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Central Excise - Case Laws

Showing 221 to 240 of 82128 Records

• 2025 (4) TMI 1318
  

  Denial of CENVAT Credit - duty paying documents were not available with the Appellant - invocation of extended period of limitation - HELD THAT:- There is nothing coming on record that the Appellant has contravened the provisions of Rule 57AE of the Central Excise Rules, 1944 or Rule 7 of Cenvat Credit Rules, 2002.

  Similar issue has been decided by this Bench in the case of Exide Industries Ltd. vs. Commissioner of C.Ex., Haldia, [2008 (1) TMI 190 - CESTAT, KOLKATA]. This Bench has held that 'There is no doubt that Notification No. 13/03, dated 1-3-2003 has substituted the word 'procured' for the word 'purchase' in sub-rule (4) of Rule 7 of CENVAT Credit Rules, 2002 w.e.f. 1-3-2003. But Notification No. 27/2000, dated 31-3-2000 which sought to amend CENVAT Credit Rules, 2000 does not prohibit to read the said substitution for the period earlier to that, under challenge. Definition “inputs” under Rule 57A of Central Excise Rules, 1944 read with Rule 57B and conditions laid down by Rule 57AC nowhere warranted 'purchase' is sine qua non. Therefore Notification No. 13/2003, dated 1-3-2003 guides to appreciate legislative intention. Further, decisions cited by learned Counsel also brings its case in all four. When a levy is not expressly designed by law by a statutory provision, respective Rule which grants credit cannot be presumed to be a charging section by any analogy.'

  Conclusion - The appellant is entitled to Cenvat Credit on inputs received from its sister unit.

  Appeal allowed.

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• 2025 (4) TMI 1288
  

  Inadmissible CENVAT Credit - short payment of service tax on the commission received in advance - taxability - debit card income - Banking and financial services rendered in Jammu and Kashmir - renting of immovable property.

  HELD THAT:- It appears that the Tribunal looked into the issue as regards the CENVAT credit in detail - there is no discussion as regards the other four issues which were raised by the Revenue. All that has been stated as regards those four issues is that they are covered by case laws. To a certain extent, the learned counsel appearing for the Revenue is right that although there is a finding recorded with regard to the CENVAT credit, yet there is no discussion at the end of the Tribunal with regard to the four issues.

  It is submitted that let this order be set aside and the matter be remanded to the Tribunal for fresh consideration so far as the untouched four issues are concerned - thus, instead of remanding the matter, liberty should be granted to the Revenue to prefer an appropriate application before the Tribunal saying that these four issues have not been discussed in the impugned order and some finding needs to be given, one way or the other.

  Appeal disposed off.

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• 2025 (4) TMI 1287
  

  Rejection of refund claim filed under transitory provision contained in Section 142(3) of the CGST Act, 2017 - rejection on the ground that refund application was barred by limitation since not filed within one year from the relevant date as per provision contained in Section 11B(1) of the Central Excise Act and refund was not allowed on cesses under the said provision of Central Excise Act - HELD THAT:- When the notification that excludes cesses from the expression “eligible duties and taxes” from the definition has not been notified to make it enforceable and Section 140 of the CGST Act providing transitional arrangement for input tax credit namely CENVAT Credit to be carried-forward to Electronic Credit Ledger for its utilisation opting to pay tax can get the same back in cash if it failed to utilise the same, refund of the said CENVAT Credit that includes education cess and secondary & higher education cesses is permissible under Section 142(3) of the CGST Act, which this Tribunal is competent to enforce in view of the decision of the Larger Bench passed in the case of Bosch Electrical Drive India Pvt. Ltd. [2023 (12) TMI 1145 - CESTAT CHENNAI-LB].

  Conclusion - Refund of accumulated credit on education cess and secondary & higher education cess is permissible under Section 142(3) of the CGST Act since Explanation 3 to Section 140, which excludes such cesses, has not been notified and is therefore not enforceable.

  The order passed by the Commissioner of Central Tax (Appeals-I), Pune refusing cash refund on education cess and secondary & higher education cesses is hereby set aside - Appeal allowed.

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• 2025 (4) TMI 1286
  

  Entitlement for refund claim - amount inadvertently paid towards National Calamity Contingent Duty (NCCD) by utilisation of CENVAT credit of basic excise duty, the utilisation of which stood expressly prohibited by virtue of amendment Notification 13/2016 – CE/NT dated 01.03.2016 - bar of time limitation u/s 11B of the Central Excise Act, 1944 - principles of unjust enrichment.

  Time limitation - HELD THAT:- The period of dispute is March 2016 to June 2017. The Show cause notice proposing to recover the NCCD is issued on 04.04.2018, in response to which the appellant remitted the payments on 13.06.2018 and 14.06.2018. Vide the letter dated 10.07.2018, the appellant filed Form-R seeking refund of the debit made erroneously towards NCCD, for the period March 2016 to June 2017. From the above, it is clear that the said application for refund is made after the expiry of one year from the relevant date and therefore going by the land mark judgement of the Constitution Bench of Hon’ble Apex Court in the case of Mafatlal Industries Ltd. Vs Union of India [1996 (12) TMI 50 - SUPREME COURT], any application for refund which could only be under Section 11B, has to be filed within the timeframe provided under the said section, which is not the case here and hence, the rejection of refund as barred by limitation, cannot be found fault with.

