Credit on the strength of fake invoices although it was not known to them; the same has been reversed along with interest and they are seeking immunity from the penalty imposed on them.
As the appellant has already reversed the amount of CENVAT Credit along with interest and contesting the same, in these circumstances, we hold that penalty on the appellant is to be imposed at only 25% of the amount involved. Therefore, in terms of proviso to Section 11AC of the Act, the penalty on the appellant is reduced to 25% of the penalty imposed as the appellant has already reversed the CENVAT Credit along with interest.
Appeal disposed off.
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2024 (3) TMI 592
Condonation of gross delay of 412 days in filing these appeals - justification for delay or not - HELD THAT:- The appellant sought to justify the delay - the reasons assigned for condonation of delay not impressive and the same are not acceptable.
The application seeking condonation of delay is dismissed.
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2024 (3) TMI 591
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT:- The respondent had applied under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and the application was processed and eventually certificates dated 24.01.2020 and 07.02.2020 under SVLDRS-4 scheme has already been given resolving the dispute.
The statement of the learned counsel for the respondent is recorded and the Civil Appeals disposed off in view of the above statement.
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2024 (3) TMI 590
Condonation of delay in filing the appeal - impugned order was reviewed by the concerned committee of Chief Commissioner beyond the prescribed period of three Months, from the date of receipt of the order - Section 35E of CEA - HELD THAT:- It is seen that as per proviso to Sub-Section (3) only the Board has power to condone the delay in reviewing the order beyond three Months and no other Authority could have condoned the said delay. The Tribunal also has no authority to condone this delay.
The Chief Commissioner has no authority to condone such delay or permit the committee of Commissioners to review the order beyond a stipulated period of three months. The provisions for review are to be construed very strictly as has been held by various authorities including the Hon’ble Supreme Court in the case of COLLECTOR OF CENTRAL EXCISE VERSUS MM RUBBER CO. [1991 (9) TMI 71 - SUPREME COURT], wherein it was held that the period of one year fixed under sub- section (3) of Section 35E of the Act should be given its literal meaning and so construed the impugned direction of the Board was beyond the period of limitation prescribed therein and therefore invalid and ineffective.
This application for Condonation of delay has been filed without any jurisdiction and authorization. Tribunal does not have any power to consider and condone this delay so the same is dismissed.
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2024 (3) TMI 589
Maintainability of appeal - non-prosecution of the case - Request for adjournment, which cannot be accepted in virtual hearing - While making the request for virtual hearing, Counsel also undertakes that he will not seek adjournment in this matter - HELD THAT:- It is also observed that the matter has been listed on the request of the Counsel for the appellant. This appeal has been listed for hearing on 16.08.2023, 15.09.2023, 20.10.2023 and for today. The Counsel for the appellant either in person or through the letter has only sought taking adjournments in the matter.
In case of ISHWARLAL MALI RATHOD VERSUS GOPAL AND ORS. [2021 (9) TMI 1301 - SUPREME COURT] condemning the practice of adjournments sought mechanically and allowed by the Courts/Tribunal’s Hon’ble Supreme Court has observed considering the fact that in the present case ten times adjournments were given between 2015 to 2019 and twice the orders were passed granting time for cross examination as a last chance and that too at one point of time even a cost was also imposed and even thereafter also when lastly the High Court passed an order with extending the time it was specifically mentioned that no further time shall be extended and/or granted still the petitioner – defendant never availed of the liberty and the grace shown. In fact it can be said that the petitioner – defendant misused the liberty and the grace shown by the court.
There are no justification for adjourning the matter beyond three times which is the maximum number statutorily provided - Appeal is dismissed for non prosecution in terms of Rule 20 of CESTAT Procedure Rules, 1982.
