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Central Excise - Case Laws
Showing 121 to 140 of 82128 Records
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2025 (5) TMI 1747
Refund claim for payment of excess duty - export duty charged on the basis of Wet Metric Tonne (WMT), instead of Dry Metric Tonne (DMT) - without assigning any reason and in terms of Section 17 (5) of the Customs Act, 1962 - HELD THAT:-The assessments of shipping bills have been done under Section 17 (4) of the Act and further Section 17 (5) mandates that if any order is passed under Section 17 (4) of the Act, the proper officer is duty bound to pass a speaking order of re-assessment within 15 days of the order passed under Section 17 (4) of the Act.
Admittedly, in the case in hand, no order under Section 17 (5) of the Act has been passed.
Thus, the appellant has no reason to challenge the assessment of the shipping bills. Therefore, the reasons for denying the refund to the appellant are not sustainable.
Hence, we set aside the impugned order and direct the adjudicating authority/proper officer to pass a speaking order under Section 17 (5) of the Act and thereafter, if any refund claim is maintainable, the same is be decided in accordance with law.
In these terms, the appeal is partly allowed.
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2025 (5) TMI 1746
Jurisdiction of Ld. Commissioner (Appeal) to remand the matter in the absence of any power to this effect under Excise Act, 1944 - revenue neutrality - HELD THAT:- In this case on various instances, the refund claim sanctioned to the appellant, periodically and on the basis of value addition, the rate of claim was fixed on that basis a consolidated refund was sanctioned, the said refund claim was challenged to the Ld. Commissioner (Appeal) and the Ld. Commissioner (Appeal) found it appropriate that the refund claimed shall be recalculated by the Adjudicating Authority, therefore, found it appropriate to remand matter back to the Adjudicating Authority to calculate the same in accordance to law and pass an appropriate order.
There are no infirmity in the impugned order and the Adjudicating Authority is directed to consider the grievance of the appellant, recalculate the amount of eligible refund and thereafter pass the order in accordance with law - appeal dismissed.
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2025 (5) TMI 1745
Demand along with interest and to impose penalty - excess grant of depreciation on the imported capital goods - whether date of commercial production be treated as 23.03.2004 or 27.11.2004, when the first export was made by the appellant - HELD THAT:- From the records we find that the Development Commissioner has issued the letter on 04.03.2005 certifying that the said unit started commercial production on 23.02.2004.
It is clear that as certified by the Development Commissioner, who is the controlling authority of the appellant’s unit, has certified that commercial production has started on 23.03.2004, therefore, the same be treated as 23.03.2004. If the date of commercial production is taken as 23.03.2004, then no demand is sustainable against the appellant and the appellant has correctly calculated the depreciation available to them.
In that circumstances, no amount is recoverable from the appellant, therefore, whole of the demand is set aside. As no demand is sustainable against the appellant, therefore, no penalty can be imposed on the appellant.
In view of this, we set aside the impugned order and allow the appeal with consequential relief, if any.
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2025 (5) TMI 1689
Demand of Cenvat credit - fake invoices - imposition of penalty under Rule 15 of Cenvat Credit Rules, 2004 [CCR, 2004] read with Section 11AC of Central Excise Act, 1944 [CEA, 1944] - availing the facility of Cenvat credit in respect of inputs, capital goods and input services - invoking extended period of limitation - HELD THAT:- After having heard both the sides and on perusal of records, I find that the entire proceedings have been initiated on the basis of statements made by the manufacturers and the Excise dealers which have been solely relied to conclude that the Appellant has not received the goods. Merely on the basis of the communication made by the DGCEI, Jamshedpur, Cenvat credit has been unjustifiably denied to the Appellant by the jurisdictional Central Excise authorities. No other evidence is available on record but the statements, which too have not been allowed to be cross- examined. No investigation was done from the side of Department and no findings were given in the impugned orders regarding the authentication of Invoices, Bilties, Vehicle weighing machine statements and Bank transactions between the Appellant and supplier.
I find that the evidence collected by the Revenue is only in the shape of statements of third party. It is well settled that in the case of clandestine allegation, the onus to establish the same is on the Revenue, which is required to be satisfied by production of sufficient, tangible and positive evidence. The uncorroborated statements of third party cannot be adopted as an evidence, without corroboration from an independent source though such statements can be of some value but cannot be solely relied upon for the purpose of holding against the assessee.
I find that the Appellant has contested that the demand was barred by limitation. In this regard, I find that the SCN dated 04.10.2018 was issued for the period 2013-14. Accordingly, the extended period of limitation was invoked. As per the undisputed fact, the Appellant was registered and was maintaining all the records such as Bank transactions, bilties & RG-23A Pt-II. Appellant has filed the monthly ER-1 returns on a regular basis and the records were also audited. There was no suppression of facts on the part of the assessee. Hence, demand for extended period was hit by limitation - Section 11A of CEA, 1944.
Accordingly, the impugned order is set aside and the appeal is allowed with consequential relief to the Appellant, as per law.