  Principles of unjust enrichment - HELD THAT:- The Original Authority has tabulated the sample invoices which reflects the passing on of the duty (NCCD) on their customers, which only reflects that the appellant had, in fact, collected the same from their customers in cash. This fact is based on the analysis of invoices issued and the appellant has not disputed these facts - The appellant's claim that passing on the duty burden was irrelevant is rejected.

  Conclusion - i) The refund claim is barred by limitation under Section 11B as it was filed beyond the prescribed one-year period. ii) The appellant is not entitled to refund as it had passed on the burden of NCCD to its customers, resulting in unjust enrichment if refund was allowed.

  Appeal dismissed.

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• 2025 (4) TMI 1285
  

  Availment of input service credit on outward freight from factory to sales outlets - Input Credit availed by the Appellant on sales commission paid to the franchisee for marketing and selling the products manufactured by the appellants is allowable or not - eligibility to avail input service credit on service tax on rent paid for the Retail outlets.

  Whether the assessee is eligible to avail input service credit on outward freight from factory to sales outlets? - HELD THAT:- The rent for the franchisee showroom is borne by the Appellant and sales tax in respect of the goods stock transferred to the outlet is suffered by the Appellant as per Clause 7 of the Franchisee agreement. Further we find that as per clause 9 of the said agreement, the appellant bears the cost of transportation of stock transferred to the franchisee outlet and for the unsold stock transferred back to the Appellant by the Franchisee. Besides, as per Clause 10 of the agreement, the insurance coverage for showroom stock is taken by the Appellant. It is also found that the definition of ‘place of removal’ contained in Section 4(3)(c) of Central Excise Act, 1944 includes the premises of a consignment agent or any other place from where the excisable goods are sold. Under the above circumstances, the Franchisee showroom is the place of removal and therefore the credit availed on outward GTA services for movement of goods from the appellant’s unit to Franchisee premises on stock transfer basis is eligible as it is for transportation of goods up to the place of removal.

  Reference made to the decision of the CESTAT New Delhi in the case of Cantabil Retail India Ltd, Rajesh Rohilla, Ani Bansal, Director Vs. Commissioner of Central Excise, Delhi-I [2017 (9) TMI 205 - CESTAT NEW DELHI] wherein it was held 'The Revenue presumed that the services should be in or in relation to manufacture of ready-made garments, whereas Rule 2(l) clearly talks about services used by manufacturers, whether directly or indirectly in or in relation to the manufacture of final products and clearance of final products up to the place of removal. A plain reading of the said statutory provision will indicate that the presumption of the Revenue is not sustainable.'

  The Appellant is entitled to avail the Cenvat credit of transportation paid on goods stock transferred to the franchisee outlets.

  Whether the input credit availed on sales commission paid to franchisees for marketing and selling the appellant's products is allowable? - HELD THAT:- The inclusive part of the provisions of Rule 2(l) of Cenvat Credit Rules, 2004 provides for availment of Cenvat credit on sales commission paid to franchisees. The appellant had incurred expenses/paid commission to the franchisees for display of the products and effecting the sale of goods which was attributable to the promotion of sales of the said goods. The CBEC Circular No. 943/04/2011 clarified that the credit would be admissible on the services of sale of dutiable goods on commission basis. The Ld. Counsel placed reliance on the decision of the Tribunal in the case of M/s. Ultratech Cement Ltd. Versus CCE, Jodhpur [2017 (12) TMI 882 - CESTAT NEW DELHI] wherein the Tribunal relying on the above said circular had held that there was no bar on availment of Cenvat credit on sales promotion service by way of sale of dutiable goods on commission basis - the Appellant is eligible for Input Credit availed on sales commission paid to the franchisees.

  Whether the Appellant is eligible to avail input service credit on service tax on rent paid for the Retail outlets? - HELD THAT:- It is not disputed that the goods manufactured were transferred from the factory premises to the franchisee showroom, from where the goods were sold to eventual customers. The issue is no more res integra as there is a catena of judgements delivered by various forums which is applicable to the present appeal. The Tribunal in the case of Commissioner of C.EX., Delhi-III Vs. Mark Exhaust Systems Ltd. [2015 (9) TMI 1472 - CESTAT NEW DELHI], on a similar issue held 'Since the duty paid vehicles were removed to the depot, from where the same were sold to the customers, such activity squarely falls under the definition of “input service” under the category of “storage up to the place of removal”, itemised therein. In the above referred cases, the Tribunal has allowed the services availed for the Go-down/Depot by holding that the services have nexus with the ultimate manufacturer of final product”' - Thus, the Cenvat Credit on rent paid on immovable property in respect of retail outlets is eligible for Cenvat Credit.

  Conclusion - i) Cenvat Credit on outward transportation upto the place of removal is allowed and the place of removal is determined to be the sales outlets (franchisees stores). ii) Cenvat Credit on Sales commission paid to the franchisees is allowed. iii) Cenvat credit availed on commercial rent paid for retail outlets/ show rooms is allowed.

  Appeal allowed.

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• 2025 (4) TMI 1186
  

  Interest on an asserted delay in disbursal of refund - it was held by CESTAT that 'Section 35FF thus indicates that interest would commence from the date of the order of the Appellate Authority as distinct from the making of an application which is prescribed to be the starting point insofar as Section 11BB of the 1944 Act is concerned.' - HELD THAT:- There are no reason to interfere with the impugned judgment passed by the High Court. Hence, the Special Leave Petition is dismissed.

