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Central Excise - Case Laws
Showing 241 to 260 of 80349 Records
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2024 (2) TMI 957
CENVAT Credit - manufacturer of dutiable goods and conditionally/partially exempted goods - failure to properly bifurcate the input services, they have taken the Cenvat Credit towards the entire input services received - reversal of proportionate Cenvat Credit in respect of the input service used in the manufacture of partially exempted goods - demand of differential duty in respect of the partially exempted goods, i.e. normal rate of duty less 1% or 2% Excise Duty already paid by the Appellant - HELD THAT:- The issue is squarely covered by the case law of HELLO MINERALS WATER (P) LTD. VERSUS UNION OF INDIA [2004 (7) TMI 98 - ALLAHABAD HIGH COURT], wherein it has been held reversal of Modvat credit amounts to non-taking of credit on the inputs. Hence the benefit has to be given of the notification granting exemption/rate of duty on the final product since the reversal of the credit on the input was done at the Tribunal’s stage.
Prior to this, the Hon’ble Supreme Court in the case of CHANDRAPUR MAGNET WIRES (P) LTD. VERSUS COLLECTOR OF C. EXCISE, NAGPUR [1995 (12) TMI 72 - SUPREME COURT] has held we see no reason why the assessee cannot make a debit entry in the credit account before removal of the exempted final product. If this debit entry is permissible to be made, credit entry for the duties paid on the inputs utilised in manufacture of the final exempted product will stand deleted in the accounts of the assessee. In such a situation, it cannot be said that the assessee has taken credit for the duty paid on the inputs utilised in the manufacture of the final exempted product under Rule 57A.
Thus, the demand on the above is set aside.
Cenvat Credit taken towards GTA Services backed up by proper documents - HELD THAT:- Matter remanded to the Adjudicating Authority. The Appellant is directed to submit all the documentary evidence.
The Adjudicating Authority should follow the principle of natural justice and decide the issue within four months from the date of communication of this order - All the penalties on the Appellants and on the co-noticee, Mr. Satish Agarwal are set aside - Appellant is required to pay the confirmed demand, if any, on account of Cenvat taken on GTA Services, along with interest. However, the penalty on the same is set aside - appeal allowed in part and part matter on remand.
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2024 (2) TMI 956
Clandestine manufacture and removal - allegation proceeds on the assumption that the differential consumption between ER-4 and ER-6 Returns has resulted in manufacturer of 1,48,942 MT of consumable steel, which has not been accounted for by the Appellant - time limitation - HELD THAT:- No corroborative evidence whatsoever has been produced by the Revenue to fortify the allegation.
On going through the OIO, it is seen that the Adjudicating Authority has held Considering the practical difficulties, in estimating the actual stock and in view of the submissions made by the appellants, we find that the demand of duty made by the adjudicating authority cannot be sustained - there are no reason to interfere with such detailed findings. Accordingly, we dismiss the Appeal filed by the Revenue on merits.
Time Limitation - HELD THAT:- Coming to the issue of limitation raised by the Respondent, it is found that neither have they filed any appeal against the impugned OIO on this specific issue nor have they filed any Cross Objection against the Appeal filed by the Revenue on the issue of time bar. Therefore, this issue need no further discussion.
The Revenue’s Appeal is dismissed on merits.
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2024 (2) TMI 955
Contravention of provisions of Rule 8(3A) of the Central Excise Rules, 2002 - liability of penalty under Rule 25 of the said Rules read with Section 11AC of the Central Excise Act, 1944 - assessee has continued to clear excisable goods availing the facility of duty payment on installment basis not resorting to consignment-wise payment of duty from Account Current - HELD THAT:- The question involved in the matter, is no more res integra and has been decided by this tribunal in the case of PRINCIPAL COMMISSIONER OF C. EX., DELHI-I VERSUS SPACE TELELINK LTD. [2017 (3) TMI 1599 - DELHI HIGH COURT], M/S. SUPERMAX PERSONAL CARE PVT. LTD. VERSUS COMMISSIONER OF CE & ST, LTU, MUMBAI [2022 (7) TMI 920 - CESTAT MUMBAI] and ANDHRA CYLINDERS PVT LTD, NALIN KHARA, MANAGING DIRECTOR VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, HYDERABAD – I [2020 (1) TMI 189 - CESTAT HYDERABAD] where it was held that Undisputedly appellants have paid the defaulted duty for the month of January 2013, by making a debit entry in the CENVAT Account on 26.03.2013. Even if this debit was to be considered as not a valid payment of duty, then also the Appellant could not have been proceeded against for the clearances made after 26.03.2013, in terms of Rule 8 (3A).
