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Central Excise - Case Laws
Showing 101 to 120 of 546 Records
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2018 (2) TMI 1403 - MADRAS HIGH COURT
Validity of SCN - the reply given by the petitioner to the Audit objections dated 16.12.2016 have not even been referred to, much less considered - principles of natural justice - Held that: - Circular dated 21.12.2015 stipulates that Pre show cause notice consultation with the Principal Commissioner and Commissioner is being made mandatory prior to issue of show cause notice in the case of demands duty above ₹ 50 lakhs (except for preventive / offence related SCN's).
Admittedly, the above referred procedure, which has been held to be a mandatory by CBEC, has not been adhered to in the instant case. That apart, when the petitioner had been given an opportunity to submit the reply to the Audit Slip, which they had submitted by reply dated 16.12.2016, the same ought to have been considered by the fourth respondent prior to issuance of the SCN.
Matter is remanded to the fourth respondent, for fresh consideration - petition allowed by way of remand.
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2018 (2) TMI 1402 - CESTAT NEW DELHI
Clandestine manufacture and removal - “Saraswati writing Pad” diary (notebook) was recovered where the details of the finished goods i.e. copper rods manufactured and cleared by them without any bill, were mentioned - Simultaneous search was conducted at the residential premises of Shri Brijesh Kumar from where a cash of ₹ 12,83,000/- was recovered - Held that: - this is a case of clandestine removal of the goods without payment of Central Excise duty. During the search, “Saraswati writing pad” was recovered from the factory premises of M/s. Tirupati Industries, appellant No. 1. Shri Tipesh Kumar, Supervisor, in his statement dated 4.3.2011 accepted that they had been clearing copper rods without raising any bills. He has recorded these details in the Saraswati writing pad. The goods were removed without payment of duty and on the basis of kachaa parchies, as is evident that the same was recovered from the tempo driver DL-IL-5371 from the premises of Shri Mukesh Kumar Gupta’s factory.
Shri Mukesh Kumar Gupta’s factory is totally unregistered factory and entire transaction was made by merely kaccha parchies by making entries in Neelgagan note book. No payment was made or receipt of payment was through banking channel. The transaction was made in cash through unknown buyers of the finished goods.
Impugned order sustained - appeal dismissed.
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2018 (2) TMI 1401 - CESTAT NEW DELHI
Principles of natural justice - The main grievance voiced by the appellant before us as well as before the Tribunal in the earlier round of litigation is that copies of all the RUDs have not been shared by the Revenue with them - Held that: - We have perused of the long list of RUDs vis-a-vis, the documents which have already been made available to the appellant and we are convinced that all the main documents leading to the demand and its computation has already been shared with the appellant - we are of the view that they have been given a fair opportunity to advance the case against them, even in the absence of copies of some of annexures of the RUDs.
Clandestine removal - shortage of raw material and finished goods - The stock was ascertained making use of the dip reading method. The appellants grievance is that this is not an accurate method of ascertaining stock - Held that: - the method has been adopted by the departmental officers only after obtaining the concurrence of the appellant’s representative who was present during the panchnama proceedings - the appellant is liable to pay the duty on the finished products found short as well as reverse the modvat credit on the inputs which were found in short - demand upheld.
Clandestine removal - finished products - it has been alleged that the appellant has removed 3996.286 MT of formaldehyde during the period under consideration and duty demand on the same has been confirmed - Held that: - the appellant, by failing to account the full quantity of raw material received by them has indulged in suppression of facts. Analysis of some of the documents relating to finished product clearly evidences that appellant has manufactured and cleared significantly more quantity of formaldehyde then what has been accounted - the preponderance of probability clearly indicates clandestine clearance in the present case.
However, the duty demand cannot be sustained on 3996.86 MT of formaldehyde as has been done by the adjudicating authority. It will be reasonable to restrict the demand to the quantity of 1378.595 MT of formaldehyde manufactured out of the unaccounted methanol which has been consumed to the extent of 453.302 MT - In addition, the appellant will also be liable for payment of duty on the shortage of raw material as well as finished products.