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• 2025 (4) TMI 1185
  

  Reversal of CENVAT Credit as per Rule 6(3) of the Cenvat Credit Rules, 2004 - inputs used in manufacture of dutiable as well as exempted final products - appellant had not maintained the separate accounts with regard to the dutiable goods as well as the exempted goods - invocation fo extended period of limitation - interest and penalty - HELD THAT:- This issue is no more res integra and Rule 6(3) of Cenvat Credit Rules was amended vide Notification No. 10/2008-CE(NT) dated 01.03.2008, wherein sub-rule (3A) was incorporated with effect from 01.04.2008.

  The appellant has reversed the proportionate amount of Cenvat Credit amounting to Rs.14,683.70 on 18.08.2008, availed in respect of services attributable to exempt goods as per the procedure prescribed under Rule 6(3A) of the Cenvat Credit Rules. The appellant also paid the interest and the same was not disputed in the impugned order.

  Vide Section 73 of the Finance Act, 2010, Rule 6 of the Cenvat Credit Rules was amended retrospectively to provide for reversal of credit on proportionate basis alongwith interest and in the present case, the appellant has reversed the credit alongwith interest and therefore, the appellant is entitled to the benefit of the retrospective amendment in Rule 6 ibid as held in the cases relied upon by the appellant - it is a settled law that reversal of credit amounts to non-availment of credit.

  Extended period of limitation - HELD THAT:- The learned Commissioner confirmed the demand by invoking the extended period, but the department had not established anything on record to show that the appellant has suppressed the material facts with intent to evade the payment of duty. Further, we find that the appellant made the proportionate reversal of Cenvat Credit even before the objection was raised by the department in the audit proceedings and the same is not disputed by the department. Also, the issue involves interpretation and hence, extended period of limitation cannot be invoked.

  Interest and penalty - HELD THAT:- Since the demand itself is not sustainable, therefore, the question of interest and penalty does not arise.

  Conclusion - i) The appellant's reversal of Cenvat Credit under Rule 6(3A) satisfies the legal requirement for reversal of credit attributable to exempted goods, despite non-maintenance of separate accounts. ii) The extended period of limitation cannot be invoked as there was no suppression or fraud, and the appellant disclosed and reversed the credit before audit objections. iii) The demand of Rs.1,79,25,988/- along with interest and penalty is unsustainable and is set aside.

  Appeal allowed.

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• 2025 (4) TMI 1184
  

  Refund claim rejected on the ground of being barred by time limitation - relevant date for the purpose of limitation under Section 11B(5)(B)(ec) when the refund arises as a consequence of a judgment or order of the Appellate Tribunal - HELD THAT:- In the present case, the Tribunal passed the order on 01.11.2018 in the presence of both the parties and the appellant was very much aware of the decision of the Tribunal as the order was passed on the date of hearing itself; but the appellant filed refund application on 16.12.2019 which is beyond the period of one year.

  There is a statutory provision as prescribed under Section 11B (5) (B) (ec) of the Central Excise Act, 1944, which says that in case, where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction will be the “relevant date” and the limitation period of one year will start from that date.

  This issue of “relevant date” has been considered by the Tribunal in the case of Prontos Steerings Ltd Vs CCE, Chandigarh-I [2011 (8) TMI 898 - CESTAT, NEW DELHI] where it was held that 'it is clear that when some order of Court or an authority affects an assessee, the limitation would start from the date on which the order was communicated to the assessee or the date on which it was pronounced or published so that the party affected by which have reasonable opportunity of knowing of the passing of such an order and what it contains.'

  Further, the statutory provision also prescribed that the period of one year would start from the date of the judgment on which the same is pronounced in the open court. Therefore, in the present case, the date of communication of the Tribunal’s order is 01.11.2018, on which the order was pronounced in the open court in the presence of the appellant’s counsel, but the refund application was filed on 16.12.2019; hence, the refund claim filed by the appellant on 16.12.2019 is beyond the prescribed period of one year, accordingly, is clearly time barred.

  Conclusion - i) The limitation period prescribed under Section 11B for filing the refund claim is one year from the relevant date. The term 'relevant date' in the case where the duty becomes refundable as the consequences of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any Court has been defined in Explanation B (ec) of Section 11B as the 'date of such judgment, decree or direction'. ii) The refund claim filed by the appellant is beyond the prescribed period of one year, accordingly, is clearly time barred.

  Appeal of appellant dismissed.

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• 2025 (4) TMI 1183
  

  SSI Exemption - clubbing of value of clearances of a holding company, with the value of clearances of its subsidiary for the purpose of determining eligibility for exemption - applicability of concept of ‘interconnected undertaking’, ‘holding and subsidiary’ etc. for denial of benefit of SSI exemption - HELD THAT:- Since, the appellants are recognized as an independent manufacturer of excisable goods, which are distinctively different from the final products of M/s. Parle Products and upon satisfaction, the jurisdictional Central Excise authorities have issued the Central Excise Registration certificate in their behalf, the clearance value of holding company M/s. Parle Products Pvt. Ltd., cannot be clubbed with the clearance value of the appellants for the purpose of denying the benefit of SSI exemption provided under the Notification dated 01.03.2000.

  The issue arising out of the present issue is no more res integra, in view of the order passed by the Tribunal in the case of Aschem Agrotech [2015 (10) TMI 1937 - CESTAT BANGALORE] where it was held that 'For all purposes the holding company would be having more than 50% of the shares of the subsidiary company and in this case admittedly 100% of the shares are held by the holding company. When 100% of the shares are held, Interest is paid on the loan or not does not really make a difference for the transaction between the two. Because in any case the holding company would have to bear the entire amount or profit or loss, whatever be the result of the activity of the subsidiary.'