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2025 (5) TMI 1688
Applications seeking rectification of mistake allegedly apparent on the face - quantification of duty - levy of penalty under Rule 26 of the Central Excise Rules, 2002 - request of reconsideration of the documents on record - HELD THAT:- Coming to the additional grievances with respect to the appeal in case of M/s Real Industrial Coating, that the appellant had referred to several documents but finding is not given in the final order. To adjudicate, I foremost look into the scope of rectification in an order and rely upon the decision in the case of Saurashtra Kutch Stock Exchange Ltd.- [2008 (9) TMI 11 - SUPREME COURT] wherein it was held that an error cannot be said to be apparent on face of record if one has to travel beyond the record to see whether the judgment is correct or not. An error apparent on the face of record mean an error which strikes on the mere looking and does not need long drawn out process of reasoning on points where there may be conceivably be two opinions. All submissions of the appellants are duly been mentioned and the finding in the final order clearly reveals the incorrectness thereof. Absence of detailed finding or express denial to accept the submission cannot be called as error that too apparent on record.
Thus, the request of reconsideration of the documents on record so as to arrive at a different conclusion as has already drawn cannot be called as the rectification of mistake which is error apparent on record. The prayer amounts to the recalling of the order which is not permissible under the garb of seeking rectification of errors apparent on record of the final order.
Hence, three of these applications are hereby dismissed.
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2025 (5) TMI 1687
Demand along with interest, and penalty - Availment and utilization of the CENVAT Credit of duty - goods were neither inputs nor capital goods or in relation to the manufacture of final products - contravention of the provisions of Rule 2(k) of the CENVAT Credit Rules, 2004 - HELD THAT:-Considering the fact that the issue has already been settled by this Tribunal in the appellant’s own case [2020 (1) TMI 477 - CESTAT KOLKATA], we are of the view that the above ratio is squarely applicable to the present case.
Therefore, by following the ratio laid down in the above decision, we hold that the demands confirmed against the appellant in the impugned orders are not sustainable. Consequently, we set aside the demands confirmed against the appellant. Accordingly, no penalty is imposable on the appellant in the facts and circumstances of the case.
In the result, we set aside the impugned orders and allow the appeals filed by the appellant, with consequential relief, if any, as per law.
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2025 (5) TMI 1686
Excisability - Demand duty on clearance of Aluminium Dross along with interest and penalty - nature of waste or residue arising during the course of manufacture of Hot Rolled Aluminium Products - applicability of Circular Nos.941/02/2011-CX and 1027/15/2016-CX - HELD THAT:- We find that the issue has been settled by this Tribunal in the appellant’s sister unit in [2019 (4) TMI 1458 - CESTAT KOLKATA],
As the issue has been settled in favour of the respondent, therefore, we do not find any merit in the appeal filed by the Revenue. Accordingly, the same is dismissed.
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2025 (5) TMI 1529
Clandestine manufacturing and removal of goods without payment of Central Excise duty - Demand based on private record/note books without corroboration of other evidences - Fulfilment of conditions laid down under Section 36(B) of the Central Excise Act, 1944 - Suppression of production and removing goods without payment of excise duty - Validity and admissibility of electronic evidence obtained during a search - pen drives found from the worker’s quarters located behind the Account Section of the factory - onus of proof - HELD THAT:- We find that the demand was confirmed by the Commissioner (Appeals) solely on the basis of the confessional statement of the director of the company. We further observe that it has not been clarified from which computer of the company, data was stored in the impugned pen drives. It is a settled principal of law that evidences available in electronic modes are accepted only when conditions laid down under Section 36(B) of the Central Excise Act, 1944 are fulfilled.
As per sub clause (4) of Section 36(B) of the Central Excise Act, 1944, electronic evidences would be admissible when a certificate is given identifying the documents contained in the statement and describing the manner in which it was produced. Given such particulars of any device involved in the production of those documents as may be appropriate for the purpose of showing that the documents were obtained from a computer and dealing with any of the matters to which the conditions mentioned in sub clause (2) relates. In the SCN, there is no such mention regarding regular use of the computers to store or processing information and the computer was operating properly.
In the present case, pen drives were not resumed from office of the Appellant but from the worker’s quarters and also there is no certificate taken by the Department as provided in sub clause (2) of Section 36(B) of the Central Excise Act, 1944. In the above scenario, the data retrieved from the pen drives cannot be accepted as tangible evidence. We may like to examine as to whether search was made as per provisions of Section 100 of the Cr. P.C. read with Section 18 of the Act or not. It is seen that the pen drives were not seized under proper seizure memo. Also, it is not clear as if seal was put on pen drives at the time of search and was intact and is duly signed by panchas. Second panchanama proceedings for retrieval of data contained in pen drives was carried out in the office of DGCEI and the print outs were obtained without mentioning the computer which was used for such data retrieval.
We are of the view that search and seizure proceedings were made in violation of Section 100 of Cr. P.C. read with Section 18 of the Act, for the reason that Department has failed to follow the provisions of Section 36B of the Act.
