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Central Excise - Case Laws
Showing 41 to 60 of 80314 Records
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2024 (4) TMI 324
Denial of CENVAT Credit - recovery of the differential central excise duty - appellant has discharged appropriate duty on the body building activity on the duty paid chassis supplied free of cost by M/s ALL during the period 2006-07 & 2007-08 or not - entitlement to avail cenvat credit of the duty paid on the chassis supplied free by M/s ALL - Sl.No.41(1)(ii) of N/N. 6/2006-CE - Extended period of Limitation - HELD THAT:- It is found that from the very beginning of the proceeding, in their reply to the internal audit, the appellants have categorically submitted that they have not opted for the exemption under Notification No.6/2006-CE dated 01.3.2006, hence, not required to comply with the conditions prescribed under the said notification. They have informed that by availing cenvat credit on the duty paid chassis and after undertaking the activity of body building on the Chassis, which amounts to manufacture, they had cleared the Vehicle applying the normal tariff rate as applicable from time to time.
The approach of the Department is fallacious from the very beginning. Assuming that the conditions of the notification 06/2006-CE have not been complied with, by availing CENVAT credit on the duty paid chassis, the appellant would not have been eligible to the benefit of the notification and the manufactured goods would be assessed in accordance with the normal provisions. Secondly, Explanation appended Sl.No.41(1)(ii) provides that the value of the manufactured vehicle shall be the value of the vehicle excluding the value of the chassis used in such vehicle, whereas, in the present case, the appellant has added the body building charges and the value of the chassis supplied free of cost in computing the assessable value for the purpose of payment of duty for the year 2006-07 and 2007-08; hence it is incorrect to allege that the appellant had availed the benefit of the said Notification - the appellants are entitled to avail cenvat credit on the duty paid chassis supplied free of cost by M/s. ALL to the appellant.
Valuation and differential duty - HELD THAT:- The period involved in the present demand notice involves 2006-07 to 2007-08. Rule 10A has been inserted to the Central Excise Valuation Rules, 2000 w.e.f. 01/04/2007. Consequently, the valuation of the body built vehicles has to be arrived at following Rule 10A from 01/04/2007 by adopting the price at which the body built vehicles are sold by the supplier M/s. ALL. For the period prior to that, the valuation has to be carried out by adopting the formula laid down by the Hon’ble Supreme Court in UJAGAR PRINTS, ETC. ETC. VERSUS UNION OF INDIA AND OTHERS [1988 (11) TMI 106 - SUPREME COURT].
Time Limitation - HELD THAT:- The present demand is relating to differential duty on the recalculated assessable value as alleged by the Revenue. There are force in the contention of the learned advocate for the appellant as the appellant was following the method of computation of assessable value adopting the principle in Ujagar Print’s case and discharging duty by disclosing all the facts; hence invocation of extended period demanding differential duty on the redetermined value by the Revenue, in absence of suppression of facts or mis-declaration, cannot be sustained. Accordingly, the differential duty of Rs.9,51,837/- demanded for the period 2006-07 and 2007-08 is barred by limitation.
The impugned order is set aside - Appeal allowed.
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2024 (4) TMI 323
Reversal of Cenvat Credit - Ammonium Sulphate - by-product or not - applicability of provisions of rule 6(3)(1) of the Cenvat Credit Rules, 2004 or not - HELD THAT:- The matter has been decided by this Tribunal in appellant’s own case M/S HINDUSTAN CHEMICAL COMPANY VERSUS C.C.E. & S.T. SURAT-II [2021 (12) TMI 1495 - CESTAT AHMEDABAD] where it was held that since the issue has been settled that Ammonium Sulphate being a by-product arising in the course of manufacture of final product, the demand under Rule 6(3) is not applicable. Accordingly, In the present case also being a similar issue, demand is not sustainable.
There are no merit in the impugned order and same is set aside - appeal allowed.
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2024 (4) TMI 298
Clandestine removal - admissibility of electronic evidence - burden/onus to prove - suppression of facts or not - Demand of duty and Levy of penalty u/r 26 of the Central Excise Rules, 2002 - Levy of penalty on Director - HELD THAT:- When Appellant is charged with production of specific quantity and payment of royalty against the said quantity, the burden of proof shifts to it under Section 106 of the Indian Evidence Act and in such circumstances of the case when Hon'ble Supreme Court in the judgment noted in Order-in-Original in the case of COLLECTOR OF CUSTOMS, MADRAS AND OTHERS VERSUS D. BHOORMULL [1974 (4) TMI 33 - SUPREME COURT] has clearly stated that law does not requires the prosecution to proof the impossible but it is required to establish such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue and had hinted at Section 106 of the Indian Evidence Act in an indirect way, as could be noticed from the submissions of Learned Authorised Representative, the Revenue has clearly established a case of clandestine removal against the Appellant and following decision of this Tribunal at Allahabad passed in the same M/s. Kamdhenu Ispat Ltd. matter in respect of another Franchise named Advance Impex Pvt. Ltd., the liability in the nature of duty, interest and penalty on the Appellant Company, as being confirmed by the learned Commissioner, is confirmed.
Having regard to the fact that personal involvement of the present as well as previous Director is not made out from the materials available on the record and the present Director is In-charge of the company, which is having another Excise registration number, against whom no proceeding for the shortage of raw material discovered in 2011 has been initiated and there is specific observation by the Commissioner that the previous Director was responsible only for day to day activity of the Appellant Company, the findings in confirming penalty on both Samir Bhagat and Raman Gupta not confirmed.
The appeal of Appellant Company is dismissed.