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2024 (3) TMI 588
Process amounting to manufacture or not - activity of “labelling or relabeling, declaration by affixing fresh Maximum Retail Price (MRP) stickers” on each unit pack, by altering the retail price stickers already affixed on the watches - demand of central excise duty on the watches cleared by them after labelling/relabeling, affixing fresh MRP stickers - demand based on statements of Store Manager of Showroom at Hosur and General Manager (Commercial) - alleged wilful suppression with intent to evade payment of duty against the showrooms and CFA premises or not - Extended period of limitation - HELD THAT:- The department does not have a case that appellant has for the first-time mentioned brand name Titan, or any such new details while affixing the fresh MRP stickers. The appellant has merely changed the MRP in fresh stickers. The distinction between a label and an MRP sticker was analysed in the case of COMMISSIONER OF C. EX., NEW DELHI VERSUS PANCHSHEEL SOAP FACTORY [2002 (4) TMI 152 - CEGAT, NEW DELHI]. A sticker merely containing the name of importer and MRP was held to be not a ‘label’. In common parlance, a label on a product is understood to contain description of the goods, its character, usage, expiry date etc., A label is a brief and quick information to the consumer as to the details of the product. A MRP sticker is information about its price only. The Tribunal in the said case was considering Note 6 to the Chapter 34 which is similarly worded as 2 f (iii). It was held by Tribunal that simply putting a MRP sticker does not amount to manufacture. It was also observed that the products were already marketable and the activity of affixing the MRP sticker did not enhance its marketability.
Again, the allegation is that the activity of affixing altered MRP amounts to deemed manufacture. There is no allegation that such activity has rendered the product marketable to the ultimate consumer. In the case of Lakme Lever Ltd., Vs CCE [2000 (10) TMI 96 - CEGAT, MUMBAI], the Tribunal observed that the process/activity should attribute marketability to the product which was otherwise not marketable.
In the case of CCE Vs. Rafique Malik [2018 (1) TMI 109 - BOMBAY HIGH COURT] similar issue was considered. It was held that affixing brand name on finished footwear received in labelled boxes affixed with MRP did not amount to manufacture.
The meaning of marketability is that the goods must be capable of being bought and sold as such. In order to fall within definition of ‘manufacture’, the process or activity must bring some transformation to the article in such manner that was not present on the article earlier. In the present case the watches are already marketable and the affixing of MRP does not enhance marketability. From the discussions above and following the decisions there are no hesitation to conclude that the activity does not amount to manufacture.
The factory at these places have not discharged duty as they have availed benefit of ABE notification. The demand, if any can be raised only against the manufacturer. As no manufacturing activity has taken place at Showrooms and CFAs, the duty demand raised against them cannot be sustained. The issue on merits is answered in favour of appellant and against the Revenue.
Time Limitation - Suppression of facts or not - HELD THAT:- The issue is purely interpretational. The issue as to whether the activity of affixing MRP amounts to manufacture has always been under litigation based on facts of each case. The department has not adduced any positive act of suppression against the appellant. The revised price list was available for perusal in the accounts maintained by appellant - there are no suppression of fact with intend to evade payment of duty on the part of the appellant. The show cause notice is time barred. The issue on limitation is answered in favour of appellants and against Revenue.
The impugned orders are set aside. The appeals are allowed.
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2024 (3) TMI 558
Clandestine removal - evasion of duty - clearance of branded Khaini - recovery of central excise duty allegedly short paid - burden to prove on Revenue - Present appeal has been filed against the majority view of the Tribunal - substantial question of law was framed as follows:
Whether the majority opinion is right in accepting the appeal and deleting the entire addition and whether the majority opinion is perverse?
HELD THAT:- The charges of clandestine removal of goods connotes accusations of serious nature. If the charges are of serious nature, evidence should also be equally strong to substantiate the charges, and therefore, the evidence needs careful scrutiny and appreciation.
There is no dispute that in adjudication proceedings to establish the charge of clandestine removal and undervaluation, Revenue is not required to prove the case with mathematical precision. Such charges are to be established on the basis of preponderance of probabilities. However, the conclusions to be arrived at are necessarily to be logical and not on the basis of presumptions and assumptions. Suspicion, howsoever grave, cannot replace the test of proof.
It is a settled law that there cannot be clandestine removal of the goods unless the assessee manufactures the same clandestinely and for that purpose, procures raw material clandestinely and uses it without disclosing its utilization. Admittedly, there is no evidence of purchase of major raw material like supari, tobacco etc even in the loose sheets/Hisaba Books recovered in the search. Revenue has not produced any evidence about the procurement of raw material which may be regarded as sufficient for the manufacture of the final product, which is alleged to have been clandestinely removed.