We also agree with the contention of the Learned Counsel of the Appellant that at the time of sealing and desealing of the external data storage device as well as the time of obtaining printouts therefrom, a certificate should have been obtained as per the provisions of Section 36B of the Act. No such certificate has been brought on record without which the evidentiary value of these printouts gets vitiated. As no certificate from the responsible person of the Appellant was obtained by the Department, the credibility of the computer printout gets vitiated.
It is evident from the panchnama that the Department failed to gather any of documents from the factory of the Appellant.
Thus, we hold that the charges of clandestine removal of the goods cannot be upheld merely on assumptions and presumptions, but has to be proved with positive evidence such as purchase of excess raw materials, consumption of excess electricity, employment of extra labour, seizure of cash, transportation of clandestinely removed goods etc. It has also been held that onus of proof of bringing clinching evidence is on the Revenue. It has been held that the clandestine manufacturing and removal of excisable goods is to be proved by tangible, direct, affirmative and incontrovertible evidence relating to receipts of raw materials inside the factory premises, and non-accountal thereof in the statutory records, utilization of such raw materials for clandestine manufacture of finished goods, manufactured of finished goods with reference to installed capacity, consumption of electricity, labour employed and payment made to them, amount received by the consignees, statement of the consignees, receipts of sale proceeds by the consignor and its disposal. All these material evidence are missing in the present case and the evidences brought into the record by the Department are incomplete, inconsistent and are not a reliable piece of evidence to prove charges of clandestine removal.
Hence, the impugned order cannot be sustained and is accordingly, set aside. Both the appeals filed by the Appellants are allowed with consequential relief, as per law.
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2025 (5) TMI 1528
Liability to pay CENVAT on the edible lactose - Demand of duty along with interest and penalty - availing credit of CENVAT on the inputs and input services - HELD THAT:- Duties can be charged if excisable goods are manufactured or produced in India. According to the appellant, as recorded in the impugned order, it had no manufacturing facility to manufacture edible lactose at all. It had imported edible lactose, took it into its factory and availed CENVAT credit of the Additional Duty of Customs paid in the Bills of Entry. The assessee got part of the edible lactose processed into pharma grade lactose through a job worker and cleared the rest of the edible lactose as such after reversing the CENVAT credit which it had taken. In the first round of litigation, this Tribunal wanted this fact checked- whether it had imported edible grade lactose. The reason is that the charge against the appellant is that it cleared edible grade lactose. If it had imported edible grade lactose, took it into its factory and later cleared edible grade lactose, it can only be clearance of the input which it had imported.
As can be seen from Section 3 of the Act, the charge of duty of excise (CENVAT) is on manufacture or production of excisable goods and not merely on clearing them (i.e., taking goods out of the factory which it had not manufactured). The Commissioner lost sight of the charging section of the Act and confirmed the demand without establishing through any evidence that the appellant had manufactured edible grade lactose.
Thus, the impugned order cannot be sustained and needs to be set aside. The appeal is allowed and the impugned order is set aside with consequential relief to the appellant.
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2025 (5) TMI 1527
Entitlement to cash refund of unutilized Cenvat credit under the erstwhile Central Excise regime and its transitional treatment under the GST regime - discontinuation of certain production activities - period of limitation prescribed provided under Section 118 of the Central Excise Act, 1944 - mischief on the account of phrase “accumulated credit” - principle of statutory interpretation - Rule 5 prior to its amendment in 2012 and amendments made in the Rule 5 of the CENVAT Credit Rules, 2004 - HELD THAT:- Central excise registration of the appellant would have been migrated into the GST regime and the appellant as per the returns filed was a continuing entity, it could have been claim the benefit of taking this credit into their GST account. There is no law which provides that if appellant fail to exercise the exercise its right to carry forward this credit to the GST, they could have claim the refund in cash. This is exactly as has been advised by the concern authorities to the appellant.
Rule 5 of the CENVAT Credit Rules,2004 was amended in the year 2012 and as per the amended rule there is no provision for the refund of the accumulated credit. The said rule after amendment provided for the refund of the Cenvat Credit taken during a particular quarter which is attributable to the export of the good or services during that quarter. Refund under Rule 5 has been made subject to the limitation as provided by the Section 11B of the Central Excise Act, 1944. In the present case appellant could not show how there refund claim can be considered in terms of amended rule 5 and was filed within the period of limitation prescribed.
I further note Rule 5 was amended with the objective, taking note of the mischief on the account of phrase “accumulated credit” used in the said rule earlier. The rule was made more specific to provide refund only in specified circumstances of the CENVAT Credit attributable to the export of goods and services during specified period. It is settled position in law that while interpreting any such provision the courts or tribunal should take note of mischief sought to be corrected by the amendments made in law. The Mischief Rule, also known as Heydon's Rule, is a principle of statutory interpretation that guides courts to interpret legislation by identifying the "mischief" or "evil" the law aimed to address. It essentially prioritizes the purpose of the law over its literal wording. The rule also aims to prevent clever evasions or circumventions of the law that would allow the mischief to continue.