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2024 (4) TMI 224
100% EOU - Valuation of goods - clearance under domestic tariff area, i.e. within the territory of India - manufacture of P & P medicaments falling under Chapter 30 of First Schedule to Central Excise Tariff Act, 1985 - to be covered under notification issued under Section 4A of Central Excise Act, 1944 or not - HELD THAT:- For arriving at total central excise duty payable on the goods manufactured by 100% EOU and allowed to be cleared in domestic tariff area, the customs duty leviable under Customs Act, 1962 if the same is charged at ad valorem rate, then the value of the goods has necessarily to be arrived at in accordance with the provisions of Section 14 of Customs Act, 1962. The said provision of the Act has been made very clear by Hon’ble Supreme Court in the case of COMMNR. OF CENTRAL EXCISE VERSUS MORARJEE BREMBANA LTD. [2015 (4) TMI 354 - SUPREME COURT] where it was held that As is clear from the bare reading of the aforesaid proviso, in those cases where excisable goods are produced or manufactured by hundred per cent export oriented undertaking are allowed to be sold in India, the duty of excise has to be the amount equal to the aggregate of the duties of customs which would be leviable under Section 12 of the Customs Act, on like goods produced or manufactured outside India if imported into India and where the said duties of custom are chargeable by reference to their value, the value of such excisable goods shall be determined, in accordance with the provisions of the Customs Act and Customs Tariff Act, 1975.
It is, therefore, very clear that basic customs duty is to be ascertained taking the value into consideration where the value is determined in accordance with the provisions of Section 14 of Customs Act, 1962. On perusal of the show cause notice, it is noted that for the purpose of demanding differential duty, basic customs duty was calculated by Revenue on the basis of MRP value minus abatement - under Section 14 of Customs Act, 1962, there is no provision for arriving at value on the basis of the provisions of Section 4A of Central Excise Act, 1944 such as MRP minus abatement as adopted by Revenue.
The impugned order set aside - appeal allowed.
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2024 (4) TMI 223
Maintainability of appeal - appeal dismissed for non-prosecution as per Rule 20 of CESTAT (Procedure) Rules, 1982 - time limitation - HELD THAT:- Having filed an appeal the Appellant should have intimated the Registry of the change in address if any, for delivery of notice / judgment etc. Moreover, the daily ‘Cause List’ showing the cases being listed for hearing is available in the public domain on the Tribunals website. After filing an appeal due diligence mandates that the Appellant follow up on the matter and make himself available on the date of hearing either in person or by his Authorized representative. Persons with good causes of action should pursue the remedy with reasonable diligence at every available opportunity. Hence there is reasonable ground to think that the non-appearance was occasioned by the Appellant as he is not serious about the appeal and is deliberately trying to gain time. It is a well-accepted position that the accrued right of the opposite party cannot be lightly dealt with.
Tribunal in the case of Pankaj Vs. CCE [2023 (12) TMI 910 - CESTAT ALLAHABAD] which has heavily relied on the judgment of the Hon'ble Supreme Court in the case of Ishwarlal Mali Rathod vs Gopal [2021 (9) TMI 1301 - SUPREME COURT], Babu Singh Vs. State of UP [1978 (1) TMI 171 - SUPREME COURT], Shiv Cotex Vs. Tirgun Auto Plast (P) Ltd. [2011 (8) TMI 977 - SUPREME COURT], Noor Mohammed Vs. Jethanand & Anr. [2013 (2) TMI 27 - SUPREME COURT] and has concluded that there is no justification for adjourning the matter beyond three times which is the maximum number statutorily provided.
Thus, no purpose would be achieved in continuing with this appeal - appeal dismissed for default as per Rule 20 of CESTAT ( Procedure ) Rules , 1982.
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2024 (4) TMI 222
Utilization of credit of Education Cess (EC) and Secondary Higher Education Cess (SHEC) towards the liability of excise duty denied - invocation of extended period of limitation - mis-leading declaration - suppression of facts or not - HELD THAT:- The appellant consciously took the benefit of the notification no.12/2015 for the purpose of utilizing the ‘EC’ and ‘SHEC’ towards payment of excise duty, which otherwise was not permissible. But deliberately did not comply with the conditions specified for such utilization, which required that the credit of EC and SHEC paid on inputs or capital goods received in the factory of manufacture of final products on or after the 1st day of March, 2015 could be utilized for the payment of duty of excise. The appellant cannot bifurcate the benefit, which was granted under the notification and avail the same but ignore the conditions specified for such utilization and hence, the invocation of the extended period of limitation was justified - It is settled law that a party cannot approbate and reprobate at the same time.
Reference made to decision of the Apex Court in the case of SHYAM TELELINK LTD. NOW SISTEMA SHYAM TELESERVICES LTD. VERSUS UNION OF INDIA [2010 (10) TMI 1017 - SUPREME COURT], laying down that the person taking advantage under an instrument, which both grants a benefit and imposes a burden, cannot take the benefit without discharging the burden. It was, therefore, not permissible for the appellant to avail the benefit of utilization under the notification without discharging the burden of declaring with reference to the cutoff period prescribed therein.
Reliance placed by the appellant on the decision of the Metco Roof Pvt. Ltd. [2021 (7) TMI 766 - CESTAT CHENNAI], where the learned Single Member, although upheld the demand raised as legal and proper, however, rejected the levy of penalty as unwarranted, since the issue is of interpretational nature. With due respect, it is begged to differ from the view taken by the learned Single Member in Metco Roof Pvt. Ltd. as the consistent view of the department and the Tribunal and as upheld by the Delhi High Court in Cellular Operators Association of India [2018 (2) TMI 1264 - DELHI HIGH COURT] that two cesses i.e. ‘EC’ and ‘SHEC’ and the excise duty and the service tax had been treated as different and separate and cross utilization was never permitted. Though the decision of the Delhi High Court is under challenge before the Apex Court in CELLUALAR OPERATORS ASSOCIATION OF INDIA SOCIETY VERSUS UNION OF INDIA & ORS. [2018 (8) TMI 2150 - SC ORDER], however, no stay of the impugned order has been granted.
