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Central Excise - Case Laws
Showing 201 to 220 of 82128 Records
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2025 (5) TMI 49
Method of valuation - physician’s samples supplied free of cost for payment of central excise duty - determination of value under Rule 4 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 or not - HELD THAT:- The issue of value of physician’s samples has been examined by this Tribunal in the case of Klars Sehen Pvt. Ltd. vs. Commissioner of Central Excise, Kolkata [2023 (8) TMI 742 - CESTAT KOLKATA], wherein this Tribunal has observed 'the valuation of physician samples is to be done as per under Rule 4 of the valuation rules, 2000 based on the pro rate value of medicaments sold in the trade and valued under Section 4A.'
As the appellant is paying duty in terms of the CBEC Circular No.813/10/2005-CX dated 25.04.2005 i.e. cost of production + 10%/15%, in that circumstances, and the assessment in this case has been initially done provisionally and same was finalized later on, the show cause notice issued to the appellant is not sustainable.
Conclusion - Valuation of physician samples is to be done as per Section 4(1)(a) of the Central Excise Act, 1944
The impugned order is set aside and the appeal is allowed.
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2025 (4) TMI 1643
Rejection of appeal on the ground that the Tribunal had no statutory power to condone the delay in filing the appeal before the Commissioner (Appeals) - it was held by High Court that 'Since the present appeal is with regard to the limitation period, we are of the view that we cannot intervene in the matter in any manner. The explanation of the counsel appearing on behalf of the appellant that the appellant was suffering from Tuberculosis though may give rise to a right in equity, but the same cannot percolate to right under the statute.'
HELD THAT:- No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India.
The Special Leave Petition is accordingly dismissed.
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2025 (4) TMI 1597
Validity of duty demand based on re-classification of the products Benzene and Toluene from chapter 29 to chapter 27 - re-classification is based on test reports dated 29.01.1991 on samples drawn in October, 1990 of which only a gist was provided to the appellant by the respondent vide letter dated 29.01.1991 - test reports can legally form the basis for re-classification of the above products manufactured and cleared during 1991 and 1992 - treating the assessments provisional for the two products Benzene and Toluene for the months of January and February, 1993 in the absence of any order passed under Rule 9B of the Central Excise Rules, 1944 and without executing any B-13 bond.
Whether a duty demand based on re-classification of the products Benzene and Toluene from chapter 29 to chapter 27 is sustainable when such re-classification is based on test reports dated 29.01.1991 on samples drawn in October, 1990 of which only a gist was provided to the appellant by the respondent vide letter dated 29.01.1991? - HELD THAT:- Sub-rule (1) of Rule 56 says that the manufacturer is under an obligation to permit any officer to take samples of any product manufactured in his factory. Sub-rule (2) says that such an officer shall conduct a test from the samples so taken and communicate the result of such test to the manufacturer. Sub-rule (3) is not relevant for the present discourse. However, sub-rule (4) is relevant. According to sub-rule (4) where the manufacturer is aggrieved by the result of the test, he may within 90 days of the date on which the result of the test is received by him, request the Assistant Commissioner that the samples be re-tested.
If at all the department wanted to inquire into the correctness of the classification submitted by the appellant, it could have taken samples of the two products prior to the approval at the stage of Rule 173B itself. Approval of classification list under Rule 173B is not an empty formality. The proper officer has to apply his mind and if he considers it necessary, he may conduct further inquiry to ascertain the correctness of classification. Therefore, such belated sampling and still further belated test reports cast a shadow of doubt about the entire procedure adopted by the respondent. This is further compounded by non-furnishing of the test reports to the appellant - the orders re-classifying the products Benzene and Toluene under chapter sub-heading 2707.10 and 2707.20 respectively and levying consequential differential duty demand cannot be sustained in law. Impugned order of CESTAT justifying such re-classification cannot also be sustained.
Whether such test reports can legally form the basis for re-classification of the above products manufactured and cleared during 1991 and 1992? - HELD THAT:- Rule 9B is the relevant provision dealing with provisional assessment. As per sub-rule (1), where the assessee is unable to determine the value of excisable goods or the correct classification of the goods, he may request the proper officer in writing giving reasons for provisional assessment to duty. The proper officer may direct after making such inquiry as may be considered necessary that the duty leviable on such goods shall be assessed provisionally at such rate or value as may be indicated by him. Such provisional assessment is subject to the assessee executing a bond in proper form binding the assessee for payment of the differential amount of duty as provisionally assessed and as may be finally assessed - If the proper officer is satisfied that the self-assessment made by the assessee is not in order, he may direct the assessee to resort to provisional assessment. In any event, for an assessment to be provisional in terms of Rule 9B, an order is required to be passed.
This Court in Coastal Gases and Chemicals Pvt. Ltd. [1977 (4) TMI 41 - SUPREME COURT] and in Hindustan National Glass & Industries Ltd. [2005 (3) TMI 123 - SUPREME COURT] held that in order to establish that the clearances were of provisional basis, an order under Rule 9B and payment of duty on provisional basis are essential.
