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Central Excise - Case Laws
Showing 181 to 200 of 82128 Records
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2025 (5) TMI 399
CENVAT credit fraudulently availed without procuring the goods and thus indulging only in paper transactions - violation of Section 9D and Section 33 of the Central Excise Act, 1944 - HELD THAT:- The appellant has not filed any appeal against the impugned order and as such, they cannot request for quashing the impugned order by way of filing the cross-objections. The respondents could have helped themselves by bringing out any inadequacies in the grounds of review by the Committee of Chief Commissioners or the grounds of appeal in the appeal filed by the Department. It is failed to understand as to how the respondents would be benefitted by setting aside the impugned order, which in fact discharges them from any liability. If the respondents had any objection to the reasoning given by the learned Commissioner in coming to the conclusion that was arrived at, they were free to file an appeal against the impugned order. It is found that the respondents have not convinced on as to how the grounds of appeal taken by the Revenue in the instant appeal are not legally tenable.
Conclusion - The respondents have not convinced on as to how the grounds of appeal taken by the Revenue in the instant appeal are not legally tenable.
Appeal allowed.
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2025 (5) TMI 398
Condonation of delay in filing the appeal beyond the prescribed period - mandatory pre-deposit requirements under Section 35F of the Central Excise Act - HELD THAT:- It was held, in Central Industries Security Force [2017 (6) TMI 279 - UTTARAKHAND HIGH COURT] and in Jagdish Ispat Pvt Ltd [2020 (2) TMI 1008 - CESTAT NEW DELHI] that the liberal approach is adaptable for condonation of delay; a litigant does not stand to benefit by lodging an appeal late and refusal to condone the delay can result in a meritorious matter being thrown out at the very threshold cause of justice being defeated.
It is found that the delay caused is not intentional and the appellant does not gain anything by delaying the filing of appeal. Therefore, the delay is condonable.
Conclusion - The Show cause Notice is not maintainable on limitation. Taking in to account other factors that the Show Cause Notice is vague and Non-specific, the same does not have any chance of survival. As such, remitting the matter back to the Commissioner (Appeals) is not going to serve any fruitful purpose.
Appeal allowed by way of remand.
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2025 (5) TMI 397
Demand on account of proportionate Cenvat reversal in terms of Rule 6(3)(ii) of the Cenvat Credit Rules, 2004 - rendering of exempted service during the period 2016-2017 and 2017-2018 up to June 2017 by issuance of the SCN dated 15.01.2022 - whether the appellant is providing any service at all or not? - HELD THAT:- As per Section 65(45) of the Finance Act, 1994, the service means “any activity carried out by a person for another for consideration”. Therefore, service means an activity carried out by a person for another person. In this case, it is required to see that whether the appellant is provided service to another person or not. It is admitted fact that appellant is an another unit of the appellant themselves for which they have provided the service. Therefore, it cannot be said that the appellant is provided service to another person.
Admittedly, in this case, the appellant has provided job work activity to their own unit, therefore, it cannot be said that the appellant has provided any service to another person. Therefore, provisions of Section 65B(44) of Finance Act, 1994 are not applicable to the facts of the case. As there is no service provided by the appellant, therefore, it cannot be said that the appellant has provided any exempted service or taxable service. In that circumstances, the provision of Rule 66B(44) of the Cenvat credit, 2004 are not applicable to the facts of this case. In that circumstances, no service tax is payable by the appellant being they have not provided any service.
The fact is noted that the show cause notice has been issued on 15.06.2022 for the period 2016-2017 and 2017-2018 up to June 2017, the show cause notice issued to the appellant beyond the period of five years. Therefore, the demand pertaining to the period up to May 2017 is not sustainable. As the said period is beyond five years, therefore, the show cause notice is barred by limitation - further, the appellant was provided permission to JSPL Angul under Rule 4(6) of CCR, 2004 to get job work done by the appellant, therefore, the activity of job work undertaken by the appellant was known to the respondent. Hence extended period of limitation is not invokable.
Conclusion - The appellant is not liable to reverse Cenvat credit under Rule 6(3)(ii) and Rule 6(3A) of the CCR. Furthermore, the extended period of limitation for issuance of the SCN is not justified as the Department had prior knowledge of the arrangement.
There are no merit in the impugned order - appeal allowed.