Even prior to the decision in Cellular Operators Association of India [2018 (2) TMI 1264 - DELHI HIGH COURT] Ahmedabad Bench of the Tribunal in M/S FIELDMAN ENGINEERS PVT. LTD. VERSUS C.C.E. AND S.T. -RAJKOT [2018 (5) TMI 183 - CESTAT AHMEDABAD] has specifically held that cenvat credit lying in balance in the account of Higher Secondary Education Cess and accumulated before 1.3.2015 can be used only for discharge of Cess as provided under the rules and cannot be used for discharging the liability of excise duty.
The appellant though made a declaration that ‘EC’ and ‘SHEC’ is being used in payment of excise duty as per the notification no.12/2015 but that was an incomplete declaration with intent to mis-lead the Department. Once the appellant was utilizing the ‘EC’ and ‘SHEC’ towards payment of excise duty by virtue of the liberty granted under the notification, it is the bounden duty to disclose as to whether the credit of the two cesses paid on inputs or capital goods was received on or after 1.3.2015. However, the appellant did not disclose whether the amount was received prior to the cut-off date or after 1.3.2015, knowing that the amount received prior to the said date could not have been adjusted towards the liability of excise duty and deliberately made bald reference to the notification.
The reliance placed by the learned Authorised Representative on the decision of the Apex Court in M/S CONTINENTAL FOUNDATION JOINT VENTURE SHOLDING, NATHPA HP VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I [2007 (8) TMI 11 - SUPREME COURT] holding that suppression means failure to disclose full information with intent to evade payment of duty, squarely covers the present case. In that view, the extended period of limitation has been rightly invoked.
There are no error in the impugned order and the same is hereby affirmed - appeal dismissed.
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2024 (4) TMI 221
Short payment of Central Excise duty - clearance of refrigerator with Washing Machine and Refrigerator with VCD as combination pack on combination MRP rather than combined MRP of the individual items - HELD THAT:- The issue is no longer res-integra. In the appellants own case Delhi Bench of this Tribunal in VIDEOCON INTERNATIONAL LTD. VERSUS COMMISSIONER OF C. EX., NOIDA [2012 (12) TMI 920 - CESTAT NEW DELHI] has held In this case, admittedly the combination packs of Referigerator with water purifiers, Refrigerators with washing machines or CTVs with VCD players are not actually packed in a bigger package. The “combination packs” in this case have to be treated as combination sales as a marketing strategy under which on purchase of two items refrigerator with washing machines, refrigerator with water purifier or CTVs with VCD players, the price charged is less than their individual MRP. Such combination sales, in our view, cannot be treated as “combination pack” or packaged commodity as understood in SWM Rules and have to be treated as sale of individually packed items at a combined price.
There are no merits in the impugned order - appeal allowed.
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2024 (4) TMI 169
Refund claim lying in cenvat credit on CVD and BCD paid by the appellant - rejection on the ground of non compliance by the appellant to the export obligation in terms of EPCG License of advance authorization for import of the capital goods by the appellants - time limitation - rejection also on the ground that refund claim filed after the expiry of period mentioned in the Section 11B of the existing law (CEA, 1944).
Non compliance by the appellant to the export obligation in terms of EPCG License of advance authorization for import of the capital goods by the appellants - HELD THAT:- The appellant had not deposited the duty during the existence of the Central Excise Act, 1944. Resultantly, the question of appellant becoming entitled to cenvat credit under the existing law does not at all arise. Section 140 and 142 of CGST, Act no doubt all the transitional provisions permits for tax or duty or refund of amount credit lying in stock on the appointed day (01.07.2012) however, subject to following two conditions:- (i) the assessee should have become eligible for the said credit under existing law; (ii) the said credit should have been transferred to electronic ledger - Since the duty in the present case has been paid after the said appointed day, the question of impugned credit being available to the appellant under the existing law is absolutely redundant,giving only one inference that on the appointed day, the appellant was not eligible for the cenvat credit as has been prayed to be refunded under the garb of the transitional provisions.
The amount in question since has been paid after introduction of CGST, Act 2017 but for the Bill of Entry of the year 2010 (dated 10.09.2010) on account of failure of compliance with the export obligation under advance authorization license, the cenvat credit of such duty which is paid under the present CGST Law, cannot be made available to the assessee in the light of the transitional provisions of new CGST, Act. More for the reason, the appellant was notregistered under Excise Department.The appellant is not eligible even under Section 172 of the GST Act.
Time Limitation - refund claim being filed after the expiry of period mentioned in the Section 11B of the existing law (CEA, 1944) - HELD THAT:- Apparently and admittedly the claim has been filed under Section 11B of the existing law, the period prescribed therein is one year from the relevant date.Present is the case of claiming refund of credit on CVD and BCD paid. The imports in question was of the year 2010, CVD/BCD were paid after 10 years in the year 2019. Therefore, the refund claim has been filed after 2 years for payment of duty in the year, 2021. The refund claim is apparently barred by time - seeing the impugned refund was absolutely online, the benefit of said decision cannot be extended in favour of the appellant.
The refund claim is held to have rightly been rejected. The impugned order is sustained - Appeal dismissed.
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2024 (4) TMI 168
Clandestine removal - onus to prove - cross-examination of witnesses - retraction of statements - Revenue’s case is primarily dependent upon the documents Collection Books (diary), forwarded by the Income Tax after seizure and a photocopy of seized by the Central Excise department during the course of panchnama at the factory on 12.01.2012 - HELD THAT:- From the plain reading of section 9D, it can be seen that it is not a discretion or choice of the adjudicating authority whether to allow or not to allow the examination in chief and or cross examination of witness. In the present case, since the witness have categorically denied the statement it become incumbent on the adjudicating authority to conduct the examination in chief and thereafter allow the cross examination of the witnesses to the appellant. Without carrying out the process as envisaged under Section 9D, the adjudication is not fair, therefore the matter needs to be remanded to the adjudicating authority for passing a fresh order after conducting the examination in chief and thereafter allowing the appellant to cross examine the witnesses whose statements were relied upon.