Further I find that the issue is also covered against the appellant by the decision of larger bench of Bombay High Court in case of Gauri Plasticulture (P) Ltd. [2019 (6) TMI 820 - BOMBAY HIGH COURT] and other decisions relied in the impugned order.
Thus, not find any merits in this appeal.
Appeal is dismissed.
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2025 (5) TMI 1526
CENVAT Credit - place of removal of goods - whether in this case the sale is on exworks basis or at buyer’s premises? - HELD THAT:- It is found from the factual matrix that the appellant has included both freight and insurance in the exworks price for the purpose of discharging their VAT liability. On going through various clauses, it is obvious that though there is a separate exworks price, which has been termed as fixed price and freight separately, a holistic perusal of all this terms and conditions would clearly indicate that the goods are accepted only when they reach the destination in good condition and liability for their transport including pre-payment of transport is on the appellants themselves. Therefore, in the factual matrix it is obvious that sale has got concluded only at the destination of the buyer and not at the factory gate.
As far as various judgments are concerned, all these judgments have been considered by different Tribunals to arrive at a particular conclusion in a given factual matrix about the place of sale. In the case of Schneider Electric India Pvt Ltd Vs CCT, Medchal-GST [2025 (3) TMI 1484 - CESTAT HYDERABAD], this Bench has examined this issue in a given factual matrix and it was held that the appellant is liable to pay excise duty inclusive of freight charges as the place of removal is the buyer's premises under the facts of this case, but the extended period of limitation and penalty under section 11AC(1)(b) are not justified and are set aside.
Conclusion - The sale took place at the buyer's premises on FOR basis and that freight and insurance costs are includable in the assessable value for excise/GST purposes.
There are no infirmity in the impugned orders and therefore, they are upheld - appeal dismissed.
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2025 (5) TMI 1525
Short payment of Central Excise duty - method of valuation - goods supplied to institutional consumers without direct sale by the manufacturer - to be valued under Section 4 or Section 4A of the Central Excise Act, 1944? - HELD THAT:- The provisions of the Legal Metrology Act & Rules provide that only those supplies which are made directly by the manufacturer/ packers or where it is endorsed that these are “ not for retail sale”, will be eligible for exemption from printing of MRP. Fact of the case show that there is neither a direct sale of PP medicines by the appellant to the institutional consumers, nor he has endorsed “not for retail sale” on the said goods cleared to their distributors which he claims were meant for such supply. Also, the appellant has printed MRP on the goods but did not assess the same under Section 4A of the Central Excise Act for excise duty payment.
What has come out of the documents that MRP was printed on the PP medicines supplied by the appellant to their distributors. There was no endorsement to show that the goods are not meant for retail sale. Only mention of “Government invoice” on the covering Central Excise invoices, does not fulfil the requirement of Legal Metrology Act and the Rules made thereunder.
Reliance placed on the decision of CESTAT, Delhi in M/s. Hanon Climate Systems India Ltd Vs. Commissioner (Appeals) CE & CGST, Jaipur [2024 (4) TMI 1267 - CESTAT NEW DELHI] wherein it is held, that if the goods are marked “not for retail sale” and sold to the manufacturers, they qualify as sale to the industrial consumers and not otherwise.
Extended period of limitation - HELD THAT:- There is no dispute that the appellant have filed Central Excise Returns but the same nowhere show clearances made to their distributors separately. The assessable value has been determined in respect of all the clearances without showing as to which of the goods were assessed under Section 4 and under Section 4A of the Act. Non-disclosure of such vital information, leads to conclude that the appellant has not disclosed full facts in the Central Excise returns and therefor, extended period of limitation has rightly been invoked.
Conclusion - i) If the goods are marked “not for retail sale” and sold to the manufacturers, they qualify as sale to the industrial consumers and not otherwise. ii) Non-disclosure of vital information, leads to conclude that the appellant has not disclosed full facts in the Central Excise returns and therefor, extended period of limitation has rightly been invoked.
The order of the lower authority confirming differential Central Excise Rs. 14,65,213/- alongwith interest and imposition of equal penalty on the appellant under Section 11AC of the Central Excise Act, 1944 upheld - penalty on manager is not justified - appeal disposed off.
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2025 (5) TMI 1452
Nonfulfillment of mandatory requirement of pre-deposit - affidavit for poor financial condition - waive the pre-deposit or to reduce the pre-deposit - Seeking direction to entertain the appeal filed under Section 35B of the Central Excise Act, 1944 - exercise of power under Article 226 of the Constitution of India - HELD THAT:- In Rahul Rajvaidhya v/s Customs Central Excise and Service Tax the Division Bench [2019 (10) TMI 227 - MADHYA PRADESH HIGH COURT], has dismissed the appeal affirming the order of the Tribunal due to nonfulfillment of mandatory requirement of pre-deposit as provided under Section 129(e) of the Central Excise Act.