The Hon’ble Calcutta High Court in the case of M/S. GOYAL MG GASES PVT. LTD VERSUS UNION OF INDIA & OTHERS [2017 (8) TMI 1515 - CALCUTTA HIGH COURT], categorically held that when Rule 8(3A) is declared ultra vires by the different High Courts then the Revenue cannot take a different stand contrary to the said judgements. The Hon’ble Court further declared Rule 8(3A) as invalid. This order of the Hon’ble High Court has not been stayed by the Hon’ble Supreme Court.
As the Appellants have made good the shortfall in duty along with interest and there is no outstanding liability on account of shortfall in duty payments, the fact that various High Courts including the Calcutta High Court have held Rule 8(3A) of the Central Excise Rules as ultra vires, there are no merit in the Department’s plea of subjecting the appellant to any penal consequences - the impugned order imposing penalty under Rule 25 of the Central Excise Rules read with Section 11AC cannot be thus sustained and the Appeal therefore is required to be allowed.
Appeal allowed.
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2024 (2) TMI 954
Availment of cenvat credit - Ferro Manganese Slag and Silico Manganese Slag received by the appellant from the supplier upon payment of duty - whether the said goods are exempt goods or not - HELD THAT:- It is observed that the impugned issue came up before the Hon’ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE & CUSTOMS VERSUS MDS SWITCHGEAR LTD. [2008 (8) TMI 37 - SUPREME COURT], wherein the Hon’ble Apex Court has held The rules entitled the receipt manufacturer to avail of the benefit of the duty paid by the supplier manufacturer. A quantum of duty already determined by the jurisdictional officers of the supplier unit cannot be contested or challenged by the officers in charge of recipient unit - The issue is settled in favour of the appellant and is no more res-integra.
The appeal filed by the appellant is hereby allowed and the orders of the lower authorities are set aside.
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2024 (2) TMI 906
Recovery of excise duty, which got extinguished on approval of resolution plan - HELD THAT:- The NCLT, Chennai has approved Resolution Plan vide its order No.25/27-June 2019. The Hon'ble Supreme Court in the case of GHANASHYAM MISHRA AND SONS PRIVATE LIMITED THROUGH THE AUTHORIZED SIGNATORY VERSUS EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR & ORS. [2021 (4) TMI 613 - SUPREME COURT] has held that all dues including the statutory dues owed to the Central Government any State Government or any local authority including tax authorities, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the adjudicating authority grants its’ approval under Section 31 of IBC can be continued. It is also stated that the Department has not made any claim before the Corporate Insolvency Resolution Process in respect of the demands arising out of the orders impugned in these three appeals.
Since the Resolution Plan has been approved, as per para 8 of the Resolution Plan, all claims shall stand irrevocably and unconditionally settled, discharged and extinguished in perpetuity.
Appeal dismissed.
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2024 (2) TMI 905
Clearance of goods in the nature of ceramic fiber board and ceramic fiber twisted rope - goods are used for insulating the furnaces /Kilns - benefit of N/N. 33/2005-CE dated 08.09.2005 denied - HELD THAT:- It is seen that the main reason for denying the benefit of Notification is that these goods do not have any direct role in power generation - the said view cannot be endorsed upon.
The Ceramic Fiber Board and Ceramic Fiber Twisted Rope are required for making the insulation on the furnace and without such insulation the heat cannot be controlled and so also the safety around the furnace cannot be ensured. These form essential part of the boiler and therefore are eligible for the benefit of Notification.