There is no order of the proper officer under Rule 9B directing that assessments for the months of January and February, 1993 for the two products Benzene and Toluene were provisional. Neither any bond in proper format was directed nor executed by the appellant. Mere endorsement by the concerned Superintendent on two RT-12 returns cannot make an assessment provisional. On the contrary, the department had issued a number of show cause notices covering the period from September, 1990 to December, 1992. Appellant had contested the show cause notices. All the show cause notices were adjudicated upon by the Assistant Commissioner. It is implausible that assessments which were regular till December, 1992 could become provisional from January, 1993. CESTAT has rightly held that assessments for the period from September, 1990 to December, 1992 were regular but inexplicably held that assessments for the months of January and February, 1993 qua the products Benzene and Toluene were provisional. Such findings of CESTAT cannot be sustained.
Conclusion - The re-classification of Benzene and Toluene based on undisclosed test reports was invalid and the consequent duty demand was unsustainable. The assessments for January and February 1993 were not provisional due to non-compliance with Rule 9B requirements, thereby invalidating the department's extended duty demand for that period.
Appeal allowed.
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2025 (4) TMI 1596
Rejection of rebate claim - entitlement to claim rebate of excise duty paid on exported goods, while simultaneously claiming duty drawback on inputs under the Customs Central Excise Duties and Service Tax Drawback Rules, 1995 - double benefit - HELD THAT:- A double benefit would arise in a case where, for a single incidence, relief is availed more than once i.e. if relief is claimed more than once on the output side or if relief is claimed more than once on the input side. If relief is claimed only once on the output side and once on the input side then the same would not amount to a double benefit to the manufacturer/exporter.
The benefits or reliefs available to the manufacturer/exporter on the input side are (i) rebate of input excise duty paid by the manufacturer/exporter to its vendors on the material purchased by it and used in the manufacture of exported goods in terms of Rule 18 of the Central Excise Rules, 2002 read with Notification No.19/2004; or (ii) drawback i.e. rebate of duty or tax chargeable on any imported material or excisable material or input service used in the manufacture of exported goods under the Drawback Rules of 1995. Rule 18 of the Central Excise Rules, 2002.
A manufacturer/exporter is eligible to avail benefits on both the input side as well as the output side on exported goods. Doing so is not a double benefit. This is because the manufacturer/exporter is claiming reliefs against two separate tax incidences. On the input side, he is claiming relief of the taxes embedded in the inputs purchased by him for use in manufacture of exported goods. On the output side, he is claiming relief of output duty paid by him on the activity of manufacturing the exported goods. A double benefit would arise when a manufacturer/exporter claims multiple input side benefits or where a manufacturer/exporter claims multiple output side benefits - In the present case, the Petitioner has claimed i) output rebate under Rule 18 of the Central Excise Rules of the Excise Duty paid by it on the activity of manufacturing the exported goods and ii) on the input side, drawback at the All Industry Rate of 16% under the category of “Cenvat facility not availed”.
The Petitioner correctly availed on the input side drawback at the All Industry Rate of 16% under the category of “Cenvat facility not available”. Hence, the Petitioner has correctly availed one input side benefit and one output side benefit.
In the case of Spentex Industries Ltd. [2015 (10) TMI 774 - SUPREME COURT], the assessee- manufacturer used duty paid inputs for manufacture of goods which were finally exported after payment of Central Excise Duty. The rebate claims filed in respect of duty paid on inputs and on finished goods were rejected by the Department. This Court had taken a view that out of the two excise duties, Rule 18 of the Central Excise Rules, 2002 permits rebate only qua one of them and not on both the duties. Overruling the said decision of this Court, the Hon’ble Supreme Court was of the view that exporters are entitled to both input side and output side rebate under Rule 18 and not just one kind of rebate - in light of the decision of the Hon’ble Supreme Court in Spentex Industries Ltd., there is no double benefit availed by the Petitioner and the Petitioner has correctly availed one benefit on the input side and one benefit on the output side.
The impugned order has completely conflated input and output side benefits. Drawback is an input side benefit granting to the Petitioner rebate of the duties/taxes embedded in the inputs purchased by it. Further, the Petitioner has claimed only output rebate under Rule 18 of the Central Excise Rules, 2002 and has not claimed any input side rebate under the said Rule 18. There is absolutely no bar in law nor is there a double benefit for the Petitioner to claim drawback on inputs and output rebate of the excise duty paid on the exported goods.
Conclusion - The Petitioner is lawfully entitled to claim rebate on the excise duty paid on exported goods under Rule 18 of the Central Excise Rules, 2002, read with Notification No. 19/2004, while also claiming duty drawback on inputs under the Drawback Rules, 1995, without it constituting double benefit.
Petition allowed.