In case of M/s Shree Marwal Sewashram v/s Customs, Excise & Service Tax, Appellate Tribunal [2018 (3) TMI 1427 - MADHYA PRADESH HIGH COURT], the writ petition has been dismissed be declining the relaxation of pre-deposit which is mandatory under Section 35(f) of the Act, 1944 and the order of dismissal of appeal by the Central Excise & Service Tax, Appellate Tribunal has been affirmed.
In view of the above, the Tribunal has not committed any error while dismissing the appeal due to non-deposit of the statutory amount as per provisions of Section 35(f) of the Act, 1944.
Accordingly, this Writ Petition is dismissed.
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2025 (5) TMI 1367
Condonation of delay in filing the application for restoration - duty paid on fixed facility charges - Demand for CENVAT credit including Education cess and Secondary and Higher Education cess in terms of Rule 2014 of the CENVAT Credit Rules, 2004, read with Section 11A (2) of the Central Excise Act, 1944 - levy of Penalty and interest - definition of "input" - HELD THAT:- We have perused the reasons given by the applicant for not being present on the day when the matter was called. The reasons are acceptable and are not being disputed by the assessee. Therefore, the delay in filing the application is condoned and the appeal stands restored to its original file and number of this Court to be heard and disposed of. The application, IA No: GA/3/2025, is allowed.
The learned Tribunal took note of the fact that identical issue was considered in the assessee’s own case and by final order dated March 23, 2018, the claim of the assessee with regard to CENVAT credit on the duty paid on fixed facility charges was allowed. While doing so, the order passed by the co-ordinate Bench of the Tribunal in the case of Commissioner of Excise, Hyderabad vs. Aurobindo Pharma Ltd., [2009 (3) TMI 908 - CESTAT BANGALORE] was relied on.
The revenue challenged the said order before this Court in CEXA 52/2019 and the said appeal was dismissed by the Hon’ble Division Bench by judgment dated February 24, 2020. Thus, the issue in the assessee’ s own case having been decided, the revenue cannot take a different view in the matter though the only distinction in the instant case is that the fixed facility charges is in respect of the facility which was provided for supply of liquid oxygen whereas in the other case it was liquid nitrogen.
That apart, the clarification issued by the Central Board of Excise and Customs dated November 10, 2014 also comes to the aid and assistance of the assessee wherein it was clarified that in the months back there is supply of gas, all elements of consideration, such as price of gas at designated rate per unit of gas and FFC would be added to determine the assessable value for payment of Central Excise Duty.
Further, it was clarified that where the gases so supplied are used by another assessee as ‘inputs’, admissibility of the duty paid on gases as reflected in the invoice for all situations would be decided in accordance with the provisions of the CENVAT Credit Rules, 2004. That apart, on facts it is not in dispute that the supplier had paid the duty and the value of the gas which was supplied was also included in the assessable value.
Therefore, we find that the learned Tribunal was fully right in allowing the assessee’s appeal. Accordingly, the appeal filed by the revenue is dismissed and the substantial questions of law are answered against the revenue.
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2025 (5) TMI 1366
Entitlement to the CENVAT Credit - Free on Road (FOR) sale destination basis - inclusion of freight in the transaction value - refund claimed on the duty paid on the returned goods - Availing the benefit of Notification No. 56/2002-CE - claim of excess self-credit - Demand of tax along with interest and penalty - HELD THAT:- From the perusal of documents on record, it is clear that the appellant sold the goods on FOR basis and have included the value of freight in the assessable value which has been disputed by the department. Further, we find that this issue is no more res integra as the same has been settled by the Larger Bench of the Tribunal in the case of M/s Ramco Cements Limited [2023 (12) TMI 1332 - CESTAT CHENNAI-LB] as well as by the Hon’ble High Court of Himachal Pradesh in the case of M/s Inox Air Products Pvt Ltd. [2024 (4) TMI 32 - HIMACHAL PRADESH HIGH COURT], wherein the Hon’ble High Court, after considering various judgments of Hon’ble Supreme Court as well as the decision of Larger Bench of the Tribunal in M/s Ramco Cements Limited (supra)’s case, has held that when there is FOR sale and the assessable value includes freight charge also, in that situation, the assessee is entitled to the CENVAT Credit of service tax.
Thus, by following the ratios of the decisions cited supra, we are of the considered opinion that the impugned order is not sustainable in law; accordingly, we set aside the same and allow the appeals of the appellant.
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2025 (5) TMI 1365
CENVAT credit on capital goods used for job-work - non-submission of undertaking - benefit of Notification No.214/86-CE - allegation of diversion of raw materials/inputs namely “Housings” imported duty free - demand of interest and imposition of penalties on UKB and personal penalties on its Director - quantum of penalty under Section 114A of the Customs Act, 1962 - HELD THAT:- So far as the first issue regarding demand of CENVAT credit of Rs.36,13,490/- on capital goods is concerned, we find from the records that the demand has been confirmed on the ground that the capital goods were not used for manufacture of dutiable final product by UKB but were used by UKN for job-work for the principal manufacturer in terms of Notification No.214/86-CE dated 25.03.1986 and the principal manufacturer has failed to submit undertaking as required under the said notification.