The Tribunal in the case of CHEMPLAST SANMAR LTD. VERSUS COMMISSIONER OF C. EX., TIRUCHIRAPALLI [2006 (8) TMI 51 - CESTAT, CHENNAI] had observed that these materials are eligible for credit as capital goods as these form part of the furnace and pipeline used in the factory. Again it is to be stated that as per the exemption Notification, all items which are used for setting up of the project for generation of power using non-conventional materials is eligible for the benefit of exemption.
The demand cannot sustain. The impugned order is set aside - Appeal allowed.
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2024 (2) TMI 904
Refund/rebate claim under N/N. 41/2012-ST on the credit availed on debit notes - rejection only on the ground that credit has been availed on debit notes and that these are not valid documents for availing credit as per Rule 9 of CENVAT Credit Rules, 2004 - HELD THAT:- On perusal of Order in Original No. 84/2013 dated 4.10.2023, it is stated by the adjudicating authority that the refund claim was verified and service tax could be correlated with the export documents. So also it is seen that specified services were received by the appellant and all documents were and required certificates submitted along with the refund claim. In para 9, it is stated that the refund claim was verified thoroughly and it is arithmetically in order.
The department has conducted proper verification as to whether service tax was paid and services were availed by the appellant. The proviso to Rule 9 states that in case of any doubt with regard to the particulars mentioned in the document on which credit has been availed, the AC/DC can conduct verification and on being satisfied can allow the credit.
In the present case, there is no evidence to show that the appellant has not paid service tax or not availed the specified services. The reason for rejection of refund / rebate is that debit notes are not valid documents under Rule 9 of CCR, 2004.
The above issue as to whether debit notes can be accepted as documents for availing credit is settled by various decisions. In the case of M/S. GATES UNITTA INDIA COMPANY PVT. LTD. VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI [2021 (9) TMI 688 - CESTAT CHENNAI], the Tribunal held that the credit cannot be denied on the ground that document on which credit is availed is a debit note.
The rejection of refund claim is not justified. The appellant is eligible for refund. The impugned order is set aside - Appeal allowed.
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2024 (2) TMI 818
Compliance with the pre-deposit - Section 35-F of the Central Excise Act, 1944 - Article 14 and 19(1)(g) of the Constitution of India - petitioner desires to have an adjudication on merits without complying with this condition - it was held by High Court that If the petitioner/original appellant complies with the statutory condition of pre-deposit within four months from the date of receipt of a copy of this order and reports compliance to the Tribunal, the Tribunal shall restore the appeal of the petitioner/original appellant for adjudication on merits.
HELD THAT:- There are no reason to interfere in the matter - SLP dismissed.
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2024 (2) TMI 817
Rejection of claim of the appellant for remission of duty on the finished goods which were destroyed in fire - whether the consequential demand confirmed by the Adjudicating authority is correct or otherwise? - HELD THAT:- It is found that the Adjudicating Authority rejected the claim for remission of duty made by the appellant, on the assumption and presumption that the appellant have not taken proper steps to avoid the fire accident. From the facts which is revealed in detail from the survey report of the survey conducted by the insurance company, it was found that the fire accident has taken place due to short circuit and immediately when the fire broken out the appellant’s staff have properly taken the steps to call the fire extinguisher. Therefore, the defense of the appellant appears to be reasonable.
It is found that one of the reasons given for rejection of remission claim is that there is discrepancy in the plot number in the Central Excise Registration of the appellant. However, the appellant have submitted that there was an inadvertent mistake in their registration which was subsequently rectified - once a mistake has been rectified, the rectification should be considered retrospectively as the same is inadvertent mistake. Accordingly, the correct registration should be considered for processing the remission claim.
The learned Commissioner must reconsider the overall case and re-adjudicate both the matters of remission as well as demand of duty. Needless to say that the appellant have relied upon numerous judgments on the identical issue, same also need to be considered while passing the de-novo orders - Appeals are allowed by way of remand to the Adjudicating Authority.