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2025 (4) TMI 1595
Entitlement to CENVAT credit by a manufacturing unit on inputs, capital goods, and input services that were physically received and used by a separate, though related, manufacturing unit - HELD THAT:- There is no denial to the fact that both the entities though are run by same management but both being separately registered under Excise Laws. However, it is also not disputed that the Karwahi Mines got registered after the coal was made excisable w.e.f 01.03.2011. This observation coupled with the admitted fact the Karwahi Mines are engaged in manufacture of coal is sufficient to hold that there was no need for Karwahi Mines to take Central Excise Registration prior 01.03.2011.
Coming to the demand for the period 01.3.2011 to 30.9.2011 of Rs. 46,21,582/ -, the said demand has been confirmed by the impunged order on the ground that w.e.f. 01.3.2011, M/s. Sarda Energy and Minerals Ltd. and Karwahi mines, Tamnar, Raigarh became a separately registered manufacturers of respective excisable goods and cenvat credit of capital goods, input and input services utilized at mines was admissible to Karwahi Mines Tamnar only and not to the respondent post the final product of Karwahi Mines/ Coal became excisable from 01.03.2011 - This perusal is sufficient to hold that the present appeal filed by the department has become infructuous and the entire demand as was proposed vide impugned Show Cause Notice including the partial demand as has been confirmed vide the impugned Order-in- Original stands already set aside.
Conclusion - The demand relating to the period before 01.03.2011 was rightly dropped as the mines were captive and not separately registered.
The appeal filed by the department is dismissed, as infructuous.
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2025 (4) TMI 1594
CENVAT Credit - inputs or capital goods - M.S. Plates, M.S. Channels, HR Coils, Chequered Plates, Linear Slide Rail, HR Sheets, RS Joists, MS Beams and MS Square Mesh which have been used as components and accessories of the capital goods which were used for manufacturing the final products - HELD THAT:- M.S. Plates, M.S. Channels, HR Coils, Chequered Plates, Linear Slide Rail, HR Sheets, RS Joists, MS Beems and MS Square Mesh are classified under Chapter 72/73 of Central Excise Tariff Act 1985 which are not covered under definition of capital goods under clause (i) of Rule 2(a)(A) of the Cenvat Credit Rules 2004. As defined above only goods falling under Chapters 82, 84, 85 and 90 are treated as capital goods. It is also important that these goods are neither components, spares nor accessories to the capital goods as required by Rules 2(a)(A)(iii) of Cenvat Credit Rules, 2004.
Hon’ble Allahabad High Court, in the case of Upper Ganges Sugar & Industries Ltd., Vs CCE [2013 (8) TMI 501 - ALLAHABAD HIGH COURT] held that “Cenvat Credit on HR/NS/GC sheers plates/angles/channels/supporting structure etc. cannot be allowed as said goods are used for fabrication and construction, and are not covered by definition of Capital Goods. The High Court also held that component is complete goods in itself and ready to use without any further processing”.
The Hon’ble Supreme Court in the case of Saraswati Sugar Mills Vs CCE, Delhi [2011 (8) TMI 4 - SUPREME COURT] has disallowed Cenvat credit on MS Plates, MS Channels, HR Coils etc., which are used in fabricating support structures for installation of equipment’s such as vacuum pan, crystallizers, sugar grader, elevator etc.
The said goods viz M.S. Plates, M.S. Channels, HR Coils, Chequered Plates, Linear Slide Rail, HR Sheets, RS Joists, MS Beams and MS Square Mesh are not “inputs” even before amendment in Explanation 2 of Rule 2(k). Since amendment in explanation is only explanatory/clarificatory.
Learned AR alternatively argued that the Appellant has claimed Cenvat Credit only during November 2009 that is after 07.07.2009. The Department may know about the Cenvat Credit availed only after availment and reflection in statutory returns. The Department may taken action only after Cenvat Credit availed and not before - The Appellant have not shown fabricating of any capital goods in statutory ER-1 Returns to be eligible for availing Cenvat Credit. In this regard, Hon’ble High Court of Allahabad in the case of Balaji Hindustan Ltd. [2013 (9) TMI 24 - ALLAHABAD HIGH COURT], held that in absence of any evidence in ER-1 Returns and intimation to the Department, Cenvat Credit on goods in subject could not be availed.
Conclusion - The appellant is not entitled to Cenvat Credit on the disputed goods as they do not qualify as capital goods or inputs under the CCR.
There is no merit in the appeal and therefore liable to be dismissed - appeal dismissed.
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2025 (4) TMI 1578
Refund claim - amount paid under protest is in the nature of revenue deposit and hence, it will not be covered by section 11B of CEA or not - principles of unjust enricment - HELD THAT:- The amount of deposit made under protest, except to the extent of amount which has been appropriated towards requirement of making pre-deposit under section 35F, would be in the nature of revenue deposit and therefore, it will not be covered by the provisions of section 11B of the Act, as held by Commissioner (Appeals) in his impugned order while upholding the order of the RSA. The reliance placed by the Revenue on the judgment of Hon’ble Supreme Court in the case of Union of India Vs Willowood Chemicals Pvt Ltd [2022 (4) TMI 980 - SUPREME COURT] is also misplaced inasmuch as this judgment is in respect of interest on delayed refund under IGST Act, whereas, in the present case, the issue is under section 11B of Central Excise Act. Therefore, the facts are distinguished.