Matter is remanded to the Adjudicating Authority to requantify the demand and redecide the penalties on the basis of the revised computation.
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2018 (2) TMI 1400 - CESTAT NEW DELHI
Benefit of N/N. 1/2011-CE dated 01.03.2011 as amended by N/N. 43/2011 dated 30.12.2011 (Sl. No. 131 - sanitary napkins falling under tariff item 9619 00 10 of the Central Excise Tariff Act, 1985 - Department took the view that since the appellant has availed Cenvat Credit of the tax paid on services, the appellant will not be entitled to the benefit of the N/N. 1/2011 ibid - case od appellant is that they had reversed the credit subsequently, and thus they are entitled for benefit.
Held that: - The legal position that once the cenvat credit availed has been reversed, it is to be considered as not availed, ab initio has been settled by the Hon’ble Supreme Court in the case of Chandrapur Magnet Wires (P) Ltd. vs. CCE, Nagpur [1995 (12) TMI 72 - SUPREME COURT OF INDIA].
It is seen from the record that in the revised return filed on 25.04.2015, the cenvat credit of ₹ 16,16,790/- paid on input services has been deleted. Further, the appellant vide their written submission dated 19.01.2018 has confirmed that they have further reversed the amount of ₹ 97,957/- alongwith the interest of ₹ 88,258/-. The net result of the revised return as well as the further payment is that the entire cenvat credit availed on input services have been reversed by the appellant.
The appellant can be considered as not availed the cenvat credit of input services, ab initio. Accordingly, they will be entitled to the benefit of N/N. 1/2011 during the disputed period - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1398 - CESTAT NEW DELHI
CENVAT credit - bags and barrels arising in the course of manufacture, not usable - applicability of Rule 6(1) of Cenvat Credit Rules 2004 - Revenue is of the view that on the said bags and barrels, the appellant is required to pay an amount equal to 6% of the value of said goods in terms of explanation to Rule 6(1) of Cenvat Credit Rules 2004 - Held that: - The provision of Rule 6 are applicable where the assessee is manufacturing dutiable as well as exempted goods - The appellant is not manufacturing these bags or barrels, therefore, Rule 6(1) or explanation thereto is not applicable to the facts of this case - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1397 - CESTAT HYDERABAD
Classification of goods - Aswini Homeo Arnica Hair Oil (AHAHO) - Appellant has classified the said produce as Medicament falling under chapter sub heading No.30039014 and were claiming concessional rate of duty under N/N. 18/2012-CE dt. 17.03.2012 - Held that: - In case of CCE Nagpur Vs. Vicco Laboratories [2004 (12) TMI 92 - SUPREME COURT OF INDIA], the Hon’ble Apex Court has held that classification cannot be changed without a change in the nature of a product or a fresh interpretation of a tariff heading by such decision - In the present case the goods in question has remained same and there is no change of tariff heading.
The goods are classifiable under chapter 30 of the Central Excise Tariff as Homeopathic medicine and liable to duty accordingly. There is no reason to demand the duties and penalties adjudged against the Appellant.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1396 - CESTAT HYDERABAD
Demand of differential duty - Cement - benefit of N/N. 4/2006/4/07-CE (as amended) - case of Revenue is that appellant herein had cleared cement to construction companies, and not affixed any MRP on the cement bags, and claimed the benefit of N/N. 4/2006/4/07 (as amended) on the ground that construction companies cannot be categorised as industrial consumers or institutional buyers - Held that: - Hon'ble High Court of Karnataka in an identical set of facts in the case of Mysore Cements Ltd [2009 (5) TMI 445 - CESTAT, BANGALORE] has held that Tribunal committed no illegality in holding that the construction industry is a service industry and the assessee had satisfied the other requirement of the Notification, they are entitled to the benefit under the Notification.