  The judgement of Hon’ble Supreme Court, in the case of Parle Bisleri Pvt. Ltd., [2010 (12) TMI 26 - SUPREME COURT], relied upon by the learned AR for Revenue are distinguishable from the facts of the present case inasmuch as the issue considered in those decided cases is in context with affixation of the brand name of another manufacturer(s) and the judicial forum have held that in the case, where brand name of another manufacturer is affixed with the product manufactured by the assessee governed under SSI, then the claim of the benefit provided to the SSI unit, shall not be available. Contrary is the situation in the present case, inasmuch as the appellants are recognized as an independent manufacturer of excisable goods and for that purpose, were also issued with the registration certificate by the jurisdictional Central Excise authorities.

  Conclusion - The value of clearances of the holding company, under such circumstances, cannot be clubbed with the value of the goods cleared by the appellants, for denying the benefit provided under the Notification dated 01.03.2000.

  The impugned order iss et aside - appeal allowed.

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• 2025 (4) TMI 1182
  

  Method of valuation - assorted leaf springs and assemblies - to be classified u/s 4 of the Central Excise Act, 1944, or u/s 4A? - Clandestine removal - demand worked out on the basis of the comparison of the figures in the order sheets with invoices issued during the same month - HELD THAT:- Taking note of the fact that the Revenue authorities have accepted the order in appeal dated 17.11.2017 holding that the value of the “assorted leaf springs”, seized and confiscated in the same proceedings initiated during the search of the Appellant premises on 04.08.2015, there are no merits in the appeal filed by Revenue in the present proceedings. Revenue authorities do not have discretion to pick and chose the proceedings for filing the appeal, when they have accepted the order on the same issue earlier. Even otherwise the both the authorities have concluded that the goods in the form in which they cleared do not qualify to be cleared in the packaged form for which the provisions of Standard of Weight and Measures Act and Rules made thereunder will be applicable.

  That being so, in view of the decision of the Hon’ble Supreme Court in case of Jayanti Food Processing (P) Ltd. [2007 (8) TMI 3 - SUPREME COURT], valuation will have to be done as per Section 4 of the Central Excise Act, 1944 and not under Section 4A ibid. The finding of fact and the application of the case law in terms of the referred decision of Hon’ble Apex Court do not call for any interference and the appeal filed by the Revenue is without any merits.

  The demand has been worked out on the basis of the comparison of the figures in the order sheets with invoices issued during the same month. In some months where the figures as per the invoices is higher than the figure indicated in the order sheet the differential figure of number of assorted leaf springs cleared clandestinely is shown as ‘0’ (Zero). In the months where figure of number of leaf springs as per order sheet is higher than the number in the invoice the differential is alleged to be cleared clandestinely. No explanation is given for adopting such an approach. It is possible that the number of assorted leaf spring which are found in excess in one month get cleared in subsequent month or vice versa.

  The assessable value of the assorted leaf springs have been calculated on the basis of the presumption in terms of the formula which has been adopted by the adjudicating authority which do not have any basis in law.

  During search of the premises of the Appellant certain excesses of the finished goods were found which were seized by the officers. In respect of these excess finished the value of the seized goods was determined as per Section 4A, and show cause notice dated 29.01.2016 was issued to the Appellant. This show cause notice was adjudicated by the original authority determining the seizure value in line with the proposal made in the show cause notice on the basis of Section 4A of the Central Excise Act, 1944.

  Interestingly on the basis of the statement of the Shri Ashu Pandey Authorized Signatory of the Appellant recorded on 23.01.2018 and accepted by the proprietor in his statement on 04.04.2018, the present show cause notice dated 20.04.2018 was issued to Appellant seeking to value the alleged clandestinely cleared goods again in terms of Section 4A of Central Excise Act, 1944 - The formula adopted by the adjudicating authority for valuation under Section 4 which is only a mathematical exercise has no basis in law. Thus computation of the assessable value on such basis cannot be anything other than presumption for computing the demand. Appellant was never put to notice about any such presumption in the show cause notice.

  The demand made on the basis of such erroneous computations and presumptions do not satisfy the test of pre-ponderance of probability enunciated by the Hon’ble Supreme Court in case of D Bhoormull [1974 (4) TMI 33 - SUPREME COURT], and relied in the impugned order. The demand thus made in respect of alleged clandestinely cleared goods on the basis such erroneous computations and presumptions need to be set aside.

  It is evident that the panchnama is totally silent about the manner in which stock verification was undertaken. From the annexure to Panchnama it is transpires that Appellant had stock of about 93.6 Tons of Assorted spring leafs and 960 pcs of Spring leaf assembly. Even the in the statement of Shri Ashu Pandey recorded on that date nothing is forthcoming to say how this stock was verified and excesses and shortages determined. In absence of any thing with regards to the manner of stock verification in the panchnama there are no merits in the confirmation of the demand made in respect of shortages determined.

  There are no merits in the impugned order to the extent it uphold the order in original to the extent of demanding duty in respect of allegedly clandestinely cleared assorted spring leafs and the shortages of spring leaf assembly detected at the time of visit of officers on 04.08.2015. As there are no merits in the demand, the penalties imposed also need to be set aside.

  Conclusion - Assorted leaf springs" cleared loose without any packaging do not qualify as retail packages under the Legal Metrology (Packaged Commodities) Rules, 2011, and hence valuation under Section 4A of the Central Excise Act, 1944 is not applicable. Valuation must be done under Section 4 of the Act.

  Appeal allowed.