The issue of unjust enrichment is not relevant in the factual matrix of the present case, as the same has not been even invoked by the RSA.
Payment of interest - HELD THAT:- There is no specific provision for grant of refund of revenue deposit under the statute, however, following various judicial pronouncements, different forums including Tribunals have been awarding interest @ 6%, as well as in some cases @ 12%, following the judgment of Hon’ble Supreme Court in the case of Sandvik Asia Ltd Vs CIT-I, Pune [2006 (1) TMI 55 - SUPREME COURT] - Hon’ble Supreme Court in the case of Poornima Advani & Ors Vs Govt. of NCT & Ors [2025 (3) TMI 60 - SUPREME COURT], inter alia, held that interest was payable in relation to refund of certain amount which was retained by the Government.
In the facts of the case, the interest is payable on the amount of Rs.1,28,95,173/-, w.e.f. from the dates of deposit made by the appellant. As far as the rate of interest is concerned, since there is no specific rate prescribed, the interest @ 6% is allowed, in view of the fact that similar rate of interest is also admissible for pre-deposit under section 35FF of the Act and the fact that the amount of pre-deposit has been appropriated from the same amount. Therefore, in the facts of the case, the rate of interest would be @ 6%. Moreover, it is seen that in the prayer itself, the total relief sought by the appellant is only Rs.59,98,517/- for refund under section 35FF, as redetermined, the differential amount will be payable. Therefore, the appellants will be entitled for refund, as discussed supra, subject to the cap of Rs.59,98,517/-.
Conclusion - i) The amount paid under protest by the appellant during enquiry is a revenue deposit and not "duty of excise" within the meaning of section 11B of the Act. ii) The RSA erred in calculating pre-deposit amounts under section 35F and interest under section 35FF by using the deposited amount as the base instead of the total disputed duty amount. The correct calculation leads to higher interest entitlement. iii) Interest is payable on the refund of the revenue deposit portion at the rate of 6% per annum from the dates of deposit, based on equitable principles and judicial precedents, despite absence of explicit statutory provision.
Appeal allowed.
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2025 (4) TMI 1577
Time limitation - refund of excise duty paid on investment subsidy adjusted against VAT and CST returns - amount was paid under protest - applicability of principles of unjust enrichment - HELD THAT:- From the grounds of appeal taken by the Revenue before the Commissioner (Appeals) and the appeal decided thereon is basically on the point that since the amount shown as “expenses” is not towards amount as “receivable”, it cannot be established that the assessee have passed the test of unjust enrichment. The said issue has been considered by the Tribunal in the case of M/s. Chambal Fertilizers and Chemical Vs. Commissioner of Central Excise and CGST [2023 (2) TMI 10 - CESTAT NEW DELHI], wherein it was noticed that the refund claim was rejected on the ground that the amount deposited was accounted as “expenses” in the Profit and Loss Account of the appellant meaning thereby that the burden of duty has been passed.
In the present case, the issue of excisability of subsidy amount was pending adjudication, and was finally concluded only by the order of the Tribunal dated 21.12.2018, where the period involved was from 2014 – 2015, however, the appellant had deposited further amount of central excise duty on VAT at their own risk and for the subsequent period which the present refund claim has been made. In this regard, it needs to be appreciated that the issue regarding the liability of duty on the subsidy amount was subjudice and the appellant to avoid any enhanced liability on account of non-payment of duty, had paid the said amount. The observations of the High Court of Delhi in the case of Team HR Services Pvt. Ltd. [2020 (6) TMI 342 - DELHI HIGH COURT], where the Court observed that the undisputed position is that the deposit “under protest” was made against the anticipated liability and which liability though fructified by the respondent was set aside by the CESTAT and which order attained finality.
Conclusion - The submissions of the learned counsel is that the disputed amount was paid under protest much after the clearance of the impugned goods and the said amount, therefore, is not covered by unjust enrichment. It is found from the decision of the Tribunal that once the supplies have already been made, any amount paid thereafter, as tax or deposit, the burden of such amount cannot be passed on to the assessee and, therefore, the test of unjust enrichment is not applicable.
The impugned order is set aside - appeal allowed.
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2025 (4) TMI 1576
Taxable service or negative listed services - activity undertaken by the appellant-sale and purchase of postal stamps through a franking machine - suppression of facts or not - invocation of extended period of limitation.