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2025 (5) TMI 314
Levy of penalty u/r 26 of the Central Excise Rules, 2002 on appellant company - main assesses has settled the issue under SVLDRS - suppression of facts or not - extended period of limitation - HELD THAT:- It is found that M/s. Super Auto Electricals Pvt. Ltd. who was a Job Worker and the main party against whom the demand of duty along with interest and penalty was confirmed and the said job worker has already settled the issue of demand of duty along with interest and penalty under SVLDRS and this Tribunal vide its order dated 22.01.2021 dismissed the appeal as withdrawn under SVLDRS.
CESTAT in various decisions has set aside the penalty on co-assessees when the main assessee has settled the issue under scheme but co-assessees failed to submit the required declaration.
Conclusion - The imposition of penalty on co-assessees was set aside, once the main assesses has settled the issue under SVLDRS.
The impugned order is set aside - appeal allowed.
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2025 (5) TMI 261
CENVAT Credit availed on inputs denied on the ground that it was taken in violation of Rule 6(1) as the final goods were said to have been cleared claiming the exemption under Notification No. 30/2004-CE - CENVAT Credit on capital goods denied on the ground that it was taken in violation of Rule 6(4) which prohibits taking of Cenvat credit on capital goods used exclusively for manufacture of exempted goods - penalties imposed under section 11AC of the Central Excise Act, 1944 and Rule 26 of the Central Excise Rules, 2002.
CENVAT Credit on inputs - HELD THAT:- The assessee had applied for this refund as the consequential relief of an order of the Tribunal. The Assistant Commissioner had sanctioned part of this refund by way of credit to the Cenvat account. Therefore, the appellant was entitled to this Cenvat credit and this does not violate Rule 6(1) of the Cenvat credit Rules. The Commissioner had, clearly erred in denying the Cenvat credit to this extent.
CENVAT Credit on capital goods - HELD THAT:- Rule 6(4) prohibits it only if the capital goods are used exclusively for manufacture of exempted goods for a period of two years from installation. The appellant’s submission is that it had also paid duty on some of the goods and claimed full exemption only on some goods. In paragraph 7 of the impugned order, the details of the duty paid are given in a table. Evidently, the capital goods were also used to manufacture certain goods on which duty was paid and they were not used exclusively for manufacture of exempted goods. Therefore, the Cenvat credit on capital goods is not taken in violation of Rule 6(4) of Cenvat Credit Rules - the denial of Cenvat credit to the assessee in the impugned order is not correct and it cannot be sustained.
Penalties - HELD THAT:- The orders of recovery and the penalties imposed on the assessee also cannot be sustained.
Conclusion - i) The appellant is entitled to Cenvat credit on inputs and this does not violate Rule 6(1) of the Cenvat credit Rules. ii) The Cenvat credit on capital goods is not taken in violation of Rule 6(4) of Cenvat Credit Rules. iii) The orders of recovery and the penalties imposed on the assessee also cannot be sustained.
The impugned order is set aside and all three appeals are allowed.
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2025 (5) TMI 152
Valuation of waste and scrap generated during the process of manufacture of final products, a part of which is captively consumed within the factory while rest is sold to independent buyers at the factory gate - HELD THAT:- This Tribunal considering the very same issue in the appellant’s own case for the previous period [2024 (6) TMI 1460 - CESTAT AHMEDABAD], held that as per the Ispat Industries decision [2006 (9) TMI 181 - SUPREME COURT] for the purpose of captive consumption, the value of transaction made through the outside buyer should be taken as assessable value.
In this case also, though the show cause notices allege that the scrap sold to independent buyers was not of the same quality as was used by them captively in the manufacture of PP granules but there is no evidence to support as to on what basis both the qualities are presumed to be different. In absence of any supportive evidence, demands raised by the department for earlier periods were set aside by the Tribunal. Therefore, the issue is no longer res-integra.
As regard department’s reliance on the decision of Cadbury India Ltd [2006 (8) TMI 2 - SUPREME COURT], it is found that the facts are entirely different. In Cadbury India case, goods were 100% consumed captively and no portion of it was sold to independent buyers, whereas in the instant case, there exists, sale price at which goods are sold to independent buyer(s) at the factory gate.
Conclusion - The valuation of captively consumed waste and scrap should be based on the sale price to independent buyers and not on the cost construction method under Rule 8. The Revenue's demand based on Rule 8 valuation is unsustainable.
Appeal allowed.
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2025 (5) TMI 63
Method of valuation - stock transfers of clinker to sister units based on the transaction value at which clinker was sold to independent buyers - to be valued under Rule 11 of the Central Excise Valuation Rules, 2000, or under Rule 8, based on cost of production for captive consumption? - interconnected undertakings related to each other under Section 4(2)(b)(F) of the Central Excise Act, 1944 - it was held by CESTAT that Appellant has correctly paid the duty in terms of Rule 8 of the Valuation Rules. In that circumstance, demand against the Appellant is not sustainable.