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2024 (2) TMI 816
Disallowance of credit availed by the appellant on security services - security services provided for the factory premises as well as trading premises is covered under Rule 6(5) of the CENVAT Credit Rules, 2004 or not - non-maintenance of separate books of account for the common input services - HELD THAT:- The First Appellate Authority (FAA) has analysed the scope of Rule (3) of CENVAT Credit Rules vis-à-vis, the activities carried on by the appellant. The First Appellate Authority (FAA) has observed that with regard to the credit of goods, the appellant was neither a manufacturer/producer nor a provider of taxable output service, since at the material time trading was neither taxable nor exempted. Moreover, according to the First Appellate Authority (FAA) exempted goods would refer only to the goods manufactured by the appellant, on which no duty was payable, but here the appellant had only bought and sold goods instead of those which were manufactured by it. In view of the above discussions, the First Appellate Authority (FAA) has concluded that the appellant was not entitled to credit attributable to credit of goods by virtue of Rule 3 which restricts and allow credit only to the manufacturer of goods or to the provider of output services.
It is not the case of the revenue that ‘security service’ was used exclusively in the manufacturing unit or used exclusively in the trading unit of the appellant, but the appellant has all along claimed that the said service was used as a common service in both the units. The amendment to Rule 2(e) was not applicable since the period under dispute is from June 2007 to January 2009 and hence, it is difficult to construe trading activity as an exempted service and that the service in question cannot be held to have been used in the provision of exempted service alone.
The impugned order of the First Appellate Authority is unsustainable in law - appeal allowed.
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2024 (2) TMI 815
CENVAT credit - capital goods installed in the distillery plant used for manufacture of Ethyl Alcohol - period from June 2011 to June 2012 - Erection, Commissioning & Installation services as input services availed after 01.04.2011 for setting up and installation of the distellery plant - exemption under Notification No. 67/1995-CE dt.16.03.1995 on the molasses consumed captively to manufacture Ethyl Alcohol - Requirement to pay an amount equal to 6% of value of the exempted goods in terms of Rule 6(3)(i) of Cenvat Credit Rules, 2004 [CCR, 2004] under Rule 14 read with Sec 11A of the Central Excise Act, 1944 - levy of interest and penalty.
Whether the Appellant is entitled to Cenvat credit on the capital goods installed in the distillery plant used for manufacture of Ethyl Alcohol during the period from June 2011 to June 2012? - HELD THAT:- While it is true that in the process of manufacture of the excisable goods, viz, denatured Alcohol, Ethyl Alcohol, which is otherwise not chargeable to central excise duty arises at an intermediate stage, and the last step of denaturing takes place in tankers itself. The manner in which the goods have left the factory is what matters with respect to central excise duty, whether it is a question of payment of central excise duty or the admissibility of CENVAT credit on the capital goods, inputs or input services. There is no good reason as to why the Cenvat credit on capital goods used in the distillery should be denied to the Appellant - neither the factor that an exempted good, viz, Ethyl Alcohol comes into existence prior to the manufacture of denatured Alcohol nor the fact that denatured Alcohol is not produced within the distillery machines, but in the tankers within the factory, should make any difference to the entitlement of Cenvat credit. Nothing in the CCR determines the eligibility of CENVAT credit based on at what stage the final goods become liable to central excise duty, and so long as the goods which are cleared from the factory are excisable goods, CENVAT credit on the capital goods cannot be denied.
Revenue relied on the decision of Division Bench of this Tribunal in RAI BAHADUR NARAIN SINGH SUGAR MILLS LTD VERSUS COMMISSIONER OF CENTRAL GST, DEHRADUN [2023 (11) TMI 1163 - CESTAT NEW DELHI] to assert that no Cenvat credit can be given on capital goods used in the manufacture of a distillery unit. We have examined the decision in Rai Bahadur Narain Singh Sugar Mills. The facts in that case were different. The Assessee in that case was entitled to an Area based exemption notification, which it availed and hence it would not have been entitled to CENVAT credit on captial goods - In this case, there is no exemption for denatured Alcohol and CO2 manufactured by the Appellant from duty and there is no dispute that duty was liable to be paid and was paid. Since the present case is different on facts, we find that the decision relied upon by the Revenue will not come to its rescue.