Taxability of service - HELD THAT:- The franking machine is a stamp vending machine or stamping machine. These can be used subject to getting license from Postal Authorities. The license gets issued by the head of the Postal Division or the independent gazetted Postmaster of the office of Director Posts, Mumbai, Kolkata or New Delhi GPO or by officer commuting postal/SDS unit/SBPO within whose jurisdiction the machine is located. Resultantly, the certificate produced on record was the certificate produced by postal governmental authorities. Presumption of correctness is attached to the said document. There is nothing on record produced by the department to rebut the said presumption. The said document produced sufficiently proves that the activity of the appellant was trading of postal stamps and the said activity is coverd under negative list, sub clause (e) of Section 66D of Finance Act, 1994 - the service tax liability has wrongly been fasten upon the appellant.
Extended period of limitation - HELD THAT:- Vide show cause notice of 25.04.2018, service tax for the period 2012-13 has been proposed. Apparently, the period falls beyond the period of five years, hence had the invocation of extended period would have been justified, the demand for the period beyond five years cannot sustain. Though the department has taken the plea that the period of filing ST-3 returns for Financial Year 2012-13 was extended by 31.10.2013 but this submission does not extend any benefit to the department for want of any apparent reason on record for invoking the period of five years for issuing the show cause notice. As already observed above that the appellant activity was not a taxable service, nonfiling of ST-3 returns and non-deposit of service tax is wrongly held an act of suppression - the show cause notice has wrongly invoked the extended period of limitation and has been vague being solely based on third party information.
Conclusion - i) The activity of the appellant is trading of postal stamps and the said activity is covered under negative list, sub clause (e) of Section 66D of Finance Act, 1994. ii) The show cause notice has wrongly invoked the extended period of limitation and has been vague being solely based on third party information.
Appeal allowed.
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2025 (4) TMI 1535
Recovery of Central Excise duty with interest and penalty - alleged default in payment of duty beyond the stipulated due dates by violating Rule 8(3A) of the Central Excise Rules, 2002 - HELD THAT:- The issue is similar to the relevant findings of the jurisdiction High Court of Punjab & Haryana in the case of Sandley Industries [2015 (10) TMI 2455 - PUNJAB & HARYANA HIGH COURT], wherein the jurisdiction High Court of Punjab & Haryana has held that 'Rule 8(3A) of the 2002 Rules to the extent it contains the words ‘without utilizing the Cenvat credit’ is held to be arbitrary and unreasonable and is struck down. In other words, the unamended Rule 8(3A) of 2002 Rules whereby the benefit of Cenvat credit for all the period till the actual payment was made, stands disallowed in the event of a minor default also is arbitrary and unreasonable.'
Conclusion - The portion of sub-rule (3A) of Rule 8 of the Central Excise Rules, 2002, that prohibits utilization of CENVAT credit during default is declared unconstitutional and invalid. The appellant is entitled to utilize CENVAT credit for payment of duty even during the default period, subject to payment of outstanding amounts and interest as per law.
The impugned order is not sustainable in law, and is set aside - appeal allowed.
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2025 (4) TMI 1534
Evasion of Central Excise duty - non-inclusion of the amount of VAT/Sales Tax collected and retained by them in the assessable value in violation of Section 4 of the Central Excise Act, 1944 - HELD THAT:- The facts are not in dispute. The appellant was eligible for remission under the State VAT scheme. Therefore, while the appellant were charging 100% VAT on their customers, they were retaining 99% of the VAT and paying only the balance 1% VAT to the State Govt. There is nothing on record that this 99% was required to be paid subsequently in instalments. Thus, it gets clarified that this amount is simply retained by the appellant.
This very issue was considered by the Hon’ble Supreme Court in the cited case of Commnr. Of Central Excise, Jaipur vs M/S. Super Synotex (India) Ltd. & Ors [2014 (3) TMI 42 - SUPREME COURT] wherein it has been held that 'As is seen from the facts, 25% of the sales tax collected has been paid to the State exchequer by way of deposit. The rest of the amount has been retained by the assessee. That has to be treated as the price of the goods under the basic fundamental conception of “transaction value” as substituted with effect from 1.7.2000. Therefore, the assessee is bound to pay the excise duty on the said sum after the amended provision had brought on the statute book.'
It is found that the issue had reached the Apex Court, which has held that the retained portion of VAT is required to be treated as additional consideration and hence the same is to be added to the Assessable Value.
The appellant is required to pay the differential Excise Duty for the normal period along with interest. However, considering the factual details of the case, all the penalties are set aside.
The demand of central excise duty for the normal period of limitation, along with interest upheld. No penalty imposable on the appellant. The demand confirmed for the extended period of limitation is set aside. The issue is remanded back to the adjudicating authority only for the limited purpose of verifying the correctness of duty payment for the normal period along with interest by the appellant.
Conclusion - VAT remission or sales tax incentives retained by the manufacturer and not paid to the State Government constitute additional consideration and must be included in the assessable value for Central Excise duty under Section 4 of the Central Excise Act, 1944.
Appeal disposed off by way of remand.