It is also made clear that despite all efforts of cross examination it the cross examination is not completed or partly completed, the adjudicating authority is not precluded to proceed with the adjudication on the basis of records.
The impugned order set aside - appeal allowed by way of remand.
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2024 (4) TMI 167
Valuation of goods - undervaluation - Across-the-Board Rebate (ABR) - admissibility of discounts - adjustment of list price by giving different rebates / discounts referred to as Movement Plan Rebate (MPR) - period from May 2008 to April 2012 - Extended period of limitation - HELD THAT:- It can be seen from the wordings as used in Section 4(1) that the assessable value is the transaction value at which goods are sold by an assessee for delivery at the time and place of removal, whereas transaction value is the price actually paid or payable for the goods. In the instant case, as the goods are not sold from the factory gate and the depot / BSO is the actual place of sale, the assessable value would therefore be required to be determined in terms of Section 4(1)(a) of the Act in accordance with the provisions of Section 4(1)(b) ibid., read with Rule 7 of the Valuation Rules, which caters to sale of goods from a depot to non-related buyers and price being the sole consideration for sale - the BSOs allow discounts to final customers beyond the price circulars that are duly known to the appellant at the time of removal of goods from the factory (conveyed through the internal communications of the CMO). Such discounts are allowable as deduction from the price of the goods for the purpose of determination of duty due thereon.
In terms of Rule 7 of the Valuation Rules, any discount given at the time of clearance of goods ought to be allowed for assessment of goods transferred to the BSO when the same is passed on to the final customers - with reference to an Across the Board Rebate (equivalent to MPR), this Tribunal in the appellant’s own case STEEL AUTHORITY OF INDIA LTD. VERSUS COMMISSIONER OF C. EX., RAIPUR [2005 (11) TMI 10 - CESTAT, NEW DELHI] had held The law with regard to the valuation of the goods is that the goods should be assessed at the net price, i.e. minus the discount, to Central Excise duty. In the present case, it is clear that the valuation adopted by the appellant was only more than the net realisation at the depot stage.
The rebate as was known by way of MPR and uniformly passed on would be required to be taken note of for determination of the assessable value.
There is a complete similarity in the factual matrix of the appellant’s own case, with the present issue at hand inasmuch as the CMO determined the ABRs (in the present case, MPRs) and indicated the same to the plant as well as depots. The goods were sold from the depots after allowing such ABRs (in the present case, MPRs) indicated on the face of the invoice. Also, the Chartered Accountant’s certificate furnished both in the said case and the present case referred to supra, establishes that the cumulative value of the ABRs (in the present case, MPRs) allowed from the depot exceeded the ABRs (or MPRs) as claimed by the appellant.
The Hon’ble Apex Court’s decision in the case of M/S. PUROLATOR INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI – III [2015 (8) TMI 1014 - SUPREME COURT] has also upheld the admissibility of discounts that were passed on to the buyers and were known at the time of clearance of goods as eligible deduction for the purpose of determination of the assessable value.
There are no sustenance in the order of the Ld. Commissioner under challenge herein - impugned order set aside - appeal allowed.
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2024 (4) TMI 109
Refund of countervailing duty - exit from the status of 100% EOU under the STPI Scheme - denial on the ground that the duty paid on de-bonded goods are IT infrastructure and are capital goods, and hence the CVD paid was not eligible to be availed as credit under the CENVAT Credit Rules, 2004 - HELD THAT:- It is well settled that the decision of a case cannot be based on grounds outside the pleadings of the parties. Since the matter whether IT infrastructure are capital goods and the CVD paid on it was eligible or not as CENVAT credit and thereby to a refund was not an issue before the Commissioner (Appeals), he could not have opined on the same. By doing so, he has first answered the appeal in the Appellant’s favour and then gone beyond the appeal made by the appellant to deny the refund.
The Hon’ble Apex Court in Krishna Priya Ganguly etc. Vs. University of Lucknow & Ors. etc. [1983 (10) TMI 298 - SUPREME COURT] and Om Prakash & Ors. Vs. Ram Kumar & Ors., [1990 (11) TMI 430 - SUPREME COURT], observed that a party cannot be granted a relief which is not claimed. Hence the learned Commissioner (Appeals) could not have given Revenue the benefit, if any, of an issue of which they were not aggrieved and had not filed an appeal or cross objection. This being so, the merits of the issue, need not be gone into.
The impugned order is hence modified and that part of the decision on whether IT infrastructure are capital goods and the credit of CVD taken are eligible for refund is set aside being made based on grounds outside the pleadings of the appellant - Appeal allowed.
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2024 (4) TMI 108
Refund of CENVAT Credit of Additional Duties of Excise (Textiles and Textile Articles) (ADE(TTA)) as per Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 - denial on the grounds that the Appellant is not eligible for CENVAT Credit as per Rule 11(3) of the CENVAT Credit Rules, 2004 - rejection also on the ground that the refund claim for the same amount was rejected in the past.
Denial on the ground that credit of Additional Duty of Excise ADE (TTA) was lapsed in terms of Rule 11 (3) of Cenvat Credit Rules, 2004 - HELD THAT:- It is found that the appellant availed the exemption from ADE (TTA) in respect of their finished product vide Notification No. 31/2004 dated 09.07.2004 at that time Rule 11 (3) of Cenvat Credit Rules, 2004 was not in force whereas the same came into force on 01.03.2007 vide Notification No. 10/2007 – CE (NT), therefore, the provisions of Rule 11 (3) cannot be applied retrospectively in respect of exemption Notification No. 31/2004- CE - issue decided in the case of COMMISSIONER OF C. EX., BANGALORE-II VERSUS GOKALDAS INTIMATE WEAR [2011 (4) TMI 1123 - KARNATAKA HIGH COURT] upheld by the Hon’ble Supreme Court in COMMISSIONER VERSUS GOKALDAS INTIMATE WEAR [2016 (3) TMI 1391 - SC ORDER], it is settled law that the provisions of Rule 11 (3) of Cenvat Credit Rules, 2004 shall not apply in respect of the exemption notification which was issue prior to insertion of Rule 11(3). Therefore, in the present case also, the refund claim cannot be rejected by invoking Rule 11(3) of Cenvat Credit Rules, 2004 - decided in favour of appellant.