In the present case, there is no evidence to show that the basic raw material required for the manufacture of huge quantity of Gutkha and Khaini was procured by the respondents. Tribunal also found no tangible evidence of removal from the factory of unaccounted goods allegedly manufactured by loading from factory and transportation there from. Tribunal found no reliable evidence of the actual customer/recipient of the clandestinely removed goods with their confirmation of unauthorized payment towards unaccounted purchase of goods allegedly manufactured and removed in a clandestinely manner from the factory of the respondents. Tribunal also found no recovery of any unaccounted sale proceeds or substantial cash in the factory or office premises or anywhere else in control of the respondent company, backed by any confirmation, oral or written, from the person giving such cash against the goods removed in clandestine manner without payment of duty from the factory of the respondents.
The burden of proving the clandestine removal was on the Revenue. The credibility of the documentary evidence i.e. seizure memos, the loose sheets, Hisaba Books for proving the involvement of respondents in the clandestine activities was required to be duly established - There is no proof that the contents of the documents are accurate. Further, the proper procedures for the seizure of the documents to ensure the authenticity and integrity of the seized material has also not been followed by the Revenue and this includes the proper sealing and protection from tampering.
The charges of clandestine removal and under valuation against the respondents in this case cannot be sustained merely on the basis of assumptions and presumptions. The absence of direct, credible evidence linking the respondents to the alleged offences necessitate the dismissal of the charges. The decision is grounded on the principles of justice and the requirement for the burden of proof to be satisfactorily met by the party alleging the wrong doing.
Thus, it is evident that learned President (Judicial) and Member (Judicial) conducted a meticulous exercise to examine and appreciate the evidence on record in the light of the settled principles and came to a categorical finding that in the absence of cogent evidence on record, charges of clandestine removal against the respondents cannot be said to have been proved.
In the absence of any tangible evidence which would indicate that there was clandestine manufacture and clearance of the goods from the factory premises of the respondents, in the facts and circumstances of this case, the impugned majority order of the CESTAT does not suffer from serious error and does not merit any interference.
The appeal is therefore dismissed.
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2024 (3) TMI 557
Levy of penalty u/s 11AC of Central Excise Act, 1944 - mistake/ inadvertence - duty liability from January 2009 onwards was being discharged on lower values by applying appropriate rate of duty to value derived from CAS 4 of 2008 - HELD THAT:- The appellant was not unaware of requirement to adhere to ‘cost construction’ in ascertainment of value of the impugned clearance with proceedings having been initiated in 2004 against them. They had paid differential duty, too, after CAS 4 certification for 2008 having been obtained. It is apparent that they were in possession of CAS 4 certification for subsequent years and these did indicate increased cost of production with corresponding duty implications from which it can be inferred that it was the burden of such enhanced liability that prompted resort to outdated certification. No justification for such overlooking has been brought on record and here exists only plea of oversight.
That the onus of countering the ingredients for resort to such penalty does not devolve on the appellant from having been aware of propensity of theirs, from experience of the past, to indulge in such evasion is neither logically acceptable nor legally tenable. However, it is on record that the appellant had, upon being prompted and before issue of notice, made good the differential duty with interest. It is also on record that credit of such duty had been enabled by issue of supplementary invoices thereafter. It is not the case of Revenue that proceedings for recovery of such credit had been initiated or concluded from which it may be inferred that entitlement to credit was undeniable.
It is of no less relevance to note that, though penalty has been imposed under section 11AC of Central Excise Act, 1944, this is not an autonomous provision empowering imposition. On the contrary, devolution and extent thereof are controlled by section 11A of Central Excise Act, 1944 and implicit therein is cause and effect as set out in the recovery provision.
In these circumstances, with the discharge of differential duty liability along with interest, on their own determination, by the appellant, section 11(B) of Central Excise Act, 1944 for the period upto 7th April 2011 and section 11A(3) of Central Excise Act, 1944 will come into operation to dispense with notice owing to lack of any duty or interest liability beyond that appropriated in the impugned order.