HELD THAT:- The view taken by the Custom, Excise Service Tax Appellate Tribunal, Eastern Zonal Bench, Kolkata agreed upon. There is no merit in the appeal and the same is accordingly dismissed.
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2025 (5) TMI 62
Entitlement to a special rate of value addition @ 73.5%, which is based on the actual value of the cost of raw materials and inventory reflected in the audited financial statement - HELD THAT:- A bare perusal of section 35G(1) of the Central Excise Act, 1944 clearly reveals that no appeal shall lie before the High Court from any order passed by the learned Tribunal (on or after the 1st day of July, 2003) if it is an order which relates among other things to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment.
Since this matter relates to valuation, this High Court has no jurisdiction to entertain, try and determine the issue as sought to be raised by the Commissioner of Central Excise, Customs and Service Tax, Siliguri.
Liberty granted to the Commissioner of Central Excise, Customs and Service Tax, Siliguri, to approach the Hon’ble Supreme Court of India for redressal of their grievances, if any, in accordance with law - application disposed off.
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2025 (5) TMI 61
Applicability of Doctrine of merger - demand of duty, interest, and penalty under the Central Excise Act, 1944 - HELD THAT:- Insofar as the prayer to set aside the order in original dated 28.1.2022 passed by the Joint Commissioner is concerned, it is found that as per the doctrine of merger, the order of the Joint Commissioner merged with the order in appeal dated 17.8.2023 passed by the Commissioner (Appeals) and, therefore, it does not exist at all.
Secondly, it is found that an appeal against the order of the Joint Commissioner lies to the Commissioner (Appeals) and not before this CESTAT. The Commissioner (Appeals) had already set aside the Order dated 28.1.2022 passed by the Joint Commissioner and remanded the matter to the Joint Commissioner.
Insofar as the prayer to set aside the Order-in-Appeal of the Commissioner (Appeals) is concerned, it is found that since an order dated 12.11.2024 has since been passed by the Additional Commissioner in pursuance of the impugned order dated 17.8.2023, this appeal has become infructuous. If the appellant is aggrieved by the order dated 12.11.2024, it can seek remedy as per the law.
Appeal dismissed.
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2025 (5) TMI 60
Admissibility of CENVAT credit of service tax paid on goods transport agency [GTA] services availed for outward transportation of goods from the factory gate/depot of the appellant to the premises of the customer under rule 2(1) of the 2004 Credit Rules - levy of service tax on “fine/penalties, retention money and liquidated damages”, against delayed completion of works or non-performance of contract under section 66E(e) of the Finance Act.
Admissibility of CENVAT credit of service tax paid on GTA services - HELD THAT:- It is clear from the invoice dated 25.06.2016 that the appellant had not charged freight charges separately and they were included in the value for delivery of the goods to the premises of the buyers. The appellant, therefore, cleared the finished goods to the buyers on FOR destination basis. The agreement executed with JSW Steel Coated Products Ltd, when read with the Memorandum of Understanding, also shows that the delivery terms were on FOR basis. In such circumstances, the finding recorded by the Commissioner that no evidence was led by the appellant to establish that delivery was on FOR terms is clearly erroneous as all the relevant documents had been submitted by the appellant - the appellant was clearly entitled to avail CENVAT credit of service tax paid on GTA services for onward transportation of goods from the factory gate of the appellant to the premises of the customers.
Demand of service tax on fines, penalties, retention money and liquidated damages - HELD THAT:- The issue is covered by a decision of this Tribunal in South Eastern Coalfields [2020 (12) TMI 912 - CESTAT NEW DELHI]. The Tribunal held that 'It is, therefore, not possible to sustain the view taken by the Principal Commissioner that penalty amount, forfeiture of earnest money deposit and liquidated damages have been received by the appellant towards “consideration” for “tolerating an act” leviable to service tax under section 66E(e) of the Finance Act.'
Conclusion - i) Since the place of removal is the premises of the buyer, the appellant was clearly entitled to avail CENVAT credit of service tax paid on GTA services for onward transportation of goods from the factory gate of the appellant to the premises of the customers. ii) It is, therefore, not possible to sustain the view taken by the Principal Commissioner that penalty amount, forfeiture of earnest money deposit and liquidated damages have been received by the appellant towards 'consideration' for 'tolerating an act' leviable to service tax under section 66E(e) of the Finance Act.