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• 2025 (4) TMI 1111
  

  Failure to discharge central excise duty within the stipulated time disqualifies them from availing CENVAT credit under Rule 8(3A) of the Central Excise Rules, 2002 - Constitutional validity of Rule 8(3A) of the Central Excise Rules, 2002 - HELD THAT:- Hon’ble Jurisdictional High Court of Gujarat in its decision in the matter of Indusr Global Ltd Vs. Union of India [2014 (12) TMI 585 - GUJARAT HIGH COURT], has already declared that part of Rule 8(3A) which prescribes “payment of duty without utilizing the Cenvat Credit till an assessee pays the outstanding amount including interest” as unconstitutional.

  As far as liability to pay interest for the default period is considered, the Hon’ble Court held that this liability continues as per subrule (3) of Rule 8. Also, consignment wise payment of duty during the default period has not been declared unconstitutional. No Contrary decision of the Apex Court has been bought to knowledge. This being the position, demand having been made under the authority of unconstitutional provision declared as such by Hon’ble Gujarat High Court, cannot be sustained. Appeals are allowed to the extent of utilising Cenvat Credit for payment of duty. Penalty on Shri Kapil Tiwari the Director of the company and Shri K M Shrivastava General Manager of the company & Authorised signatory are also set aside.

  However, liability of interest due to delayed payment of duty if any and penalty on account of delayed filing of returns sustains.

  Conclusion - i) Demand having been made under the authority of unconstitutional provision declared as such by Hon'ble Gujarat High Court, cannot be sustained. ii) Penalty on the Director of the company and General Manager & Authorised signatory are also set aside. iii) Liability of interest due to delayed payment of duty if any and penalty on account of delayed filing of returns sustains.

  Appeal allowed in part.

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• 2025 (4) TMI 1110
  

  Classification of services - business auxiliary service or services of selling of space for advertisement? - income received by the appellant from mall management activities - extended period of limitation - HELD THAT:- Firstly, if the services were rendered to the developer the consideration should have been received from the developer for rendering the service. In this case, the appellant had, instead of receiving any amount from the developers, paid the developer Rs. 1,00,000/- per annum and bought the space. Thereafter, it sold the space and earned income. Therefore, the consideration which is received from the buyers of this space for advertisement cannot be called as income received for promoting the business of the developer. The second reason is that once the department accepted the activity as the service of selling of space for advertising with effect from 01.05.2006, it can also not say that the service was some other service prior to this date. If the activity of selling space for advertisement had fallen under business auxillary service” before 01.05.2006, they would have been no reason to introduce a separate service of “selling of space for advertisement” service. Since the activity was not covered before, the new service was introduced from 01.05.2006. The department does not dispute the service tax paid by the appellant from 01.05.2006 under the service “selling of space for advertisement”.

  The demand of service tax on the income received by the appellant and recorded under the head of income from mall management cannot be subjected to service tax in the facts of the case under the head of “business auxiliary service” before 01.05.2006.

  The impugned order is set aside - Appeal allowed.

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• 2025 (4) TMI 1109
  

  Clandestine removal - seeking demand of duty on the clearances of the containers without payment of Central Excise duty for the periods from April 2014 to March 2015 and January 2015 to September 2015 - continuation of recovery proceedings or demands against the corporate debtor for dues not included in the approved Resolution Plan, after the approval of the Resolution Plan by the National Company Law Tribunal (NCLT) - HELD THAT:- The Supreme court in the case of Ghanashyam Mishra & Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Company Ltd. [2021 (4) TMI 613 - SUPREME COURT] has held that after the approval of the resolution plan by the NCLT, a creditor including the Central Government cannot recover any dues from the corporate debtor which are not a part of the resolution plan approved by the NCLT and the debt shall stand extinguished and no such proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority [NCLT] grants its approval under Section 31 could be continued.

  It is not ascertainable whether the Department has registered its claim with the Liquidator as above. However, now no further proceedings can survive in this appeal.

  As the NCLT, Chennai has already accorded its order for Liquidation of approval of the Resolution Plan in respect of the appellant vide its order dated 27.06.2019 and as application as per Rule 22 has been made by the Official Liquidator appointed by the NCLT for continuance of the appeal, the appeal should abate.

  As such the appeal gets abated in terms of Rule 22 of the CESTAT (Procedure) Rules, 1982 and also gets dismissed being infructuous.

  Conclusion - i) The excise duty demands confirmed by lower authorities cannot be enforced post-Resolution Plan approval. ii) No further proceedings for recovery of dues not included in the Resolution Plan can be initiated or continued against the corporate debtor.

  Appeal dismissed.

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• 2025 (4) TMI 1097
  

  Denial of Cenvat credit on capital goods purchased by the appellants - multiple contracts forming part of an Engineering, Procurement, and Construction (EPC) turnkey project - HELD THAT:- The issue involved in the matter is squarely covered by the decision in the case of Larsen & Toubro Limited [2024 (8) TMI 395 - CESTAT KOLKATA], wherein it was held that 'appellant-Tata has correctly taken CENVAT Credit on the capital goods procured by them which have been ultimately used in the manufacture of final products. In these circumstances, the denial of CENVAT Credit is not sustainable.'

  The appellant has correctly taken the Cenvat credit on capital goods procured by them which were ultimately used in the manufacture of their final product, therefore, Cenvat credit cannot be denied to the appellant and the same is available to the appellant.

  Appeal allowed.