Appeal is allowed by setting aside the penalty under section 11AC of Central Excise Act, 1944.
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2024 (3) TMI 556
Price escalation clause - alteration through supplementary invoices - Propriety of resort to provisional assessment under rule 7 of Central Excise Rules, 2002 against the wishes of the assessee - HELD THAT:- It is on record that finalization was, indeed, deferred amid requests made to assessee for submission of pertinent documents which was not forthcoming. No justification has been offered for truncation of the value except that payment had not been received. That, however, is of no consequence to valuation for levy of duties of central excise.
Even after elapse of over a decade, the dispute over the consideration does not appear to have attained finality. The appellant, doubtlessly, is holding fast to the stand that the revised value is the actual value. Assuming of a contrary stand to question the finalization of provisional assessment is not acceptable. Therefore, the claim of ‘transaction value’ having been overlooked to insinuate ‘provisional assessment’ that would have the outcome of charging duty on enhanced consideration, which included elements that did not form part of the price, does not appear to be tenable.
There are no reason to interfere with the rejection of the appeal of M/s Crompton Greaves Ltd by the first appellate authority - appeal dismissed.
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2024 (3) TMI 555
Clandestine removal of mild steel (MS) bars - denial of cross examination of witnesses - admissibility of documents retrieved from computer without authentication - Demand confirmed based on certain records recovered from other parties and sought to be backed by statements of customers and transporters - violation of principles of natural justice - HELD THAT:- It is found from the records that the confirmation of demand on goods allegedly cleared clandestinely has been based on certain records recovered from other parties and sought to be backed by statements of customers and transporters. No evidence as forthcoming of any other material records of physical clearance or of any recovery of sale proceeds.
The request for cross-examination had been declined without assigning any reasons or even considering the mandate of section 9D of Central Excise Act, 1944.
The sole evidence is records of other parties and linking of the appellant with those has been attempted through statements that were not tested in cross-examination despite requests from the appellant. No corroborative evidence of any kind appears to have been brought forth either. With almost a decade having been elapsed after the proceedings, it would be impossible to establish relevancy of the documents in terms of section 9D of Central Excise Act, 1944 leaving the conclusions therefrom to be inadmissible.
There is no merit in the conclusion of the adjudicating authority - the impugned order set aside - appeal allowed.
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2024 (3) TMI 554
Recovery of short paid duty alongwith interest and penalty - clearances effected on clearances of a category between July 2000 and March 2002 and between April 1999 and March 2002 - non-inclusion of ‘royalty’ and ‘administrative overheads’ in computation of cost of production computation - alleged misclassification enabling abatement in ‘retail sale price’ under section 4A of Central Excise Act, 1944 - HELD THAT:- It is evident from the submissions of Learned Chartered Accountant that rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2002 is appropriate recourse for valuation of clearances in the impugned circumstances. It is no less apparent that CAS4 is to be the basis of computation for which purpose the insight afforded by the Guidance Notes is adequate justification. That this aspect was not considered by the adjudicating authority at all, insofar as the two additions supra are concerned, is amply evident and, for remedying that want in fresh proceedings, it is necessary that the impugned order be set aside.
Appeal allowed by way of remand.
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2024 (3) TMI 553
Dropping of Extended period of limitation - restriction of demand of excise duty for the normal period - compliance with the conditions specified in the exemption N/N. 08/2014-CE dated 11.07.2014 so as to be entitle to the benefit of the concessional rate of duty prescribed therein. N/N. 08/2014-CE dated 11.07.2014 inserted Entry no.70A or not - Polyester Staple Fibre or Polyester Filament Yarn manufactured from Plastic Scrap or Plastic Waste including waste Polyethylene Terephthalate (PET) bottles - Time Limitation - Penalty - interest - HELD THAT:- As per the allegations made in the show cause notice and as admitted by Shri Suresh Kawar Jain, Managing Director of the appellant in his statement dated 14.12.2017, it is correct that the appellant had been using textile yarn waste to manufacture ‘Popcorn’, which is manufactured from different types of waste including yarn waste and is a recycled product.