The impugned order dated 30.09.2022 passed by the Commissioner, therefore, deserves to be set aside and is set aside. The appeal is, accordingly, allowed.
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2025 (5) TMI 59
Demands of Central Excise duty on freight along with interest and penalty - clubbing of the value of purchases - addition of freight with clearance value to deny the benefit of SSI exemption on the first clearance value - HELD THAT:- From the Profit and Loss Account of the appellant company, we observe that the appellant has been involved in trading of the control panel purchased from MCG Electrocontrols Pvt, in addition to their own manufacturing of the control panels.
Thus, it is clear that the Department has accepted the trading activity of the appellant company. However, the trading value pertains to the purchases made by the appellant company from MCG Electrocontrols Pvt. Ltd. has not been considered as trading activity of the appellant company. We observe that there is no evidence brought on record to include the trading value along with their own manufactured goods.
Therefore, we hold that the Department has not brought in any evidence to establish that MCG Electrocontrols Pvt Ltd. is a dummy unit of the appellant. Accordingly, we hold that the demand of central excise duty confirmed in the impugned order by including the value of purchase made by the appellant from MCG Electrocontrols, is not sustainable and hence we set aside the same.
Since the demand of duty is not sustainable, the question of demanding interest and imposing penalty does not arise.
Hence, we set aside the impugned order and allow the appeal filed by the appellant with consequential relief, if any, as per law.
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2025 (5) TMI 58
SSI exemption - clubbing of clearances - 'Eagle' brand flasks were finally assembled and manufactured at the premises of the appellant - premises was shared by both the Appellant and M/s Shanti International, a partnership firm - HELD THAT:- It is a fact on record that the course of search of the appellant’s premises, no manufacturing activity was observed by the visiting team. The Appellant has been consistently stating that he is getting the goods manufactured by various small scale manufacturers in rural area which is exempted from levy of excise duty. The investigation has not brought any contrary evidence either.
If the 'Eagle brand' flasks are manufactured in rural areas, then the said goods are eligible for the exemption provided under the above said notification. From the impugned order, it is observed that the Ld. Adjudicating Authority refers to the statement of the Applicant that though he is not having any manufacturing unit, he gets the goods manufactured by various job workers by supplying raw materials, moulds etc. and that various parts of the flask likewise is manufactured by job workers and finally assembled at their premises 5/1, Height Road, Liluah, Howrah. Flasks along with packing boxes [inner and outer covers with the brand name ‘Eagle”] are sent to an address in village Bhattanagar in Anandpur, Liluah for final manufacture of the “Vacuum Flask”. Thus, we observe that the Ld. adjudicating authority in his findings accepts that the final products after packing the goods ready with the brand name of 'Eagle' ready for sale emerges at the rural area namely, village Bhattanagar in Anandpur, Liluah - the clearance of finished goods bearing the brand name 'Eagle' by the appellant are eligible for the SSI exemption as provided under the notification 8/2003 -CE dated 01.03.2003, as amended. Hence, demand of duty from the appellant for manufacture and sale of branded goods of another person is not sustainable and accordingly, the same is set aside.
Clubbing of clearnces - HELD THAT:- The Adjudicating Authority observes that both the units are operative from the same premises ; they were controlled by one single family; all the production activities were carried out in the premises of one unit and raw materials and packing materials were stored in the other premises and both the units have common office; accordingly, the value of clearances of both the units are clubbed. Regarding the role of M/s Eagle Home Appliance Pvt. Ltd., the Adjudicating authority finds that they dealt with such excisable goods on which proper central excise duty was not discharged and hence were liable to confiscation. Accordingly they were liable to penalty under Rule 26 of the Central Excise Act, 1944.
Conclusion - The clearances of the appellant-company M/s. Exotic Industries (India) and that of M/s. Shanti International cannot be clubbed together for the purpose of demanding central excise duty from the appellant company. Accordingly, the demand confirmed by clubbing the value of clearances of both the companies is set aside.
The impugned order is set aside - appeal allowed.
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2025 (5) TMI 57
Levy of penalty under Rule 26 of Central Excise Rules, 2002 - fraudulent availment of CENVAT credit - HELD THAT:- In addition to the factual inconsistencies in the show cause notice, as highlighted by the learned Counsel for the appellants, we also find that no positive action on part of the appellants in order to allege collusion with M/s Puneet Exports Inc. has been brought on record. The fact that the appellants are job-workers and thus, are not required to maintain any records is not disputed. Under the circumstances, it is not understood as to how Revenue confirms the collusion by the appellants.