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• 2025 (4) TMI 1063
  

  Rate of duty - Cassification of the goods manufactured by the appellant - classifiable as Jarda Scented Tobacco (JST) covered by Tariff Entry 2403 9930 or as Chewing Tobacco (CT) covered by Tariff Entry 2403 9910 - Evasion of payment of higher rate of duty - levy of interest and penalty - HELD THAT:- The issue is no longer res integra and has been decided by the Apex Court by a recent decision in Commissioner of Central Excise, Ahmedabad versus Urmin Products P. Ltd & Ors. [2023 (10) TMI 1112 - SUPREME COURT], where the Apex Court considered the issue with reference to seven separate appellants and the appeal filed by the revenue against the appellant was considered at Sl. No.3. In the said decision, the Apex Court concluded that the assessee had mis-classified the goods from JST to CT for evading payment of higher duty. The issue was, therefore, decided against the appellant and in favour of the Revenue. The relevant observations of the Apex Court as rendered in the lead matter of Urmin Products and which has been held to be squarely applicable to the facts of the present appellant.

  The learned counsel for the appellant submits that the decision of the Apex Court in Urmin Products is not applicable to the present appeal as the appeal before the Apex Court had arisen from the order of the Tribunal dated November 14, 2018, whereby the order passed by the Commissioner (Appeals) was set aside, where the challenge was to the order passed by the Assistant Commissioner dated August 28, 2015 for the period, June 2015 to August 2015, whereas the present appeal arises out of the order dated July 16, 2018 passed by the Adjudicating Authority. There are no merits in the submissions of the learned Counsel, for the simple reason that the issue decided by the Adjudicating Authority in the present case is whether the appellant misclassified and mis-declared their manufactured goods as ‘Chewing Tobacco’ instead of ‘Zarda Scented Tobacco’.

  Levy of interest - HELD THAT:- The appellant having failed to discharge the duty liability on the goods manufactured by them as JST, they are liable to pay interest on the duty amount, which is automatically leviable. As noted by the Adjudicating Authority, the decision of the Apex Court in Pratibha Processors versus Union of India [1996 (10) TMI 88 - SUPREME COURT], that interest is compensatory in character and is imposed on an assessee who was withheld payment of any tax as and when it is due and payable, and that the levy of interest is in accordance with the actual amount of tax withheld.

  Levy of penalty - HELD THAT:- The Apex Court in Urmin Products has also noted the conduct of the appellant in suppressing the facts from the Department by mis-declaring and mis-classifying their goods from time to time was with intent to evade payment of central excise duty. In view thereof, the Adjudicating Authority has rightly confirmed the penalty of equivalent amount under the provisions of Rule 18 of Unmanufactured Tobacco Packing Machines (Capacity Determination & Collection of Duty) Rules, 2010, read with section 11AC of the Act and rule 25 of Central Excise Rules, 2002.

  Conclusion - The appellant's goods are correctly classifiable as "Jarda Scented Tobacco" under Tariff Entry 2403 9930, not as "Chewing Tobacco."

  Appeal dismissed.

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• 2025 (4) TMI 956
  

  Exemption from service tax under N/N. 25/2012-ST dated 20.06.2012 - Governmental Authority or not - services rendered to IIT Guwahati and M/s. Power Grid Corporation of India - adjudication order issued beyond the prescribed one-year time limit under Section 73(4B) of the Finance Act, 1994 - HELD THAT:- The Hon’ble Bombay High Court in the case of IDFC First Bank Ltd. vs. Union of India, [2023 (8) TMI 1153 - BOMBAY HIGH COURT] while deciding whether the time limit as prescribed in Section 73 (4B) of the Act are mandatory or directory in nature, laid emphasis on the word “shall” used in the provision to hold that the time limit prescribed in Section 73 (4B) of the Act is mandatory and held 'The word 'where it is possible to do so' thus cannot be read to defeat the timelines of six months and one year as set out in clauses (a) and (b) of sub-section (4B). Also these words cannot be construed to mean that by use of such words a complete freedom is available to the adjudicating officer to adjudicate the show cause notice at his own sweet will, much less, with such inordinate delay as in the present case which is of almost more than 12 years.'

  Section 73 (4B) provision of the Finance Act 1994, is pari materia the provisions of Section 11A (11) of Central Excise Act 1944 and Section 128 (9) under Customs Act 1962. Under all these Acts, the words used are “Shall” and “Where it is possible to do so” and in the Manual, it is “as far as possible”.

  In the case of M/S. KOPERTEK METALS PVT. LTD. VERSUS COMMISSIONER OF CGST (WEST) NEW DELHI [2024 (12) TMI 269 - CESTAT NEW DELHI] decided by the Principal Bench at New Delhi, it has been held that non adjudication of the order, with no reason being given to the effect that the order could not be passed on time due to circumstance beyond the control of the adjudicating authority, would be fatal to the legality of the order.

  In the present case, it is observed that the Show Cause Notice was issued on 15.10.2015 and the adjudication order was passed on 06.01.2017 i.e. almost after 01 year 2 months from issue of the notice. As per amended Section 73(4B) of the Finance Act, 1994 w.e.f. 06.08.2014, the time limit for issuance of Order-in-Original is a maximum of one year, even in suppression related cases.From the said Order-in-Original, it is observed that there is nothing to indicate that the appellant has in any way delayed the proceedings necessitating the ld. adjudicating authority to delay the passing of the order at his end. As the Order-in-Original in this case has been issued beyond the one-year time limit fixed for adjudication, the whole adjudication proceedings in terms of the instant Order-in-Original have become a nullity and the Order-in-Original is to be considered as non-est in law.