The notification specifically provides for plastic scrap or plastic waste including waste Polyethylene Terephthalate bottles and even the minimum quantity of textile yarn used by the appellant cannot be included in the specification under the notification. The Adjudicating Authority is right in observing that the moment any other waste or primary material is used which does not fall in the description of the plastic scrap/plastic waste/PET bottles, the assessee goes out of the purview of the said notification.
Considering the principle of law that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession, the appellant has failed to substantiate the same. Also, if exemption is available on complying with certain conditions, the said conditions have to be complied with and as per the discussion above, it cannot be said that the appellant has complied with the mandatory conditions of the notification - the contention of the learned Counsel that the terms ‘plastic waste’ in the notification is not specific but is of general nature is rejected. The wordings of the condition provided in the notification are absolutely clear and unambiguous and leaves no manner of doubt.
Time Limitation - Penalty - HELD THAT:- The Adjudicating Authority had confirmed the demand only to the normal period as there was no suppression of facts or mis-statement on the part of the appellant and consequently, the mandatory penalty under Section 11 AC(1)(c) of the Act was held to be not leviable.
Interest - HELD THAT:- The liability to pay interest under Section 11AA of the Act on the central excise duty amounting to Rs.1,67,20,988/- being mandatory and automatic by operation of law is upheld.
There are no strong and compelling reasons to differ from the impugned order, which deserves to be upheld - appeal dismissed.
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2024 (3) TMI 552
CENVAT Credit - trading activity - exempted service - availing cenvat credit of service tax paid on certain input services which were utilized by them for manufacture as well as trading purposes (common input services) - non-maintenance of separate records - HELD THAT:- It is very clear that Hon’ble Supreme Court in CHANDRAPUR MAGNET WIRES (P) LTD. VERSUS COLLECTOR OF C. EXCISE, NAGPUR [1995 (12) TMI 72 - SUPREME COURT] has laid down that once a debit entry is made in respect of a credit entry, then the result is as if that credit entry was never made. In other words, the entire cenvat credit availed on common input services being debited before adjudication and at the time of adjudication, it was as if such credit was never availed. Now on the question whether subsequent to the activity of trading, such debit can be effected.
Hon’ble Delhi High Court has held that since the rules have not provided as to how attributable cenvat credit is to be debited and in advance it would not be known as to how much quantum of trading will take place, it is logical that the attributable cenvat credit is debited after the trading activity is over, may be once in a quarter or once in six months - the appellant had debited the entire cenvat credit availed on common input services. Therefore, it is to be treated that they had never availed such credit. When credit on common input services is not availed, the question of payment of 5% or 6% of the value of exempted services will not arise.
The confirmation of demand of Rs.2,44,54,675/- is set aside along with interest and equal penalty - Appeal allowed.
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2024 (3) TMI 494
Denial of CENVAT Credit - Input service or not - Inland Haulage Charges/Transport Charges - place of removal - HELD THAT:- The activity of transportation of goods for export is an input service provided it is availed upto the place of removal and that the service tax paid for transportation of goods upto the place of removal entitles the eligibility of availing cenvat credit there upon - Place of removal has not been defined in Cenvat Credit Rules however Section 4 (3) (C) of Central Excise Act, 1944 defines ‘place of removal’. However, Rule 2(t) of Credit Rules allowed import of definition of the terms under Excise Act for interpretation of the terms employed in the Credit Rules.
Though the exporter always need not to appoint the CHA or the clearing and forwarding agent and can fulfill all the formalities on his own but the another peculiar admitted fact of the present case is that the goods were agreed to be exported on FOB basis. FOB in shipping terms indicate who owns the goods during transit and who pays for the shipping associated fees and other freight charges. There is nothing on record to show that the appellant as manufacturer-exporter has incurred the expenditure till the time the goods are put on the vessel at the Gateway Port.