Rejection on the ground that the refund claim for the same amount was rejected in the past - HELD THAT:- The appellant had filed the refund claim under altogether different provision i.e. Rule 5 and notification issued thereunder. The refund claim was rejected for non compliance of the condition of Rule 5 and notification thereof. Once the refund claim was rejected under Rule 5, the accumulated Cenvat credit of ADE (TTA) stands restored in the appellant’s Cenvat account and the same can be utilized in future but in the present case since the appellant could not utilize the same and due to the introduction of GST with effect from 01.07.2017, the accumulated credit of ADE (TTA) cannot be utilized by the appellant. The only remedy is to claim the refund under Section 142 of CGST Act, 2017. Therefore, the rejection of refund in the past under Rule has no relevance and does not create any embargo for processing the refund claim which is otherwise admissible to the appellant in terms of Section 142 of CGST Act, 2017 - reliance can be placed in the case of KIRLOSKAR TOYOTA TEXTILE MACHINERY PVT. LTD. VERSUS COMMISSIONER OF CENTRAL TAX, BENGALURU SOUTH GST COMMISSIONERATE [2021 (8) TMI 818 - CESTAT BANGALORE] where it was held that refund can be granted of the cesses viz. Education Cess and Higher Education Cess which could not be transitioned into GST - In view of the above judgment, the appellant, being also on the same footing, claiming the refund of accumulated ADE (TTA) are eligible for refund.
The appellant are eligible for the refund of accumulated Cenvat credit of ADE (TTA) in terms of Section 142 of the CGST Act, 2017 read with Section 11 B of Central Excise Act, 1944 - the impugned order is set aside - Appeal allowed.
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2024 (4) TMI 65
Condonation of delay in filing the appeal - It was held by High Court that The delay in filing the appeal is too long without any cause much less sufficient for adopting liberal approach also. In the absence of any cause shown, delay cannot be condoned. Therefore, the application is rejected - HELD THAT:- There are no reason to interfere in the matter - The Special Leave Petition is hence dismissed.
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2024 (4) TMI 64
Utilization of CENVAT credit - Area Based Exemption - manufacturer/producer receiver of goods, working under N/N. 1/2010, can avail Cenvat Credit of inputs purchased from the manufacturers who are also availing the same Notification - extended period of limitation - suppression of facts or not - HELD THAT:- On going through the provisions of the Rules it is clear that in terms of Rule 3, a manufacturer/ producer of excisable goods or an output service provider can avail Cenvat Credit of Goods/Services received by them and on which applicable duty/tax is paid; the only bar appears to be on goods in respect of which benefit under Notification No. 1/2011 Central Excise dt. 1st March 2011 is availed or goods specified at serial nos. 67 and 128 in respect of which the benefit of an exemption under Notification No. 12/2012 Central excise dt. 17/03/2012 is availed.
Cenvat Credit Rules cannot be read in isolation. If the Notification No. 1/2010 is not listed under Rule 12 for a certain period, it cannot be held that credit would still be admissible in view of Rule 3 (1). Such a proposition would not only render the other Rules of the Cenvat Credit Rules, particularly Rule 12, not only redundant but also would lead to unintended interpretation. This bench cannot preside over to look into Legislative intent in the Cenvat Rules framed, particularly when there is no ambiguity in the wording of the Rules. It’s a clear case of inclusion or otherwise of a Notification for certain period under Rule 12 of Cenvat Credit Rules, 2004 - the appellants are not eligible to avail Cenvat Credit during the impugned period, that is 01/05/2012 to 19/01/2014, as the notification No 1/2010 is not mentioned under Rule 12 ibid during the relevant period.
Extended period of Limitation - suppression of facts or not - appellants did not disclose relevant facts in the ER-I Returns or through any correspondence and only because of the audit, Revenue could find out that the appellants have availed ineligible credit - HELD THAT:- Courts and Tribunal have been consistently holding that in order to invoke extended period, a positive act of fraud, collusion, suppression of facts etc. with intent to evade payment of duty, needs to be established. In the absence of the same, extended period cannot be invoked. Looking into the fact that the appellants have been regularly filing the ER-I Returns and have been availing self-credit of duty paid and the same was being sanctioned/ratified by speaking orders, it is found that suppression cannot be alleged. The Tribunal has held that extended period cannot be invoked for the only reason that a discrepancy has been found during the course of the audit. Therefore, the appellants succeed on limitation.
The appellant has not made out any case on merits. However, they succeed on limitation - Appeal allowed on limitation.
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2024 (4) TMI 63
Clandestine removal - appellant have not accounted for the excisable goods in the records - non-entry of the final products and waste and scrap in Daily Stock register - adjudicating authority failed to consider vital submissions made by the appellant - violation of principles of natural justice - confiscation under Rule 25 of CER - HELD THAT:- It is found that the adjudicating authority has not considered the vital submissions made above by the appellant. Therefore, the principle of natural justice has not been complied with by the adjudicating authority - despite giving his finding in respect of the other proposal of the show cause notice he has not given any finding in respect of the proposal (ii) and (vii) of the show cause notice. It is incumbent on the Commissioner to pass an order on each and every proposal made in the show cause notice and he cannot be silent in the operating portion of the order on any of the proposal made in the show cause notice.
There is a clear error in the order. In the absence of reasons in support of the order it is difficult to assume that the authority had properly applied provision of laws before passing of the order. Since no order was passed on the above two proposal, the whole matter needs to be remanded for passing a fresh order. The learned Adjudicating Authority granting fair opportunity of hearing shall pass a reasoned and speaking order in respect of the concerned charges to hold whether sustainable or not. Such exercise shall meet the scrutiny of law.