It is also found that when the credit involved in respect of the appellants was only about Rs.3.73 Lakhs Rs.8.17 Lakhs and Rs.8.13 Lakhs penalty of Rs.50 Lakhs each was imposed on the appellants beyond the provisions of Rule 26 as above.
The impugned show cause notice and the impugned order are not on a reasonable foundation and are not legally also tenable - Appeal allowed.
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2025 (5) TMI 56
CENVAT credit on service tax paid on GTA (Goods Transport Agency) services when the credit is availed through the Head Office - denial of credit on the ground that the Head Office of the appellant is not registered as an ISD - HELD THAT:- Reliance placed on the decision of Hon’ble High Court of Gujarat in the case of Dashion Ltd [2016 (2) TMI 183 - GUJARAT HIGH COURT] where it was held that 'there is nothing in the said Rules of 2005 or in the Rules of 2004 which would automatically and without any additional reasons disentitle an input service distributor from availing Cenvat credit unless and until such registration was applied and granted. It was in this background that the Tribunal viewed the requirement as curable. Particularly when it was found that full records were maintained and the irregularity, if at all, was procedural and when it was further found that the records were available for the Revenue to verify the correctness, the Tribunal, in our opinion, rightly did not disentitle the assessee from the entire Cenvat credit availed for payment of duty.'
Conclusion - The appellants have correctly availed the CENVAT credit on GTA services, distributed by their Head Office even though their Head Office is not registered as an ISD.
Appeal allowed.
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2025 (5) TMI 55
Clandestine manufacture and clearance of biris - unlabelled biris found during the search, particularly those accounted for in the appellant's RG 12A stock register - failure to maintain Daily Stock Accounts (DSA) - demand on the basis of 9(nine) sale bills of tobacco, ITRs, three cash memos and the statements, diary and loose sheets recovered during the course of investigation - HELD THAT:- All the unlabelled and labelled biris were not seized from the factory. They were seized from the residence and the rooms adjacent to the factory. Further, we observe that there is no duty on unlabeled biris upto a clearance of 20 lakh sticks. The appellant has accounted the 1,67,000 unlabelled biris in the RG 12A account. Thus, we hold that the 1,67,000 unlabelled biris which were accounted for in RG 12A are not liable for seizure. We find that all the unlabelled biris found at the time of visit of the officers have been later labelled and cleared on payment of central excise duty. Similarly, the labelled biris found not entered in the register were also accounted and cleared on payment of duty. Accordingly, the demand of duty on the 1.67 lakhs unlabelled biris accounted in their books of account as well as the labelled biris accounted in the books and cleared on payment of duty cannot be confiscated and duty cannot be demanded again on the same goods.
The appellant procures unlabelled biris from the contractor. In the impugned order on the basis of the statement recorded from the contractor, it has been alleged that the appellant has procured 1,00,000 biris per day from January 2005. However, it is observed that the investigation has not done verification and confirm the same from Shri Palash Biswas. It is seen that the contractor retracted his statement by filing an affidavit before the Executive Magistrate. Thus, the retracted statement has no evidentiary value without any further corroboration.
Wherever the appellant decides to manufacture labeled biris, they label it and enter in the register. Thus, having unlabelled biris in the factory or residence cannot give rise to the conclusion that they have been kept for clandestine clearance. As per rule 25(1)(b) of the said Rules if any producer, manufacturer, registered person of a warehouse or a registered dealer does not account for any excisable goods produced or manufactured or stored by him then, all such goods shall be liable to confiscation. The unlabelled biris were not required to be entered in the register maintained under rule 10 of the said Rules. Under these circumstances, the said goods are not liable to confiscation and accordingly, the confiscation of unlabelled biris made in the impugned order set aside.
The demand of central excise duty has been made mainly on the basis of the 9(nine) sale bills of tobacco, ITRs, three cash memos and the statements, diary and loose sheets recovered during the course of investigation. We take note of the appellant’s submission in this regard that they have categorically denied to have purchased the said 160 kgs of tobacco from M/s. Jay Hind Tobacco Store. Even if it is assumed that the purchase was genuine, it is observed that no attempt has been made to ascertain quantity of probable manufacture at the time of investigation or at the time of adjudication by the Ld. Additional Commissioner. There is no evidence available on record to show that the appellant has manufacture labelled biris liable to duty by using those tobacco - The allegation in the impugned order is that the labelled biris manufactured by the appellant were subsequently cleared clandestinely without payment of duty. It is to be noted that clandestine removal is a serious charge which needs to be established with cogent and tangible evidence. There is no such evidence for clandestine removal brought on record in this case and hence the demands confirmed without any corroborative evidence is not sustainable.