Whether the Appellant is entitled to Cenvat credit on the Erection, Commissioning & Installation services as input services availed after 01.04.2011 for setting up and installation of the distellery plant? - HELD THAT:- This Bench held in PEPSICO INDIA HOLDINGS (PVT.) LTD. VERSUS COMMISSIONER OF CENTRAL TAX, TIRUPATI [2021 (7) TMI 1094 - CESTAT HYDERABAD] that after 01.04.2011, although the services rendered in relation to installation and commissioning of the plant were not in the inclusive part of the definition but they were not excluded either and the main part of the definition of input service is broad enough to include the input services used in setting up and installation of the plant and machinery and hence CENVAT credit is admissible - the Appellant is entitled to Cenvat credit on the inputs used in setting up the plant and machinery.
Whether the Appellant is entitled to claim exemption under Notification No. 67/1995-CE dt.16.03.1995 on the molasses consumed captively to manufacture Ethyl Alcohol? - HELD THAT:- There are no strong force in the submission of the learned Counsel that the adverse report of the Range Superintendent obtained after the Hearing was over, cannot be relied upon unless a copy is served upon the Appellant and it is given an opportunity to defend. The only matter of fact to be determined is if the appellant had fulfilled the requirements under Rule 6 of CCR or not. In view of the above, it is found that it is a fit case to be remanded to the Commissioner on this question, with a direction to provide or send a copy of the report of the Range Superintendent to the appellant and after giving the appellant sufficient opportunity to rebut the report and explain how it had fulfilled the obligation under Rule 6 of CCR, and pass a reasoned order after following principles of natural justice.
Whether the Appellant is required to pay an amount equal to 6% of value of the exempted goods in terms of Rule 6(3)(i) of Cenvat Credit Rules, 2004 [CCR, 2004] under Rule 14 read with Sec 11A of the Central Excise Act, 1944? - HELD THAT:- In M/S TIARA ADVERTISING VERSUS UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE [2019 (10) TMI 27 - TELANGANA AND ANDHRA PRADESH HIGH COURT], it has been held by the Hon’ble High Court that the obligations under Rule 6(1) or Rule 6(2) or Rule 6(3) are various options given to the assessee and it is not for the Department to choose an option for the Assessee. If the assessee does not follow any of the options and fulfill its obligations, demand can be raised to deny the entire amount of Cenvat credit, but the assessee cannot be forced to pay an amount equal to 6% under Rule 6(3)(i) of CCR, 2004. Therefore, the demand equal to 6% of the value of exempted goods sold, under Rule 6(3) of CCR, 2004, cannot be sustained and needs to be set aside.
Appeals are partly allowed and partly remanded.
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2024 (2) TMI 814
Compounding of duty - unsealing of one pouch making machine or not - one pouch packing machine that was installed in separate room as per the ground plan and used for packing sweet supari - HELD THAT:- No evidence has been produced by the revenue to establish that this machine was being used for packing Gutkha. All the evidences produced in form of declaration, ground plan and correspondences show that this machine was installed in the separate room and was used only for the purpose of packing sweet supari. Accordingly, there are no merits in the impugned order to that extent. It demands duty contrary to the declaration filed along with the ground plan, which is required in terms of Pan Masala Packing Machines (Determination of Capacity and Collection of Duty) Rules, 2008.
Appeal allowed.
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2024 (2) TMI 813
Availment of inadmissible self credit of Education Cess and S&H Education Cess in contravention of para 2C of the Notification - recovery alongwith interest and penalty - HELD THAT:- The identical issue was considered by this Tribunal in the case of M/S ALU BOND ENTERPRISES VERSUS THE COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, JAMMU & KASHMIR [2023 (12) TMI 1290 - CESTAT CHANDIGARH], wherein the Division Bench of this Tribunal has held The impugned order cannot be sustained and is accordingly set aside.
Since the issue is no more res integra and this Tribunal in the above cited case has held that the impugned order is not sustainable in law; therefore, by following the ratio of said decision in the above cited case, it is held that the impugned order is not sustainable and the same is set aside by allowing the appeal of the appellant - appeal allowed.