Demand set aside - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1395 - CESTAT NEW DELHI
Waste - N/N. 89/95-CE - Whether fatty acids, wax and gum arising in course of manufacture of refined vegetable oil are to be treated as “waste” for the purpose of exemption N/N. 89/95-CE and would be exempt from duty under this notification?
Held that: - The appellants are engaged in converting crude rice bran oil into refined rice bran oil. In effect the processes undertaken by them are towards this intended final product. For producing refined rice bran oil, the gums and waxes available in the crude rice bran oil are to be removed by deguming and de-waxing. Thereafter by a process of deacidification/ de-odourisation, by distillation the refined oil is obtained. In this final process fatty acid distillate (fatty acid with odour) is obtained as a waste. As can be seen the gums, waxes and fatty acid distillate are emerging due to removal/refining process of crude rice bran oil - the process is to obtain refined rice bran oil by removing these unwanted products alongwith spent earth, which when present makes the oil as crude refined oil.
The process of manufacturing refined vegetable oil is essentially by removing the unwanted materials that were present in the crude vegetable oil so that a refined vegetable oil can be obtained. In this process of refining, the unwanted materials are removed. Hence, we are of the considered view that the removal of unwanted materials resulting in products like gums, waxes and fatty acid with odour cannot be called as a process of manufacture of these gums, waxes and fatty acid with odour. The process of manufacture is for refined rice bran oil.
Noting that the reference is to decide whether these are to be treated as waste for the purpose of exemption N/N. 89/95-CE we note though the excisability of the product itself is seriously in dispute as per the opinion expressed by us, as above, these cannot be considered as anything other than waste and as such will be covered by the exemption N/N. 89/95-CE.
The appellant/assessee are eligible for exemption under the said notification - appeal returned to the regular Division Bench for decision on the points raised in the respective appeals.
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2018 (2) TMI 1394 - CESTAT NEW DELHI
CENVAT credit - input services - GTA Service - reverse charge mechanism - Held that: - The definition of “input service” was amended vide N/N. 10/2008-CE(N.T.), dated 01.03.2008, w.e.f. 1.4.2008. The effect of amendment was that the Phrase “from the place of removal” was substituted by “upto the place of removal”. As per the amended provisions of definition of “input service”, service tax paid on freight for transportation of goods “upto the place of removal” should only merit consideration as input service - the freight paid by the appellant from 1.4.2008 to 10.07.2014 should merit consideration as “input service” and service tax paid thereon should be eligible for cenvat credit - credit allowed.
With regard to the period after 11.07.2014, though the “place of removal” was specifically defined in Rule 2(qa) of the CCR 2004, but on analysis of such definition Clause, the CBEC vide Circular dated 20.10.014 has clarified that the place, where sales have taken place or when the property in goods passes from the seller to the buyer, is relevant consideration to determine the “place of removal”. On perusal of the said clarification of the Board, it reveals that there is no difference between the amendment in the definition of “input service” effective upto 10.07.2014 and the amendment brought out on 11.07.2014 - However, since the appellant, at this juncture, has not produced all the copies of the purchase orders/invoices in respect of all the buyers and only submitted sample copies issued by few numbers of buyers, the matter should go back to the Original Authority for verification of the purchase orders/invoices in respect of the buyers, to whom the goods were sold by the appellant on FOR destination basis - matter on remand.
Appeal allowed in part and part matter on remand.
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2018 (2) TMI 1393 - CESTAT HYDERABAD
Benefit of N/N. 10/97-CE, dated 1.3.1997 - clearance of testing equipments to public funded Universities etc. - denial on the ground that Essentiality Certificate from head of the institution not produced (as was signed by the other authority) - Held that: - It must be kept in mind that the intention of the Legislature in extending this exemption was only to engage research in public funded research institutions, universities, Institute of Technology etc. Discernibly, there is no allegation that the goods have not been received or used by the intended beneficiaries - the person who has signed the essentiality certificates in these cases would have done so only after being authorized to do so by the concerned institution - Essentiality certificates not having been signed by the officer designated in the notification but by some Other Officer of the same Institution is only a curable defect, of a technical nature, and can very well be overlooked - demand set aside.