In the present case, it is a fact on record that there is no evidence of manufacture of labelled biris and clandestine clearance of the finished goods without payment of duty. In this case, the investigation has merely relied upon the statement of the contractor that he was supplying one lakh biris per day and arrived at the duty liability on that basis - No evidence on record regarding receipt of money in cash for the clandestinely cleared goods. In the absence of any corroborative evidence for manufacture and clandestine removal labelled biris manufactured out of the said 160 kgs of tobacco said to have been purchased from M/s. Jay Hind Tobacco Store, the allegation of clandestine clearance is not sustainable.
Further, the Income Tax Returns (ITRs) filed by the appellant for the financial years from 2005-06 to 2008-09 have been relied upon - the income declared in the returns does not show whether it was received from the sale of labelled biris cleared clandestinely. Thus, on the basis of the income declared in the ITRs it cannot be concluded that the appellant has clandestinely cleared labelled biris.
The demand of central excise duty confirmed in the impugned order is not sustainable and hence we set aside the same. Since, the demand of duty is not sustained, the question of demanding interest and imposing penalty does not arise.
Conclusion - i) Having unlabelled biris in the factory or residence cannot give rise to the conclusion that they have been kept for clandestine clearance. ii) In the absence of any corroborative evidence for manufacture and clandestine removal, the allegation of clandestine clearance is not sustainable. iii) Since the demand of duty is not sustained, the question of demanding interest and imposing penalty does not arise.
Appeal allowed.
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2025 (5) TMI 54
Clandestine manufacture and removal - shortage of goods - non-appreciation of facts and evidence - non-speaking order - based on recovery of certain documents and explanation/corroboration in terms of statements of the relevant persons of the company as well as that of dealers receiving such clandestinely removed goods - irregular availment of credit - HELD THAT:- The whole case is based on recovery of private records showing certain production of excisable goods, their clearances and also receipt on payment, etc., in relation to such clandestinely removed goods. The department has also adduced evidence to support as to from where the raw materials were brought in without accounting for the same which have been used for manufacture of certain unaccounted furniture cleared to some of the dealers, who have also corroborated the same by admitting that they have received certain chairs without payment of duty and in respect of some, they have paid to the appellant in cash - when clandestine removal takes place, there has to be certain amount of clandestine production and also use of certain unaccounted raw materials, etc., without taking them on record. Similarly, when clandestine clearances take place, the sale proceeds cannot be reflected in their regular accounts. The detailed investigation has clearly brought out various evidences in this regards, as discussed in detail by the Adjudicating Authority. It is also found that authenticity and veracity of these private records have not been denied by the Managing Director of the appellant himself and in fact, it gets further corroborated by the statements made even by the people who are not the employees of the appellant company.
It is found that the various objections taken by the appellant are having one common theme that the entire case is based on self incriminating statements and there is no corroborative evidence. It is failed to understand that when the Managing Director himself has admitted the veracity of all the documents relied upon, as also the relied upon statements recorded under section 14 of the Central Excise Act, where is the room for doubting the conclusion drawn based on those documents. It is also an admitted fact that none of these statements have been retracted.
In the case of CCE, Mumbai Vs Champion Confectionery [2010 (2) TMI 1044 - CESTAT MUMBAI], the Bench, inter alia, upheld the demand of duty in respect of clandestine removal of goods relying on the statements, even when the said statements were retracted by the people who made the statements. While evaluating various evidences including statements, etc., it held that evidence relating to excess unaccounted stock found on the date of visit and the quantum of unaccounted clearances on certain date itself can be reasonable to conclude that the clandestine clearances are substantial.
In the case of CCE, Mumbai Vs Kalvert Foods India Pvt Ltd [2011 (8) TMI 24 - SUPREME COURT], the Hon’ble Supreme Court has dealt with demand on the basis of clandestine removal, wherein the reliance was placed on the statement of managing director, buyer and production supervisor. The Hon’ble Supreme Court, inter alia, made an observation that for the statements made before Central Excise officer cannot be considered, looked into and relied upon.
Essentially, what emerges from the judgments cited is that when there is clear-cut admitted position and facts in terms of statements recorded by the responsible persons admitting narration in such private records, the conclusion drawn based on said documents along with statements of corroborative nature in itself would be sufficient evidence for alleging clandestine removal. It is obvious that in the case of clandestine manufacture and removal it cannot be proved with mathematical precision and therefore, preponderance of probability in itself would be a good ground for establishing the allegation unless it has been rebutted strongly with the cogent evidence to the contrary. In the present appeal, each and every argument and defence taken by the appellant has been considered and examined by the Adjudicating Authority before arriving at his conclusion. Therefore, there are no infirmity in the order passed by the Adjudicating Authority except to the extent of not excluding the amount from the confirmed demand where the demand itself has been dropped on merit.