In view of the dicta of law laid down by Hon’ble High Courts in Commissioner of Central Excise, Chennai-IV vs. Kyungshin Industrial Motherson Ltd.[2015 (11) TMI 899 - MADRAS HIGH COURT], we conclude that the goods manufactured on job- work basis and cleared by availing benefit of Notification No.214/86, as amended, are not exempted goods and therefore Rule 6(4) of the CENVAT Credit Rules, 2004 restricting CENVAT credit on capital goods is not applicable.
Non-submission of undertaking in terms of Notification No.214/86 by the principal manufacturer is concerned, We find that ER-1 return of the principal manufacturer was submitted before the adjudicating authority showing payment of duty on final product and the same has not been disputed in the impugned order. The finding in the impugned order that UKB has not put forth the evidences to show taxability of goods manufactured under job-work is therefore perverse and incorrect.
Even if we assume for a moment that benefit of Notification No.214/86, as amended, can be denied to UKB, on account of non-submission of undertaking by the principal manufacturer, then also in such a case, the revenue can demand duty on job-worked goods and cannot deny the CENVAT credit on capital goods. Having not demanded duty on job-worked goods, the revenue cannot deny CENVAT credit on capital goods and therefore we find that the demand of CENVAT credit of Rs.36,13,490/- along with appropriation of the amount of credit reversed by UKB cannot be sustained.
Demand of customs duty of Rs.49,60,092/- is concerned, In this regard, we have perused the letter dated 07.09.2011 issued by the Deputy Commissioner, Pune Commissionerate intimating the facts found during enquiry and statements of Shri Pankaj Bhardwaj. However, we fail to gather as to how the said letter or its enclosures point out diversion of “Housings” from UKB to its Pune unit.
We also find that a certificate dated 27.03.2018 issued by M/s East West Automation Technologies Pvt. Ltd. clarifying that the purchase order placed by UKB was for housings and terminals only and the same goods were supplied to UKB. Despite, this certificate on record before the adjudicating authority, neither any enquiry has been made from M/s East West Automation Technologies Pvt. Ltd. nor the contents of the certificate has been disputed by the adjudicating authority. In these facts, we cannot draw any adverse inference on the two invoices in question.
We also find that apart from the two invoices issued by UKB, there is absolutely no material on record to sustain the case of diversion of imported goods. Merely because UKB failed to give details of utilisation of imported “Housings” in beginning, the same could entail imposition of penalty under appropriate provision but the same cannot form the basis for alleging diversion of goods and demand of duty. Therefore, we conclude that the demand of customs duty of Rs.49,60,092/- cannot be upheld.
Accordingly, the duty liability is worked out to Rs.3,98,149/- only, by reducing the duty involved on these machines from the total duty liability of Rs.9,04,380/-. The appropriation of amount, over and above the said amount of Rs.3,98,149/- is also therefore set-aside.
So far as demand of duty of Rs.32,761/- is concerned, we fail to understand that when UKB paid certain amounts in excess, than why the said excess amount can be adjusted towards the short-paid amount of duty. The reasoning given in the impugned order is therefore not tenable.
So far as imposition of penalties on UKB and demand of interest is concerned, since removal of machineries may be prior to 08.04.2011 but determination of duty postulated under Section 114A was made only on 10.09.2020, that too under Section 28(2)/Section 28(10) and not under Section 28(8) and therefore, we find that UKB is not the person liable for penalty under Section 114A in respect of demand of duty of Rs.3,88,149/-. In so far as demand of personal penalties on director is concerned, since we have set-aside the majority of demand of duty, hence personal penalties on the director are also set-aside.
This takes us to the appeals filed by the revenue. The revenue has challenged the impugned order to the extent it imposes penalty equivalent to the amount of duty and not the amount equivalent to duty and interest, on the basis of Circular No.61/2002-Cus dated 20.09.2022.
The ground raised in the appeals filed by the revenue is squarely covered by the decision of the Tribunal in Commissioner of Customs, Noida v. Unnati Fortune Industries Pvt. Ltd.[2024 (1) TMI 532 - CESTAT ALLAHABAD] and therefore the appeals filed by revenue cannot succeed.
Thus, we partly allow the appeal filed by UKB by setting aside the entire demand of duty, interest and penalties except demand of Customs duty, CVD & Addl. Duty (Imports) of Rs.3,98,149/-. Since we are confirming demand of duty of Rs.3,98,149/- only, hence appropriation of amounts made in the impugned order, over and above of Rs.3,98,149/- is set-aside.
The appeal filed by Director of UKB is allowed in toto and the appeals filed by revenue are rejected.