  Conclusion - i) The whole adjudication proceedings in terms of the instant Order-in-Original have become a nullity and the Order-in-Original is to be considered as non-est in law. ii) The time limit period cannot be extended endlessly without any plausible justification. iii) The Central Excise Officer 'shall' determine the amount of service tax due under section 73(2) within one year from the date of notice where it is possible to do so, and this timeline is mandatory and not merely directory.

  The appeal is allowed on the ground of delay in adjudication.

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• 2025 (4) TMI 955
  

  Clandestine manufacture and removal - data contained in the CDs/Pen drive and Computer print out/CD print out/pen drive printout in the instant case do not satisfy the mandatory conditions of Section 36B of CEA, 1944 - reliability of evidence - cross examination of the persons - corroborative evidences or not - penalty imposed on the Director of the company under Rule 26 of the Central Excise Rules, 2002 - HELD THAT:- The proceedings against the present Appellant No. 1, namely, M/s. Vasundhara Metaliks Pvt Ltd. has been initiated on the basis of the documents recovered from the premises of one M/s Vasundara Power and Infra Pvt. Ltd. (VPIPL) and some loose sheets/private records recovered from the factory premises of the Appellant. It is observed that from the said office premises of M/s Vasundhara Power & Infra Pvt. Ltd., the Officers of DGCEI seized 16 Nos of CDs and 2 Nos Pen Drives. Scrutiny of the data recovered from the CDs, pen drives and loose sheets/private records revealed that the Appellant has been clearing the goods clandestinely. Thus, it is observed that the prime evidence of the Revenue is the documents retrieved from CDs, Pen drives and some statements recorded from various persons associated with the manufacturing and clearing, during the course of investigation. It is observed that the Appellants have raised the point about the reliability of the data recovered from the CDs/Pen drives recovered from the premises of VPIPL.

  A pen drive is a floating device and has no evidentiary value on its own and can be admitted as evidence only when it strictly fulfils the conditions specified in Section 36B of the Central Excise Act. Refence made to the decision of the Hon'ble Apex Court in the case of Tukaram S. Dighole vs. Manikrao Shivaji Kokate [2010 (2) TMI 1130 - SUPREME COURT] wherein it has been held that electronic devices such as Pen Drive with fast development in the electronic techniques, are more susceptible to tampering and alterations by transposition, excision, etc which may be difficult to detect and therefore such evidence has to be received with caution.

  In the present case, it is observed that the officers had not obtained any certificate as required under Section 36B(4) of the said Act. It is also noted that none of the conditions stipulated under Section 36B(2) of the Act, 1944 have been followed. In such situation, it is difficult to accept the printouts retrieved from the sixteen CDs and two pen drives as evidence to support the clandestine removal of the goods. It is pertinent to note that the requirement of certificate under Section 36B(4) is also to substantiate the veracity of truth in the operation of electronic media - the data recovered from the sixteen CDs and two pen drives cannot be relied upon in the proceedings in the absence of Certificate as mandated under Section 36(4) of the Central excise Act, 1944.

  In the present case, therefore, the only other evidence is the data retrieved from the sixteen CDs and two pen drives, which is also not as per the procedure prescribed under Section 36B of the Act.

  The entire case has been built with no corroborative evidence brought in whatsoever, there are no hesitation to apply the ratio of the case laws cited supra in respect of reliability of data recovered from Compact Disks / Pen drives, non-allowing of cross-examination of the persons recording the statements, non-production of corroborative evidence, and consequently, set aside the impugned order on these counts in respect of the confirmed demands.

  Penalty imposed on Shri Kamalpat Dalmia, Director of the Appellant-company / Appellant No. 2 - HELD THAT:- The Department has not brought in any evidence against him warranting imposition of penalty under Rule 26 of the Central Excise Rules, 2002. Accordingly, the penalty imposed on him set aside.

  Conclusion - i) Without a certificate as mandated under Section 36-B (4) of the Central Excise Act, the computer print-out, Compact Discs, and pen drives cannot be relied upon by the Department in the adjudication proceedings. ii) The denial of cross-examination of persons whose statements are sought to be relied upon under Section 9D of the Central Excise Rules results in such statements losing their evidentiary value and renders them irrelevant for adjudication. iii) In the absence of compliance with mandatory provisions of Sections 36B and 9D, and without any corroborative evidence, the confirmed demands of duty, interest, and penalties cannot be sustained. iv) Penalty imposed on a Director under Rule 26 of the Central Excise Rules without evidence implicating him is unsustainable and liable to be set aside.

  The impugned order is set aside - appeal allowed.

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• 2025 (4) TMI 954
  

  Clandestine manufacture and removal of excisable goods - cogent, tangible, affirmative and corroborative material - demand has been confirmed on the basis of 'estimated production' arrived at by supplying theoretical input / output norms based on the expert opinions - HELD THAT:- No duty can be demanded merely on the basis of input / output ratio without consideration of parameters such as quality of raw materials, kiln condition and other manufacturing parameters like fine engineering tendency of iron ore, etc. We observe that a similar view has been held by this Tribunal in the case of Commissioner of C.Ex. &S.Tax, Rourkela v. Argasen Sponge Pvt. Ltd. [2024 (12) TMI 1531 - CESTAT KOLKATA] where it was held that 'As none of the test has been conducted to establish clandestine manufacture and clearance of the goods by the Respondent, therefore, the impugned demand are not sustainable against the Respondent.'