Conclusion - The demand of duty and penalties upheld based on a holistic evaluation of private records, admissions by the Managing Director and key employees, corroborative statements of dealers and suppliers, and consistent application of legal principles regarding clandestine manufacture and removal and irregular credit availment.
Appeal dismissed.
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2025 (5) TMI 53
Clandestine manufacture and removal - stainless steel (SS) billets, flats, and rounds - existence of corroborative evidences or not - allegation is based on the records recovered from the appellant itself which showed actual daily production of the goods - demand of interest and penalty - extended period of limitation - HELD THAT:- The quantity of goods shown as manufactured in the RG-1 register was lower than the quantity mentioned in the private registers. The present demand pertains to only two months namely August 2010 and September 2010. The appellant does not dispute the recovery of the documents or that the registers were their own records maintained by the staff. The submissions of the appellant is that the department failed to establish the clandestine manufacture and removal and sale of the goods through positive, cogent evidence.
Clandestine removal, by its their nature, is secretive. If every transaction is recorded in official registers and documents are issued, then there cannot be clandestine removal. Therefore, clandestine removal can only be established through indirect evidences - there is positive evidence in the form of the appellant”s own records maintained privately that more goods were manufactured than what was recorded in the RG-1 register. Therefore, the appellant was bound to pay excise duty on the entire production, but had paid duty only on some part of the production.
The contention of the appellant is that the department should show through positive evidence that there was a clandestine removal. If there were documents showing clearance of every consignment of the appellant, then it would not be a clandestine removal. On the facts in this case, there was sufficient evidence with the department to conclude that goods were clandestinely manufactured and cleared by the appellant. As far as the demand of excise duty under Rule 2 (3) (5) of the CCR is concerned, this is on account of refractories and slag which the appellant had removed from the factory. There is no dispute about such removal - the entire demand of duty of excise in the impugned order needs to be upheld on merits.
Extended period of limitation - HELD THAT:- The extended period of limitation under Section 11A (4) can be invoked if duty is not paid, short paid, not levied, short levied or erroneously refunded by reason of fraud or collusion or willful mis-statement or suppression of facts. In this case, the allegation is the suppression of part of the production by the appellant - the extended period of limitation has been correctly invoked in this case.
Demand of interest - HELD THAT:- As the demand needs to be sustained consequently interest under Section 11AA also needs to be upheld.
Penalty - HELD THAT:- Penalty can imposed under Section 11AC, if the duty is not paid or short paid by reason of fraud or collusion or willful mis-statement or suppression of facts or violation of Act or Rules with an intent to evade payment of duty. As it is found in favour of the Revenue on the question of suppression of facts, there are no reason to take a different view on the question of penalty under Section 11AC also needs to be upheld.
Proceedings and liabilities are affected or barred by the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- This Tribunal is not concerned with nor does it have any role in recovery of any dues. The CIRP proceedings do not determine the tax liabilities but only determine the recoveries. Further, as per IBC, 2016, institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law Tribunal, arbitration panel or other authority is prohibited. This position is also reflected in para “d” of the order of the NCLT enclosed with the letter of M/s Shyam Sel and Power Limited - This appeal is not against the corporate debtor but by the Corporate Debtor assailing the liability of duty and penalty. It is also not about the recovery of the dues. Nothing in the IBC prohibits this Tribunal from hearing and deciding on merits an appeal filed by the Corporate Debtor against the Revenue.
Conclusion - i) The clandestine manufacture and removal can be proved by indirect evidence such as discrepancies in production records, that extended limitation applies where suppression of facts is proved, and that penalty and interest follow from confirmed duty demands. ii) The insolvency proceedings do not bar adjudication of appeals on merits.
There are no infirmity in the impugned order. The impugned order is upheld and the appeal is dismissed.
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2025 (5) TMI 52
Refund of education cess and secondary & higher education cess paid during the disputed periods under the area-based exemption N/N. 56/2002-CE dated 14.11.2002 - demand by holding that education cess and secondary & higher education cess are not duties of excise and therefore, for payment of education cess and secondary & higher education cess, CENVAT Credit of basic excise duty cannot be used - HELD THAT:- This issue has been settled by the Hon’ble Apex Court in the case of SRD Nutrients Pvt. Ltd. [2017 (11) TMI 655 - SUPREME COURT] which has been subsequently followed in various final orders passed by this Tribunal viz, Final Order in SUN PHARMACEUTICAL INDUSTRIES [2018 (3) TMI 2009 - CESTAT CHANDIGARH ] and Final Orders in SUN PHARMACEUTICALS INDUSTRIES [2018 (8) TMI 2128 - CESTAT CHANDIGARH] ].