As the appellant had also impressed upon the concept of the sale, it is observed that the said aspect has already been decided by the Hon’ble Apex Court in the case of COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, NAGPUR VERSUS M/S ISPAT INDUSTRIES LTD. [2015 (10) TMI 613 - SUPREME COURT], the Hon’ble Apex Court in the said case has held invoices were prepared only at the factory directly in the name of the customer in which the name of the Insurance Company as well as the number of the transit Insurance Policy were mentioned. Above all, excise invoices were prepared at the time of the goods leaving the factory in the name and address of the customers of the respondent. When the goods were handed over to the transporter, the respondent had no right to the disposal of the goods nor did it reserve such rights inasmuch as title had already passed to its customer.
Though the appellant has relied upon the Board Circular of 2007 and 2014 but both the circulars are prior to impugned decision in Ispat Industries Ltd. case otherwise also both these circulars stands superseded by the other circular of 2015 as relied upon by the department and of 2018 as has been issued subsequent to the decision in Ispat Industries Ltd.
The Inland haulage charges from ICD Garhi Harsaru to shipping port, Pepavav were the charges for the service received beyond the place of removal, hence, the appellant has rightly been disallowed the availment of cenvat credit thereupon. Finding no infirmity in the order under challenge, the same is hereby upheld.
Appeal dismissed.
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2024 (3) TMI 493
Activity amounting to manufacture or not - work of printed labels and printed cartons for corrugated boxes falling under Tariff Heading 48211020 and 48191010 of Central Excise Tariff Act, 1985 - manufacture and clearance of printed labels without assessing the duty involved thereon, without payment of duty and without issuing proper invoices for clearances of such goods during the period January 2007 to March 2011 - contravention of provisions of Rules, 4, 6, 8, 10, 11 and 12 of Central Excise Rules, 2002 - vague SCN - HELD THAT:- The case of the department is that the appellant is a job worker who received raw material from the customers and do the activity of printing which amounts to manufacture of finished products. However, in the show cause notice or in the Order-in-Original it is not explained by department as to which is the provision which renders the activity of printing undertaken by the appellant excisable so as to be ‘manufacture’.
The Department has construed the activity of printing to be manufacture, merely because the goods fall under tariff heading 482110. The classification of the goods or its excisability cannot be a ground for holding that the activity amounts to ‘manufacture’. The department has to establish that the activity undertaken by the appellant as per the chapter notes of Section 48 to be that of manufacture. In the present case, there is nothing brought out on record to hold that the activity of printing is “manufacture’ by chapter notes.
In the case of M/S MATCHWELL VERSUS C.C.E. -AHMEDABAD-I [2019 (6) TMI 1019 - CESTAT AHMEDABAD], the Tribunal had occasion to consider similar issue. It was held that merely because the goods are classifiable under a particular tariff heading, it cannot be said that the activity undertaken by the appellant in the nature of printing of images on paper would amount to ‘manufacture’.
In the case of HBD PACKAGING (P) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NOIDA [2013 (5) TMI 33 - CESTAT, NEW DELHI], similar issue was considered wherein it was held that the activity of printing and plastic / varnish coating of plain paperboard as per customer’s specification either purchased by assessee or received for job work does not amount to manufacture. It was held that the basic character of paper board has not changed.
Thus, the activity of printing done by the appellant does not amount to ‘manufacture’. The demand of Excise duty, interest and the penalties imposed cannot sustain. The demand, interest and penalties are set aside. The impugned order is set aside.
Appeal allowed.
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2024 (3) TMI 492
Recovery of CENVAT Credit already taken - allegation is that the Invoices under which the Cenvat Credit has been taken are not proper documents in terms of Rule 9 & Rule 11 of the Cenvat Credit Rules, 2004 - time limitation - suppression of facts or not - HELD THAT:- Admittedly, there is no dispute that the goods in question have been received by the Appellant and the same have been taken in their Stock Register and have been consumed by them in the factory premises. On going through the endorsed invoices, it is seen that the agent Krishna Chemicals has endorsed to the effect that the entire consignment in respect of the Invoices have been sold to the Appellant.