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2024 (2) TMI 769
Maintainability of SLP - Low tax effect - SSI exemption - dummy units - it was held by High Court that without issuing the SCN to the other units, the clearance of those units could not be combined with that of the Respondent - HELD THAT:- In view of the low tax effect, it is not required to interfere with the impugned judgment passed by the High Court.
The Special Leave Petitions are dismissed.
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2024 (2) TMI 768
Distribution of input service credit by the Principal manufacturer to its Contract Manufacturing Units (Job workers) - permitting distribution of credit by principal manufacturer to its job workers is correct or not - Job worker i.e. Sweety Industries were manufacturing biscuits under the brand names belonging to Principal Manufacturer - duty paid by job worker in Parle Biscuits retail sale price (MRP) less permissible abatement u/S 4A of CEA - Job worker’s factory was dedicated for Parle Biscuits and was an extended factory of Parle, manufacturing biscuits under Notification No. 36/2001- CE (NT) dated 26.06.2001 - amendment to Rule 7, CCR was clarificatory in nature or not - conscious or deliberate suppression of facts or mis-statement on the part of the Appellants or not - invocation of Extended period of limitation.
HELD THAT:- All the issues involved in the present case have been answered by the larger bench in the case of M/S. KRISHNA FOOD PRODUCTS, M/S. MARIAMMA R. IYER, M/S. PARLE BISCUITS PVT LTD. VERSUS THE ADDITIONAL COMMISSIONER OF CGST & C. EX [2021 (5) TMI 906 - CESTAT NEW DELHI] where it was held that It would not be necessary to answer the issue that whether the appellant would, irrespective of the answer to the first issue, be entitled to avail CENVAT credit when input service is attributed to the goods on which excise duty is paid and includes the cost of services on which credit was taken.
From the above judgment, it can be seen that the issue involved in the present case has been settled in favour of the assessee. Accordingly, the impugned order in the present case is also not sustainable.
The impugned order is set aside. Appeals are allowed.
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2024 (2) TMI 767
Classification of micronutrient fertilizers - Presence of nitrogen as a chelating agent - essential constituent - Analysing implementation of the observation/direction of the Hon’ble Supreme Court [2008 (5) TMI 14 - SUPREME COURT] in remanding the case for deciding the classification of the products viz. micronutrients - classifiable under Chapter Heading 3105 of Central Excise Tariff Act, 1985 or under chapter sub-heading 3808.20 of CETA, 1985? - Extended period of Limitation - HELD THAT:- The adjudicating authority, pursuant to the remand, commenced the de novo proceeding by appointing a Committee of Officers to examine the process of manufacture of the impugned products and submit their report accordingly. The Committee comprising of two Superintendents visited the factory of the Appellant, examined the process of manufacture and submitted their report to the Commissioner on 08.5.2009.
Based on the said legal advice/opinion, the Commissioner himself visited the factory premises of the appellant on 16.12.2009 and examined the process of manufacture of the impugned products - The procedure adopted by the learned Commissioner in carrying out the direction/observation of the Hon’ble Supreme Court, in the denovo proceeding has been assailed by the appellant.
The Ld. Commissioner while analyzing the said allegations of the appellant held that since his predecessor after receiving the report of the Committee of officers neither commented nor recorded his opinion on the report, therefore, with a change of adjudicating authority, a reference was made to the departmental standing counsel seeking legal opinion on delegation of the task of examination of method of manufacture to the Committee of officers. The opinion of the learned Standing Counsel was that constitution of a Committee without express permission of the Hon’ble Supreme Court would be ultra vires of the direction of the apex court.
It is found that reading the Committee”s Report on the process of manufacture and that of recorded by the Ld. Commissioner after visit to the factory premises of the appellant, we do not see any material difference on the facts. What is noticed is that in addition to stating the process of manufacture, the committee of officers in its report proceeded further by interpreting the order of the Hon’ble Supreme Court, applicability of Note 6 of Chapter 31 and Circular dated 19.5.1998 observing that the goods are rightly classifiable under Chapter 31.05 and the products may not be called as “Plant Growth Regulator.
Their Lordships analysing the scope of the terms micronutrient, PGR and other fertilizers, in the backdrop of rival claims, observed that admittedly nitrogen is present as a chelating agent, not as a fertilizing agent; even if it is a fertilizing agent, would not amount to an essential constituent under explanatory note 6 of chapter 31.