Following the above said final orders, in the appellant’s own case of the previous period, the Tribunal set aside the order of Commissioner (Appeals) and allowed the appeals of the appellant.
Conclusion - The appellant is entitled to refund of education cess and secondary & higher education cess for the disputed periods.
The impugned order is not sustainable and is set aside - appeal allowed.
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2025 (5) TMI 51
Inclusion of transportation charges in the assessable value - place of removal - suppression of facts or not - invocation of extended period of limitation - HELD THAT:- The adjudicating authority disallowed the show cause notice based on a clear finding rendered in the appellant’s own case by the Commissioner(Appeals) referred to above. There is no new fact that has been brought out in the impugned proceedings by the department to negate the findings of the Ld. Commissioner (Appeals) referred supra. When it is well accepted and not being contested by the Revenue that the property in the goods did actually got transferred to the buyers at the factory gate of the appellant, and the fact of supply of goods to the buyer by the appellant separately recording the freight element cannot therefore form a part of the assessable value. It is also not disputed that the factory gate price of the impugned goods was available at all point in time for consideration by the Revenue.
It is evident that the place of removal of the impugned goods is the factory gate and Central Excise duty would therefore be liable to be paid on the basic price excluding the transportation cost that has been said to be paid by the assessee and collected by the buyers at the rate prescribed in terms of the contract irrespective of the fact that the goods were delivered at the buyer’s premises. In case, the point of delivery, as contended by the Revenue is to be considered as place of removal for charging of Central Excise duty, then the goods have to be further removed from the buyer’s premises for sale. This indeed is not the case in the present matter. The fact that the appellant arranged for transportation of the goods at the buyer’s instance cannot be a ground for loading the factory gate price with the transportation charges and the outward freight cannot be incorporated in the assessable value.
The Hon’ble Supreme Court in the case of Commr. of C.Ex., Chennai-II vs. Aeons Construction Products Ltd. [2015 (8) TMI 441 - SC ORDER] had held that transportation charges were not includible in the assessable value as property in the goods had changed hands from the assessee to the customer at the factory gate and had upheld the impugned order.
Conclusion - The freight element separately shown in invoices and collected at the buyer's instance is not includible in the assessable value for Central Excise duty.
The order of the Ld. Commissioner(Appeals) is not sustainable in the eyes of law and needs to be set aside - Appeal allowed.
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2025 (5) TMI 50
Levy of Additional Excise Duty (AED) imposed by the Finance Act, 2014 on pre-budget stock as in existence at the time of introduction of the levy - appellant contends as per settled law, AED being a new levy, they could not be called upon to pay AED on such stocks as were in existence prior to the introduction of the same - HELD THAT:- The issue with regard to collection of a fresh levy on pre-budget stock/stock manufactured and produced before imposition of the levy has long been settled by a slew of cases. Even the CBEC vide letter D.O.F. No.334/1/2003-TRU (Pt.) dated February 28, 2003 and TRU Letter F.No.345/2/2004-TRU (Pt.) dated August 10, 2004 had clarified that the new levy imposed will not be attracted on pre-budget stock in view of the judgement of the Hon’ble Apex Court in the case of CCE, Hyderabad vs. Vazir Sultan Tobacco Co.Ltd., [1996 (2) TMI 138 - SUPREME COURT]. The said position was reiterated by the Hon’ble Apex Court vide its decision in the case of Ponds India Ltd. vs. Collector of Central Excise, Madras [1997 (1) TMI 77 - SUPREME COURT].
Following the aforesaid ruling of the Apex Court various High Courts and the Tribunal have in a slew of cases accordingly held that any fresh levy introduced is not applicable to goods manufactured prior to the introduction of the levy.
Conclusion - The appellant cannot be fastened with Additional Excise Duty (newly imposed for the first time) on stocks of finished goods that were already in existence at the time of introduction of the said levy and were only awaiting clearance. The levy of duty on goods is fastened only as a consequence and the fact of their manufacture when the said levy is in vogue, its collection having been deferred till the time of removal of the said goods from the factory.
The impugned order, being contrary to law is required to be set aside - Appeal allowed.
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