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2025 (5) TMI 1364
Invocation of extended period of limitation - suppression of facts, knowingly and willfully - evasion on payment of duty - non-submission of price list - claiming wrong valuation and wrongly availing benefit of SSI exemption under the Notification No.8/2003-CE - classification of goods - failure to take registration and file monthly Returns - demand and recovery of duty along with interest, penalties - HELD THAT:- Now once the revenue was aware of the material facts regarding classification under tariff item 2106 9011 and also the claim under the exemption notification, we find that there was no suppression on the part of the Appellant as the Appellant disclosed the correct information. Merely because the goods classifiable under tariff item 2106 9011 were assessable under Section 4A and not under Section 4 will not make out a case of suppression, as the relevant facts were already in the knowledge of the revenue. Therefore no case of suppression with intent to evade duty is made out against the Appellant, which is in consonance with the law laid down in Pushpam Pharmaceuticals Co. vs. CCE [1995 (3) TMI 100 - SUPREME COURT].
So far as non-submission of price list is concerned, we find that price list is relevant for the purposes of valuation under Section 4A of the Act and once the Appellant was paying duty under Section 4A without there being any objection of the revenue, the question of submission of price list does not arise and consequently it cannot be a ground for invoking extended period. We also cannot approve the finding in paragraph 5.4 that it is already proved that the assessee had suppressed the facts as the adjudication order, prior to paragraph 5.4, nowhere deals with the issue of suppression.
The fact that during 2016-17, the Appellant cleared goods of more than Rs.4 crores also does not lead to suppression, when the Appellant had admittedly paid duty on turnover in excess of Rs.4 crores. The fact that the Appellant did not paid duty in 2017-18 by claiming SSI exemption also cannot be a ground for alleging suppression, when the said fact was already in the knowledge of the revenue and non-payment of duty was under the bona-fide belief that the Appellant is still entitled for SSI exemption. It is important to note here that mere non-payment of duty is not sufficient to sustain the charge of suppression, since for suppression, there must be intent to evade payment of duty, which is not there in the present case.
We further find that in the impugned order, the charge of suppression has been sustained on grounds, which were not there in the adjudication order. This is clearly impermissible in law, as the case of the revenue cannot be sustained on a ground which was not there in the adjudication order and therefore the impugned order, to this extent, is not sustainable in law.
Thus, the impugned order, to the extent challenged, is set-aside and the appeal is allowed with consequential relief, as per law.
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2025 (5) TMI 1282
Clandestine removal - Seizure of Pen Drive from the premises of another party, contains the “Production & Dispatch of Sponge Iron” - Demands along with interest and penalty - difference between the Excel Sheet production figure and the RG1 figure - excess / unaccounted production of sponge iron - modus operendi - HELD THAT:- We find that apart from heavily relying on the pendrive and recorded statements, the Revenue has made no effort to bring in corroborative evidence to fortify its claim of clandestine removal. There is no discussion about procurement of materials / inputs, the input – output ratio analysis, electricity consumption, statement of purported sellers of inputs, purported buyers of the finished goods, movement of vehicles and statement of such vehicle drivers / owners. While the Revenue is not required to bring in pinpoint and precise evidence but still efforts have to be made to ensure that sufficient evidence is produced in support of their case.
From the present proceedings, we find that even within the pen-drive the Revenue claims that part of the same is accounted for in the RG 1 records and clearance has been made on payment of Excise Duty. The quantification has been done by comparing the RG 1 sales figures vis-à-vis the figures shown in the Pendrive data and admittedly the author of the Pendrive is not known and no statement has been recorded to this effect from that person. The procedure prescribed under the statutory provisions have not been followed while relying on the data contained in the pendrive.
As we have observed that entire case in respect of the all demands on different heads as observed in the table referred above, has been built up with miniscule evidence, with no corroborative evidence brought in whatsoever. Therefore, we have no hesitation to apply the ratio of the cited case laws in respect of Pendrive, non-allowing of cross-examination of the persons recording the statements, non-production of corroborative evidence, and set aside the impugned order on these counts in respect of the confirmed demands of Rs.1,47,93,916/-.
Since the demands are being set aside, the corollary interest and penalties also get aside.
The impugned Order is set aside towards the confirmed demand of Rs.1,47,93,516/- along with interest and penalty thereon. The penalty on the second appellant is set aside and appeal is allowed.
The appeals are disposed off thus.
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2025 (5) TMI 1281
Demand of duty - Clandestine manufacture - demand with interest and various penalties - solely on the basis of private records found during the course of investigation - satisfying the tests laid down in the case of Arya Fibres Pvt. Ltd. [2013 (11) TMI 626 - CESTAT AHMEDABAD] - HELD THAT:- As none of those tests has been satisfied as from where the excess raw material has been procured by the appellant from where the excess labour has been employed to manufacture such a huge quantity of the goods, how much electricity has been consumed by the appellant, what is the production capacity of the plant installed in the factory premises, where the clandestine removal of the goods were sold and how the transaction were made by the appellant. None of these tests has been satisfied. Therefore, on that ground the demands are not sustainable.