Coming to the Circular issued on 05/05/2015, it is seen that under Para 5 (iii), it has been clarified that when unregistered dealer sells the entire consignment in respect of particular invoice with endorsement to that effect, the recipient would be eligible to take the Cenvat Credit - this Circular has been issued clearly specifying that clarifications are being given after the amendments have been carried out vide Notification No. 08/2015-CE (NT) dated 01/03/2015. Therefore, the Commissioner (Appeals) is correct in taking the stand that the Circular would be effective from 01/03/2015 only cannot be applied retrospectively for the period 2012-13 and 2013-14. However, when compared the amendments carried out under Notification No. 08/2015 and the clarifications given in the Circular, it is found that this Notification No. 8/2015 has not amended any provision with regard to the endorsement to be done by un-registered dealer.
Thus, the unregistered dealer Krishna Chemicals has correctly endorsed the invoice and the Appellant has correctly taken the Cenvat Credit. Further, there is no dispute about the goods having been received and used by the Appellants. Therefore, on merits the appeal succeeds.
Time Limitation - suppression of facts or not - HELD THAT:- There are force in the arguments of the Learned Advocate that the Appellant has received the goods, taken the same in the stocks and accounted for the same in RG 23A Part I and Part II and also has declared the details in their Monthly ER-1 Returns. Therefore, the Department has not made out any case of suppression against the Appellant. Accordingly, the confirmed demand is required to be aside on account of limitation also.
Appeal allowed.
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2024 (3) TMI 491
Maintainability of appeal - non-prosecution of the case - when the matter was called neither anybody appeared nor is there any adjournment request - HELD THAT:- The appellant counsel have received the notice for hearing. However he has not shown any interest in pursuing this matter. From the facts given, it is observed that the matter is pending only for the reason that appellant/counsel on record is not responding to the notices for hearing issued making it evident that they are not interested in prosecuting this matter any further. Having allowed a sufficient number of opportunities to the appellant/appellant’s counsel for hearing, there are no reason to further adjourn this matter.
Interestingly in this case this appeal filed by the appellant was earlier also dismissed for non prosecution. Subsequently it was restored by the bench on application made by the appellant. However it is observed that that appellant chose not appear even at the time of hearing of the miscellaneous application also appellant was not represented and restoration was done in absentia. Even after restoration appellant has not shown any interest towards prosecuting this appeal. Even in response to the hearing notice no communication has been made by the appellant/ appellant’s counsel.
In case of Ishwarlal Mali Rathod [2021 (9) TMI 1301 - SUPREME COURT] condemning the practice of adjournments sought mechanically and allowed by the courts/ Tribunal’s Hon’ble Supreme Court has observed considering the fact that in the present case ten times adjournments were given between 2015 to 2019 and twice the orders were passed granting time for cross examination as a last chance and that too at one point of time even a cost was also imposed and even thereafter also when lastly the High Court passed an order with extending the time it was specifically mentioned that no further time shall be extended and/or granted still the petitioner – defendant never availed of the liberty and the grace shown. In fact it can be said that the petitioner – defendant misused the liberty and the grace shown by the court. It is reported that as such now even the main suit has been disposed of.
Appeal is accordingly dismissed for non prosecution in terms of Rule 20 of the CESTAT Procedure Rules, 1982.
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2024 (3) TMI 490
Method of valuation - section 4 or 4A of CEA - Packaged Drinking Water - SSI Exemption - Eligibility for abatement Notification No.2/2006, 14/2008 and 49/2008 - threshold exemption limit of Rs.150 lakhs of all the four units crossed - failure to account details of production and clearance in daily stock account - non-issuance of invoices - non-payment of duty - Demand alongwith interest and penalty - invocation of Extended period of limitation - HELD THAT:- The whole confusion has arisen for the reason that the Notification No.2/2006-CE (NT) [noticed in para 14 above] has mentioned the chapter heading in Col. 2 as CETH 22019090 as well as 22011010. As per the Tariff Act, Heading 22011010 applies to ‘Mineral Waters” and Heading 22019090 applies to ‘Packaged Drinking Water’. However, the description in column (3) of the notification is given as “Mineral Waters”. The department has therefore held that the ‘Packaged Drinking Water’ would fall within the category of ‘Mineral Water’.