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2025 (4) TMI 1533
Evasion of Central Excise Duty by resorting to undervaluation - clearance of finished products through related unit viz., M/s. H.D. Consortium India Ltd. at a price which was lower than the price at which the said product was subsequently sold by M/s. H.D. Consortium India Ltd. to unrelated buyers - revenue neutrality - HELD THAT:- In the appellant's own case [2024 (6) TMI 1320 - CESTAT KOLKATA], this Tribunal has examined the very same issue and observed that 'the Appellant has adopted a higher value addition and duty was paid at a higher side. Thus, we find that there is no evidence available on record to substantiate the allegation that the appellant has undervalued the finished goods sold to M/s. H.D. Consortium India Ltd. Accordingly, we hold that the demand confirmed in the impugned order on the allegation of undervaluation of the final product is without any basis and liable to be set aside.'
Conclusion - As the issue has already been decided by this Tribunal in the appellant's own case for an earlier period, no demand is sustainable against the appellant, as also being revenue neutral.
Appeal allowed.
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2025 (4) TMI 1532
Irregular availment of CENVAT Credit - denial of credit on the ground that the process undertaken does not amount to manufacture - HELD THAT:- he appellant has been availing CENVAT Credit of duty paid on inputs viz. PP/HDPE/LLDPE Granules, Calcium Compound, Master Batch and PP/HDPE & Woven Fabrics. The said inputs were used in the manufacture of their final products. The appellant was clearing their finished goods on payment of duty and was submitting their Returns regularly. The Department has not raised any dispute against availment of credit by the appellant. It is also observed that when the appellant paid duty on the finished goods, the Department has accepted the same. If the finished products attract duty, then the CENVAT Credit availed on the inputs used in the manufacture of the said finished goods cannot be denied, even if the process does not amount to manufacture.
Reliance placed in the case of Commissioner of C.Ex. & Cus., Surat-III v. M/s. Creative Enterprises [2008 (7) TMI 311 - GUJARAT HIGH COURT]. In this case, initially, the Tribunal had granted the benefit of MODVAT Credit despite the final product not being dutiable as the activity did not amount to manufacture.
The CENVAT Credit availed by the appellant on the said inputs cannot be denied on the allegation that the process undertaken by the appellant did not amount to manufacture and no new product emerged - the demands confirmed in the impugned order are not sustainable - Appeal allowed.
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2025 (4) TMI 1531
Irregular availment of Cenvat Credit - violation of the provision of Rule 11 of Central Excise Rules, 2002 and Rule 10 of Cenvat Credit Rules, 2004 - HELD THAT:- It is quite clear that in the instant matter there is no aspect of unutilized credit in consideration, as evident from the language of the letter dated 12.01.2010 issued by M/s Henkel India Ltd., referred to in para-4 above. The impugned matter, therefore cannot be construed to be a case within ambit of Rule 10 of the said Rules. Thus, we are of the view that the Revenue has misdirected themselves by referencing the present issue within the ambit of Rule 10 on Cenvat Credit Rules, 2004. The fact of the appellant stating to the audit query, of availment of the credit in terms of Rule 10 ibid cannot be so held against them, when the facts on records stand out clearly duly demarcated and distinguishable.
It is an undisputed fact on record that there is no physical removal of any goods as the entire factory as a whole, lock stock and barrel, was purchased by the appellant and there is no shift of the premises involved. It is also not disputed that due duty was paid in respect of goods that were transferred to the appellant by reversing cenvat credit availed. The question that the goods were already in possession is therefore rendered futile and has no ramification with the availability of the credit, till a legal title in the good accrues in favour of the appellant. The argument of the Revenue is therefore baseless.
No credit can be denied if there is no dispute regarding the receipt of such inputs or capital goods and its utilization in the manufacture of final products. It is not disputed that the appellant had received the goods under consideration on which Cenvat Credit has been availed from M/s Henkel India Ltd., in accordance with the Asset Purchase Agreement entered between the two parties and as it is a clear that the title in goods only passed onto the appellant upon issuance of invoices and payment of duty as applicable on the said goods.
The denial of credit therefore to the appellant is clearly erroneous and the argument of delay in issuance of the invoices, without disputing the validity of transference of goods, duty payment thereon and their ultimate utilization is at cross/contradicting purposes. The Asset Purchase Agreement is privy between the parties entering thereto and when they mutually decide to cast aside a delay of 1-2 days, in issuance of the invoice, it is not open for a third party to question the same on grounds of delay and presumed invalidation thereof. It is between the two consenting parties to overlook any such variation of the terms of contract, to which both the sides have no qualms and reportedly agreed to.
Extended period of limitation - HELD THAT:- Once the agreement has been implemented and the goods come into possession and title of the appellant, their duty payment not questioned, their consumption and utilization in manufacture of goods not doubted, all payment including duty payment made by the appellant, the department cannot hold that such invoices were irregular and inadmissible for availment of credit. For reasons foregoing, there are no justification in the department’s stance of invoking extended period of limitation and charging the appellant with willful suppression more so when there are proper communications on record, intimating the department from time to time.