In the de novo proceeding, the learned Commissioner after verifying the process of manufacture held that it is purely a physical process of mixing of various constituents; the Nitrogen which is added in the form of urea does not undergo any chemical reaction with any of the constituent of the impugned product, it remains as it is, therefore, adding the same at the beginning or at the end of the process of physical mixing would not make any difference. Accordingly, he has concluded that the process of mixing undertaken by the appellant could not lead to their claim that adding Nitrogen containing chemical urea converts PGR into nutrient falling under Chapter 31.05.
The said finding of the Ld. Commissioner answers/satisfies the question raised by the Hon’ble Supreme Court in remanding the case to ascertain whether process of manufacture would demonstrate the presence of “Nitrogen” as an essential constituent though present as a “chelating agent”.
The finding of the Ld. Commissioner that the impugned goods merit classification under CSH 3808.20 (38089340) of CETA, 1985 upheld - confirmation of demands with interest is also upheld. Since the issue relates to classification and interpretation of law, imposition of penalty under Rule 25 on the company and personal penalty under Rule 26 CER, 2002 on the Appellant Shri Mahesh G Shetty is unwarranted and accordingly set aside.
Appeal allowed in part.
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2024 (2) TMI 727
Valuation - MRP based value u/s 4A or transaction value u/s 4 - Extended period of limitation - package of MCCBs cleared to industrial/institutional consumers - requirement to affix MRP on the Product MCCB as per the Standards of weights and Measures (packaged Commodities) Rules, 1977 or not for clearances effected to industrial and institutional customers through their dealers and depots - existence of machinery provisions available to determine the MRP for the product or not - list price can be adopted to determine MRP as per the Rule 4(a)(ii) of Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 or not?
HELD THAT:- The impugned SCN has been issued on 11.05.2012 for the period from 01.04.2007 to 27.05.2008. The entire issue has arisen because of change of opinion due to differing legal interpretations. The Appellant has contended that he was under the bonafide belief that there was no requirement to affix MRP on the switchgear products sold by them industrial/institutional consumers through their dealers and these were exempted under the Packaged Commodity Rules, 1977. Moreover, it is an admitted fact that they were affixing a sticker on their own on the packages of their products that they are “Specially packed for the exclusive use of an industry as a raw material or for the purpose of servicing any industry, Mine or quarry for industrial use only and not intended to be displayed for sale at a Retail Outlet. Hence, it is to be noted that there is no mis-declaration by the Appellant to intentionally evade payment of duty.
The Appellants have been issuing invoices under Rule 11 of Central Excise Rules and periodically filing ER 1 returns disclosing the value adopted for the clearances and it is not the case of deliberate and wilfully evading payment of duty and hence the proviso to Section11 A(1) is not invokable and hence the penalty imposed under Section 11 Ac will not sustain.
In fact the impugned order has not adduced any evidence on the above allegation and the intention to evade payment of duty due to any contraventions of the provisions of the Act has not been well brought out - the Show Cause Notice is barred by limitation and hence the demand will not survive.
The appellant succeeds on limitation. The appeal is thus allowed with consequential relief.
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2024 (2) TMI 726
Valuation - inclusion of insurance charges recovered in excess from the customers - HELD THAT:- The issue is not more res integra and has already been decided by the Hon’ble Supreme Court in the case of BARODA ELECTRIC METERS LTD. VERSUS COLLECTOR OF CENTRAL EXCISE [1997 (7) TMI 126 - SC ORDER], wherein the Hon’ble Supreme Court held the excess amount represents profit element. Once this is so, the same cannot be subjected to excise duty inasmuch as the duty is leviable on manufacture of goods and not on profit.
The impugned order set aside - appeal allowed.