Entire matter remanded to the Ld. Adjudicating Authority for passing a de novo order within a period of six months from the date of receipt of this order - appeal disposed off by way of remand.
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2024 (4) TMI 62
Valuation - inclusion of freight charges for delivery at buyer's place in the transaction value - removal from factory gate - HELD THAT:- It is found that freight have been charged separately and received separately. It is also noticed that the buyers of the goods-Western Coalfields Ltd., Nagpur and M/s Bharart Coking Coal Ltd. (A Subsidiary of Coal India Ltd.) have issued purchase order specifying the price for the goods separately and also specifying the transportation cost for the supply of goods. Accordingly, appellant have supplied the goods and raised invoices for the price of goods and the transportation. Thus, it amounts to showing the cost of transport separately in the invoices.
The place of removal is factory gate, however the goods were delivered at customer place. Therefore goods were sold for delivery not at the place of removal (i.e. factory gate) but at other place i.e. customer door step. On perusal of copies of the purchase orders placed by the M/s Western Coalfields Ltd., Nagpur and M/s Bharat Coking Coal Ltd. and invoices issued by the Appellant. From the invoices it is seen that the freight shown in the invoices is in addition to basic price of the goods. It is clear from the terms of the purchase order that basic price and other components have to be indicated separately. Therefore, there is no dispute that basic price and the freight components are clearly indicated separately in the invoices and therefore criterion i.e. cost of transportation should be in addition to the basic price of the goods stand fulfilled.
There are no valid reason for disallowing the deduction for the freight paid inasmuch as the sales are FOR destination - It is also found that a coordinate Bench of CESTAT in the case of STERLITE OPTICAL TECHNOLOGIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE & CUSTOMS AURANGABAD [2015 (9) TMI 1023 - CESTAT MUMBAI] has taken a view in identical facts that freight will be allowable as a deduction from the composite price. Thus, the contention of the Department to include the freight amount in the assessable value does not meet the test of law and hence not legally sustainable. Hence, there are no merit in order passed by the appellate authority.
The impugned order is set aside - appeal is allowed.
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2024 (4) TMI 61
Exemption from Duty - Wrongful availment of N/N. 12/2012-CE dated 17.03.2012 - food preparation supplied to Women Industrial Co-Operative Societies intended for free distribution to the economically weaker sections of the society - Department denied the benefit of the exemption contained in the impugned Notification to BCPM on the ground that the Appellant Assessee did not supply the same directly for free distribution to the economically weaker sections of the society and had supplied the BCPM only to WCS for further manufacture of Complementary Weaning Food - suppression of facts - Extended period of limitation.
HELD THAT:- The Expert Committee introduced a new product in the name of BCPM and also the role of Private Enterprise in the manufacturing activity, to ensure supply of quality products to the beneficiaries. From the above, it is found that the scheme has been announced by the Government with the aim to supply nutritional food supplements to Children, Pregnant and Lactating women free of cost, through women cooperative societies. As the societies do not have sufficient infrastructure for processing of Ragi malt, the processing and supply of BCPM was envisaged through a Private Enterprise and the Appellant Assessee was awarded the contract for the supply of BCPM to WCS and also to ensure qualitative supply of the nutritional food supplement from WCS to the weaker sections of the society. From the above, it emerges that BCPM was never considered as a separate product. But, in the scheme formulated to supply the nutritional supplement primarily through the women cooperative Societies, BCPM being an integral part of the scheme, it has been supplied after being added with roasted wheat flour at WCS, in the name of CWF to the beneficiaries. Effectively, only one final product namely CWF has been supplied under the ICDS scheme either by the Appellant Assessee directly or through the WCS as mandated by ICDS.
There is no dispute regarding the eligibility of the exemption notification to the product CWF. Since, the Department has denied the benefit of exemption provided in Notification No. 12/2012 only to the product BCPM, the discussion confined only on the availability of the said exemption to BCPM. Now, coming to the eligibility of the exemption provided under Notification No. 12/2012-CE dated 17.03.2012 to the product BCPM, it is observed that the benefit of the Notification No. 12/2012 has been extended to the product CWF, as the same has been manufactured and sold by the Appellant Assessee directly to the Anganwadis, the limb of ICDS Department.
Whether the product “BCPM” manufactured by the Appellant Assessee and supplied to the WCS is entitled for the exemption contained in the Notification No. 12/2012? - HELD THAT:- It is observed that CWF is the product intended to be supplied to the beneficiaries under the ICDS scheme. BCPM, as a separate product would not ordinarily come into existence during the course of manufacture of CWF. BCPM, as a separate product, has been introduced only by the Expert Committee suggesting the Technical Specification for BCPM. It is observed that all the essential ingredients such as Malted Ragi and vitamin premix which are instrumental to contribute amylase activity and micronutrients are contained only in BCPM. CWF has come into existence by mere addition of wheat flour in the ratio of 58:42 in the premises of WCS. The addition of roasted wheat flour with the BCPM does not transform it into a new product with new character and quality - Such certificates have been submitted to the jurisdictional Central Excise Officers, as required under condition No. 5 of Notification No. 12/2012-CE dated 17.03.2012, once in a quarter. Thus, the Appellant Assessee has proved beyond doubt that BCPM has been consumed ultimately by the beneficiaries under the ICDS scheme as mandated in the Notification No. 12/2012 dated 17.03.2012.
In the impugned order, the Adjudicating Authority confirmed the demand of central excise duty on the ground that the BCPM manufactured and supplied to WCS are not intended for distribution to the beneficiaries of the ICDS scheme, as they were not supplied directly to the Anganwadis - the Commercial Tax Department has issued a clarification to the effect that BCPM is in the supply chain of the scheme and was intended for free distribution as mentioned under Clause 36(2)(v) of the Tender Document and the benefit of the Notification is applicable to BCPM.