Conclusion - The appellant is entitled to avail Cenvat credit on the capital goods and inputs purchased from the transferor company, as the invoices were valid and duty was duly paid.
Appeal allowed.
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2025 (4) TMI 1324
Exemption /effective rate for goods falling under Chapter Heading Nos.84 to 98 of of the Central Excise Tariff Act, 1985 under N/N. 6/2006-CE dated 01.03.2006 - Clearance of goods without payment of duty to M/s.Nagarjuna Thermal Power Project, Udipi, Karnataka for setting up of a Mega Power Project - Condonation of delay of 309 days in filing the appeal which has not been satisfactorily explained - It was held by CESTAT that 'Thus, the denial of exemption is without any legal or factual basis. The appellant is eligible for exemption under Notification No.6/2006-CE dated 01.03.2006.'
HELD THAT:- There are no good reason to interfere with the impugned order dated 01-03-2024 passed by the Customs Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai.
The appeal is, therefore, dismissed on the ground of delay as well as on merits.
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2025 (4) TMI 1323
Condonation of gross delay of 246 days in filing the petition which has not been satisfactorily explained - release of fixed deposits seized from the petitioner and the company - it was held by High Court that such goods and assets be released in favour of the petitioner forthwith along with statutory interest - HELD THAT:- There is a gross delay of 246 days in filing the petition which has not been satisfactorily explained.
There are no reason to interfere with the impugned order passed by the High Court - SLP dismissed.
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2025 (4) TMI 1322
Prayer for a declaration to the effect Rule 8(4) of the Central Excise Rules, 2002 and 2001 respectively are inconsistent with Rules 3 and 4 of Cenvat Credit Rules, 2001 - HELD THAT:- Since there is no dispute on the position that the above reasoning would apply on all fours to the challenge in the present case as well, Rules 8(4) of 2001 and 2002 Central Excise Rules also, as a consequence, will be liable to be set aside.
A portion of the demand thereunder would stand covered by the decision that are taken in the Writs of Declaration that have been allowed. To this extent, the demand under order-in-original dated 16.05.2005 and recovery notice dated 24.06.2004 are set aside.
Since the Department is agreeable to a hearing of the above afresh, the petitioner is directed to appear before 1st respondent, who now carries the designation The Commissioner of Central Excise, Office of the Commissioner of CGST and Customs, Central Excise and Service Tax, No.1, Foulk's Compound, Anai Road, Salem – 636 001 on 17.04.2025 at 11 a.m. without expecting any further notice in this regard.
Petition disposed off.
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2025 (4) TMI 1321
Refund of Education Cess, Secondary Higher Education Cess and Krishi Kalyan Cess - transitional provisions of the CGST Act, 2017 - applicability of amendment to Section 140(1) of the CGST Act, 2017, which excludes cesses from the definition of "eligible duties and taxes" for transitional credit - HELD THAT:- Definition of “eligible duties and taxes” as per the explanation 3 under Section 140 of the CGST Act was amended with retrospective effect from 01.07.2017 whereby it is specified that Cesses are excluded from the definition of eligible duties and taxes. Thus, the credit is ab initio not available for utilization for GST. In view of the above, Cesses are not be transmitted through Tran -1 as per the transitional provisions specified under CGST Act. As the amount of Cenvat Credit balance of Education Cess & Secondary Higher Education Cess was included in the carried forward amount by the appellant as on the appointed day i.e 01.07.2017 in terms of Section 142(3) of CGST Act, 2017 refund of the same is not admissible to the appellant.
The Cesses are excluded by adding explanation 3 in the Section of the 140 of The Central Goods and Services Tax Act, 2017 from definition “eligible duties and taxes”. The credit is not available as refund. Hon’ble Supreme Court, different Hon’ble High Courts and CESTAT Benches including this Bench held that Education Cess and Secondary Higher Education cess is not refundable as discussed supra. Therefore, there are no legal or factual infirmity in the Order-in-Appeal.
Conclusion - Refund of Education Cess, Secondary Higher Education Cess, and Krishi Kalyan Cess credits carried forward under the pre-GST regime is not admissible under the CGST Act, 2017 transitional provisions or the existing law.
There is no error in the order of the Commissioner (Appeals). Therefore, appeal is liable to be dismissed.
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2025 (4) TMI 1320
Refund of Education Cess, Secondary Higher Education Cess and Krishi Kalyan Cess - transitional provisions of the CGST Act, 2017 - applicability of amendment to Section 140(1) of the CGST Act, 2017, which excludes cesses from the definition of "eligible duties and taxes" for transitional credit - HELD THAT:- Definition of “eligible duties and taxes” as per the explanation 3 under Section 140 of the CGST Act was amended with retrospective effect from 01.07.2017 whereby it is specified that Cesses are excluded from the definition of eligible duties and taxes. Thus, the credit is ab initio not available for utilization for GST. In view of the above, Cesses are not be transmitted through Tran -1 as per the transitional provisions specified under CGST Act. As the amount of Cenvat Credit balance of Education Cess & Secondary Higher Education Cess was included in the carried forward amount by the appellant as on the appointed day i.e 01.07.2017 in terms of Section 142(3) of CGST Act, 2017 refund of the same is not admissible to the appellant.