Demand on the ground that essentiality certificate was not available or produced - Held that: - The averment of the appellants that in no case, goods were cleared by them without receipt of the certificate issued by respective buyer institutions/Colleges/ Universities should indeed be given credibility. After all, these buyers are institutions of stature and cannot be expected to obtain these goods without following requirements laid by notification and issuing the necessary Essentiality Certificates - demand set aside.
Penalties also set aside.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1392 - CESTAT NEW DELHI
Clandestine removal of finished goods - mis-use of the cenvat credit - seizure of currency - Held that: - Revenue should pay interest for the period the amount remained in its custody - the amount of ₹ 8 lakh seized in cash and held by the Department in bank account should be eligible for interest from 21.09.2005 (from the date of seizure) till its actual refund. The interest in this case should be computed on the basis of the interest accrued to the Revenue for keeping such money in the bank account.
Interest as per the provisions of Section 35 F ibid - Held that: - the only active provision contained in the Central Excise Statute for grant of interest is Section 11 BB, which mandates that if the refund is not sanctioned within three months from the date of its filing, the said refund should be paid along with interest at the prescribed rate. Further, Section 35 FF of the Act provides that in case of favourable order by the Appellate Authorities, the refund should be sanctioned within three months from the date of communication of such order to the adjudicating authority - In this case, since the order was not communicated to the appellant or the Adjudicating Authority on 26.12.2016, the claim of the appellant for interest from such date, should not merit consideration.
The appellant should be entitled for refund of interest from the date of seizure of currency, till its actual refund by the Department and that the Department should pay the interest amount at the applicable bank rate - appeal disposed off.
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2018 (2) TMI 1391 - CESTAT MUMBAI
Transfer of CENVAT credit - whether appellant have rightly transferred the CENVAT Credit from their Service Tax Credit Register to CENVAT Credit Register under Rule 11 of Cenvat Credit Rules, 2004, of the balance as on 31.12.2004 under intimation to Revenue by letter dated 19.01.2005? - time limitation - Held that: - transfer of credit from Service Tax credit Register to CENVAT Credit Register, was properly done under intimation to Revenue and as such the demand for this is hit by limitation.
CENVAT credit - GTA service - whether the appellant have rightly utilized CENVAT Credit for payment of GTA on reverse charge basis? - Held that: - utilization of CENVAT Credit for the purpose of payment of service tax on the GTA services is concerned, the appellant is covered by the ruling of Hon’ble Delhi High Court in the case of CST vs. Hero Honda Motors Ltd. [2012 (12) TMI 734 - DELHI HIGH COURT], where it was held that there is no legal bar to the utilisation of Cenvat credit for the purpose of payment of service tax on the GTA services.
Penalties imposed under Rule 15 of Cenvat Credit Rules, 2004 (Rule 13 of the Cenvat Credit Rules, 2002) read with Rule 25 of Central Excise Rules, 2002, read with Section 11AC of Central Excise Act, 1944 are set aside.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1390 - CESTAT NEW DELHI
Clandestine manufacture and removal - M S Steel Bars and Rods - the entire allegation of the clandestine removal is based on the statement of the transporter as well as detailed culled out from the register of the transporter - Held that: - the Department has not verified to whom the unaccounted goods were sold. No attempt was made to verify the excess consumption of the raw material and use of the extra energy - It is settled law that the documents recovered from third party cannot be used against the manufacturer to prove the clandestine removal unless they are supported by corroborative evidence.