The Adjudicating Authority has relied upon the decision of the Hon’ble Supreme Court in the case of Harichand Shri Gopal [2010 (11) TMI 13 - SUPREME COURT] wherein it was held that in order to avail any condition-based exemption, the condition specified in the said notification has to be fulfilled. In the present case the Appellant Assessee has fulfilled all the conditions as stipulated in the Notification No. 12/2012. The Ld. Adjudicating Authority has imported the word ‘directly’ into the notification and arrived at a conclusion that the benefit of the notification would be available only if the food preparations are directly supplied for the intended purpose. We observe that the Notification only envisages that BCPM, in this case, has to be supplied for the beneficiaries of the ICDS scheme - the Appellant Assessee has fulfilled the conditions of the Notification 12/2012-CE to avail the benefit of the said exemption notification. Accordingly, it is found that the above said decision relied upon by the Adjudicating Authority in the impugned order is not relevant to this case.
It is an admitted fact that the Respondent Assessee paid VAT on the sale of BCPM. In view of the VAT payment, the Department took the view that BCPM is different from CWF. It is observed that when BCPM was sold to ICDS and delivered to the WCS, there was a transfer of title against the consideration and VAT was paid. This VAT payment has no relevance to the provision of service rendered to the WCS, as the definition for Service excludes the transfer of title of goods as clarified in Paragraph 2.6.4 of the Education Guide issued by CBEC. Therefore, levy of service tax is not permissible on the value of goods on which VAT has already been paid.
The Lower Authority has rightly relied upon the decision of the Hon’ble Supreme Court in the case of BHARAT SANCHAR NIGAM LTD. (BSNL) VERSUS UNION OF INDIA [2006 (3) TMI 1 - SUPREME COURT] and held that the contract entered into by the Respondent Assessee is a composite contract for the supply of BCPM and no separate invoices were raised for the service charges and hence the inbuilt price cannot be vivisected, to demand Service Tax - the decision of lower authority regarding dropping of the demand of Service Tax in the impugned order is in accordance with the law and it requires no interference as prayed for by the Department.
Extended period of limitation - HELD THAT:- The proforma attached to the said letter indicates that the Appellant Assessee did produce all the documents called for therein for scrutiny by the Audit party. A perusal of the list of documents submitted to the Audit party clearly reveal that the Appellant Assessee has furnished all documents to the Audit party and no abjection was raised. Further the decisions of various appellate fora quoted by the Appellant Assessee in their reply were not considered by the Adjudicating Authority. In view of the above, we observe that there was no malafide intention established on the part of the Appellant Assessee to suppress any information before the Department with an intention to evade payment of duty. Accordingly, the submission of the Appellant is agreed upon that there is no suppression of fact with an intention to evade payment of duty exists in this case - it is observed that no incriminating documents of any kind has been brought on record to substantiate the allegation of suppression. The entire demand has been raised based on the statutory documents submitted by the Appellant Assessee. Therefore, the demand confirmed in the impugned order by invoking extended period of limitation is not sustainable and accordingly is ordered to be set aside on the ground of limitation.
The demand of Central Excise duty along with interest and penalty confirmed in the impugned order is set aside. The dropping of demand of Service Tax by the Adjudicating Authority is upheld - the appeal filed by the Appellant Assessee is allowed on merits as well as on limitation.
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2024 (4) TMI 32
CENVAT Credit - place of removal for the GTA Services provided under a F.O.R sale contract is the manufacturer's premises and not the place where the goods are sold or not - rejection of appeal filed by the Appellant solely on the basis of the judgment of Apex Court in the case of CCE v. Ultra Tech Cements Ltd. [2018 (2) TMI 117 - SUPREME COURT] - levy of interest under Section 11AB of CEA - HELD THAT:- It is not in dispute that for a manufacturer/consignor, the eligibility to avail credit of the service tax paid on the transportation during removal of excisable goods would depend upon the “place of removal” as per the definition contained of the said term in the Central Excise Act, 1944. Such place of removal is the place where the sales take place - It is also not in dispute that in an F.O.R sale which the appellant was doing in the instant case, freight charges form part of assessable value, the ownership of goods remains with seller till delivery at customer’s doorstep, seller bears risk of loss or damage to the goods during transit to the destination, and property in the goods is not transferred till delivery. So outward transportation qualifies as ‘input service’ and is eligible for CENVAT Credit - The sale being of gases manufactured by the appellant, due to the peculiar nature, sale happens at the buyer’s premises and admittedly such sale is on F.O.R basis.
In Ranadey Micronutrients etc. vs. Collector of Central Excise [1996 (9) TMI 124 - SUPREME COURT], the Supreme Court held that in view of Section 37B of the Central Excise & Salt Act, 1944, instructions issued by the Board in order to ensure uniform practice of assessment of excisable goods throughout the country get statutory status and significance, and they are binding on officers of the Central Excise Department.
The Tribunal was not justified in holding that place of removal for the GTA Services provided under FOR sale contract is the manufacturer’s premises and not the place where the goods are sold; that the Tribunal was not justified in holding that the GTA services in the present case are being received beyond the place of removal and therefore not covered within the definition of Input Service under Rule 2(1) of CANVET Credit Rules, 2004.
The impugned orders are set aside - appeal allowed.
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2024 (4) TMI 31
CENVAT Credit - input services - management fee - common sharing of Head office services - documents on which credit is availed by the appellant are in order or not - Invoices from the service provider were not in the prescribed format - show-cause notices dated 07.02.2011 and 26.03.2014 are hit by limitation or not - HELD THAT:- FMGL has paid service tax on ‘Management fee’ and “common sharing of Head office services” considering the same as “Business Auxiliary Service” was not disputed by the jurisdictional Service Tax authorities of the service provider; hence denying cenvat credit to the appellant as receiver of service, cannot be sustained as held in Hon’ble Madras High Court in the case of M/S. MODULAR AUTO LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI [2018 (8) TMI 1691 - MADRAS HIGH COURT].