The Cesses are excluded by adding explanation 3 in the Section of the 140 of The Central Goods and Services Tax Act, 2017 from definition “eligible duties and taxes”. The credit is not available as refund. Hon’ble Supreme Court, different Hon’ble High Courts and CESTAT Benches including this Bench held that Education Cess and Secondary Higher Education cess is not refundable as discussed supra. Therefore, there are no legal or factual infirmity in the Order-in-Appeal.
Conclusion - Refund of Education Cess, Secondary Higher Education Cess, and Krishi Kalyan Cess credits carried forward under the pre-GST regime is not admissible under the CGST Act, 2017 transitional provisions or the existing law.
There is no error in the order of the Commissioner (Appeals). Therefore, appeal is liable to be dismissed.
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2025 (4) TMI 1319
Excisability - classification of Refined Bleached Deodorized Palm Stearin (RBD) and Hydrogenated Palm Stearin (HPS) - to be classified under Subheading Nos. 1511 9090 and 1516 2099 respectively or under Sub-heading Nos. 3823 1112 and 3823 1190 respectively? - Extended period of limitation - HELD THAT:- The CBEC in the Circular No. 81/2002-Customs dated 03.12.2002 has classified Palm Stearin under Chapter heading 15.11, when the same is obtained through fractionation process and classified the same under Chapter heading 38.23, when obtained through the Hydrolytic splitting process. Since, the by-products were obtained by the appellants through the fractionation process, they had claimed the classification of the goods under Chapter 15, which is in consonance with the circular dated 03.12.2002. With regard to the dispute in classification of the subject goods, this Tribunal, in the case of Gokul Enterprises [2008 (11) TMI 135 - CESTAT AHMEDABAD] and Jocil Ltd. [2009 (2) TMI 306 - CESTAT BANGALORE] has taken the view that the product should appropriately be classifiable under Chapter 15. However, the classification dispute in the case of Jocil Ltd. was differed with by the Hon’ble Supreme Court in the case of Jocil Ltd., by holding that the Palm Stearin to be classifiable under Chapter 38. Since, the classification issue was finally resolved by the Hon’ble Supreme Court in the case of Jocil Ltd., the appellants had started paying the Central Excise duty, suo moto, w.e.f. April 2011.
The period in dispute, involved in the present appeal is from November 2009 to March 2011. The Show Cause Notice (SCN) was issued by the department to the appellants on 23.03.2014, seeking for confirmation of the duty demand. The provisions for recovery of non-levied, non-paid, short levied or short paid duties are contained in Section 11A of the Central Excise Act, 1944 - On reading of the above quoted statutory provisions, it transpires that any amount, if lawfully required to be recovered, then the same can be given effect to, by way of issuance of show cause notice within the normal period of one year from the relevant date.
In the case in hand, it is an admitted fact on record that the CBEC in the Circular dated 03.12.2002 had classified the disputed goods under heading 15.11, which was subsequently withdrawn vide Circular No. 31/2011-Customs dated 26.07.2011, pursuant to the judgment of Hon’ble Supreme Court, delivered in the case of Jocil Ltd. - there was proper documentation in support of generation of such by-products in the manufacturing process and removal of the same from the factory premises. Thus, under such circumstances, the extended period of the limitation cannot be invoked for confirmation of the adjudged demands on the appellants inasmuch as there is no element of suppression, wilful misstatement, fraud etc., on the part of the appellants, with an intent to evade payment of Central Excise duty. The department had not specifically brought out any evidence to show that non-payment of Central Excise duty by the appellants was due to the reason of any fraudulent activities, with intent to defraud the Government Revenue.
The issue arising out the present dispute with regard to initiation of the show cause proceedings by invoking the extended period of limitation, was dealt with by the Co-ordinate Bench of the Tribunal in the case of Cargill India Vs. Commissioner of Central Excise. [2024 (9) TMI 1729 - CESTAT MUMBAI], [2024 (9) TMI 1728 - CESTAT AHMEDABAD],wherein the Tribunal has allowed the appeal in favour of the assessee, by holding that the extended period of limitation cannot be invoked for confirmation of the duty demands.
Conclusion - i) Classification disputes, when bona fide and supported by official circulars and Tribunal decisions, negate intent to evade duty. ii) Extended limitation under Section 11A(1) proviso applies only where there is evidence of fraud, collusion, wilful misstatement, or suppression with intent to evade duty. Show cause notices issued beyond one year without such evidence are barred by limitation.
There are no merits in the impugned order, insofar as it has upheld confirmation of the adjudged demands by invoking the extended period of limitation - appeal allowed.
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