From the record of the factory, no evidence has been brought on record regarding manufacture of the finished goods for the clearance of the same without payment of duty - also, the Department has failed to prove the case of clandestine removal.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1389 - CESTAT AHMEDABAD
CENVAT credit - capital goods - MS Plates etc. - Held that: - MS Plate were used for fabrication in tanks - In absence of any allegation in the SCN or another expert’s opinion, Chartered Engineer Certificate produced by the appellant needs to be accepted - credit allowed - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1388 - CESTAT NEW DELHI
Restoration of appeal - Mandatory deposit under 35F of Central Excise, 1944 - Held that: - no pre-deposit has been made by the appellants as required under section 35F of the Central Excise, 1944. When mandatory pre-deposit has not been made by the appellants, then appeals are not maintainable - applications for Restoration of Appeals are dismissed as not maintainable.
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2018 (2) TMI 1387 - CESTAT NEW DELHI
CENVAT credit - capital goods - input services - area based exemption - Original Authority held that the appellant being the same Central Excise assessee under a single registration, cannot take credit on such capital goods and input services as they are not covered by Cenvat Credit Rules.
Held that: - if the unit is one and the same as contended by the Revenue, the products which are otherwise eligible for exemption under the said notification are to be cleared without payment of duty. It is not tenable to hold that some products can avail area based exemption and others need not avail area based exemption. Admittedly, the lower Authorities recorded that various products manufactured in the distillery unit are not excluded from the area based exemption.
There is contradiction in the approach by the Revenue while denying the credit on capital goods and input services which were admittedly used in setting up and further manufacture in distillery unit. This aspect requires a fresh consideration - appeal allowed by way of remand.
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2018 (2) TMI 1386 - CESTAT NEW DELHI
100% EOU - N/N. 23 of 2003-CE dated 31.03.2003 - Revenue held a view that Zinc powder cleared to DTA is not similar to Zinc ingots exported by the appellant and accordingly, denied the exemption - Held that: - Admittedly, Zinc is manufactured by the appellant and exported in the form of ingots. Some of the zinc is cleared to DTA in the form of powder - there is no reason to deny the exemption to the appellant as the products cleared for export to DTA can be considered “similar” in absence of specific definition restricting the said scope of the said term - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1385 - CESTAT NEW DELHI
Liability of duty - job-work - lunch carry bag under the brand name of “Tupperware” - Held that: - since the duty liability is essentially on the manufacturer, i.e. job-worker in the present case, the duty liability will need to be recovered from them. The appellant cannot be held liable for payment of such duty for the period prior to such undertaking - demand set aside - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1384 - CESTAT NEW DELHI
Valuation - product manufactured by the assessee-appellants which is neither used in the production nor manufacture of final product, but consumed for the purpose of erection of tower - applicability of Rule 11, residuary clause - Held that: - The Hon’ble Supreme Court in the case of PCC Pole Factory Vs. CCE, [2003 (10) TMI 53 - SUPREME COURT OF INDIA], allowed the claim of the assessee-appellants where PCC Poles were used for transmission of the electric energy. There was no further activity of manufacture and no business was carried out by the Electricity Board - Identically, in the instant case, the towers were used by the assessee-appellants for only transmission of the signals without carrying out any further business activity.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1317 - MADRAS HIGH COURT
Application for Settlement - Settlement Commission, while rejecting the application, by the impugned order, did not allow the application to be proceeded with, in terms of Section 32 F (1) of the Act, as the petitioner did not satisfy the condition in Clause (a) of Section 32 E (1) (a) - Held that: - the petitioner stated that, there was no processing of dyeing blended yarn in the last year, so, they did not file 173 B during that period, and in future, they will commence processing of blended yearn and they will file 173 B return. The petitioner specifically mentioned that they are doing job work, i.e., 100% polyester yarn to M/s Kousalya Thread Mills, Tiruppur, under Rule 57 F (4) transactions and apart from that, they are doing job work of Bleaching and Dyeing for the knitted fabrics and not doing the same process for woven fabrics. Appropriate declaration under Rule 173 (B) was also filed, mentioning the relevant details and furnishing the necessary declaration.
The application filed before the Settlement Commission ought not to have been rejected at the threshold - matter is remanded to the first respondent/ Customs & Central Excise Settlement Commission for fresh consideration, with the direction to entertain the application and take a decision on merits - petition allowed by way of remand.
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