  The clandestine removal is a serious charge which must be proved with tangible, cogent and affirmative evidence. However, in the impugned order, there is no evidence of production or clandestine removal of 13854. M.T. and 204.320 M.T. of sponge iron by the appellant. There is no evidence of acceptance of the clandestinely removed goods by the buyers and there are no statements recorded from the transporters regarding clandestine removal of the transported goods - There is no evidence of unaccounted purchase and/or consumption of raw materials (such as iron ore, coal and Dolomite) brought on record. Thus, the allegation of unaccounted production arrived at merely on estimation basis and the demand of duty on the basis of the same, are legally unsustainable.

  As the demands are not sustainable, the question of demanding interest thereon or imposition of penalty does not arise.

  Conclusion - i) No duty can be demanded merely on the basis of input / output ratio without consideration of parameters such as quality of raw materials, kiln condition and other manufacturing parameters like fine engineering tendency of iron ore, etc. ii) Clandestine removal is a serious charge which must be proved with tangible, cogent and affirmative evidence. iii) The mere application of expert opinion-based input/output ratios, without corroborative evidence or independent verification, cannot form the basis for confirming duty demands. iv) The burden of proof lies on the Revenue to establish clandestine manufacture and removal with cogent and affirmative evidence; mere estimation and assumptions are insufficient.

  The impugned order is set aside - appeal allowed.

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• 2025 (4) TMI 953
  

  Proportionate reversal of Cenvat credit on inputs and input services used in the generation of exempted goods (electricity) - compliance with the requirements of Rule 6(3)(i) of the Cenvat Credit Rules, 2004 or not.

  Whether the proportionate reversal of Cenvat credit of input and input services used in generation of exempted goods shall suffice to meet the provision of Rule 6(3)(i) of Cenvat Credit Rules, 2004 or not? - HELD THAT:- This Tribunal in the case of Rukmani Power & Steel Ltd. [2015 (8) TMI 1461 - CESTAT NEW DELHI] has observed 'In this case, admittedly, the appellant has already reversed the entire amount of input/input services used in generation of electricity, therefore, same is sufficient. Therefore, appellant is not required to pay any amount of the value of 8/10% of electricity.' - the proportionate reversal of Cenvat credit availed on input and input services which has been used for generation of electricity is sufficient to meet out the provision of Rule 6(3)(i) of Cenvat Credit Rules. Therefore, on that count no demand is sustainable against the assessee.

  Whether the assessee has reversed the Cenvat credit in terms of Rule 6(3)(i) of Cenvat Credit Rules, 2004 or not? - HELD THAT:- As no Cenvat credit has been availed by the aseessee on coal fine and coal reject as no duty has been paid thereof. Further, it is found that these coal fines and coal rejects are generated being the manufacturing the dutiable product namely, sponge iron, therefore, the question of availing the Cenvat credit on coal fines and coal rejects does not arise. In that circumstances, the demand raised by the learned adjudicating authority in the impugned order to the tune of Rs.2,65,35,674/- is not sustainable.

  Conclusion - As the assessee has reversed the proportionate Cenvat credit of input and input services used for generation of electricity the same is sufficient in compliance to Rule 6(3)(i) of Cenvat Credit Rules, 2004. Therefore no demand is sustainable against the assessee, consequently, no penalty can be imposed on the assessee.

  The appeal filed by the assessee is allowed.

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• 2025 (4) TMI 934
  

  Availment of Cenvat Credit on the strength of invoices issued by various traders which were investigated by the Director General of GST Intelligence, Ludhiana - fake invoices without the supply of material mentioned therein - Revenue has not afforded the opportunity of cross-examinations of the witnesses whose statements were relied upon by the Revenue against them - Violation of principles of natural justice - prayer for remand of matter back to the original authority with the direction to original authority to afford an opportunity to the appellant - HELD THAT:- In the present case, the department has made out the case on the basis of statement of Director of the company who has admitted the factum of fake invoices issued by M/s Blue Star Exports, Ludhiana and has also reversed the Cenvat Credit availed wrongly by them. Further, it is found that Director of the company had never retracted his statement made before the authorities below.

  The request for cross-examination made by the appellant will not serve any purpose as the case was not built on the basis of statements of dealers rather it was on the basis of various documents recovered during investigation such as ICC Barrier Report, VAT 23 Returns of the traders, Replies of source manufacturers, Invoices of traders, Details of invoices of source manufacturers etc. and finally the admitted statement of Director of the appellant in all the cases. The documents were shown to Director of the appellant, Sh. Anil Kumar Jindal who in his statement clearly admitted the facts that Cenvat Credit was not admissible to them. On the basis of documents produced before him, he had also stated that they had reversed the Cenvat Credit in all the cases.

  Further, the appellants have also failed to prove the admissibility of Cenvat Credit in terms of Rule 9(5) of the Cenvat Credit Rules.

  Tribunal in identical facts in the case of M/s Unipearl Alloys [2024 (8) TMI 8 - CESTAT CHANDIGARH], has dismissed the appeal of the assessee when the department had sufficient proofs to prove the wrong availment of Cenvat Credit on the basis of fake invoices.

  Conclusion - Cenvat Credit cannot be availed on the basis of fake invoices without actual supply of goods and that admitted statements of the parties and documentary evidence are sufficient to establish such fraud. The right to cross-examination is not absolute and may be denied where the case is not solely dependent on witness statements and where the party has failed to raise such a plea before the lower authorities.

  There is no infirmity in the impugned orders passed by the learned Commissioner (Appeals) - Appeal dismissed.

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