A product has to be classified on the basis of Tariff Act and not on the basis of the notifications. The present notifications are Central Excise Notifications giving the details of abatement in regard to valuation of goods under Section 4A. Merely because the chapter heading, sub heading has been mentioned in Col. 2, the goods cannot be said to be assessed under Section 4A unless the goods also fall under the description given in Col.3. At the cost of repetition, in Column 3 of Notification No.2/2006, 14/2008 and 49/2008, the description of goods is given as ‘Mineral Water’ only. The process of manufacturing Mineral Water and Packaged Drinking Water is different. From the Circulars issued by the Board, it can be seen that when no minerals are added to the water, it cannot be classified as mineral water. So also, it is clarified by the Board that when the water is demineralized by reduction of minerals the same would form ‘artificial mineral water’.
The Packaged Drinking Water is entirely different product falling under separate chapter sub-heading. Further, the price of Packaged Drinking Water is less than the price applicable to Mineral Water. Again, BIS specification for Mineral Waters is different from that of Packaged Drinking Water. The appellant has been issued BIS certification for packaged drinking water as IS 14543.
The valuation of the product has to be based upon the classification of the product. When the classification unambiguously falls under 22019090 the valuation has to be on transaction value as per Section 4 of Central Excise Act, 1944. Merely because the abatement notification mentioned heading 22019090 in column (2) it cannot be said that the Packaged Drinking Water is included in the Mineral Waters. Interestingly, the department does not dispute the classification adopted by appellant for ‘packaged drinking water’. However, department construes that packaged drinking water is mineral water as per notifications 2/2006, 14/2008 and 49/2008. These notifications are issued under subsection (1) and (2) of Section 4A - The department is of the view that sub-heading 22019090 applicable to packaged drinking water when mentioned in column (2) of the notification, it is implied that packaged drinking water is to be included in the category of mineral water. This view cannot be endorsed with.
Taxation statutes cannot be interpreted on any presumptions or assumptions. In other words, there is no implied power of taxation. It has often been held by courts that subject goods is not to be taxed, unless the words of the statute unambiguously impose a tax. An ambiguity in a taxation provision is to be interpreted in favour of assesee.
In Notification 49/2008, the Sl.No.24 referred to ‘Mineral Water’ and Sl.No.25 to ‘Aerated Water’. As per amendment brought forth in Notification 49/2008 w.e.f. 1.3.2015, a new Sl.No.25A was added which referred to ‘all goods except mineral water and aerated water’. This makes it clear, that ‘drinking water’ was never intended to be specified as goods to which Section 4A would apply - the duty demand cannot sustain.
Time Limitation - Penalty - HELD THAT:- The issue is purely interpretational in nature. Further, there were earlier notices issued to the appellant on the very similar set of facts. In other similar matters, the department has set aside demand and taken the view that Packaged Drinking Water cannot be assessed under Section 4A of the Act ibid. For these reasons, the invocation of extended period cannot sustain. For the same reasons, the penalty imposed on the Executive Director of appellant-company is not warranted and requires to be set aside.
The impugned order is set aside - Appeal allowed.
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2024 (3) TMI 489
Reversal of CENVAT Credit - duty paying document - reversal sought on the ground that while WCMIL was not eligible to take Cenvat credit as the same was imported by M/s. Neo Metaliks Limited (NML) who had paid the CVD - it is alleged that invoice issued by WCMIL is not a proper document for availing the Cenvat credit - HELD THAT:- If the department had any dispute that WCMIL was not eligible to take Cenvat credit of the CVD paid by NML, it was for the Department to initiate action against WCMIL. From the appellant’s side, they have received the invoices from WCMIL and after finding that Excise Duty payments have been properly recorded in the invoices, they have taken the Cenvat credit. After converting the cooking coal to Metcoke, treating this activity not as a mere job work, but as a jobwork amounting to manufacture, they have paid the Excise Duty on the finished goods by way of PLA and RG-23A part-II as recorded by the Commissioner(Appeals).
There are no reason to interfere with the considered order passed by the Commissioner(Appeals) - appeal of Revenue dismissed.
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