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2024 (2) TMI 725
Valuation of goods - manufacture of M.S. Fabricated Hot Dip Galvanized Steel Structures (Tower) - non-inclusion of freight chaged from their buyers in the transaction value in terms of Section 4(3)(d) of the Central Excise Act, 1944 - HELD THAT:- The price of goods depends upon the transaction value of goods and the element of freight has no bearing whatsoever on the value of goods. It is the case of the Department that the excess of transportation (Freight Element) of the excisable goods from the factory to the buyer’s premises was liable to be included in the assessable value of the goods for computation of duty. Further, in the delivery terms, it is mentioned freight at actual. Accordingly, the place of removal is the factory gate and not the premises of the buyers - the issue is no more res integra and is covered by the decision of this Bench in the case of M/S FLAKTWOODS ACS (INDIA) PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE & S.T., NOIDA-II [2016 (9) TMI 1173 - CESTAT ALLAHABAD] where it was held that the, transfer of ownership takes place at the factory gate when the goods are delivered. Therefore, the ld. Commissioner have erred in holding that the goods manufactured and cleared by the appellant, shall not be valued under Section 4(1)(a) but under Section 4(1)(b).
As per Rule 5 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000- wherein excisable value of goods are sold in the circumstances specified in clause (a) of sub-section (1) of Section (4) of the Act, except the circumstances in which the excisable value of goods are sold for delivery at a place other than the place of removal, then the value of such excisable value shall be deemed to be the transaction value, excluding the cost of transportation from the place of removal up to the place of delivery of such excisable goods.
The Respondent had arranged for the transport of goods to buyer’s addresses and the freight charges were mentioned separately in the invoices. The goods after manufacturing in the plant of the Respondent were subject to pre-delivery inspection by the buyer and were ascertained in favour of the particular buyer before the delivery. In the invoices, the Respondent have charged sales tax and have reflected freight separately in most of the cases. The transfer of ownership takes place at the factory gate when the goods are delivered.
There are no reasons to interfere with the impugned Order-in-Appeal passed by the learned Commissioner (Appeals) and the same is sustained - appeal of Revenue dismissed.
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2024 (2) TMI 669
Recovery of interest on the wrongly availed credit - penalty under Rule 15 of the Cenvat Credit Rules, 2004 - HELD THAT:- The issue involved in the present case is squarely covered by the decision of Hon’ble Supreme Court in the case of M/s Ind-Swift Laboratories Ltd. [2011 (2) TMI 6 - SUPREME COURT] following has been held Rule 14 specifically provides that where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest would be recovered from the manufacturer or the provider of the output service. The issue is as to whether the aforesaid word "OR" appearing in Rule 14, twice, could be read as "AND" by way of reading it down as has been done by the High Court. If the aforesaid provision is read as a whole we find no reason to read the word "OR" in between the expressions `taken' or `utilized wrongly' or `has been erroneously refunded' as the word "AND". On the happening of any of the three aforesaid circumstances such credit becomes recoverable along with interest.
It is quite evident that the N/N. 18/2012-CE (NT) clearly provides the date from which the word “or” has been substituted in Rule 14 of The CENVAT Credit Rules, 2004. It is unambiguously provided that the substitution is being made from 17th March 2012, and no retrospective effect has been given to the said amendment/ substitution - It is settled position in law that physical statute need to be interpreted in a literal sense on the basis of what have been stated in the law or statute. There is no room for indictment or according to any beneficial construction to the appellant/assessee.
It is also settled law that interest is a statutory/ contractual liability for the wrongly taken credit or is equivalent to the time value of the money/credit. It is an absolute liability as has been held by the courts in the various decisions for the same no person could claim the benefit and claim that interest as provided by the statute could not have been recovered as has been held the same is barred by limitation. It was for the appellant to have paid the interest along with the reversal of the excess credit taken. It is also observed that during the period of dispute section 11A did not provided, for recovery of interest and hence was not applicable. The recovery of interest was made in terms of Section 11AB/ 11AA which did not provided for any limitation.
As the demand made within the period of five years for recovery it is upheld, there are no merits in the submissions made for not imposition of the penalties imposed under Rule 15, in view of the decision of the Hon’ble Apex Court in the case of Rajasthan Spinning and Weaving Mills Ltd [2009 (5) TMI 15 - SUPREME COURT].
There are no merits in the appeal filed by the appellant - appeal dismissed.
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