Further in the case of Commissioner of C.Ex, Chandigarh versus Laxmi Engineering Works, (2010 (3) TMI 276 - PUNJAB & HARYANA HIGH COURT), the Hon’ble High Court observed that even if some record recovered during raid and corroborated by some supportable evidence holding that there was an attempt of clandestine production and removal of goods then it is necessary to have some positive evidence of clandestine production and removal of the goods. Admittedly, no such evidence is produced by the Revenue therefore, demand against the appellant is not sustainable.
Thus, it is alleged that appellants were involved in clandestine removal of goods on the basis of private records during the course of investigation and statements recorded during the course of investigation which were not corrugated by the tests laid down in the case of Arya Fibres Pvt. Ltd. (Supra) the demand of Central Excise duty is not sustainable against the appellant. As demand of duty is not sustainable, consequently, no penalty can be imposed on the appellant. In these terms we drop the demand alongwith penalties imposed on the appellant.
In result, we set aside the impugned orders and allow the appeal filed by the appellants.
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2025 (5) TMI 1224
100% EOU - Appellant has achieved negative NFE and had not fulfilled the obligations and conditions as provided in Para 4(b) of Notification No. 22/2003-CE and Para 3(d) of Notification No. 52/2003-Cus dated 31.03.2003 - contravention of provisions of Section 5A of Central Excise Act, 1944, and violating Rule 20 of the Central Excise Rules, 2002 as well as contravened Section 25(1) of the Customs Act, 1962 - Extended period of limitation - HELD THAT:- There is no controversy regarding the fact that appellants failed to achieve positive NFE and could not export the goods to achieve positive NFE earning for the period 2010-15 having procured goods without payment of duty.
The main argument of the appellant is that they have duly complied with the condition stipulated in para 4(b) and 3(d) of exemption Notifications No. 22/2003-CE and 52/3003-Cus dated 31.03.2003 respectively by furnishing bond and hence the impugned order to recover the duty in the absence of any breach of conditions, cannot be sustained. The argument of the learned Counsel for the appellant not agreed upon. From the plain reading of the provisions as contained in 4(b) and 3(d) of the exemption notifications as mentioned above, it is clear that conditions stipulate the payment of duty alongwith interest in case of failure of achieving positive NFE earning and the adjudicating authority can demand duty alongwith interest in case of failure to achieve positive NFE.
Learned Counsel for the appellant has also argued that encashment of bond as stipulated in para No. 4(b) and para No. 3(d) of the exemption notifications 22/2003-CE and 52/2003-Cus dated 31.03.2003 respectively is permissible only when there is permanent failure to achieve net foreign exchange earning and LOP is cancelled leading to the debonding of the EOU. In the present facts, the LOP has been extended upto 12.05.2020 whereas the impugned order dated 31.03.2016 demands the excise duty and Customs duty for the period 2010-15. He contends that when the LOP is in force and not cancelled, appellant are entitled to all the privileges and benefits attached to the LOP including the benefit of the exemption notification and the Revenue has no authority to recover the duty. The arguments of the learned Counsel for the appellant not agreed uponand the contention of the appellant cannot be accepted.
Extended period of limitation - HELD THAT:- The arguments of the learned counsel for the appellant cannot be accepted that they have regularly submitted the returns etc. disclosing the net foreign exchange earning achieved and extended period of limitation cannot be invoked. The department has rightly invoked extended period of limitation and the ingredients mentioned in provision of Section 11A of Central Excise Act, 1944 and Section 28 of the Customs Act, 1962 are present in the instant case.
The appellant also argued that subsequent to the impugned order-in-original, appellant have achieved the stipulated positive NFE earnings as required by DC KASEZ while granting an extension of the LOP period. Annual progress reports for FY 2016-17, 17-18 and 18-19 submitted to SC-KASEZ establish the fact of positive NFE achieved which is enclosed by the appellant. The argument of the learned Counsel cannot be accepted because the show cause notice was issued to the appellant for violation of exemption notifications for the Financial Year 2010 to 2015 and not for the Financial Year 2016 to 2019.
Conclusion - The appellant has violated the conditions of Notification No. 22/2003-CE dated 31.03.2003 and 52/3003-Cus dated 31.03.2003, having failed to achieve positive Net Foreign Exchange earnings during the period 2010-11 to 2014-15 and the appellant have contravened Section 5A of the Central Excise Act, 1944 and violated Rule 20 of Central Excise Rules, 2002. They have also contravened the provisions of Section 25 of the Customs Act, 1962. Therefore, demand of Central Excise duty of Rs. 6,93,932/- as per provisions of Section 4(b) of the Notification No. 22/2003-CE dated 31.03.2003 with interest and penalty and Customs duty of Rs. 42,576/- demanded as per para 3(d) of the Notification No. 52/2003-Cus with applicable interest and penalty is liable to be upheld. Therefore, the impugned order passed by Commissioner (Appeals) is liable to be confirmed whereas the appeal filed by appellant is liable to be dismissed.
Appeal dismissed.
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