The department has contended that the appellants have availed cenvat credit on documents, which are not cenvatable documents as they are not in the prescribed form/format under Rule 9(1) of CCR, 2004 - as per proviso to Rule 9(2) of CCR, 2004, when the documents have the particulars/details as mentioned therein and the jurisdictional Deputy Commissioner/ Assistant Commissioner is satisfied that the goods covered by the document have been received and accounted for in the books of the account of the receiver, he may allow the Cenvat credit - the appellant has being availing cenvat credit and filing periodical returns indicating such availment.
Extended period of limitation - HELD THAT:- The appellant has been filing the ER-1 returns, hence there is no suppression of facts by the appellant, therefore invocation of extended period is not tenable and imposition of penalties under section 11AC of Central Excise Act, 1994 read with Rule 15 of CCR, 2004 are not sustainable.
The impugned orders confirming the demand of cenvat credit along with the interest and imposition of penalties are not sustainable and need to be set aside - the appeals filed by the appellant are allowed.
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2024 (4) TMI 30
Process amounting to manufacture - manufacture and clearance of excisable goods such as modems, converters, ethernet switch, ISDN terminals, multiplexes etc. in their own brand name falling under Chapter heading 851762 of the Central Excise Tariff Act, 1985 - duty paid after availing cenvat credit of the CVD paid on imported modems from the manufacturing unit at 29B/1 is permissible or not - CENVAT Credit on inputs used in manufacturing of finished goods under CENVAT Credit Rules, 2004 - violation of Rule 8(3A) of the Central Excise Rules, 2002 - levy of penalty.
Whether the activities carried out by the appellant on the imported Modem at their Registered trading premises at 29B/3 resulted into ‘manufacture’ as per Section 2(f)(iii) of Central Excise Act, 1944? - HELD THAT:- A plain reading of the extended meaning of ‘manufacture’, it is clear that for the goods specified in Third Schedule, the activities of packing or repacking of such goods in a unit container or labelling or relabelling of containers including the declaration or alteration of the retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer have been considered as amounting to ‘manufacture’ even if the said activities do not fall under main part of Section 2(f). Modems are specified at Sl.No.81A of the Third Schedule to the Central Excise Act, 1944.
A careful analysis of the activities undertaken by the appellant from the dealers premises, it reveals that the imported modems were not simply cleared ‘as such’ but it has been opened, tested (for whatsoever reason); the purpose is not only visual inspection as a formality, but tested by qualified engineers which necessarily includes, if damaged or any manufacturing deficiency, to repair/remove the same, to put in saleable condition; the tested modems then repacked in the boxes and placed in bigger cartons along with other modems, accessories which would make the modems marketable, procured and supplied along with the modems after affixing the logo and labelling the modems with appellant’s name and address. These activities definitely relevant and necessary for marketing the product to the end consumer.
In similar circumstances for the product, ‘switch gears’, this Tribunal in the case of HPL Electronic & Power Ltd. [2018 (2) TMI 223 - SC ORDER] held that the activities of packing and repacking, labelling and relabelling of switch gear amounts to manufacture within the definition of Section 2(f)(iii) of the Central Excise Act, 1944 - the activities carried by the appellant in the premises at 29B/3 on imported modems would result into ‘manufacture’ within the meaning of Section 2(f)(iii) of Central Excise Act, 1944. Consequently, the appellant are required to discharge duty on the imported modems for the aforesaid activities in their trading premises, which amounts to manufacture.
Whether the duty paid after availing cenvat credit of the CVD paid on imported modems from the manufacturing unit at 29B/1 is permissible? - HELD THAT:- When the Department examined the processes/activities carried out by the appellant opined that the activities would result into deemed ‘manufacture’; hence duty is payable, therefore in all fairness, the dealer’s Registration for the said premises belonging to the appellant ceases and the trading premises became manufacturing premises as there is no other items other than ‘modems’ which was traded from the said premises - there are no irregularity in availing the cenvat credit even though the input-modems had already sold/cleared by the appellant. Further, when there is no dispute that the imported modems earlier received and cleared from trading premises; the credit subsequently availed only for the purpose of discharging duty leviable on the ‘modems’, when the activities found to be ‘manufacture’ under Section 2(f)(iii) of Central Excise Act, 1944. However, the excess credit that remained in balance after debiting the credit equal to the duty payable on the imported modems, and utilised for the clearance of their own manufactured modems at the manufacturing premises, is definitely inadmissible, as the said excess credit attributable to imported modems had already been passed on by the Appellant to their customers while selling the imported modems, by issuing dealer’s invoice.
Now, availing the same credit again and utilising it for clearance of indigenous modems and other goods manufactured in the manufacturing premises, would result in availing and utilising cenvat credit twice on the same amount of CVD and other duties relating to imported modems, that is, once mentioning in the dealer’s invoice and second time in the manufacturer’s invoice while clearing the manufactured goods from the manufacturing premises. The said excess credit has been subsequently paid by the appellant by debiting their PLA account with interest and the ld. Commissioner has rightly appropriated the same in the order.
Whether the Appellant contravened Rule 8(3A) of the Central Excise Rules, 2002 in discharging the duty by utilising the credit from their manufacturing unit situated at 29B/1? - HELD THAT:- As contended by the Ld. Advocate for the Appellant since Rule 8(3A) of the Central Excise Rules, 2002 has been held to be ultra vires of the rule making power by the Hon’ble Gujrat High Court in the case of INDSUR GLOBAL LTD. VERSUS UNION OF INDIA & 2 [2014 (12) TMI 585 - GUJARAT HIGH COURT], therefore, the findings of the learned Commissioner on this count also cannot be sustained.
Levy of penalty - HELD THAT:- The issue involved in the present case is interpretation of law, and consequent actions of debiting the duty from cenvat credit account maintained in the manufacturing premises was after due intimation to the Department, therefore imposition of penalty on the appellants is unwarranted and accordingly set aside.
Appeal disposed off.
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